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Technology Stocks : Semi Equipment Analysis
SOXX 303.84+1.3%Dec 22 4:00 PM EST
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To: robert b furman who wrote (9359)4/9/2003 6:36:12 PM
From: The Ox  Read Replies (1) of 95626
 
The key here is that there is still over capacity in the semi industry. This has kept, and will continue to keep, a lid on earnings within the various semi sectors. We are seeing plenty of cuts but we haven't seen enough businesses merge or go under to help remove the over capacity issue which still looms large in this industry. Couple over capacity with a moderate to very slow general economic setting and corporate earnings should continue to suffer. I don't think that Geopolitical events are the main force driving prices here. I think the poor economic environment is the main influence, especially in this sector. Don't get me wrong as I am very encouraged by, and delighted to see, the fall of the Butcher of Baghdad. However, the US economy usually falls into recession after a war and it's hard to envision a current scenario where this is avoided. Passing additional economic stimulus plans are a step in the right direction but even they will take time to work their way through to the point we can see a positive effect. I understand your enthusiastic view of the day's events but I would temper this with some concern about how fast a recovery could occur in this environment.
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