Summary
- Last week, U.S. June Inflation soared to 9.1%, a New 41-Year High. As a result, the US10Y-US2Y spread turned negative for the third time this year and went as low as -0.22, the lowest since 2000 which is a sign of recession.
- Banks reported mixed earnings. Of the four major banks to report second-quarter results last week, only Citigroup topped expectations for revenue. The banks cited "challenging macro and geopolitical environment" for pausing buyback.
- TSMC reported another quarter of record profits, booming sales, and high margins, which caused the Semiconductor sector to rally with the hope the chips booming is not over. The rally may put some bulls in euphoria, but we have to remember that TSMC is based on a big backlog of orders that the chip makers made in advance. Chip makers such as Intel and Micron Technologies lowered the guidance for Q2 Earning due to customers working through stockpiled inventory instead of placing new orders. I still believe the sector has yet to see the bottom.
- In the upcoming week, the market will focus on Goldman Sachs earnings on Monday, Netflix earnings and Numbers on housing starts and building permits on Tuesday (one of the Fed's key metrics), Tesla on Wednesday, and Snap on Thursday. Snap's earnings will serve as a guidance for the social media market stocks (Meta, Twitter Pinterest).
- We may see a big move in the Indices this upcoming week if we have bad guidance from the companies above. If not, I expect the market to keep consolidating between the price levels since June, before making a big move during FOMC week.
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Submitted July 17, 2022 at 04:23AM by Terjen_Hood https://ift.tt/zgTGDmW
