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On July 30th, Samsung Electronics semiconductor division reported a more than 250-fold increase in profits, driven by the lucrative reliance on memory in the field of artificial intelligence. The divisions second-quarter operating profit reached 89.2 trillion won (approximately $62 billion), exceeding analysts average expectation of 79.3 trillion won. The groups overall net profit was 71.3 trillion won, also surpassing market expectations. The profitability of the worlds largest memory chip manufacturer is under close scrutiny, as investors seek evidence to justify the massive investments and valuations driven by the AI boom. Global semiconductor stocks have soared to record highs this year, but also face increasingly fierce competition and concerns about overcapacity. Investors are increasingly questioning the commercial viability of the massive investments pouring into the industry.Samsung Electronics: Dividend of 374 won per share.Polish Armed Forces: Poland has scrambled fighter jets for protection in response to Russian airstrikes on Ukraine.U.S. Central Command: U.S. forces launched strikes against Iran at 8 p.m. Eastern Time (8 a.m. Beijing Time) today. These strikes are a strong response to yesterdays Iranian attempt to attack U.S. forces in the Middle East.July 30th - According to institutional analysis, the equal-weighted Nasdaq 100 index has lagged behind the equal-weighted S&P 500 index by 6.8 percentage points so far in July, potentially marking its worst monthly relative performance on record. Previously, equal-weighted technology stocks had outperformed the broader market for four consecutive months. Never in the past 20 years has the average performance of technology stocks lagged behind the S&P 500 by more than 5 percentage points. Meanwhile, the equal-weighted S&P 500 index has risen 2.2% so far this month, near historical highs, while the equal-weighted Nasdaq 100 index has fallen 4.6%, near its lowest level since mid-May. Investors are taking profits on technology stocks at a record pace.

Global Macro Analysis

Cory Russell

Apr 07, 2022 11:35


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The S&P 500 index fell 1.0 percent on Wednesday. US 2s10s steepened even further, with 10yr rates rising 5 basis points to 2.6 percent, the most in three years, and 2yr yields falling 5 basis points to 2.47 percent. The price of oil has dropped by 4.7 percent.


I won't go into detail about the FED minutes since Vice-Chairman Brainard has previously laid the groundwork.


The global bond market resumed its sell-off after a March respite, causing a worsening in cross-asset risk sentiment, with global tech equities suffering the brunt of the fallout.


In a high-inflation climate, reducing the balance sheet is a substantial source of market uncertainty. However, despite the build-up of economic and geopolitical headwinds over the previous several weeks, stock markets were overbought to a great extent, so this is simply a corrective move to a more sensible level.


The major source of worry seems to be rates, so if rates manage to stabilize, we may see a systematic bid return. However, if interest rate volatility remains high, stocks may continue to be under pressure.


The overnight movement in US transport equities is the latest in a long line of smoke signals the market is sending about recession fears. No market analyst is predicting a recession with too much speed in the economy, but that does not rule out the possibility that some of the signs of one are beginning to appear.


The overall picture has shifted from a certain mid-cycle situation a month or two ago to a late-cycle likelihood presently. I've been preaching about the compressed nature of market cycles since Covid's inception, and the most recent adjustment took weeks rather than a year. Another illustration of the ticker tape's ruthlessness and the speed with which key pivots are priced.


The point is that, similar to the 2's10's inversion, although we may argue about the likelihood of a recession and if the Transports move is a signal for one, the viciousness of pricing actions has pushed people's hands whether they believe in them or not.


Even though one swallow does not make a spring, it seems that the market is concerned that the Fed is behind the curve, and that something like the Volcker adjustment is in the cards with that proviso in mind.

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