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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: Douglas V. Fant who wrote (1362)	3/18/1998 7:31:00 PM
From: Nevin S.	Read Replies (1) \| Respond to of 2542

The primary effect of the Asian crisis on U.S. companies is reduced buying by Asians. The secondary effect is the fear that faced with reduced demand overseas, U.S. companies reduce output and demand for products/services declines here at home causing a recession or slower growth. This secondary effect of the Asian crisis is most dangerous because just as upward demand spiral spurs additional growth in the growth phase of an economic cycle, reduced consumption/demand causes economic growth to slow to even lower levels during a downturn. To this point we have not seen much evidence of the latter, however, the secondary effects are bound to be felt somewhere. Demand for PCs is down, as well as demand for hard drives and other products. When Intel or Seagate slow hiring and spending (or even lay off workers) this has to have some impact on our economy. The $64,000 question still remains: has the secondary effect of the Asian crisis been factored into stock prices? Stay tuned, we will see. The S&P and the Dow have gone up dramatically over the last few weeks but a number of sectors haven't participated fully or at all.