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.
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The United States concluded its eighth consecutive night of strikes over the weekend, targeting Iranian maritime and air defence facilities. Suffice to say that tensions between the two sides are not cooling down. Oil prices are reacting in no uncertain terms this morning, with Brent Crude pushing north of $90 per barrel and WTI rising to $83. With that said, markets at large do not appear to be too flustered as of yet, with gold remaining stable and silver edging higher enough to reclaim $56 per ounce. Bitcoin is not showing much interest in current events either, stabilising under $65,000 per coin as markets begin a new week. US futures are likewise flat as a pancake so far, with sights set on events further afield.
The selloff in semiconductor stocks continued deep into last week, but the relentless selling pressure finally began to show signs of petering out by Friday. A number of familiar names initially dropped sharply as the session got underway, but buyers quickly stepped up to the plate to drive prices higher, painting some long wicks along the way. AMD, Nvidia (NVDA), Broadcom (AVGO), Intel (INTC), Micron (MU) and SanDisk (SNDK) all incurred minor to modest losses, but most closed off the session lows, while Western Digital (WDC) and Seagate (STX) broke the trend by closing 2.2% and 5.7% higher respectively. The SOX semiconductor index fund (SOXX) fell another 1.6% on Friday, translating to a 10% loss on the week. The Japanese Nikkei 225, heavily exposed to the semiconductor sector, was down 6.4% by the weekly close, the index’s worst week of the year by far, while the Korean Kospi index had shed the better part of 9% on Thursday evening before closing early for the week. The rotation from chip stocks to the wider tech sector is well illustrated by Apple (AAPL) overtaking Nvidia (NVDA) to become the world’s most valuable company.
Japanese markets are closed due to a public holiday today, so traders will have to start the week without the usual barometer for market sentiment, although Korean markets are holding steady so far this morning after opening marginally lower. Too early to tell if the panic is over, and certainly too early to call the bottom on the recent devastation in global semiconductor stocks, which has wiped out over $3 trillion since the end of June.
Not much to write home about in this week’s economic calendar. As mentioned above, Japanese markets will remain closed on Monday, limiting liquidity even more than normal this morning. Canadian CPI data will grace the newswires later this afternoon, followed by the UK employment rate and weekly ADP numbers on Tuesday. UK inflation is the sole item on the menu on Wednesday, while Thursday delivers an interest rate decision from the European Central Bank, which is once again expected to hold the deposit rate steady at 2.25%. The meatier releases this week are to be found on the earnings calendar, which delivers both Alphabet (GOOG) and Tesla (TSLA) after market close on Wednesday, followed by Intel (INTC) after the bell on Thursday. The question on everyone’s mind is whether capital will continue to rotate out of semiconductors and into the magnificent seven, which have outperformed convincingly over the past few weeks.
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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