When retail tanks in 4Q and 1Q (and likely other quarters)
the market is similarly going to tank on multiple bad earnings reports and grim
projections. Intel is going to be swept down with that general market collapse
regardless of rationale.
As said by others the market always looks ahead by six months to a year. A global recession and a tanking of Q4 and Q1 09 was already written into the market, by the plunge in Q1 08, and Intel was swept down by the market collapse. But the further collapse in Sept and October is discounting something far worse, like a prolonged deep recession/depression for a 5-10 year time frame. This is prompted by the fear that a dysfunctional world banking system will destroy everything. The banking crises of 1908 and 1929 did indeed lead to prolonged depressions. If the present bank rescue effort becomes effective the gloom will dissipate. The bailout bill has been passed, but the Treasury action has yet to achieve the desired effect. I look for better confidence before the end of the year, because the Election will be behind us, the World Wide coordinated bank rescues will have kicked in, and there will be better visibility about the future of Banking.
Intel's mid quarter earnings update will happen in early December. So if Intel's numbers look reasonable, Intel could lead the market out of its abyssmal state. But a more likely is a state is that the market moves sideways for several months, and then takes off in Spring, even though the Intel Q2 earnings are the worst at that time. All this assumes that Banking is fully functional by the end of the year.
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