Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 314.52

-0.6%

Dec 11 4:00 PM EST

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To: Donald Wennerstrom who wrote (13653)	3/3/2004 10:30:01 AM
From: Jess Beltz	Read Replies (2) of 95573

Well, it looks as if folks are getting a "dip" to buy back in. Chairman Greenspan is notorious for loving to rattle the market's chain with comments that hint about rate changes, and it does indeed take time for monetary policy implementations to translate into real effects in the economy. This might be just what institutions looking to get back in need. Does anybody have any insights into the overall sensitivity to interest rates that the sector has? Obviously, rate hike regimes that last for long periods of time and ultimately slow down the economy substantially will take the top off of profits for everyone. However, by and large the firms in this industry use virtually no debt, and so short-term rate hikes that are aimed at simply maintaining a target growth rate in the economy shouldn't ultimately translate into either lower sales or higher interest expenses. The market's extreme aversion to the possibility of higher rates should shake out the sector as a near-term down draft (begun yesterday and continuing today) without longer-term consequences. Now how extreme the shakeout is is anybody's guess, but I think the prospects for earnings gains in the sector going forward remain largely in tact, and I look for people to take advantage by re-entering relatively soon. Comments welcome. Jess.

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