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Technology Stocks : Semi Equipment Analysis
SOXX 285.23-3.7%Dec 17 4:00 PM EST
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To: Sam who wrote (48039)6/2/2010 4:16:15 PM
From: marc ultra2 Recommendations  Read Replies (2) of 95597
 
<but the PIIG crisis and--perhaps more important but related--slowing growth in China has led me to question that view. Not reject it, but doubts are growing.

Exports are about 10% US GDP. Europe is about 20% of that so if Europe was to fall off the face of the Earth it would be a 2% hit on US GDP. That would be significant but Europe is not falling off the face of the Earth. In fact the major economies of Germany, France and the UK are all growing decently. The PIIGS are a minuscule unimportant piece of the puzzle. In contrast to 2008 US banks are extremely well capitalized and they're not holding a lot of PIIG paper so we also don't have the threat of bank contagion causing a big problem in the US that we had in 2008

As to China it seems like a week ago everyone was fretting that it was growing too fast and they'd have to slam on the brakes. Now we get a slight moderation that people were hoping for and suddenly we're supposed to be concerned that China will grow at 8% instead of 10% or whatever with that moderation greatly improving chances of a relatively soft landing. Is there something in any of those numbers that sound like a major threat to the semi cycle any time soon? In terms of consumers China is largely still a market of dumb handsets and is just starting the transition to smart phones. Again what is in this that is not bullish for the chip cycle?
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