John Helzer's  Instablog

Microchip Technology is in a distinct minority of semiconductor firms that recognize their revenue at distributor sell-out rather than sell-in. With over 70,000 customers in all geographically areas, they serve as a good read of turning points in the semiconductor cycle.

Tonight they reported revenue of $340.6M and non-Gaap earnings of $0.46 per share for the September Quarter which matched their pre-announcement of October 13th. Revenue guidance for December quarter was flat to down 7%, but most important was their call that the December quarter would be the bottom in Microchip's revenue for this semiconductor cycle. 

In the last down semiconductor cycle in 2008-2009 Microchip's revenue declined 35% from peak to trough. Using the midpoint of their guidance for next quarter as the bottom of the cycle would generate a 13.5% decline from peak to trough.












Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

From Markit Press Release:

Data collected 12–24 October.

- Final Manufacturing PMI at 47.1 in October, below flash estimate of 47.3
- PMIs signal contraction in all nations but Ireland
- Jobs growth weakens, with only Germany, France and Austria seeing employment rise

Manufacturing PMI at 27-month low
Conditions in the Eurozone manufacturing sector continued to weaken in October. At 47.1, down from 48.5 in September, the final Markit Eurozone Manufacturing PMI® fell to its lowest level since July 2009 and below the flash estimate of 47.3.

Countries ranked by Manufacturing PMI® (Oct)
Ireland 50.1 5-month high
Germany 49.1 27-month low
France 48.5 2-month high
Austria 48.0 27-month low
Netherlands 48.0 27-month low
Spain 43.9 2-month high
Italy 43.3 28-month low
Greece 40.5 31-month low

It's a catch 22.....they must have austerity to pay off their debts...but how do they pay off their debts when their economy is sinking because of the austerity?

It really is a serious question!

I'am watching the spread between 10 year Italian bonds and the German Bund.
Was at 4.42% a little while ago. Italian 10 year at 6.19 and German bund at 1.768%.

Full disclosure...I own a small position in the short S&P ETF's SH and SDS, short Russell 2000 ETF - RWM, and short Nasdaq 100 ETF - QID.
Covered 11/9 for a very small profit. Market is way too volatile for me.







Disclosure: I am long SH, SDS, RWM, QID.

As the talking heads on the business news networks squawk about Europe, the economy world wide is slowing down. Today's ISM PMI Index at 50.8 is the lowest since July of 2009. China's PMI came in at 50.4. Again the lowest since early 2009. JP Morgan's Worldwide PMI came in at 49.9 for September. October's number is due out in a few days.

Is history repeating itself again?...3rd time in 10 years?