QUANTUM Message Board - Msg: 3030987

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Technology Stocks : QUANTUM

QNTM 7.230

-11.1%

2:33 PM EST

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To: Z Analyzer who wrote (6856)	12/23/1997 12:50:00 PM
From: Rob S.	Read Replies (1) of 9124

It looks like the Asian situation is unravelling as one might expect: lots of bankruptcies and further turmoil before things improve. This may continue to be unsettling to the markets in the weeks to come. Once the institutional investors get back in the game after their vacation it will be interesting to see which way the market turns. In something like 17 out of the past 20 years the market has been up around the holiday season - I guess spirits rise enough to take the market with it (either that or investors are hitting the puch too much. When the market has failed to rally even modestly during this period it has not done well in the following quarter. On the other side of the coin, the US and European economies are doing well, with low inflation and sustainable growth rates. Commodity prices are at the lowest inflation adjusted level in 11 years. And the prospects for level or lower prices in the coming months looks promising. However, while this "dis-inflation" will hold down interest rates that can compete with equity markets and will help to keep sales robust, it will narrow profit margins for many US and foreign companies, including HDD mfgs. The HDD cos. have more to worry about, the Asian picture is number 2 or 4 on their list of concerns according to the CEO of WDC. The rapid errosion in HDD prices has not abated and inventory levels appear to be remaining higher than is neccessary to stabilize prices or drive them up. PC and add-on sales are the big unknown at this point. Some retailers are reporting less than expected sales and reports from the much larger and more important business segment are not yet in to my knowledge. If PC related sales are good, this could signal a shortening of the problem and an upturn in the HDD stocks. If these sales are poor, the HDD sector could continue a slide down IMO.

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