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September 3, 2003
Issue 4

 In This Edition

  • Economic Highlights
  • A Technology Update - Should You Get Blue?
  • Market Highlights

 Economic Highlights

Source – Bloomberg and BCA

US Manufacturing Activity

The August US ISM survey demonstrated broad-based strength, with a rebound in output growth. Although the manufacturing survey is still lagging, a turnaround was evident in new orders, with particular strength in the service sector. Monetary and fiscal policies are accommodative, posing fewer obstacles to stronger production growth ahead.

Global Economic Growth
With the exception of employment, US growth has been solid in recent months. A survey of 22 established international markets also reflects that global policymakers are focused on stimulating growth and that business investment is beginning to revive. Weakness in capital spending has been a drag on global growth over the past two years and a rebound is critical for sustaining the budding economic upturn. In addition to the upturn in US capital spending, Japanese capital spending is also increasing. Europe remains a weak spot, but the capital spending outlook is encouraging with business confidence levels and corporate profits improving.

US Corporate Earnings
A rebound in consumption, cost cutting, and a lack of new job creation have contributed to the recent upturn in corporate earnings. Forward earnings and revisions rose again in the past month and should climb further given the bullish readings from the Conference Board’s Leading Economic Indicators report.

 Should You Get Blue?

When it comes to technology, people usually fall into three different camps. First, there are those who avoid anything that has a circuit. The second group waits and adopts specific technology only if it will make their lives easier. And then there is the last group, comprised of people like me, who love anything new, cutting edge and shiny. So as all these new products with Bluetooth have been hitting the market, I find myself itching to get my hands on them.

For those readers in groups 1 & 2 worried that Bluetooth is a new dental ailment, please let me explain. A few years ago in the early dawn of the wireless revolution, a bunch of companies started to work on a low-power, low-cost wireless way of networking gadgets known as Bluetooth. Unlike it’s bigger cousin Wi-Fi, Bluetooth was not meant to create large wireless networks or LANs. Rather, with its shorter range (30ft vs 150+ft) and slower transfer rate (720 Kbps vs 11 or even 54 Mbps) it was designed to connect small devices such as cell phones, PDAs, and printers. This creates what techies like to call a PAN ( personal-area network).
In other words, Bluetooth replaces usb and serial cables just as Wi-Fi replaces Ethernet wired networks.

Through a combination of software and hardware like CSR's Bluecore radio chip ( found in nearly 60% of bluetooth products), the device detects and establishes short-term pairings with other enabled devices within range. These pairings are quickly and easily established but once out of range, the pairing is terminated.

So what can Bluetooth enabled technology do in the real world? And who are the major tech companies involved? Here are just a few of the applications companies are currently developing:

Automobiles with integrated or aftermarket installed Bluetooth technology allow cell phone calls with a Bluetooth phone without taking the phone out of a purse, bag or pocket. The car and phone automatically communicate with each other once they are within range. When connected they synchronize phone and address books allowing calls to be made from the steering wheel or by voice activation. Currently BMW, Daimler-Chysler, and Audi among others are deploying this ability in their cars. While Nokia, Motorola, and other cell phone makers are delivering Bluetooth car kits and phones. In the near future, car navigation systems will also sync with the addresses from a phone or PDA in order to direct drivers to their destination.

Computers with Bluetooth can wirelessly sync calendars, email and data with PDAs or cell phones without searching for the correct wires. Microsoft, Apple and Palm have in the last year made Bluetooth support native in their operating systems allowing easy synchronization between PCs and PDAs. The technology has also allowed the development of wireless keyboards and mice which free the clutter of wires from the desktop.

In the cell phone industry, Bluetooth is removing the wires and changing the way we use them. Enabled phones can serve as wireless modems for your laptop or PDA allowing web surfing from the ocean to the mountains. Headsets with Bluetooth capabilities allow communication with the phone without the annoying headphone/speaker wire dangling. And just as with PDAs, these new phones can act as digital assistants and sync wirelessly with your PC.

In the very near future expect Bluetooth enabled phones and PDAs to pay bills at restaurants, purchases at stores and vending machines from a digital wallet. In the same way, Bluetooth capable cars will transmit payment to tollbooths without the need to stop. In the kitchen, Bluetooth appliances will allow control and orchestration of meals in the kitchen with appliances communicating with each other instructing themselves on when to turn on and off. And devices will be able to tell other devices how to customize themselves to your personal preferences.

This is just a small sample of what is in store for this technology. For more information click on one of the links or visit www.bluetooth.com.

 Market Highlights

  8/29/03 7/31/03 6/30/03 3/31/03 12/31/02
DJIA US 9415.82 9271.76 8985.44 7992.13 8341.63
S&P 500 US 1008.01 984.03 974.5 848.18 879.82
Nasdaq US 1810.45 1686.61 1622.80 1341.17 1335.51
EAFE Int'l Equity 1072.14 1057.97 1025.74 868.55 952.65
5 Yr Treasury 3.494 3.462 2.41 2.71 2.74
5 Yr AAA Muni 2.820 2.730 2.17 2.50 2.59
10 Yr Treasury 4.427 4.547 3.52 3.80 3.82
10 Yr AAA Muni 4.080 4.010 3.30 3.75 3.72
30 Yr Treasury 5.190 5.431 4.56 4.82 4.77
30 Yr AAA Muni 4.890 4.880 4.50 4.66 4.69
EUR Currency 1.0908 1.1264 1.1425 1.0899 1.0488
JPY Currency 116.65 118.88 120.06 118.67 118.69
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