Does anyone have a sense as to why the telecom equipment makers have been substantially beating the Nasdaq lately? Lu gained almost 7% yesterday, JDSU over 5% and NOK and GLW over 3%. Friday they were all well in the black while the market indices were all red. Is someone projecting a significant upturn in telecom capital expenditures?
I think, truth be known, the pro's in the market are using their volume strength to play us little guys (assuming we will trade) like violins. Every time they can move GLW and others, up or down, they make money and most of the small players lose over time. Nice for them, bad for us.
Things got started with 3 fast contract wins by NT in china, dominican rep. & 1 Billion from Verizon. NT was large customer of JDSU & other telecoms & it's the spending trickle down theory, saw where LU will also benefit. Cisco says sales strong in Aug (a first for conservative hand wringing John Chambers-a Marty Zweig clone) all this puts a positive sipn on tech/telecom & future spending & a true sense for the first time the worst is over & turn around has begun. Of course Corning to be helped by the above also!
My simple reply is that GOVNET, RBOC Initiatives will be announced this Fall and speculators are anticipating the value of the awards to the Telecomms; GLW follows the wake as it will probably be the fiber supplier of choice; maybe even more encouraging is a potential new commitment to wiring up the country and fully implementing FFTP.