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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (26717)	9/7/1998 7:21:00 AM
From: flickerful	Read Replies (1) \| Respond to of 94695

Japan Inc seen bracing for 25% drop in H1 profit By Miki Shimogori TOKYO, Sept 7 (Reuters) - Japan Inc's mighty profits may plunge 25 percent between April and September -- their biggest interim drop in six years -- and companies face a double-digit drop in profits for all of 1998/99, analysts said on Monday. Current profits at major Japanese firms, which are being haunted by the spectre of deflation, are expected to fall a combined 25.4 percent year-on-year in the first half of the business year, Nomura Securities Co Ltd said. ''It's hard to find any bright spots on the corporate earnings front,'' said Takashi Ito, a strategist at Nomura. ''It seems that a resumption of exports from Asia played a big part in hurting corporate profits here.'' Nomura and other research institutes rushed to revise down earlier corporate profit estimates in the face of worse-than-expected sales slumps at home and in Asia. They said companies would also be hit by an unexpectedly rapid fall in worldwide prices for goods such as steel and semiconductors caused by cheap Asian exports. The stagnant business environment has already forced several big-name companies, notably electronics giant Hitachi Ltd to issue loss warnings for the full year. Hitachi said on Thursday it would post a group net loss of 250 billion yen ($1.89 billion) in 1998/99 -- an announcement that sent shivers through Tokyo markets by raising the prospect of more downward revisions from other manufacturers. The ''Hitachi shock'' was quickly followed by announcements from Japan's top six steel makers on Friday, which all said they would fall into the red on a group net basis for 1998/99. Nomura said the forecast 25.4 percent year-on-year drop in current profits would be the biggest interim drop in profits by Japanese firms since the first half of 1992/93. Other research firms predicted a similar drop. Nomura said it now predicted a 11.2 percent drop in current profits, which are pretax and include gains or losses from non-operating activities, for the full year -- revising down a June estimate of a 6.6 percent drop. The brokerage's report was based on a survey of 374 major Japanese companies and did not include financial institutions. ''We've never expected profits in the electronics sector would fall so far,'' Nomura's Ito said. ''We had thought chip prices would remain weak, but that gains such as from solid U.S. sales on the back of the weak yen would trim the loss.'' Ito said Sony Corp and Matsushita Electric Industrial Co Ltd appeared to have cut sales prices in the United States to compete with cheap exports from Korean producers. The price cuts were in turn eroding the benefits from a weak yen, which usually inflated their export returns. Nomura said Japanese companies might enjoy a 4.3 percent rise in current profits in the second half, owing to the effects of the introduction of new car models and an expected recovery in personal computer output. But such a rise was not assured, it said. ''The recent firm trend in the yen would not affect our profit estimates, we are more worried about the damage from possible declines in the global stock market,'' Nomura said. Ito said a further dive in U.S. stocks would dampen U.S. consumers' appetite for Japanese cars and electronics products, which are expected to play a role as a pillar for corporate profits in the second half. Nomura's profit estimates were based on an average dollar/yen rate of 133.9 yen for 1998/99. The dollar was at just below 132 yen in late Asian trade on Monday. Nomura said it expected corporate current profit to grow 11.1 percent next business year. ($1=132 yen)

To: William H Huebl who wrote (26717)	9/7/1998 8:30:00 AM
From: donald sew	Read Replies (3) \| Respond to of 94695

Bill, >>>>>>> Globex is now up the equivalent of 150 DOW points. <<<<<<<<< My original position for how TUE would go was that it could go either way, then after seeing Globex last night, I changed my position and felt that TUE would be up strong. Then I did the following research and now I am back to - I DONT HAVE A CLUE. GGGGGGGGGGGGGGGGGGG Its like the market - not knowing which way to go. I am leaning towards just tomorrow, and maybe into WED the market could be up, but then the downswing could start near WED, or as early as tomorrow afternoon. ggggggggggggggggggggggggggggggggg >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Reply # of 51700 INDEX UPDATE -------------------- With Steve's frequent posts concerning international markets, I thought it was time to check them out and discovered some interesting things which can effect the U.S. market in the next few days. For my research I used the following: EWU - ENGLAND EWQ - FRANCE EWG - GERMANY EWH - HONG KONG EWJ,JPN - JAPAN EWM - MALAYSIA (COULD NOT FIND AN INDEX FOR KOREA IN MY CHARTS) HK, JAPAN, MALAYSIA are now all in the the OVERBOUGHT region and are CLASS SELLS to be obtained tonight. I have also noticed that all 3 have now broken the trendline to the upside, which is giving a good signal that they may have bottomed. They should either flatten out or start coming back down as early as tonight. It is possible that they could do a double bottom and the time frame would be about 4-6 days, which would not help our market. Now heres the flip side of this, assuming that I am correct that they have bottomed, - when they start moving back up, which could be as soon as next week, there could be an exodus of funds from the U.S. bond and stock market, which wont help us either. Sure many may feel that with/if Asia improving it would help our markets, but I feel that the initial reaction may actually help push our markets down further for the short-term (1-2 weeks). Since these Asian markets broke the trendline to the upside there may not be a retest of the lows, if the bottom was formed, and may take a "V" shape which could turn out to be a strong ralley, which initially may pull the funds out faster from the U.S.markets. Germany is near a CLASS SELL and could be a CLASS 1 SELL as soon as tomorrow with the reversal to the downside on WED, or as early as tomorrow. England and France are just approaching the overbought region so they still have about 2-3 more days of upside, unless they turn down here. These European markets have broken the lower trendline to the downside, so the probability is that there will be at least a retest of the lows, which should happen within 6-10 days. With Europe moving back down shortly, such will also not help the U.S.Market. As I previously mentioned, wouldnt it be a real kicker - the Asian markets are up big, but the U.S. market is closed. Then tonight the Asian markets could be down or flat and the the optimism of the strong Asian rebound last night will be minimized or even completely forgotten. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<