By: Gary Tanashian of Biiwii.com
Last night’s post on the US stock market ended as follows:
“As far as the Fed and its puny rate hikes are concerned, that is irrelevant. This market is flipping them the bird. Markets can rise a long way before a rate hike regime finally kills them. It feels like inflation folks.”
This prompted a question from an NFTRH subscriber about what markets would benefit, and in what differing ways would they benefit if an inflationary phase comes to dominate? That is a far reaching question and a difficult one as well, because inflation’s effects have a way of being unpredictable (how many would have answered ‘US stock market’ in the spring of 2011 to the question “where will the post-crisis inflation to date manifest on this cycle”?).
Last weekend, in an NFTRH 396 excerpt we talked about Applied Materials stellar quarterly report and what it might mean for the economy, the Fed, the gold sector and most of all the idea of an inflationary backdrop becoming more readily apparent (2003-2007 Greenspan style). Continue reading "It Feels Like Inflation"
Since we were the only ones (so far as I could see) even talking about the Semiconductor equipment industry ramp up (and positive implications on US manufacturing) back in early 2013 I think we should continue to tend the sector and finish what we started.
Last month the SOX took a massive dive down to our noted long-term support area in a giant swoosh of hype (coming from the financial media by way of one company’s outlook) and emotion by way of stampeding herds trying to get out at all costs. It was just a setup as the SOX resides at new recovery highs this weekend.
From my days in manufacturing (most of which were spent not directly participating in this sector) I remember the Semiconductor Book-to-Bill ratio (B2B) as a pretty heavily watched indicator among industry types. From Semi.org:
“The SEMI Book-to-Bill Report provides a first look at the book-to-bill ratio for North American Headquartered Semiconductor Equipment Manufacturers. The three-month average global bookings and billings are a strong indicator for trends in the worldwide semiconductor industry. SEMI follows the protocol established by the U.S. Department of Commerce in publishing our figures only on a three-month average basis. We do this in order to smooth out the natural volatility in bookings. This report is distributed monthly approximately three weeks after the close of each month. Categories covered include front-end (wafer processing/mask/reticle/wafer manufacturing/fab facilities) equipment and final manufacturing (assembly/packaging/test) equipment.”
On November 20 Semi.org published its most recent B2B data. First their summary and then a table covering the May through October 2014 period. Continue reading "Semi Equipment Book-to-Bill Ratio Moderating"