Intel Boosts Sales Forecast on Higher Chip Demand

daniel grisinger daniel at
Fri Aug 22 08:49:43 PDT 2003

Peter Kilby wrote:

> *UK's semi's going through the roof off the back of this news, and don't 
> forget semi's were the first to report bad news (seems like ages back 
> now), in theory first in first out, is this the end of the "bear market"*
> ** 

The end?  Well, I'd say that it is a definite maybe.

Business investment is turning upwards again, and there's some
sense among the people that I know that at least some of the
investment is to finance expansion, not just replace depleted
capital equipment.  If this were to continue, then yes, the
economy looks to be in ok shape.

There are still notable risks.  The biggest of them is that
the increase in global equity markets has contributed to an
increase in American mortgage rates.  This has led to an utter
collapse of activity in the American mortgage market which,
while slowing the unsustainable pace of housing inflation, will
remove the continuous stream of home-equity-cashouts that has
financed the American consumer's shopping binge over the last
couple of years.  Unless the job market improves, consumer spending
is set to show a marked decrease.

Basically, we're watching an economic race condition, hoping that
business investment can shoulder the growth burden before consumer
spending scuttles it.


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