Rolling coverage of the latest economic and financial news
Jim Reid at Deutsche Bank says that the Japanese Nikkei index is now on course for its worst day in more than three months.
The Nikkei is currently likely on course for its worst day since March, and also leaves the index on track for technical correction territory, having now shed over 12% since its peak less than a month ago.
There wasn’t a single catalyst behind the selloff, but we had TSMC’s earnings shortly after we went to press yesterday, and their share price is down -5.26% this morning after they said that capital expenditure would be higher than previously forecast.
TSMC’s focus on increased capex raised market concerns around valuations and the returns on capex. The sector has been under pressure with position unwinds as it was one of the most crowded sectors in the market in June.
In our view, the market moves have been driven by high expectations and position unwinds rather than underwhelming earnings. Our positioning indices suggest that semis was one of the most crowded trades in June, with positioning of over +6.5 in the third week of June. Sharp unwinds have seen that positioning drop to +1.3 (on a scale of -10 to +10) as of yesterday close.
Our strategy is working . We are attracting a broad range of luxury customers across product categories, channels and geographies , reinforcing my confidence in the opportunities ahead.
Today: Andy Burnham to be named Labour leader
7am BST: Burberry Q1 update
9am BST: EU current account figures for May
10am BST: EU harmonised CPI inflation figures for June
11am BST: United Utilities AGM
1.30pm BST: US housing starts and building permits for June
Continue reading...
