Stocks Falling Faster Than Notre Dame Defensive Backs

January 2, 2001
Jon Najarian

The
news of the continued deterioration of the nation’s manufacturing
sector certainly was not what the doctor ordered. Activity at U.S. factories
contracted for a fifth straight month in December, leaving output at its weakest
level in almost a decade. The NAPM report immediately put the whip to both the
Nasdaq and the Dow, shattering whatever hopes for a rally that briefly existed.

I know this isnâ€™t news to any of you, but the market is in a very
physiologically damaged state. As in any oversold condition, there is the risk
of one or more sharp, painful bear market rallies, but I donâ€™t see investor
sentiment changing until the Fed makes some much needed moves.

Being an optimist, I think reports like todayâ€™s NAPM will assure us that the
Federal Reserve will have to make multiple rate cuts in the coming months. Had
they initiated those cuts at their December meeting, we wouldnâ€™t be facing
such a dire situation today. But thatâ€™s water under the bridge now. It might
not be the hand we wanted, but itâ€™s the one we have to play.