Glad you like the tables that are posted from time to time and find them useful. The charts that are posted by you and many others are very appreciated by me and give another way to look at what is happening overall and in the semi sectors we concentrate on.
The tables and charts show that the past years starting in 07 went into a deep depression that started recovering late 08 and early 09. The SOX hit bottom in Nov 08(SPX in Mar 09) and Bookings/Billings Mar/Apr 09. Bookings and Billings are still on an uptrend, but the SOX has been in a "plateau" mode since the beginning of the year while earnings estimates have continued to increase week after week for the SOX stocks. Due to the long period of under investment during the depression phase, demand continues strong for semi equipment at the moment with many reasons sited for a continuation of the upward investment trend.
That is a very condensed description of the recent action. Lately, the world economy everywhere has been of concern. This has been dragging down the major averages(and the SOX with it).
I thought the Briefing.com synopsis of the present world and market situation was very good today so I am posting it below.
<<More to the Story
Last Update: 21-May-10 09:00 ET
The stock market got caught Thursday in a maelstrom of uncertainty about the growth outlook and had the losses to show for it. The S&P 500 dropped 3.9%, leaving it more than 10% below its closing high on April 23. Accordingly, one will now hear talk that the U.S. market has experienced a "correction," which is the first 10%+ pullback since the recovery rally began in March 2009.
Yesterday was the second straight session where the euro rallied (+0.8%) and the U.S. stock market acted as if it could care less. The indifferent response raised new questions about the catalyst behind the recent losses. In particular, it spoke to the idea that the U.S. market is worried about more than just Europe.
Enter China, which is headed for a growth slowdown of its own and has a stock market in the Shanghai Composite that has fallen as much as 27% from the high it hit last August. The Shanghai Composite, therefore, has graduated from a correction to a bear market based on unofficial definitions that label the former as a 10% pullback from a high and the latter as a 20% pullback. As an aside, the Shanghai Composite rose 1.1% in Friday's trading.
In effect, then, the U.S. market is being sandwiched by the looming slowdown in Europe and China as that is stirring concerns about the growth outlook for the U.S. economy.
With the uncertainty about the outlook, participants are leaving little to chance at the moment and are simply deleveraging from risk trades and seeking the safety of cash, U.S. government bonds, and the German bund for the most part. In sum, a newfound premium has been placed on the capital preservation trade and understandably so.
We are seeing it again this morning, with the S&P futures indicating a lower start and risk-free rates in the U.S. and Germany coming down again. After dropping 16 bps Thursday, the yield on the 10-year note has fallen another 8 bps this morning to 3.13%. The German bund, meanwhile, has seen its yield drop 5 bps to 2.63%. At the end of April, those benchmark yields were 3.66% and 3.01%, respectively.
Strikingly, the S&P futures have been on the defensive for most of the morning despite news that the German parliament voted to approve Germany's portion of the nearly $1 trillion bailout plan.
This is yet another indication that the U.S. market has more on its mind than just Europe. On that note, the U.S. Senate passed its version of the financial regulation bill. It will head to the House for reconciliation, yet the die has been cast and it is clear that tougher regulations that will crimp profit potential for the financial sector are on the way.
There isn't any economic data this morning, so it will be a free-float day for the stock market, which should again see some heavy trading due in part to this being a monthly options expiration day.
The current indication suggests the S&P 500 will begin the session with a decline of about 0.7%, which would take it through the "flash crash" low of 1065.79 on May 6.
--Patrick J. O'Hare, Briefing.com>>
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