Current quarter reports have given a better view of what we have to expect till the end of the year. (page 1 of 3)

US STOCKS
General Electric Co (GE, $26.52, CSFB recommendation: Buy) 2Q'02 earnings ($0.44 EPS) were in line with the expectations. During the conference held by the company, GE's management responded to concerns related to GE's accounting system. First, company's CEO affirmed the integrity of GE's financial statements and numbers and said the company supported many of the proposals to address investor confidence in financial reporting. Second, the company said it does not see anything in its current results or orders that would suggest the U.S. or global economies are on the verge of a double dip recession. Finally, the quality of GE's earnings was higher than the first quarter ($0.35 EPS). This conference call should calm investors. As with Boeing, we think that the near future would remain weak as long as the U.S. economic recovery remains slow. Hold

Boeing Co (BA, $39.92, CSFB recommendation: Buy) published a 2Q'02 EPS of $0.96, beating the $0.80 EPS expected. Operating margins were 8.9% vs. 8.2% expected by CSFB. The margins were better than expected across all three major business units (commercial aerospace, military and space unit). Management continues to expect the company to generate total sales of about $54 billion and operating margins of 8.25% (8.2% CSFB's forecast) in 2002 and total sales of $52 billion with same operating margins of 8.25% (7.8% CSFB's forecast). For the following quarter, the market expects an EPS of $0.656, reflecting decreasing new aircraft and satellite orders. Nevertheless we continue to believe that a stock price lower than $40 offers attractive opportunities to build positions for long-term investors. For the short-term stock price should be more volatile as airline fundamentals remain weak, aircraft orders remain low and the risk of labour unrest remains high. CSFB estimates at 75% chance of a strike in late August. Hold

JP Morgan Chase & Co. (JPM, $26.10, CSFB recommendation: Buy) announced a 2Q'02 EPS of $0.50, lower than expected ($0.65). The shortfall comes from trading. For the short-term we believe stock price will remain weak as long as the capital markets do not recover. This recovery does not seem to be expected for 2H'02 anymore, but for 2003. Hold

The Bank of New York Co. Inc. (BK, $29.34, CSFB rating: Buy) made public a $0.50 EPS for the second quarter 2002, in line with the expectations. Compared with JP Morgan Chase & Co. results, BK's earnings are good, given the more challenging market environment and the inclusion of severance charges. Revenues were up 4% due to a 6% increase in securities processing fees. Half the increase was acquisition driven while the other half was organic growth (new business wins, market share gains). Trading profits and service charge income strengthened as well. CSFB estimates EPS of $2.05 and $2.30 for 2002 and 2003 respectively. Hold

Finally, among our recommendation list, the following companies will make public their quarterly results:

- Corning Inc. (GLW): $-0.094 expected EPS vs. $-5.13 y-o-y on July 23rd

- Exxon Mobil Corp. (XOM): $0.463 expected EPS vs. $0.63 y-o-y on July 24th
- American International Group (AIG): $0.85 expected EPS vs. $0.50 y-o-y on July 25th


US Technology Stocks
On a week-on-week basis, the NASDAQ Composite Index lost 3.96% to 1319.15.

The last week has brought a bit more visibility about what to expect for the next six months. Several of the companies doing business in the hardware sector have guided down the expectations, with the announcement, that they don't see a pick up in IT spending for the year 2002.