Thematic (Sector/Industry) Archives | Page 44 of 116 | Smartkarma

• The Federal Reserve made a pivotal move last week, cutting its policy rate by 0.5%—the first rate cut in four years and larger than the typical reduction
• Japanese stocks rallied strongly this week, with the Nikkei gaining 3.1% and the Topix rising 2.8%, as the yen weakened by more than 2 yen to 143 per dollar.
• Rotation into economically sensitive areas like machinery and chemicals – KHI, Resonac, and Fujikura all out performed

• Revenue Impact: Google’s ad segment may see a 5-10% drop due to stricter user data protections, reducing personalized advertising reach. 
• App Store Revenue Loss: Mandated alternative payment systems threaten Google Play and Apple’s app store revenue streams, cutting commissions. 
• Operational Costs: Non-compliance fines of up to 20% of annual revenue and the added costs for compliance systems intensify financial pressure.

• A review of recent events/data impacting our investment themes or outlook
• We take a look at how some of the markets we focus on reacted to the aftermath of the Federal Reserve Decision.
• China is watching key levels on the Shanghai Composite Index

• The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Chinese industrial production, retail sales, and fixed asset investment data.
• Companies mentioned:Samsung Electronics (005930 KS), Xiaomi Corp (1810 HK), Tata Group (1396Z IN)

• Meta’s ongoing compliance with the DSA has escalated expenses, requiring a dedicated team of over 1,000 and an annual content moderation budget exceeding $5 billion. 
• The DSA imposes restrictions on targeted advertising, crucial to Google’s revenue, necessitating shifts toward less invasive methods, increasing operational complexity and long-term financial risk. 
• Compliance with the DSA and DMA could undermine Apple’s closed ecosystem, forcing it to allow third-party app stores, jeopardizing its revenue from App Store commissions.

• Global semiconductor sales for the month of July 2024 amounted to $51.3 billion, representing an increase of 18.7% increase YoY and a 2.7% increase MoM
• The July revenue number was the second highest monthly semiconductor revenue ever recorded, the highest being $51.7 billion in May 2022
• Increasing memory prices along with modest recoveries in both PC and Smartphone unit shipments will continue to drive semi sales higher through EOY 2024.

• AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX CN)C; Target price A$0.75 per share: Production boost at Anshof in October – The ANS-2A sidetrack well has encountered a 6.5 m net vertical oil column in high quality Eocene-aged sandstone reservoir.
• The reservoir quality encountered at ANS-2A is consistent with ANS-2 (porosity and permeability ~20% higher than at ANS-3).
• The oil-water contact was encountered very close to the top of the water wet reservoir encountered at ANS-2.

• FED has finally decided to cut the interest rate by 50 bps and plans to another 50 bps cut in 2024.
• By end of 2025, policymakers expect 100 bps cut in rate and in 2026 another 50 bps cut.
• We analyse the impact of the rate cut on Indian Markets, and GDP.

• The semiconductor market is currently enjoying an AI-driven demand surge
• The past two demand-driven surges have turned into collapses as growth returned to the long-term trend
• When we compare the past two cycles to the current one, it appears that a collapse could occur relatively soon

• U.S. stocks soared Thursday, with the Dow Jones climbing 522 points (1.26%) to close above 42,000 for the first time
• European vehicle sales dropped 17% year-on-year to 755,000 units in August, with electric vehicle (EV) sales down 36%
• Japanese household financial assets reached a record 2,212 trillion yen (about $15.4 trillion) by June, rising 4.6% year-on-year, driven by higher share price

• Markets go risk-on with the Fed’s 50 bps cut a greenlight for AI/tech favourites to rebound sharply.
• New highs for homebuilders setting the tone for further gains the Sumitomo Forestry and Sekisui House, while logistics may be weak after FedEx numbers.
• Worth noting out-of-favour JP autos with high short interests and US sales ratios who may be squeeze targets with undeployed capital and foreigners coming back to the Japanese market post-Fed.

• ATAT US/TCOM US:Travel Volume During Mid-Autumn Holiday Slightly Increased Compared to 2019(+/+)
• 1519 HK/ZTO US: Parcel volume collection +28% yoy in prior week (+/+)
• XPEV US/LI US:Xpeng is rumored to launch an extended-range PHEV SUV next year.(///)

• NTES US: <Hearthstone> PC Preload Begins, Official Return on September 25 (+)
• 700 HK: Tencent’s <Peacekeeper Elite> Tops iOS Grossing Chart After Major Gameplay Update.(+)
• 700 HK: Tencent’s FPS Game <Delta Force> Pre-launch Character Creation Event Starts, Launch on September 26 (/)

• U.S. stocks closed with modest losses on Wednesday after the Federal Reserve cut interest rates by 50 basis points
• The Fed’s projections suggest a fed funds rate of 4.4% by 2024, with further easing into 2025
• Japan’s exports grew 5.6% in August, marking the ninth consecutive month of increase. Semiconductor-related goods drove growth

• Paladin fission deal facing opposition from CGN Mining, a subsidiary of China General Nuclear Power Corp
• CGN previously invested $82 million for a 19.9% stake in fission in late 2015
• Detailed background to the agreement between Paladin and fission revealed in 444-page information circular, showing fission’s eagerness for the deal and competitive process involved.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• While maybe deflation may not be a concern right now, we believe that high real rates will be a consideration of the Fed
• With average lending rates at 8.5% in August and the All Urban CPI Index recording 2.5% inflation in the August, real lending rates are high at 5.97%
• When figures were similar, it was July/August 2007 – rarely has there been a time in recent years, where real loan rates have been so high, without Fed reaction

• Don’t expect initial ‘sell the fact’ reaction to Fed’s best-case 50 bps cut to weigh on Japan, with a lot of money on the sidelines in Asia to be deployed.
• Shin-Etsu via its PVC sub Shintech and the Japanese home builders with high US exposure continue to look attractive as rate cut plays.
• Further US export controls for allies on chip making equipment are imminent and names with lower China sales ratios remain the safer SPE plays.

• Hindalco to Invest INR 2,450 Crore in Gujarat Copper and E-Waste Projects
• JK Cement Plans INR 30 Billion Capacity Expansion by FY26
• Hindustan Zinc Unveils $2.5 Billion Expansion Plan to Double Output

• The S&P 500 closed slightly higher on Tuesday, gaining 0.03% to finish at 5,635 after hitting a record intraday high of 5,670
• Investors are focused on the Federal Reserve’s anticipated rate cut decision on Wednesday, with a 63% chance of a 50 basis point reduction
• Japan’s average land prices rose 1.4% in July 2023, marking the third consecutive annual increase

• Strawberry was a breakthrough. Some people ask, “What’s the big deal?” but feasibly, there is a new scaling law working in tandem with training, and that’s the Chain of Thought / Inference.
• The chart below is a bit confusing, but the conclusion is the longer the model “thinks,” the better the answer.
• The new model has another log-linear scaling law. It pretty much computes, and the Bitter Lesson wins again.

• Global renewable continue to outperform, although this is yet to be seen in Japan related names.
• Very little read from the US with the market firmly in wait-and-see mode ahead of the Fed.
• Kose sell-side meeting yesterday points to plans for global growth despite few specifics released for its new MTP set to be released in October.

• U.S. stocks closed mixed on Monday as expectations for a 50-basis-point rate cut by the Federal Reserve grew
• The dollar weakened as the yen hit a one-year high, with expectations growing for a significant Federal Reserve rate cut this week
• GU, Uniqlo’s sister brand, has opened a New York headquarters to oversee its U.S. expansion, coinciding with the launch of its first permanent U.S. store.

• AI has become a dominant topic of discussion among industry leaders, signaling a significant shift in focus over the past year
• Investment opportunities in AI extend beyond just a few mega cap stocks, with opportunities in chips, infrastructure, data and models, software applications, and services and solutions
• Tony emphasizes the importance of building a new computing infrastructure for AI, which is transforming industries and creating new opportunities for tech investors.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Granular data at Hang Seng Bank suggests a greater deterioration in both HK and China than is readily visible in headline numbers
• The bank’s China pre-tax profit is down 70% YoY in 1H24 and its total stage 3 loans are up 84% YoY in 1H24
• The bank’s credit-impaired loans for Hong Kong CRE rose from HKD1,081m to HKD13,485m, from 2H23 to 1H24

• Positive sentiment from Intel’s deal with AWS and extra Govt. backing may outweigh plans to delay its EU fab capex for JP SPE suppliers.
• Concerns iPhone 16 Pro preorders are below expectations to weigh on JP component suppliers, but can this be much of a surprise?
• The JP Govt. agreeing for 7&I to be designated as a ‘core’ company is not a show-stopper and may compel Couche-Tard to up their game.

• Adani Green and Adani Power secure 6.6 GW power supply deal, bolstering renewable and thermal capacity.
• Tata Electronics plans two more semiconductor fabs in Gujarat, enhancing India’s chip manufacturing capabilities.
• Reliance expands non-food retail space by 50%, focusing on boosting profitability and premium segments.

• Copper smelters are struggling for profitability but output is still rising, creating a relative concentrate imbalance in copper and zinc.
• Zinc mine output has declined year on year, leading to a tightness in concentrate supply and challenges for smelters.
• The electric vehicle market is facing challenges due to high costs and lack of policy support, especially in OECD markets, while China has a significant lead in the industry with lower costs and established supply chains.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Getting China property right is essential for investors who follow China equities because most companies, from cyclical to consumer, can’t be insulated from its downturn.
• China housing market is not collapsing as people feared; instead we see signs it is bottoming out with Xi’s pursuit of high-quality growth model starting paying off.
• We expect the sector’s strain on Chinese economy will ease moving into 2025/26, setting a favorable backdrop for most China’s consumer-oriented stocks.

• China M1 and M2 data disappoints and reinforces deflationary risks. Closely watched Consumer Sentiment barometer, new & used prices in top 70 cities, unequivocally weak
• . Rise in the dynamic of US auto delinquencies is cause for concern
• Corporate caution at investor conferences from Coca Cola Co (KO US) , Visa (V US), Mondelez International (MDLZ US), Wendy’s Co/The (WEN US), Dow (DOW US), 3M and Campari

• Apple iPhone 16 pre-orders weak and Questions on Apple Intelligence remain
• Big software investor days. Expect AI to feature big on hype, but what to expect from TAM to ARR to products?
• Semis: Samsung challenges, Intel relief but pressures remain, TSM momentum, this time with ByteDance 

• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Last week started a busy season of medical and healthcare conferences, with obesity and cancer as major themes. SMMT led with Keytruda-beating (MRK) data in lung cancer, lifting TIL and BNTX with similar drugs.
• NVO boosted amylin class of obesity drugs with positive early data, including ZLDPF, GPCR, and VKTX. 

• Core inflation rates remain stubbornly high and real wages are still falling. 
• Surveys suggest one more major round of price hikes in October but the government still thinks prices will stabilise below its 2% target by the end of the year.
• The increases are lowering consumer confidence – bad news for most retailers, although major discount chains are making hay while the sun, well, doesn’t shine.

• Major central banks are shifting towards rate cuts, with the European Central Bank this week lowering rates to 3.5%
• Japanese stocks ended mixed: Nikkei (+0.5%), Topix (-1%), while the yen strengthened ~1 yen to 140.8/$.
• Ebara, IHI, and Softbank were among the major gainers this week

• Chinese banks are under strain as their deposits shrink in the wake of a regulatory crackdown on offering deposit rates higher than regulatory caps.
• In the first half of the year, many Chinese mainland-listed commercial banks saw a decline in their net cash flow generated from operating activities — a key indicator of lenders’ liquidity — Caixin calculations based on their interim reports show.
• Among China’s “Big Six” state-owned banks by assets, only Postal Savings Bank of China Co.

• Chariot (CHAR LN)C; Target price £0.40 per share: Anchois-3 encounters gas in the appraisal targets but one of the exploration target is dry – The Anchois-3 well has 3 objectives.
• While the initial pilot hole encountered the targeted reservoirs at the Anchois Footwall prospect, they were interpreted as water wet.
• Our ReNAV for this prospect was £0.03/sh.

• U.S. stocks climbed Thursday after a key inflation report showed the producer-price index rose 0.2% in August, in line with expectations
• The European Central Bank cut its deposit rate by 25 basis points to 3.5% amid slowing inflation and weak economic growth
• Sumitomo Corporation is launching a renewable energy business in India, investing 100 billion yen with a local partner to develop solar and wind power plants

• The Fed’s Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new
• JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of ‘importance to system’ so that JPM is ranked as first and State Street the lowest
• Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared

• EV demand slump prompts CATL production cuts, lithium prices fall below breakeven
• What happened to Nvidia’s MOAT? AMD is gaining inference traction 
• Samsung issues at 2nm and 4nm and TSM continues to widen tech leadership. TSM as a Monopsony could hurt TEL and ASML in time

• US homebuilders outperformance after Freddie Mac reported 30-year mortgages were at 18-month lows a positive for Sumitomo Forestry and Sekisui House.
• Shin-Etsu should also see upside given its US PVC exposure, with the stock looking oversold after heavy foreigner selling MTD.
• Shiseido’s first new product launch in 4-years for ‘Elixir’ range, along with reports that its domestic business is picking up, may be enough to spark a squeeze off multi-year lows.

• ATAT US/TCOM US: Hotel demand grow steadily in 1st week of September, with leisure travel being the main driver(+/+)
• AAPL US/1810 HK/981 HK: Pre-registrations for iPhone 16 series in China well below prior models.(-/+/+)
• AAPL US/1810 HK/981 HK: Huawei Mate XT receives positive commentary for design (-/-/+)

• During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.
• Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.
• The Silicon wafer segment is entering a recovery phase. Yet, you can buy the key players today for the same price you would have paid 5 years ago. That’s nice..

• Shopping malls have finally recovered to pre-Covid sales levels now that consumers are travelling freely (at least inside Japan) and spending more on discretionary items in some segments.
• But development of new malls is slow due to falling demand from tenants, saturation in the best locations, higher costs and the labour shortage.  
• The outlook remains muted, with little prospect of a major change in investment schedules although some larger developments are in the pipeline.

• PDD US/BABA US: PDD’s updated ad-tool to launch this week (+/-)
• BABA US: Freshippo private-brand food products to launch in Australia supermarket eBest (/)
• PDD US/SE US : Temu remains most-downloaded app in LATAM during August (+/-)

• WTR-CMI last week. In a down week for the market, with both the S&P 500 and Russell 2000 declining 4.2% and 5.7%, respectively, 29 of the 30 stocks in our WTR-CMI Index likewise saw their prices fall 4.0%, with AVD being the only exception, appreciating 9.1% for the week.
• YTD, the S&P 500, heavily weighted toward tech and internet stocks, has increased 13.4%, while our WTR-CMI Index has increased 7.2%, outperforming the broader Russell 2000’s 3.2% rise, despite lithium stocks’ 50%- plus declines.
• Recycled plastics market gaining acceptance. LYB announced the acquisition of German APK AG, a mechanical plastics recycler to bolster its circular economy and low-carbon credentials, while AVTN launched a pigment additive for plastics used in automotive plications made from recycled tires, as an alternative to carbon black, again aiming at helping its customers reduce their carbon impact while improving its own circular economy efforts.