The ISI Tech Survey Weakness Not Yet Reflected in the Market

By Walter Kurtz, Sober Look

The ISI Tech Company Index (see discussion) shows continuing weakness. The survey, which is heavily weighted towards US semiconductor firms, is now at the lows of 2008/09. It seems that firms have been postponing spending on equipment and to a lesser degree on software. The obvious explanation is the uncertainty in Washington.

So far this weakness has not been reflected in the equity markets. The PHLX Semiconductor (SOX) index is definitely off the highs but is still up for the year. At some point (probably within the next couple of months), either the sentiment in the industry will begin improving or we will see a selloff in the tech sector. Companies manufacturing and servicing business tech equipment (as opposed to retail) are particularly vulnerable.

Source: ISI Group

 

Sober Look

Sober Look

Sober Look was founded by Walter Kurtz, a New York based hedge fund manager and credit markets specialist.

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