new York Price losses in the chip sector weighed on US stock markets on Friday. The Dow Jones index of standard stocks was 0.5 percent lower at 34,731 points. The broader S&P 500 lost 0.8 percent to 4,468 points, the Nasdaq technology exchange index fell by 1.3 percent to 13,746 points. A Reuters report weighed on the mood, according to which the world’s largest contract manufacturer TSMC is delaying acceptance of ordered chip machines.
Shares of Applied Materials, Lam Research and KLA Corp each fell more than three percent. Shares in chip designer Arm initially rose another seven percent to $69 one day after the acclaimed stock market debut on the Nasdaq, but fluctuated sharply over the course of the trading day. On the second day of trading, after short-term losses, the shares were at $65.10 per share, up around 2.4 percent.
Investors saw the positive price development on Thursday as a signal of a turnaround in the trend for IPOs. “The fact that performance was good suggests the potential for further new issuance, which is likely good for both the market and the banking sector,” said Rick Meckler, partner at Cherry Lane Investments.
According to information from the Bloomberg news agency, small investors in particular drove up the price of the share. Arm owner Softbank sold just 10 percent of Arm shares in the IPO, which led to low participation from retail investors, according to Peter Garnry, head of equity strategy at Saxo Bank. “This has likely created a lot of demand” from that part of the market, Garnry said.
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The value of Arm, whose chips are found in most of the world’s smartphones, rivals the valuation of competitor Nvidia. The US company has had a strong year on the stock market and has very good sales forecasts. Arm’s revenue, on the other hand, has declined slightly in recent months, although the company remains highly profitable.
Softbank raised almost $5 billion through Arm’s IPO. The investment giant actually wanted to sell Arm to Nvidia for $40 billion last year. However, the sale did not take place because the authorities resisted. The reason was Arm’s licensing model, because Nvidia designs Arm processors itself and would be in direct competition with many license buyers.
US stock market expert Koch: “The probability of an interest rate increase is zero”
The fact that the IPO has been successful so far despite the abruptly interrupted price increase is also positive news for the online grocery supplier Instacart and the marketing and data automation provider Klaviyo. Both companies want to set the price for their IPOs next week.
US imports significantly more expensive
However, the economic data continues to put the markets under pressure. In August, US imports unexpectedly became significantly more expensive. They increased by 0.5 percent compared to the previous month, as the Labor Department announced on Friday in Washington. Economists surveyed by the Reuters news agency had only expected an increase of 0.3 percent, after an increase of 0.3 percent in July 0.1 (previously: 0.4) percent. Energy imports in particular became noticeably more expensive this time.
Financial markets are following developments closely as they provide an indication of inflation. This had recently increased more than expected at a rate of 3.7 percent. This does not mean that the US Federal Reserve has given the all-clear, as its target of an inflation rate of 2.0 percent is far from being achieved.
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The Fed is heading for a pause on interest rates. It is largely expected on the financial markets that the monetary authorities will leave their key rate in the range of 5.25 to 5.50 percent next Thursday. Investors are wondering whether the Fed will step up its fight against inflation this year or whether the upcoming break will mark the end of the era of interest rate hikes.
Oil prices continue to rise
Oil prices rose to their highest level since November last year on Friday as Chinese economic data came in much better than expected.
Output from China’s oil refineries also rose to a record high in August, data showed on Friday. Solid summer travel demand and high export margins have prompted refiners to ramp up production.
A barrel of US crude oil currently costs $90.50, 0.4 percent more expensive than the previous day. The North Sea variety Brent, on the other hand, climbed 0.3 percent to $ 94.00. Both benchmarks closed yesterday around four percent higher than a week ago and will end the third trading week in a row in the black.
Chinese industrial production grew faster than expected. This fuels hope that the ailing Chinese economy will improve. Industrial production rose 4.5 percent in August compared to the previous year, according to current data from the National Bureau of Statistics. The figure was ahead of forecasts for growth of 4 percent and exceeded July’s growth of 3.7 percent.
Meanwhile, the People’s Bank of China announced on Thursday that it would cut the reserve requirement ratio for local banks by 25 basis points. It was the second such cut this year and is intended to bring more liquidity to the world’s second-largest economy to boost growth.
Look at other individual values:
General MotorsFord and Stellantis: The United Auto Workers union is on strike at three major US automakers’ factories. The forced production stop is not reflected in the stock market values. General Motors gains 1.5 percent, Ford gains about 0.5 percent and Stellantis gains about 2.2 percent. Almost 13,000 workers are on strike; in total, the union represents 146,000 employees from all three companies, according to CNBC.
delta Airlines: The airline warns that high fuel prices will hurt the company’s profits. Now the earnings forecast is $1.85 to $2.05 per share, whereas previously it was $2.20 to $2.50 per share.
The crust then rises by one percent. Earlier this week, American Airlines, Spirit Airlines and Frontier Airlines also warned that the summer quarter would be difficult as higher costs hurt their profits.
JP Morgan: The bank plans to compete more strongly with fintech companies like Square and Paypal by offering digital payroll to small businesses. This announcement resulted in a slight decline of 0.1 percent on the stock market. JP Morgan has selected San Francisco-based fintech firm Gusto to provide the underlying technology for the feature, Gusto CEO Joshua Reeves said.
Nvidia: Competitor Arm’s strong stock market debut and the weak industry environment are weighing on Nvidia shares. They lose almost three percent.
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