Newsletter

May 16, 2001

Volume IV, Issue 44

Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:

Market Comment

The NASDAQ was up nicely today on the heels of yesterday's 1/2 point interest rate cut by the Federal Reserve. As far as the market is concerned, the 1/2 point cut was not a significant event.

More significant was the FED's statement concerning their posture going forward. Any hint the FED was neutral on the economy or further expansion of the Money Supply was eradicated in their press release.

Many economists have been highly critical of the FED's failure to intervene earlier to stem the economic downward momentum. However, the FED is clearly prepared to take further agressive steps to prevent recession. Greenspan is rapidly making up for lost time. Here is an excerpt from yesterday's press release which demonstrates the FED's agressive posture towards doing its part to affect an economic upturn:

A significant reduction in excess inventories seems well advanced. Consumption and housing expenditures have held up reasonably well, though activity in these areas has flattened recently. Investment in capital equipment, however, has continued to decline. The erosion in current and prospective profitability, in combination with considerable uncertainty about the business outlook, seems likely to hold down capital spending going forward. This potential restraint, together with the possible effects of earlier reductions in equity wealth on consumption and the risk of slower growth abroad, continues to weigh on the economy.

The FED is not convinced the economy is getting healthier and is therefore prepared to take further steps to stimulate the resurgence. This is the best possible scenario for the stock market.

We believe the market is fairly priced today. Stocks will go up and down from here based on investor's perceptions of the future prospects for companies. In today's market environment stocks are going up when companies exceed earnings expectations, and going down on short falls.

We published an edition of the OTC Journal on March 17th that has proved to be quite prophetic. In the edition we wrote about the value in
Apple Computer (NASDAQ: AAPL) at $19.50, and we wrote about the market. Here were our thoughts at the time: (Click Here if you wish to review the edition).

There is a very simple way to view this market. Think of the NASDAQ over the past twelve months like this:

The drop from 5,000 to 3,000 eliminated the irrational exuberance.
The drop from 3,000 to 2,000 correctly reflects slowing economic conditions.
The drop below 2,000 is irrational pessimism about the future state of the economy and purely emotional.

Thinking along these lines, any continuation of the NASDAQ's drop below 2,000 represents a chance to make profits on the way back up. The further it falls, the more you will make.

If you have your entire wealth in the stock market right now with no chance of ever having cash to work with you will have a long wait, but it will come back. It might take several years for the NASDAQ to see 5,000 again, but it will get there.

We have now reached a rational point in the market. Technology stocks have a great deal of upside, but they will trade up and down on perception of an improving business environment.

The FED is as cooperative as possible, even though they are a little late to the game. The next positive governmental step would be a tax cut which would provide further economic stimulus. When there are signs of the next economic upturn, the Bull Market will come roaring back.

XML Global (OTC BB: XMLG) Teams up with IBM

In order for a small company like XML Global to advance, large partners are required. Today, after the market closed, XML Global announced it has formed an alliance with IBM, and will participate in IBM's jStart program. This is a major milestone for the company.

Small companies with proprietary technology require large partners to acquire market share. IBM is one of the best names to partner with in the ecommerce world. XML has been described as the Holy Grail of ecommerce. Many software developers including Microsoft believe XML will dominate as the preferred common language in the new age of computer communication as older legacy systems are replaced.

XML Global is positioned with proprietary software tools for this next generation, and they now have IBM for a partner. This is a strong endorsement of the technology.

We are becoming more convinced this stock is destined for $2 later this year, 243% above today's closing price. Look for a nice surge in the stock on the open, and more exciting news is just around the corner.

Here is the complete text of the news release for your review:

Wednesday May 16, 4:01 pm Eastern Time
Press Release
SOURCE: XML Global Technologies, Inc.

XML Global Technologies Works with IBM's jStart Program

NEW YORK, NY, May 16 /PRNewswire/ - XML Global Technologies, Inc. (OTC BB: XMLG), a product focused, XML powered, e-business platform company, announced today that they will work with IBM and their jStart program, designed to drive customer adoption of emerging technologies. Under the terms of the relationship, XML Global and the IBM jStart team will work closely using leading edge technologies to deliver the high-quality Web enabled business solutions.

A particular focus of the relationship will be to extend XML Global's proven XML data integration platform, GoXML Foundation, within the Universal Description Discovery and Integration (UDDI) environment, an e-Business standards initiative co-sponsored by IBM. By so doing, XML Global will be able to offer a suite of Web services enabling tools that will free clients from having to invent their own protocols for inter-process communication and partner interaction while at the same time allowing them to connect their back end systems to the GoXML platform.

XML Global and IBM both embrace the complementary coexistence of ebXML and UDDI and together have played leading roles with respect to the interoperability of these two specifications. XML Global understands the importance of open infrastructure tools that will allow companies to find products and services electronically and then automate the processing of business transactions. By working with IBM's jStart program, and building on IBM's framework in this area, XML Global will be able to offer the most technologically advanced solutions to their clients.

XML Global will collaborate with the IBM jStart team to feed its dynamic e-Business efforts with direct access to early tooling and innovations such as IBM's Web Services Toolkit, UDDI for Java and WebSphere. IBM also will provide the infrastructure needed to develop these emerging technologies into compelling business solutions for XML Global's growing customer base.

``XML Global has embraced UDDI and Web services technologies as core components of our Dynamic e-Business strategy,'' states Gordon Ebanks, XML Global's Executive Vice President of Sales and Marketing. ``We have chosen to work with IBM because of their leadership and commitment in these areas. Working with IBM, XML Global will be able to complement UDDI technology with our patented XML technology and ebXML expertise to develop the most advanced web enabled business solutions on the market.''

For more information on XML Global and the IBM jStart program please visit http://www-4.ibm.com/software/ebusiness/jstart/xmlglobal.html

About XML Global Technologies, Inc.
XML Global Technologies, Inc. provides an XML-based data integration platform, GoXML(TM) Foundation, and an application-to-application integration platform, GoXML(TM) Central. These products form a core framework for additional expansion as the enterprise builds or enhances its infrastructure.

GoXML(TM) Foundation includes: Searching: GoXML(TM) Search, a scalable, context-based XML search engine that delivers precise results.

Transformation: GoXML(TM) Transform, a transformation engine for dynamic exchange of XML, EDI, and other data formats.

Storage: GoXML(TM) DB, a native XML database with a high performance query engine.

GoXML(TM) Central is an XML platform for global participation in electronic marketplaces. It uses ebXML methodologies and is designed for interoperability, allowing businesses to find each other, form trading partner agreements, and conduct business electronically. XML Global empowers its clients to build and manage technology platforms for web services, net markets and e-business initiatives. For more information please visit our website at www.xmlglobal.com or call the numbers below.

Forward Looking Statements
All statements are based on XML Global Technologies, Inc.'s current knowledge and specific assumptions with respect to future business decisions. The actual results of XML Global Technologies, Inc. may differ materially from those indicated by these forward looking statements as a result of various important factors, including, but not limited to, those discussed in the Risk Factors section of XML Global Technologies' recent registration document, SB-2/A, which is on file with the Securities and Exchange Commission.
SOURCE: XML Global Technologies, Inc.

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