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The Bahraini military said it intercepted an Iranian attack on Tuesday.July 21 – According to a report by Nikkei Asia citing multiple sources familiar with the matter, TSMC (TSM.N) plans to raise its foundry prices for advanced and mature process chips in 2027 by up to 10% to cope with rising costs of materials, manufacturing equipment, and overseas new plant construction. TSMC has already begun discussions with customers regarding the price increase, which involves 7nm and more advanced processes. This segment contributed approximately 77% of TSMCs revenue in the April-June quarter of this year. Sources indicated that the base price increase will be 5% to 10%, depending on the customer and product. For new orders for high-performance computing (HPC) chips that exceed customer forecasts, TSMC plans to add a premium of 10% to 15% on top of the base price increase. Therefore, the overall price increase for some advanced process chip orders may exceed 10%. For mature processes (including 12nm, 16nm, 28nm, and other traditional processes), TSMC plans a maximum price increase of 10%, but the increase for some products will be lower than this level. Mature process technology accounted for approximately 23% of the companys revenue in the last quarter. Sources familiar with the matter said that negotiations began around June and were finalized in July, with the new price set to take effect in early 2027.At the close of trading in Hong Kong stocks, the Hang Seng Index fell 0.04%, while the Hang Seng Tech Index rose 1.32%. Chip stocks surged, with sectors such as optical communication, PCB, artificial intelligence, and power equipment leading the gains, while sectors such as batteries, oil, mainland property, and mainland banks weakened. Zhipu (02513.HK) closed up 36.89%.Both WTI and Brent crude oil prices fell by more than 1% during the day, currently trading at $82.04 per barrel and $86.52 per barrel, respectively.July 21 – KPMGs Chief UK Economist, Yael Selfin, stated that weak wage growth in the UK strengthens the Bank of Englands case for maintaining interest rates. She said that in the three months to May, overall wage growth excluding bonuses remained unchanged at 3.4%, with little evidence that recent energy price increases have been passed on to payroll settlements. Private sector wage growth is currently below the Bank of Englands 2% target, as weak hiring continues to weigh on workers bargaining power. Selfin said, "We expect the Bank of England to keep interest rates unchanged at its meeting next week, and developments in the energy market are likely to play a greater role in shaping the interest rate outlook in the coming months."

S&P 500, Nasdaq 100 Weekly Forecasts – Bond Yields Hammer Equity Sentiment

Skylar Shaw

Apr 25, 2022 10:31

It's going to be a busy week for US firms reporting first-quarter profits, with familiar names like General Electric (GE), Microsoft (MSFT), Ford (F), Twitter (TWTR), Amazon (AMZN), and Apple (APPL) all due to release their latest quarterly financial reports. Netflix (NFLX) and Tesla (TSLA) had drastically contrasting results this week, with Netflix (NFLX) falling over 35% on very low membership numbers and Tesla (TSLA) rising approximately 8% on strong sales and profitability. 


The fact that famed hedge fund billionaire Bill Ackman sold his newly acquired Netflix position for a $400 million loss after the results does not bode well for other stay-at-home tech businesses. The earnings schedule for the next week might be full of surprises.

 

While the small print of firms' balance sheets will be scrutinized next week, the 800-pound monster in the room — US interest rates and government bond yields – will need even greater scrutiny. 


Market expectations for US rate rises have risen to the point that the market is now pricing in the Federal Reserve aggressively front-loading rate hikes, with four 50 basis point raises expected at the next four FOMC meetings. 


The last time the Fed raised interest rates by 50 basis points was in May of 2000. While increased interest rates may help banks make more money, the IT industry, particularly the big names like Apple and Amazon, becomes less tempting as interest rates rise.


After Thursday's bearish engulfing candle erased the preceding three days' gains, the S&P 500 is expected to close the week flat. The 200-day simple moving average behaved as resistance, and the indices are currently trading below all three moving averages (20, 50, and 200), which is still another bad indicator. If support at 4,361 is firmly broken, 4,270 seems to be the next target.

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