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
Small cracks in the semiconductor trade appeared earlier this week, particularly among memory manufacturers, which are facing increased competition from China. Chinese company ChangXin Memory Technologies recently unveiled a breakthrough architectural leap that substantially reduces DRAM chip size; the company plans to launch new products based on the design before the end of the year. The development directly challenges the South Korean monopoly on the DRAM market, which explains the 7% and 10% drops incurred by Samsung and SK Hynix on Tuesday. The Kospi index, half the weight of which is accounted for by the two above companies, slipped over 5% yesterday, following on from a 4% slide the day prior. The extreme technological narrowness of the Kospi is doing no favours for the index, which now sits 35% off its record high.
Intimately intertwined as they are, the Nasdaq-100 is also on the back foot, and for many of the same reasons. Micron (MU) suffered back-to-back losses over the last couple of sessions, dragging shares in the American chip maker to a 7% loss so far this week, while Western Digital (WDC) and Seagate (STX) drop around 4% over the same time frame. SpaceX (SPCX) also suffered a 4% loss on Tuesday in sympathy of the wider tech sphere. The timing of the fall is somewhat awkward, with ASML releasing its latest quarterly earnings report later today and TSMC following suit tomorrow.
US CPI figures are scheduled to hit the newswires in the following hours, with economists predicting marginally higher headline inflation in September; excluding oil and food prices, the core element of the reading is expected to remain stable. Elevated crude oil prices have been the obvious contributor to inflationary pressures throughout the world, but an increasing number of investors are now coming round to the idea that, at least in the US economy, expensive oil is in fact the only culprit pushing prices higher. The broader US economy has showed fewer signs of systemic, structural inflation in recent months, as evidenced by the more modest core inflation readings. Month-over-month, core CPI is predicted to fall to just 0.2% in September, while the headline number is expected to rise to 0.6%. The disconnect serves as confirmation of the lack of contagion so far. The shift in sentiment has also reflected on interest rate predictions, with FedWatch now showing an 80% chance of a rate hold during the next meeting, programmed two weeks from now, although the implied odds of a rate hike in December remain elevated at around 90%.
Speaking of oil, the Brent Crude benchmark has been on the rise once again this week, climbing to $107 per barrel earlier this morning, while WTI contracts lag far behind at just $95. The huge spread reflects the high demand for seaborne petroleum, as well as the abnormally high sea freight costs which are currently inflating international shipping rates, to say nothing of the increasingly isolated nature of American oil markets. As striking as a $12 spread between the two benchmarks is, it is nothing compared to the widening chasm between US and European natural gas prices. Dutch TTF natural gas futures rose to a whopping €87 per MWh on Tuesday, the highest level since 2022 and roughly eight times more expensive than equivalent natural gas futures in the United States. The winter months are just around the corner and EU underground storage sites are currently only 73% full.
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
Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
Il trading di derivati e prodotti con leva finanziaria comporta un rischio elevato e può causare perdite superiori al capitale inizialmente investito. Prima di fare trading, leggere i nostri Termini e Condizioni (T&C) e il Product Disclosure Statement (PDS).
APRIRE UN CONTO