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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (43919)	3/17/2001 9:12:46 AM
From: Jerome	Read Replies (1) \| Respond to of 70976

Obviously the pain is not spread around evenly. I was interested in companies that will be reporting decent results, although the expectations have been lowered, the lowered expectations would still be pretty good. So far the following suggestions....Aixtron (ADR available?) Emcore NTAP and JNPR GLW (Corning) denies any slowdown. NVLS and KLAC and LRCX and ATML very modest slowdown and hit on earnings. If once again the focus in tech stocks comes down to earnings these companies should rebound quicker. Keep in mind its a theory, and the recent drop in the Nasdaq has killed a whole lot of theories. Jerome

To: Jacob Snyder who wrote (43919)	3/18/2001 10:59:42 PM
From: Rick Storm	Respond to of 70976

Jacob, what do think of this? March 15, 2001 Fed's Philadelphia Survey Points to Bottom in Manufacturing Sector Gain in new orders, shipments suggest inventory adjustment continuing apace Written by Tony Crescenzi , CEO BondTalk.com The results of the Philadelphia Fed survey are bullish for the economy. While the index suggests that the manufacturing sector continues to contract, it is doing so at a slower rate and there are indications in the survey pointing to the likelihood of positive growth in the coming months. At -23.5 (consensus -25.0), the survey's key index of general business conditions improved from -30.5 in February and -36.8 in January. The upward grind is pointing to a bottoming of activity in the manufacturing sector and the details support this notion. New orders, for example, rose to -3.1 from -19.6. Importantly, unlike the NAPM, the new orders component is not part of the Philadelphia Fed’s overall index. This therefore suggests that the overall index is being skewed lower by negative perceptions about economic conditions rather than actual conditions. It is for this reason that the NAPM includes the new orders component as part of its overall index, giving it a weighting of 30%--the most for any of its subcomponents. New orders, after all, are the backbone of manufacturing activity. As new orders grow, production, shipments, employment, and the workweek inevitably follow suit. That is what makes the jump in the Philadelphia survey's new orders component significant. Outside of that component, there were other notable improvements. Shipments, for example, which are a measure of real economic activity and are an input into GDP (new orders are not, of course) rose sharply in the latest month with the index jumping to -3.6 from -29.0 in February. The relative gain in shipments helped to reduce inventories as the inventory component fell to -22.0 from -6.3 in February. That's the lowest since the last recession, indicating a sharp drop in inventories in March, which will likely lay the groundwork for production increases in the months to come. Another positive sign within the index was the jump in the workweek index. While it stayed in negative territory at -13.2, it gained smartly from -25.7 in February and 0-27.3 in January. Importantly, as an indicator of where area manufacturers see the economy headed next, the index on the 6-month outlook rose to +20.9 from +4.8 in February, putting it at its highest level since last September. The prospects for further gains in the manufacturing sector look better than most perceive. With production already having been slashed drastically in response to the slowing in the economy, and with final sales still growing, the probability of a recovery in production is rising. Indeed, perhaps the biggest reason to believe that manufacturing activity will rebound is the production schedule planned for next quarter by automobile manufacturers. In response to stronger-than-expected sales and a reduction in unwanted inventories, manufacturers have announced increases in production that could add as much as 1.5 percentage points to GDP in the next quarter. Since the automobile sector accounts for roughly 10% of all U.S. industrial production, the rise will have a significant impact on manufacturing data. And since manufacturing data dominates the economic calendar, perceptions about the economy will likely begin to change, perhaps substantially. Manufacturing has already started to gain in the steel sector where production has risen seven weeks straight. As a result of the gains, the capacity utilization rate in the steel sector has risen to 81.4% from a low of 63.6% at the end of 2000. Other sectors of the manufacturing sector are likely to raise production as production cutbacks and relatively steady levels of final demand combine to reduce unwanted inventory levels. As Federal Reserve Chairman Alan Greenspan recently said, the adjustment phase is occurring more swiftly than in the past: “ New technologies for supply-chain management and flexible manufacturing imply that businesses can perceive imbalances in inventories at a very early stage--virtually in real time--and can cut production promptly in response to the developing signs of unintended inventory building.” But Greenspan noted that the rapidity of the adjustment phase has benefits: “The hastening of the adjustment to emerging imbalances is generally beneficial. It means that those imbalances are not allowed to build until they require very large corrections.” That is why the recovery in many of the Philadelphia survey’s key components is so significant; it is evidence that the inventory adjustment process continues to advance at a rapid rate. By next quarter, this should become abundantly clear.