Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Northern Vertex Files Preliminary Economic Assessment Report for the Moss Gold Mine in NW Arizona
By: Northern Vertex Mining Corp.

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dent’s Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOIN…. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
US Economy and the Semi 'b2b'


 -- Published: Thursday, 28 May 2015 | Print  | Disqus 

By Gary Tanashian

A quick review for newer subscribers: In Q1 2013 we noted that the Semiconductor Equipment industry was in “ramp up” mode per a personal source in the industry. After that pivotal period, we have relied on the Semi Equipment ‘book-to-bill’ ratio as a monthly checkup on what is often an important economic leading indicator. The Canary chirped in 2013 and it is still singing a sweet song today.

b2b

For forward looking purposes we note that it is the bookings, not billings that matter.

The graphic is, as usual, from SEMI.org (w/ my mark ups) as is this quote…

“Both bookings and billings trends have improved, with the ratio remaining above parity over the past four months,” said Denny McGuirk, president and CEO of SEMI. “Orders are higher than last year’s numbers, and current spending is on target with 2015 capex plans.”

NFTRH 343’s opening segment reviewed the US economy, including the following…

  • But again, the USD has taken a correction and as the macro ripples along, might we expect an ephemeral improvement in economic data due to USD weakness?
  • We may play Whack-a-Mole with short-term data popping up and down but it still looks like cyclical changes are coming on a 1 (+/-) year horizon.

I’d say that yes, we might expect a ripple of economic improvement, notably in coming ISM manufacturing reports. That is in keeping with the original thesis that Semi would lead manufacturing, which would lead the economy and ‘Jobs’.

The US dollar plays a central role here as well, as its strength out of last summer pressured manufacturing and exports and even helped depress the Semi Equipment makers to a degree. April is the month that USD cracked and began to correct hard.

So the strong b2b implies that we may see one of those ripples in the economic data. We should try to stay ahead of these shorter-term trends (for survival and moderate capital appreciation) while at the same time staying focused on the big picture as well (for future investment and exceptional capital appreciation potential).

usd

The early-April to mid-May drop in USD may well pump future economic data to some degree. It is just something we should be aware of as a factor in the game of economic Whack-a-Mole we noted last week.

A lot will depend on what USD does at 97 area resistance. Elliott Wave people might be able to tell you whether the USD has conclusively ended its correction or not. But I, using simpler TA, am not. I am from the ‘keep it simple’ KISS school after all. What I am able to tell you is that certain sensitive economic data have already bounced and other data are likely to bounce (at least to a minor ‘bump’ degree) due to USD weakness.

If the USD resumes its bull market that data improvement would likely prove very temporary. If USD takes a harder correction, it would probably be a tail wind for the stock market and the capital equipment/exports segments of the economy. I am very interested to see what the Machine Tool sales data were for April and will update that as soon as it is released. [edit] We updated this on May 26.

From FactSet.com we get an update of the Dow 30 components and their still weak European sales. Understand that this data was compiled while the USD was still relatively strong and had been on a relentlessly strong trend for about 8 months.

djia.revs

From FactSet: “The stronger dollar was clearly a key factor in the weaker revenue performance in Europe. Of the 12 companies in the DJIA that provided revenue growth numbers for Europe, 11 cited a negative impact on revenues or EPS (or both) for Q1 due to unfavorable foreign exchange during their earnings conference calls. Seven of these 11 companies specifically discussed the weakness of the euro relative to the dollar during these same earnings calls.”

The nature of the current stock market is to look for things to be positive about in order to ‘buy buy BUY!’ stocks. As the Fed fades to the background for a couple of months (the market is apparently taking June off its radar for a rate hike) might not a bump in economic data be just the tonic for this groaning, wheezing, sideways going market?

Just one scenario among several could be a ‘sell in May’ downturn in May or June (to small or larger degree), followed by a data (and sentiment) driven recovery (the ole’ summer rally) as Q2 earnings season kicks off in July.

That is just one guess. We will need to update the process weekly and simply stay in tune with it. Gold would be in trouble short-term in this scenario (more troubling short-term aspects for this sector to follow) “as the macro ripples along”.

So without further delay, let’s move on to update the usual markets… which is what NFTRH 344 proceeded to do, in depth. Consider joining NFTRH for well rounded analysis at a very affordable rate compared to services offering only a fraction of our coverage area.

NFTRH.com and Biiwii.com.


| Digg This Article
 -- Published: Thursday, 28 May 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.