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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 164.06+3.0%11:42 AM EST
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To: Proud_Infidel who wrote (9677)4/12/2001 5:05:04 PM
From: WTSherman  Read Replies (1) of 10921
 
Contrary to the BS that alot of pro business economists are spouting, this is a demand driven slowdown/recession. What's happening in the semi-equip area is a triple whammy, consisting of normal cyclicality of semi's compounded by the disintegration of hundreds of start-up tech co's, ClEC's, etc., that were buying HUGE amounts of equipment that was loaded with silicon(note the demand for communications equipment, networking equipment and webserv related software and equipment was vastly out of proportion to the demand increase for the services that these company's offer) and all of that overlaid by a general ecomonic slowdown.

I don't believe its at all clear where all this leads. If the next 3-4 months see a serious increase in unemployment it will lead to a major cutback in consumer spending and a serious recession will ensue during the second half of this year. If, however, layoffs don't cascade and economic activity stabilizes enough for company's to hold onto their works and consumers keep their confidence then things will start to brighten during the second half.

Until the overall course of the U.S. and world economy is clearer I don't believe that any tech rally can sustain itself. The market will rally in anticipation of a turn in the economy and if news comes in confirming that speculation it will continue to go up. However, if the news that comes in does not confirm it the rally will fold and things will go right back down to where they were or lower.

My guess is that the the sharp recession is more likely than anything else.
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