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CNN Live At Daybreak

America's New War: What to Expect From Markets This Week

Aired September 24, 2001 - 07:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: This will be the second full week of trading since the attacks on September 11. Last week didn't wrap up so nicely. So what can investors expect this week?

Well, Andy Serwer of "Fortune" magazine joins us with some predictions.

All right, so the Dow had its worst record in 61 years last week?

ANDY SERWER, "FORTUNE" MAGAZINE: Yes, that's right. It was a brutal week.

ZAHN: And futures, though, look promising today.

SERWER: Yes, there are some encouraging signs, Paula. Let's first talk a little bit about last week, a historically bad week on Wall Street. If you think about the other weeks that were that bad, we're talking the fall of France and the Depression, just to put things in perspective.

The people I talked to over the weekend were just numb, really had a terrible time coping with this. But there are some encouraging signs, as you indicated. Japan is closed today. The Asian markets are mixed. But the European markets are very strong right now, up two to three percent. And the futures are up about 160 points right now. So we're seeing some good stuff.

Also, over the weekend the influential news weekly "Barron's," which is widely read on Wall Street, had a cover story which said, you can see it there, which said "Buy Stocks." Stocks haven't been this cheap in five years. A lot of people are reading that and the thinking is maybe they're going to come in and do some buoying this morning.

ZAHN: Can you explain this morning, though, why the futures are up so much higher than they were this period of time last week?

SERWER: Well, to me it's really just a snap back rally, Paula. If you look at Europe, stocks are up across-the-board -- insurance companies, airlines, all the stocks that were battered down, people are coming in and buying saying these things are bargains right now.

ZAHN: So, the question is whether you can sustain any sort of rebound you might get today. SERWER: Right. I really am doubtful over the intermediate term that we can have a sustained rally. We may have a snap back rally today. But if you look at what's going on here, the economy is still declining. Also, we have uncertainty over a war that even the president has called protracted.

So with those two major uncertainties, I just don't see a sustained rally. We may have a snap back today, I hope. But over the next couple of days it will be tough, I think.

ZAHN: A quick word of advice to investors out there before you leave them this morning?

SERWER: I really think that unless you have a wedding to pay for next month, you've just got to sit tight. I mean it's such an incredibly volatile time.

ZAHN: That's a hard thing to do in this market.

SERWER: I know. I know.

ZAHN: Andy Serwer, thank you.

And we're going to take some of your questions out there about the economy at 9:30 Eastern this morning. That's about two hours from now. E-mail your questions to attack@cnn.com. Andy's well read in. I bet you he can answer every single one of those. Make them as tough as you can.

SERWER: Yes, thanks.

ZAHN: All right.

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