Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
AZIONI
The shine has come off the semiconductor trade over the past week or so and a number of big names are beginning to feel the pain. Events took a turn for the worse on Tuesday after Samsung Electronics published its latest quarterly earnings report, which failed to impress investors despite exceeding expectations, leading to a round of heavy profit-taking. The South Korean giant fell 7% yesterday, which went on to trigger a similar round of profit-taking among US semiconductor companies later in the day. Intel (INTC) was one of the worst hit, falling 9.7% when all was said and done; Western Digital (WDC) fared little better with a 7.9% daily loss; SanDisk (SNDK) followed swiftly behind with a 7.3% loss of its own; Advanced Micro Devices (AMD) shot down 6.5% by the daily close, while Micron (MU) escaped with comparatively minor losses of 4.7%. With the exception of AMD, all of the companies mentioned above are now down 20% or more from recent highs, dragging a number of semiconductor ETFs into dangerous territory. The timing could not be worse for SK Hynix, which is expected to launch its IPO on the Nasdaq stock exchange this coming Friday, under the ticker SKHY. The South Korean semiconductor manufacturer is looking to raise $28 billion from US investors this week, making it the largest foreign company share sale on record. Investors are currently on the fence as to whether the listing will provide some much-needed momentum to the struggling memory sector or whether the launch will flop miserably. Bets are open.
Just as markets were beginning to think that the Iran chapter had been closed for good, the conflict reared its head once again this week after the regime attacked three commercial vessels transiting the Strait of Hormuz. In response, US Central Command forces conducted a round of retaliatory strikes, hitting a number of targets including air defence systems, radar sites and 60 Revolutionary Guard small boats. Although no further escalation has been noted as of yet, the recent spat overshadows attempts at ongoing peace talks between the two powers. The US has also revoked Iran’s licence to sell crude oil and petroleum products of Iranian origin, first granted on the 22nd of June as part of a series of de-escalation measures. Oil prices shot up 5% as a result of yesterday’s back-and-forth, lifting the Brent Crude benchmark up to $76 per barrel. The damage appears to be contained for the time being, with traffic still flowing through the strait and no loss of life reported.
A reminder to watch out for the FOMC minutes later today, which could affect interest rate expectations throughout the rest of the year, along with everything downstream of such.
About the Author
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
Reviewed by RADEX MARKETS
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