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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Alastair McIntosh who wrote (8006)	1/10/2003 9:31:33 AM
From: Return to Sender	Respond to of 95471

8:56AM S&P futures vs fair value: -10.3. Nasdaq futures vs fair value: -17.0. : Futures indications continue to slip following the release of the weaker-than-expected Dec. employment report... Crude oil's rise due, in part, to ongoing geopolitical tensions, highlighted this morning by news that North Korea has pulled out of the Nuclear Nonproliferation Treaty, has acted as a restraining influence. 8:33AM Employment report weaker than expected : Payrolls fell 101K vs the +20K consensus, led by a sharp 104K decline in retail jobs - not that surprising given the pessimism among retailers this Christmas (note that this will be offset somewhat by fewer layoffs in January which will boost adjusted numbers). The workweek fell to 34.1 hours from 34.2 in November, also weaker than expected. The unemployment rate and earnings were in line with consensus at 6.0% and +0.3%. Overall, this report is clearly weaker than expected, though as we noted before the report, there has been much volatility in this series through 2002 even though the trend in the job market was very steady - in fact it was and is almost dead flat. We seriously doubt that the employment picture is weakening further - it's more likely that this is just a continuation of monthly volatility without a real change in trend. 8:01AM Celestica cut to Reduce from Hold at UBS; target $14 (CLS) 17.43: Firm sees downside risk in the stock and expects that co's concentration in high-end telecom and server mkts will cause CLS to underperform peers with more diversified exposures, such as Flextronics. Firm does not believe 20% rally since Dec 31 is supported by near-term fundamentals. 9:19AM Employment in Perspective : It is hard to stomach the amazing lack of perspective you heard from the talking heads on TV after this morning's Employment Report. Yes, the report was clearly weaker than expected - payrolls fell 101K and the workweek fell to 34.1 hours. Neither is good news, and whenever you get a report like this, you have to acknowledge a somewhat greater risk of additional economic weakness. But at the same time, the Employment Report has a history of forecasting 20 turns in the economy for every 1 that occurs, so a little perspective is in order. It is of course the job of anyone appearing on TV to tell a story, and tell stories they do. And we will almost certainly be pilloried as stock market touters for even suggesting that today's report really doesn't tell us anything new. That, however, is most likely the truth of the matter. Note that we didn't say that this report didn't tell us anything - there was indeed plenty of information to digest. We said that it didn't tell us anything new. For the year through November, payrolls had been down 80K total with today's revisions. Given a labor force of over 140 mln, this is not a downward trend - it is flat. Today's 101K decline may seem like a sudden acceleration to the downside, but that's unlikely. Though jobless claims have been volatile, they have generally been holding near 400K, and have not suggested a sudden deterioration in employment conditions. That information alongside the fact that the December payrolls weakness was centered entirely in retail (-104K) pretty much tells the story. With retailers anticipating a lousy holiday season, they didn't ramp hiring nearly as much as the seasonal adjustment factors expected (though they did ramp hiring in absolute terms - retail payrolls were up 162K before seasonal adjustment). This is consistent with claims - they don't show any pick-up in layoffs because the weakness in today's report was due to less hiring, not more layoffs. This is also important as it hints that January payrolls will show significant improvement. When retailers don't hire as much in December, they don't fire as much in January, and seasonal adjustments turn this smaller decline into an increase. We saw this last year as well, when retail payrolls plunged 131K in December but then jumped 78K in January. A similar result is likely this year, with January showing improvement, though not a complete offset to December. Where does this leave us? Right back where we started. We are still in a jobless recovery. There is no denying that today's report was weaker than expected, and that the past two months' payroll declines are a disappointment to anyone hoping for a quick turn in the labor market. But given the flat trend in claims and the fact that much of the Nov/Dec weakness has come in the retail sector, we suspect that this is a short-term retail story rather than a trend change. The job market is still flat, productivity is strong, and the economy chugs along at a frustratingly modest pace. - Greg Jones, Briefing.com 9:03AM Page One - Ahead of the Open: Stocks were indicated to open higher on continued momentum from yesterday. Then at 8:30 ET, a disappointing December employment knocked the market back. It will be a down open. December non-farm payroll declined a large 101,000. That was a complete surprise, as a slight increase was expected, and there was talk of an upside surprise. The November decline was also revised lower to -88,000 from an originally reported -40,000. The Unemployment Rate was unchanged at 6.0%, but that statistic doesn't have market impact. The report is simply bad for the market and raises serious questions about the strength of the economy heading into this new year. This report is worse than other economic data, and indicates that business remain extremely reluctant to hire. It is not a good report, even though it is not clear that a weaker trend has developed. finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+CLS+INTC+KLAC+LLTC+LSCC+LSI+MOT+MU+MXIM+NSM+NVLS+TER+TXN+XLNX&d=t Alastair and AD that's for the semiconductor news pieces! RtS