In the Milpitas testing labs of Sandisk, they're cheering the Greeks. In the hallways of Palo Alto-based VMWare, they're praising the Portuguese. What, you may ask, does Silicon Valley technology have to do with the morning news out of Europe? Plenty, if you're a salesperson, or a Bay Area investor.
News that the European Union, along with the International Monetary Fund will take aggressive moves to avoid a debt crisis sent stocks around the world soaring. A trillion dollars will be airlifted to calm the economy of Greece, and along with it, other economies, like Portugal and Spain, that were rumored to be teetering as well. The money will also strengthen the Euro, and that will be felt directly by Silicon Valley companies that export their technology. A stronger Euro means stronger sales for the like of Sandisk, Applied Materials, Apple, etc, etc.
It's also good news for investors who have been watching their portfolio value go south faster than birds flying away for the winter. Stock prices are jumping like crazy this morning, in what's commonly called a "relief rally." As in, we're so relieved that the world economy isn't going to crash, we're buying stocks at bargain prices. If you had confidence late last week that stocks would come back after their steep drop and bought, you're being rewarded richly for that faith.
Sandisk, VMWare, Apple, Google, HP, and others, all part of the hit parade of money-makers to start the week. Many stock-watchers had wondered why tech stocks were so badly beaten up by the Euro crisis, and we're seeing tech bounce back faster than anything else. These days, technology companies sell more products overseas than they do here, so a strong economy in Europe will likely lead to strong sales for Valley based companies.
And that's something worth toasting. Salud.