<<Declines in large cap semi equips . . .- were generally greater than smaller>>
As far as I can tell, this reflects the general market. The very large cap and gilt-edge stocks, which have been propped up to incredible multiples, are getting hit the hardest. They were overpriced from a value point-of-view relative to smaller caps, due to influx of foreign money. I'm following Coke and a couple of banks - Coke took a hit from 85 to 75 in the past week or two, and I wouldn't be surprised to see it slow down to 55 right soon. (Drive 55 - Speed kills!)
In other words, to a large degree this is the "stealth correction" popping up on the radar screen.
<<Generally, you would expect some kind of rally from the extreme negative tick figure>>
I personally don't hold any hope at all for the semi equipment sector in the near term, and very little in the mid-term. Korea officially announced that it is in a recession this morning and expects a 7% (or something like that) decline in the economy for the 2d half of '98. The Nikkei crossed under 14,000 last night -- Japan, rather than heading for recovery, has another round of bad news coming. Europe, which has been cruising along, is feeling the pinch now, due to heavy German lending in Russia.
One nice thing - commodity prices are plummeting also, so the really distressed third-world countries (or emerging manufacturing nations, like Korea) should be able to get raw materials. I've never seen deflation before, but it looks like it may actually be occurring. |
