Chips are up, but U.S. economic woes might spoil the party
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(InfoWorld) - News coming out the chip sector has been great so far this week, but analysts warn that economic woes such as the housing mess might still spoil the party. The consensus among analysts appears to be that corporate and personal spending on technology products will be hurt by the housing issues in the U.S., but nobody knows how bad the impact will be, according to Peter Sutton, head of research at CLSA Asia-Pacific Markets in Taipei. Demand for technology products, especially computers and mobile phones, in the rest of the world is going strong, he said, but even that demand could pull back in the event of a U.S. slowdown because many developing countries depend on exports to the U.S. for income. By the end of this year, people should know how bad the loan and home foreclosure situation will be, according to Sutton. The housing market in the U.S., he said, is expected to bottom in the first quarter of next year. The fear is that the housing issues could hurt consumer spending at some point later this year, but so far the technology industry isn't showing any signs of trouble. The flow of good news started in Asia on Monday with the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co. (TSMC), reporting record high sales in August and revising up its third quarter financial guidance. The company, considered a bellwether for the overall tech industry because of the variety of gadgets it makes chips for, said consolidated sales in August rose 10 percent year-over-year to NT$30.02 billion (US$907.0 million), beating its previous record of NT$27.96 billion from July of last year. TSMC also predicted its third quarter revenue will likely hit between NT$87 billion to NT$89 billion, higher than a previous forecast of NT$85 billion to NT$87 billion, and said its gross margin would come out at the top end of expectations. Some customers asked TSMC to ship some chips earlier than expected, a spokesman for the company said, but the company won't comment on how that might impact the fourth quarter. Taiwanese chip designer MediaTek followed up TSMC's news, announcing an agreement to buy certain telecommunications chips products from Analog Devices Inc., of Norwood, Massachusetts, for US$350 million in cash. The deal itself isn't huge, but merger and acquisition activity normally takes place when companies see bright prospects for the future, and MediaTek is looking to use the acquisition as part of its mobile phone chip strategy. Among the products the company acquired is a chipset used in TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) basebands and radio receiver products, which will help it increase its presence in its main market, China. TD-SCDMA is the 3G (third-generation) telecommunications standard being pursued in China. Positive corporate news for chip makers didn't stop in Asia. As the work day opened in the U.S., technology industry watchers were treated to theÂ long-awaited launch of Barcelona, the new quad-core processors from Advanced Micro Devices. The Sunnyvale, California company announced a number of companies are already using the chips, including IBM, Sun Microsystems, Dell, and Gateway. The world's largest chip maker capped Monday with the biggest news of the day.Â Intel raised its third quarter revenue forecastÂ to between US$9.4 billion and US$9.8 billion from a previous range of US$9.0 billion and US$9.6 billion, and said its gross margin would be at the upper end of guidance due to stronger than expected global demand for computing products. Despite the strong chip news and outlook for the current quarter, which ends Sept. 30, the future remains uncertain. "Near term data shows little evidence of order cutbacks in the tech supply chain," said Warren Lau, chip analyst at Macquarie Research Equities. "But having said that, the question remains: will the sky come crashing down because of the meltdown in the U.S. subprime markets?"
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A U.S. recession could ironically boost the dollar against the euro and high-yielding currencies as worried investors avoid risk, but much would depend on the depth of the downturn and its impact elsewhere.
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While the stock market close to stumbling through its fifth-longest stall since 1983, there could be a little election-year boost for equities.
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U.S. blue-chip stocks inched higher on  Friday afternoon, while the Nasdaq slipped as investors showed  caution before next week's presidential election.
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Don't expect lawmakers to stave off a downturn, if that's where the economy is headed.
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A recession is on the cards for the Unites States, predict economists at the World Economic Forum.
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The looming US presidential election, pricier oil and mixed economic data left investors wary on Friday, with blue-chip stocks ending slightly higher, techs near
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TORONTO - The prospect of a John Kerry victory in next Tuesday&#39;s US presidential election has some Canadian analysts worried that the country might have to contend with a more protectionist-minded neighbour and dominant trading partner.
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At the same time, an increase in inventory is making chip vendors and distributors worried.
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Wall Street is hammering this nut processor, but, at today's prices, it looks interesting.
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Wall Street's top forecasters have some good news and bad news for 2008. Many think stocks will head higher but that unemployment will rise and the overall economy will slow.
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With elections and economic woes, congressional approval of foreign trade accords will be an uphill battle.
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Investors cheered President George W. Bush&#39;s re-election yesterday, but analysts caution that when the cheering stops, investors might refocus on real problems that could still hold back the economy and stocks.
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The first U.S. presidential debate next week and a load of data on consumer spending will settle some questions that have been hanging over U.S. stocks, and equity strategists and traders say the decreased uncertainty could draw buyers back to the market.
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The first U.S. presidential debate  next week and a load of data on consumer spending will settle  some questions that have been hanging over U.S. stocks, and  equity strategists and traders say the decreased uncertainty  could draw buyers back to the market.
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The United States is facing the possibility of a severe economic correction. Yet most of the causes of such a correction are, for the most part, being completely ignored in preference to partisan bickering. It is the proverbial elephant in the living room - except it is not just one, but several elephants that everyone is doing their best to ignore. While the likelihood that any of these issues could result in disaster is low, these are issues worth taking the time to discuss.
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Don't expect lawmakers and Treasury Secretary Paulson to stave off a downturn, if that's where the economy is headed.