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US Monetary Policy Impact on top Silicon Valley 100 IT, Biotech Sales, Proftis
Margin , stock prices, Risks OSA, Investment strategy
by Dr. Warren Huang, OSA
US Fed Monetary Policy on US inflation, GNP and economic
indicators,industrial sector sales, profits growths
US Fed 3 interest rate cut 1998 winter boosted money supply from 7 % to 10.5 %, pushed Dow
Jones
index to 11300, Nasdaq to 3400 , GNP to 6.2 % at 1.6 & low inflation due to
falling commodity and oil prices However, 1999 winter excessive money supply
for Y2K resulted US all time high stock prices and soaring Asian stock prices and
demand boosted consumer and business spending pushed oil prices more than
tripled caused US inflation up 3.6 % (exceeding the target 2 %) and 35 %,industrial sector
sales, profits growths,industrial sector sales, profits growth. and this year first
quarter consumer spending increased 8.3 % lead to 27 % ,industrial sector sales,
profits growth and serious labor shortage lead to Greenspan 6 interest rate hike, to
cooldown the wealth effect on the US asset bubble bursting
US Fed Monetary Policy
on US Dow Jones, Nasdaq S&P stock index, bond yield:
US soaring Stocks,Housing prices, low unemployment, fueling consumer and business
demand, and this website warning that early this year, US Dow Jones index will test
9600, Nasdaq will test 2800-3000 support, with high flier IPO, internet, IC, Biotech
stocks crash plunge more than 50-95 %, US economic growth will be slowdown to 3 % in the
second quarter He also predicted last Dec and Aug this year on this site that Dow
made near term high 11300, were overpricedshould retreat to 9600 ,Nasdaq wil crash,
plunged to retest to 1600 support due to excessive money supply in the last quarter
resulted overheated GNP of7.3%, first quarter GDP of 5.3 % continued robust Apr
inflation runs 3.5 %, and wages increase 4.5 % all time high consume
confienceand spending in auto, housing , retail sales and manufacturing prices index
rose to 74 which lead to Fed's 6 rate hikes. Financial
markets ignored Greenspan rate hikes to
cooloff the overheated housing, labor and stock markets resulted wealth effect related
excessive business and consumer demand. Dr. Huang accurately predicted
overpriced, correction to 9100-9600- Nasdaq entering final stage of phaseI
corrections and consolidation in 1600-2000 as NAPM entering 41.4 recession
in the first quarter 2001.
Greenspan 6 rate cuts to 3.75 % and US tax cuts fail to
stimulate US business demand which caused by IT bubble burst, Nasdaq plunged 65 %
and global slowdown and strong dollar further caused export slump
soaring oil prices lead to profit and stock prices slump in the month ahead as repeat 1992
recession performance
Monetary policy impact on Silicon Valley 100 IT, Biotech Sales, profits growth and Margin, stock
prices OSA.
most Silicon VAlley IT shares will plunge belwo 100 and entering 40-60 range in the weeks ahead, as Nasdaq correction back
to 2200 , it will be the buying opportunties again
stock Name : earning/ margin ,
near trem trading range
Biotech
Chiron
low margin, market share
10-125-
DNA( Genetech) low margin, market share
20-40-
PDL I
low margin, market share
10-20
Internet Software
ARBA (Ariba) still lose, retail newtwork can not help
3-6
Broadvision
low margin, market share
2-3
Commerce One low margin,
market share
20-
35
Inktomi
low margin, market share
10-
15
ORCL
slowdown in data base, sharp competition 5-9
Siebel
low margin, market shar
10-`15
Veritas Software still lose, retail newtwork can not help
10-20
PSFT
shring margin, market share
10-
20
Telecommunication
Copper Moutain still lose,
5-12
JDSU UNiphase heavy loss,debt , SDL merger
can not help 5-7
SBC
competition
12 -18
Internet Content/Service
Brocade
still loss
10-21
CSCO
Slowdown in Second half
11-15
Exodus
still loss
2-5
Yahoo
slowdown
10-16
Semiconductor
Altera
high growth potential
20-30
Intel
high growth potential
14-17
LSI
earning decline
12-15,
NVDA
high growth potential
12-18
National Semic
high growth potential
20-24
Taiwan Semiconductor falling demand, prices
6-10
Palm
Low margin, market
share 5-
6
Rambus
low margin, market share
3-5
Xilink
high growth potential
15-22
AMAT
slowdown growth
20-30
Microcomputer
Apple
slowdown
12-16
HWP
earning decline
10-15
SunnMicro
facing loss
5-9
Bank/ Finance
Bank Of America slowdown
and nonperformance loan 40- 51
E*Trade
slowdown and competition
5- 10
Schwab
slowdown and competition
10-15
Wells Fargo
slowdown and competition
35-45
Dr. Warren Huang accurately
predicted US Fed will raise fund rate in June due to soaring stocks, properties, oil
prices, which will take US stocks and Asian stock prices into minimum 15 % correction, and
some internet , biotech stock with 50 % corrections, Dow Jones will test 10,000, Nasdaq
test 3000, Henseng test 15000, Nikkei test 18,000, Taiwan index down to 8500 with
asset bubble simulation models on Macao's central bank governors conference,
Taipei's Pacific Basin finance conference and Washington DC NASD conferences.during April
and May , June, Dec. 1999.
These deterministic, dynamic simulation of last 20 years global asset
prices, and economy boom and bust of the asset bubble vicious cycle of excessive monetary
policy, low interest rate induced sustained long term bull markets stocks prices gain
caused consumer and business spending in real estate properties pushed soaring housing
prices and rent. And deficit spending (negative saving) in stock markets, pushed the stock
s even higher, until abrupt reverse of consumer and investor confidence --the bubble
burst- plunge of stocks and properties prices as it happened in US, Japan, Taiwan in 1980,
1987, 1990, energy crisis, EURO 1992 currency crisis, 1994 China runaway inflation, 1995
Mexico crisis, 1997-98 ASEAN, Japan, Korea, Russia, Brazil currency crisis, all caused by
overpriced stock prices due to excess monetary policy and high GDP growth
USA
China Thailand
Taiwan Japan
Hong Kong Korea
Singapore Indonesia
Canada Mexico
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