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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (4399)	6/11/1998 3:10:00 PM
From: don pagach	Respond to of 9980

MikeM, Thanks to you we knew this a long time ago, thanks... Thursday June 11, 2:14 pm Eastern Time U.S. profit warnings more numerous than usual By Huw Jones NEW YORK, June 11 (Reuters) - The rate at which U.S. companies are warning Wall Street about their second-quarter earnings is faster and more negative than usual so early in the pre-announcements' season, analysts said. ''We are running with more pre-announcements and they are somewhat more negative than usual,'' said Chuck Hill, director of research at First Call. ''Clearly we are going to exceed last year's number by a good margin. Whether it ends up more negative or not, we don't know.'' First Call has also cut its year-on-year earnings growth forecast for the Standard & Poor's 500 companies to 4.9 percent from a year ago, down from 5.3 percent last week. The forecast is, however, usually overtrimmed by about 1.0 percent to create ''positive surprises'' for the Street, analysts said. As long predicted, the technology sector is among the worst hit with Asia's slowdown partly to blame. The surging dollar is also becoming more of an issue. Sawtek Inc. (SAWS - news) a maker of wireless telecommunications equipment, warned Wednesday its earnings for the quarter ending Sept. 30 will be dented by Asia's crisis eroding its customer base, and the strength of the dollar was affecting the company's ability to compete. Morgan Stanley Dean Witter's analyst Mark Gulley cut his stock rating and earning outlook for blue chip Minnesota Mining & Manufacturing (MMM - news) on Wednesday because of the Scotch tape maker's exposure to the Pacific Rim. ''The company's earnings are being held hostage to the sliding Japanese yen,'' Gulley said in a report. ''It looks like warnings are coming in heavier than we have normally seen, and the majority of the pre-announcements have occured in techs,'' said Joseph Abbott, an analyst at I/B/E/S International. Technology blue chip Hewlett-Packard Co. (HWP - news) last month reported a 13 percent fall in fiscal second-quarter profits due to weakness in Asia. Investor worries about Asia have been thrust to the fore again this week as stocks in the region slide amid currency worries. At 1754 points in early afternoon trading on Thursday, the tech-studded Nasdaq was off 8.5 percent from its record high close of 1917.61, robbing the stock market of crucial leadership. The index is still up 10 percent for the year. The dollar's surge to an eight-year high against the yen deepens concern over U.S. corporate profits by prolonging Asia's turmoil, reducing revenues earned overseas when translated into greenbacks, and harming U.S. competitivity in the region, analysts said. To date, 207 companies have made pre-announcements, and 60 percent are negative, compared with 352 for the whole season last year, First Call said. At this point in the season, negative announcements usually run at the rate of about 53 to 54 percent, and then climb to about 59 to 60 percent by the end of the season. Wall Street is only halfway through its current pre-announcements' season, with the peak usually coming in the final week of June and the first two weeks of July. First Call said tech sector earnings are expected to fall by 4.0 percent in the second quarter from a year ago, still better than the 9.0 percent dip in the first quarter. The ongoing slide in crude prices will also dampen energy sector profits. Retailers continue to be a bright spot, with earnings being revised upwards at a strong pace, Abbott said, adding that this comes as no surprise after Thursday's economic data which showed retail sales in May climbing by a stronger-than-expected 0.9 percent. ?

To: MikeM54321 who wrote (4399)	6/11/1998 3:54:00 PM
From: Sam	Respond to of 9980

Mike and Don, 126 trillion yen is a lot of money, true. But with their birth rate of less than 1.4 and their rapidly aging (already pretty old) society, they will need a lot. And as the yen crashes, it is less and less by the day. So it isn't in equities, they say. But where pray tell is it? In the banks which are on the verge of insolvency? Is it in mattresses (or the equivalent thereof) gathering dust at 1% or less, in a deflating currency no less? Is it in Japanese bonds which essentially have nowhere to go but down in price? Or in US Treasuries? Or perhaps it's buried in the undoubtedly wonderfully green golf courses that were lovingly built in the 80s? How many times is that 126 trillion yen counted? As pension money, as bank deposits, as loans, as foreign reserves, as. . . .? This is more complicated than my poor brain can compute. But if I have even a glimmer of understanding of what has gone on yonder (which I readily admit I may not), their goose is not only cooked, it is being burned to a crisp.

To: MikeM54321 who wrote (4399)	6/11/1998 5:30:00 PM
From: Mark Myword	Respond to of 9980

>> "Some members of the ruling Liberal Democratic Party had urged using public pension funds to prop up stock prices ahead of corporate book-closings at the end of March. Now from the statement above, it sounds like there is no public pension fund money in their equities markets currently. "The Health Ministry intends to submit to the Diet next year a bill to put the study group's proposals into effect in fiscal 2000." Does that mean there currently is public pension money already propping up their equities markets? That Business Week article may have referenced this, but I don't remember. Or, is the Health Ministry simply saying it is okay to invest the money, but let's follow the new rules starting in 2000? <<< Mike / Don - there is already LOTS of the pension money in the market. I don't have a figure , and the authorities wouldn't tell the true number , anyway. No doubt it's a shocker. They have been pumping it in like crazy all winter , to avert a collapse. As to waiting until 2000 , they can't afford to implement restrictions now , as it would crash the market. When 2000 rolls around , they probably won't be able to either. There is most likely a public outcry in Japan, as the public pensions are being used to bail out the big business interests. Can you blame the public? They don't want their funds going into a black hole where it could disappear altogether. I wouldn't either , if I were they. The house of cards is coming unglued day by day....stay tuned.