>>>We have already had a YOY quarterly expansion in earnings across the board of about 11%. Some companies like Intel have seen their profits climb 144% YOY. Last year was pretty bad earnings wise. Christams sales grew YOY but not at their usual pace. Auto sales remain strong. Companies like GM and Intc have achieved new operating efficiency. Intel's revenue growth is due to marketshare gains.
The semiconductor industry association has forecast a 20% increase in revenues this year. They have also stated that a recovery is now underway. The book to bill ratio is now 1.28 which is pretty good. We will see if it is sustained.
There is some early evidence of an expansion in capex spending and consumer demand should remain strong for a while with all the refinancing going on and new home construction and sales.<<<
Book to bill is not at 1.28 as you say. The Dec book to bill was .98
Also, the semiconductor industry association does not forecast a 20% increase in revenues this year. SEMI has forecast growth in the semiconductor capital equipment business of between 10 percent and 20 percent in 2003, although some analysts question whether that estimate is too optimistic. Glen Yeung of Salomon Smith Barney issued a report predicting first-quarter worldwide orders would rise 5 percent to 15 percent.
Yeung also forecast 2003 spending budgets, in general, would be up 5 percent to 10 percent annually.
Data released from the U.S. Federal Reserve Board showed that fab utilization at semiconductor and related electronic components plants in the United States remained flat in December. The capacity utilization last month was at an estimated 66.7 percent, compared with 66.4 percent each in November and October.
Also, GM and many other companies are making their numbers by cost cutting. This is not a sign that the economy is seeing growth. Lets not forget jobs. Lay offs are at record highs. Consumer debt is also at record highs. We have a clear lack of demand. We're seeing a any lack of pricing power which could hinder any rebound in corporate profits. Lets not forget the tax increase in the form of higher oil prices.
Another thing, you've posted that business is picking up in the Silicon Valley. This is simply not true. I've spent 22 yrs in the Headhunting business. I'm consistently in communication with a national network of Headhunters. My contacts tell me that business is not picking up in the Silicon Valley. As a matter of fact, things are getting worse as many are being laid off. Search firms are now being flooded with resumes of employed high-tech professionals who are worried about being laid off.
The bottom line here is that the economy is very weak and any negative global event could weaken it further.
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