- Treasury dominates the earnings situation again, but the sun looks like it’s shining in the sun
- Semiconductors are trying to bring in chips despite a downturn in the supply chain
- How semiconductors affect most of the economy
Large financial companies still dominate revenue news. Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), Citigroup (C), and US Bancorp (USB) all exceed their earnings and earnings expectations. The financial sector is benefiting from rising interest rates.regardless of 10 year financial yield (TNX) Pre-opening transactions are slightly lower and interest rates may continue to rise as the Fed approaches tapering.
Wells Fargo, Morgan Stanley and Bank of America have also announced that they will release reserved cash reserved for pandemic-related defaults. These actions suggest a vote of conviction that the United States is returning to normal. Positive gestures help push up the stock before it opens. Volatility index (VIX) The AKA VIX fell 8% before the opening.
Some health care stocks were also reported Thursday morning. Despite the fallout around the COVID-19 delta wave UnitedHealth (UNH) was trading 2.74% higher before its opening in response to the company’s higher-than-expected earnings and earnings reports. In addition, United Health has provided forward guidance.
Walgreens Boots (WBA) also exceeded EPS and revenue expectations, driving a 1.35% pre-market recovery. Pharmacy sales increased 8.1% in the US business and 11.4% in the UK business. In addition to pharmacy sales, the company’s retail sales increased 8.9% in the US and 15% in the UK.
Due to the congestion of the world’s supply chains, the shortage of microchips is a major bottleneck. Therefore, the profit of Taiwan Semiconductor (TSM) is also attracting attention. The company reported higher-than-expected revenue, despite lower-than-expected revenue. Stocks were trading more than 3.8% higher in pre-market trading. Taiwan Semi raised its gross margin from 51% to 53% in response to strong demand that Chief Financial Officer Wendelfan Project remains high.
The global supply chain is one of the causes of rising inflation. The Producer Price Index (PPI) measures inflation at the wholesale level. However, the PPI was lower than expected. This means that this level of inflation is not growing as fast as analysts predict.
Gold futures (/ GC) rose almost 2% on Wednesday following the forecast that the Consumer Price Index (CPI) measured consumer price inflation. Precious metals such as gold are often considered a hedge against inflation, but gold has been declining since August 2020. On Thursday, traders appeared to be following Wednesday’s rally. Gold bugs may be looking for more signs of inflation in today’s oil inventories. crude oil (/ CL) was trading higher than 1.25% before opening.
Rising energy prices seem to be helping solar PV inventories. This week, SolarEdge (SEDG), SunRun (RUN), SunPower (SPWR), and Daqo (DQ) all rose 15%, 13%, 17%, and 15% after closing Wednesday, respectively. In the past, these companies have also benefited from the Green Act. With debt caps pushed back in December, some investors may be looking for President Biden’s infrastructure bill to ultimately gain momentum.
It also became clear what the Fed members were thinking. The FOMC minutes were released Wednesday afternoon, confirming the most suspicious that the Fed could begin tapering in November. The debate was about the current pace of securities purchases. The plan appears to reduce purchases of government bonds and mortgage-backed securities by $ 15 billion per month.
Chips and dips
Earlier, I talked about how Taiwan Cicadas forecasts future demand growth due to a shortage of semiconductors. This shortage is hitting many industries such as electronics, computers, telephones and automobiles. Semiconductors can be divided into microprocessors, memory chips, commodity integrated circuits, and complex circuits. Consumers are accustomed to buying final products, but may not be aware of the various companies involved in making these chips.
So what are some of these chip makers? They include Intel (INTC), Taiwan Semiconductor (TSM), Qualcomm (QCOM), Broadcom (AVGO), Micron (MU), and Texas Instruments (TXN). Some of these companies offer multiple types of semiconductors, while others specialize in them. When these companies cannot deliver, it can hurt other companies. Recently, Apple (APPL) lowered its production forecast for the iPhone 13 as semiconductor suppliers Skyworks (SWKS) and Qurvo (QRVO) were unable to keep up with demand due to pandemic-related issues.
Some companies are in contact with semiconductor manufacturing and are helping to bring them to market. For example, ASE Technology (ASX) performs semiconductor testing, assembly, and packaging.
South Side Socks: My Chicago White Sox cruised to the division title just by being knocked out in the first round of the playoffs, but the SOX or PHLX Semiconductor Index seems to be finding support near the 3160 level. Over the past few months, SOX has bounced off this level several times. This tells me that my Chartist friend suggests that there is a demand for industry groups.
SOX is with that sector S & P 500 (SPX) After May, the question is “Can the group break out?” The answer to this depends on the group’s ability to meet high demand.
Chipping in: Mobile phone semiconductor maker Qualcomm (QCOM) has confirmed that its board of directors has approved a $ 10 billion share buyback plan. A stock repurchase plan, or stock repurchase plan, is when a company uses cash to buy back its shares on the open market. Repurchase plans usually define the amount and duration of spending. Qualcomm plans start immediately with no expiration date.
Stock buying is popular. Last month, companies such as Keurig Dr Pepper (KDP), Dollar Tree (DLTR), Lockheed Martin (LMT), Accenture (ACN), Cracker Barrel (CBRL), Microsoft (MSFT) and Campbell Soup (CPB) announced buybacks. bottom.
Chip or wafer: There are several materials used to make semiconductor chips, but the one commonly associated with semiconductors is silicon carbide. This is because it is used to make silicon wafers used in semiconductor circuits. High demand for wafers means high demand for silicon. Top Silicon Miners include US Silica (SLCA), Ferroglobe (GSM), and US Steel (X). Once the silicon is harvested, it is sent to wafer manufacturers such as Applied Materials (AMAT).
By tracking the division of labor, you can see that the demand for one product can affect the demand for another product.
TD Ameritrade ® commentary for educational purposes only. Member SIPC.