RF to Light Update - January 29, 2007
First Things First:
The RF to Light 100 rose 0.2% last week to 2486. NASDAQ dropped 0.7% to 2435. The RF semiconductor market rose 3% and stands now at +5% year-to-date. All other market segments changed little.
A survey by Merrill Lynch showed that 41% of domestic fund managers are pouring more money into tech stocks compared to 23% last November. MEMC Electronic Materials (WFR) reported 100% profit growth in 4Q06 - stock up 16%. RF Microdevices reported four-fold profit increase and record sales - stock up 13%. Endwave expects 2006 revenues up 25% as backhaul data rates continue to about double every year - stock up 12%. 4Q06 proforma sales of Alcatel-Lucent declined 16% year-on-year and operating profit will just break even compared to 11% margin a year earlier. Qualcomm warns on escalating legal costs to defend their patents. Cingular's customer increase lifts AT&T.
In the News:
US economy shows signs of new vigor; hopes for Fed rate cut fades on Wall Street: the weekly leading index edged up to 4.5% growth rate, UBS investor optimism increased from 90 to 109 (Nov vs Dec). Consumer price index increased to 2.54%. US's technology superiority (versus China) is not in grave danger. In 2005, foreign-invested enterprises produced 58% of China's total exports, but fully 88% of high technology exports. And Taiwan-owned enterprises produced 60% of China's exports of computers and handsets.
PIS (personal investment system):
5 year lows: Conexant, Zhone, Exar, Vitesse, Maxim, Verizon
AGR, AMK, AMT, COL, HLIT, LMT, MSFT, NOC, SI, T, WFR
Market Oversold Indicator:
up to 80% (80% indicates that the market is oversold).
Market Overbought Indicator:
up to 60%