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Xilinx Inc. Message Board

  • get_a_clue99 get_a_clue99 Jun 7, 2003 1:46 PM Flag

    no 10% - 20% "correction"

    There will be no 10% - 20% "correction" in June. For there are no such triggers for big boys to rush to exit.

    There are no big events in earings release next week. The following week will see ORCL reporting after the close of June 17, but ORCL has reiterated its guidance yesterday. So, there is supposedly nothing quite negative to expect at this moment.

    Besides, we will have FMOC meeting and new interest rate move on June 25. Note that ECB has cut 0.50% yesterday. Also, the end of June is the window-dressing period for funds managers. They have to load up those winners...

    Any meaningful correction will be likely to come, in my opinion, in the July earnings season when and only when many CEOs in tech leaders lower their forward guidances. In this case, yes, there will be 10% - 20% correction. But, I am not sure they will do so. Besides, the summer is a traditionally light season for the technology sector anyway, so the Wall Street will not take it serious.

    So, in my opinion, the moment of truth will come in the warning period of Q3 2003, which is Sep. Remember the selloff last Sep? But, this year, I bet not many people are betting that we shall see a mini-crash in Sep due to a worsening business outlook at that time. After all, the economic cycle has bottomed out. The consumer is okay, the housing market is okay, the PC upgrade cycle is heating up, and SARS should be over soon, and we also benefit from a weakening US dollar...

    So, the market may trade in ranges sometimes, but no 10% to 20% correction. And, there is still a lot of sidelined money that want to jump back to the game. If you want to take your profits, fine, they will buy the dips no matter what.

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    • It is exactly the fact that you don't see any reason for a correction that there will be one. You probably think the market reacts "irrationally", but it doesn't. Wall Street wants to make money. And the way to make money right now is to have a correction.

    • A 10% correction is only 1515 on the Nasdaq.

    • << 06-Jun-03
      Looking Ahead : As the market transitions to the June quarter reporting season, next week's events calendar mirrors much of this week's action. The economic data are fairly heavy, earnings reports extremely light, and shareholder meetings/brokerage firm conferences well-represented on the calendar.

      Amid the myriad of economic reports on tap, a few will shed particular light on the strength of economic recovery - a driving factor behind the indices' broad-based rally. Jobless claims for the week of June 6 will be released Thursday at 8:30 ET, with the market expecting the figure to come in above the 400K mark for the 17th week in a row (at 427K). May retail sales are also scheduled for release at the same time. A slew of generally better than expected May comparable store sales has set the stage for an uptick from the lackluster April result. May consensus estimates are pegged at +0.2%, or +0.3% excluding autos.

      On Friday, the University of Michigan Consumer Sentiment preliminary number for June and the May PPI report will bring attention back to the consumer and pricing picture. Concerns surrounding the risk of deflation have been amplified following the Fed's cautious comments at its May meeting, and the April PPI report that marked the largest decline on record. As such, the May reading will provide important insight into the pricing environment, and should show some improvement as the price of gasoline has stabilized following its post-war plunge.

      In contrast to the economic data, earnings reports are few and far between next week, and should play an inconsequential role in market movement. Adobe's (ADBE) Q2 (May) report Thursday after the close should command a decent amount of interest, especially in light of the software company's move to raise its forecast to $0.24-0.28 in GAAP EPS and $305-320 mln in revenues.

      Finally, the events calendar is relatively full and features a mid-quarter update from Nokia (NOK) on Tuesday, and shareholder meetings from AT&T (T) and Siebel Systems (SEBL) on Wednesday. Notable conferences include Goldman Sachs' Healthcare Conference, Bear Stearns' Technology Conference, and USB Piper Jaffray's Consumer Conference. Rounding out the meetings, Fed Governor Kohn (who is a voter on the FOMC) will speak at a Fed conference in Massachusetts on Tuesday, and Fed Governor Susan Bies (also a voter) will speak on corporate governance in Washington on Wednesday. --Heather Smith, Briefing.com
      >>

 
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