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

To: Gottfried who wrote (25903)	11/1/1998 8:02:00 PM
From: blake_paterson	Read Replies (1) \| Respond to of 70976

Gottfried: Thanks for the heads up. Yardeni's two positions illustrate the dichotomy... According to the Yahoo scenario, one could speculate that the semi-equip rally will fizzle in the next few months in this ambience of an earnings recession (US) and continued semi capex freezes. Sorry to sound like a broken, scratched record (can you tell my age now?), but as I try and put the semiequip numbers together w/ semi and semiequip forecasts along with world economic forecasts, I don't come up smiling. My bearish antennae picked up these 3 areas of risk which merit further attention this week: 1. Japan's earning season is (of course) grim and downward pressure anticipated (I heard one guy last week talking about Nikkei 10,000!!!): dailynews.yahoo.com 2. Brasil reform approval (the country is a more of a true confederation of states than the US) is not necessarily in the bag: dailynews.yahoo.com 3. Some Taiwan firms are beginning to appear overleveraged: dailynews.yahoo.com My big fear is that the fed will not follow thru, thus popping the bubble. Why? From Vectorvest: <<23757 And now some speculation that the Fed might not cut rates (from Vectorvest) on Nov 17: " I'm not an economist, but there are certain things that I watch to sense the pulse of the economy. Three of them are auto sales, housing starts and new orders for durable goods. Auto sales and new housing starts are the big engines that drive the economy. New factory orders for durable goods is an indication of future manufacturing activity. The economy will be OK as long as these factors hold up. Auto sales have been robust and are expected to hit an annulized rate of 16 million in October. When sales of cars and trucks are robust, so are the workers jobs. These people stimulate the economy by purchasing all manner of goods and services. New housing starts hit record highs back in June and July, but have slipped since then. Nevertheless, the time involved to build and furnish new homes means that the economy will remain solid for many months to come. New orders for durable goods rose smartly in September propelled by strong demand for electronic equipment, household appliances and industrial machinery. This means that our factories will be busy for a while yet. The good news is that Gross Domestic Product grew at a healthy 3.3% pace in the last quarter. The bad news is that a solid econony may cause Dr. Alan Greenspan, Head of the Federal Reserve Board, to defer lowering interest rates again as has been anticipated. So what will it be at the next meeting of the Federal Open Market Committee...Trick or Treat? >> How does this tie into semi-equips? I guess that Zeev Head said it best today: <<short of the US market going into a deep recession (and count on Greenspan to do whatever is needed to prevent that), I would use retrenchments to load up. If you can get into AMAT and NVLS in the high 20' (which I still think is feasible), I think it is a good deal. I would also look at some secondary players like MASK and DPMI. I also like VECO (and at current prices, 27 to 30 I think it is a good deal). There are plenty of other companies that have been decimated and are still cheap, like CYMI (around 10 or so), WFR (special case with coming dilution, but still cheap if you can get in below 6)...... Actually, right now, I prefer some of the chips on the equipment companies, and I like a little gamble like Rambus, it seems that their architecture is being pushed hard by Intel, and that will mean a lot of bottom line money for them.>> Regards, BP