Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Monday, November 26, 2001
as of 9:30AM EST
Information provided by Schwab Center for Investment Research


NO HOLIDAY HANGOVER FOR U.S. STOCKS

Equity index futures were suggesting a positive open, continuing 
the trend from overseas on the heels of the recent upside 
momentum in U.S. stocks. Although economic and corporate news 
was sparse following the holiday weekend, early 
post-Thanksgiving results in the retailing sector, including 
record sales at Wal-Mart Stores (WMT,56,f2&f4), hinted that 
consumer spending may be more resilient than previously 
expected. According to TeleCheck Services Inc., same store sales 
in the U.S. rose 2.4% on Friday. Treasuries were virtually 
unchanged in the absence of any economic data.

Discount retailing giant Wal-Mart reported a single-day record 
for sales of $1.25 billion on Friday after its Holiday Blitz 
promotion attracted bargain hunters to its stores. Rival K-Mart 
(KM,6.85) also said it saw a strong response as compared to the 
year-ago post-Thanksgiving period. However, most of the holiday 
buying appeared to be narrow in scope, with shoppers favoring 
the deep-discount retailers over department stores. In related 
news, Pier One Imports (PIR,13.97) raised its same-store sales 
forecast for November to an increase of 6%-8% and increased its 
3Q earnings forecast to $0.21-$0.23 per share from the previous 
$0.19-$0.21 per share guidance.

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TREASURY AND ECONOMIC SUMMARY 

Bonds were virtually unchanged as traders await economic data 
scheduled for release later in the week. Treasury Secretary Paul 
O'Neill hinted that the U.S. economy was on its way to a 
recovery, citing Friday's increase in post-Thanksgiving sales as 
compared to a year-ago as a sign that consumer spending remains 
intact. Although early reports reflected a strong retailing 
picture over the holiday weekend, tomorrow's consumer confidence 
report for November, due at 10:00 a.m. EST, should shed more 
light on consumer sentiment. Existing home sales are also slated 
for a 10:00 a.m. EST release.

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WORLD MARKETS 

European bourses kicked the week off on a positive note led by 
strength in telecom equipment and computer-related stocks. Nokia 
(NOK,24,f2) and Ericsson (ERICY,5.55,f1) shares got a boost 
after Morgan Stanley increased its forecast for worldwide 
wireless phone unit sales by 5.4% to 390 million phones in 2001 
and by 3.6% to 435 million phones in 2002. Siemens AG (SI,60) 
was also higher after the company broached the subject of a wage 
freeze for up to 40,000 of its employees in a cost-cutting move. 
The euro advanced against the U.S. dollar, after falling to a 3 
1/2 month low last week. The Bloomberg European 500 index was up 
0.3% as of 8:52 a.m. EST.

Asian markets were also broadly higher with Japan's Nikkei 225 
index closing up 3.4% on the heels of Friday's positive momentum 
in U.S. stocks. Export stocks got a boost from Wal-Mart's 
favorable post-Thanksgiving sales results and technology stocks 
were widely higher. Taiwan Semiconductor (TSM,15.70) upped its 
2001 pre-tax profit guidance and sales forecast by 55% and 2.8% 
respectively, due to a recent pick-up in demand for its 
products. The yen rose against the dollar as Bank of Japan 
Governor Masaru Hayami said that the increased purchase of 
foreign currency-denominated bonds would have a limited economic 
impact, bucking speculation that Japan's central bank may adopt 
this particular strategy to weaken the Japanese currency.

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FUTURES WATCH 

In the December Globex futures contract as of 8:52 a.m. EST, the 
S&P 500 index was 0.5 points lower (2 points above fair value), 
while the Nasdaq 100 index was up 6.5 points (6 points above 
fair value). The December DJIA futures contract was down 12 
points (8 points above fair value), and the January crude oil 
futures traded on the NYMEX were down $0.21 at $18.75/barrel.

William Johnson, Market Analyst

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