Linea Mercati Interview 7/17/24
July 18, 2024Linea Mercati Interview 7/18/24
July 22, 2024The New York Stock Exchange was trading in disarray on Wednesday, weakening with, as a trigger, a drop in the semiconductor sector, disrupted by statements from Donald Trump.
Around 2:10 p.m. GMT, the Dow Jones gained 0.30%, the Nasdaq fell by 2.26% and the broader S&P 500 index lost 1.14%.
“The market has been strong, with daily records, and it is clear that it needs to breathe,” observed Peter Cardillo of Spartan Capital.
On Tuesday, the S&P 500 hit its 38th record since the start of the year, while the Dow Jones set a second consecutive historic high.
For the analyst, the crop of company results published before the stock market was not in question, all the big names having done better than expected, notably Johnson & Johnson (+3.36%), the US Bancorp bank (+3 .84%) or the logistics giant Prologis (+4.50%).
For Patrick O’Hare, of Briefing.com, Wall Street was prompted to decline by several news affecting the technology sector.
The Taiwanese microprocessor manufacturer TSMC, listed in New York, took a nosedive (-7.23%), after the publication of an interview with Donald Trump in Bloomberg Businessweek magazine.
The Republican candidate for the presidency of the United States explains that, in his opinion, “Taiwan should pay to be protected” from China by the United States.
All major American players in the industry subcontract part of their production to TSMC, the world’s leading semiconductor producer.
Nvidia (-5.87%), Qualcomm (-6.34%), AMD (-7.42%) or Broadcom (-5.82%) therefore followed the same path as TSMC, while Intel, which produces itself a good part of its chips, was spared (+5.05%).
By far the Taiwanese’s biggest customer, Apple was also in turmoil (-3.02%). Furthermore, according to figures mentioned by the CIRP network of researchers, the iPhone 15 sold less well in the second quarter than previous models at this stage of their marketing.
Added to Donald Trump’s statements was information from the Bloomberg agency according to which the Biden government plans to further strengthen restrictions on chip exports to China.
It would thus be based on an old law which allows exports to third countries of companies based outside the United States to be controlled as long as they use American technologies.
The Dutch equipment manufacturer ASML (-10.76%), listed in Amsterdam but also in New York, would be targeted.
As in previous sessions, the Dow Jones performed better than the Nasdaq or the S&P. “We have a rotation underway,” recalled Peter Cardillo, with investors changing the composition of their portfolio to include old economy values, particularly SMEs.
In addition to Johnson & Johnson, the energy sector benefited from other comments from Donald Trump in the same interview, promising measures favorable to the industry in the event of an election in November.
Oil companies Chevron (+1.77%), ExxonMobil (+1.69%) and ConocoPhillips (+1.69%) were all clearly in the green.
Elsewhere on the stock market, the low-cost airline Spirit Airlines suffered (-8.54%) after a warning on results, Tuesday after the market. The group now expects a lower turnover than announced in the second quarter.
The bout of weakness in stocks did not benefit bonds. The yield on 2-year US government bonds recovered to 4.46% compared to 4.41% the day before at closing.
