Recovery is muted in the second half of 2001 and profit surprises remain skewed toward the downside. The indexes do not have a major rebound, but rather continue to consolidate and digest the gains of the late 1990s. Old economy stocks do better than new, but at least two household names in American industry agree to mergers to avoid Chapter 11 filings. Consumer electronics and home improvement retailers become hot stocks in the second half of the year, led by Best Buy, Circuit City, Home Depot and Lowe's. The semiconductor inventory cycle turns up as Federal Reserve easing finally starts to work.
New products associated with wireless data and optics begin an important new growth trend.
Broadcom, National Semiconductor, Applied Materials and Teradyne have major moves. Causing some hostile comments from his brother Jeb, George W. Bush lifts the embargo on Cuba and allows unlimited travel and investment there. This unexpectedly spurs the South Florida economy, and the Bush brothers reconcile at an emotional Thanksgiving celebration. To finance infrastructure projects, Cuba issues government bonds that can be redeemed in local currency or dollars. They become known as Castro convertibles.