Samsung reportedly planning to cut Q3 wafer foundry production by 10%

Three headwinds are slowing down the premier chip foundry after blistering years of growth Taiwan Semiconductor (TSM) is the giant chip foundry that serves the world's most important manufacturers, like Apple and NVIDIA.These big clients are considered "fabless" because they rely on foundries like Samsung and Taiwan Semi (aka, TSMC) to conduct wafer fabrication of their designs.On April 20, TSMC reported profit of $6.8 billion in its first quarter. On a per-share basis, the Hsinchu, Taiwan-based company said it had profit of $1.31, which beat the Zacks Consensus estimate of $1.21 by 8.25%.The chip company posted revenue of $16.72 billion in the period, versus consensus of $16.81B. "Our first quarter business was impacted by weakening macroeconomic conditions and softening end market demand, which led customers to adjust their demand accordingly" said Wendell Huang, VP and CFO of TSMC.And reaction to the quarter and outlook has skewed negative with estimates for this year being taken down by several analysts.Since the report, the EPS consensus has fallen from $5.57 to $5.33, representing a 19% drop in annual growth versus last year.Meanwhile, projected revenues of $71.6 billion for this year are expected to come in 5.65% shy against 2022.What's Driving the Slowdown As NVDA Soars?This softening outlook comes after years of strong high-tech growth -- TSMC revenues have more than doubled since 2019 -- and may now pivot on three different catalysts.First, geopolitical tensions with Taiwan have scared some investors away, including Warren Buffett who reportedly sold all his TSM shares bought last year.Second, as Artificial Intelligence and ChatGPT fuel the current fortunes of companies like NVIDIA (NVDA) and Microsoft (MSFT), the chips they need fabricated by TSM run on a much longer planning and production cycle.And now we are hearing about delays in the next micro-revolution in chip architecture. Engineers regularly design and build integrated circuits and transistors at the sub-10 nanometer scale (a billionth of a meter).The next evolution includes designs for 3nm. But as DigiTimes reported last week, TSMC's major fabless clients may defer their 3nm chip rollouts. "TSMC has obtained 3nm chip order commitments from vendors including AMD (AMD), NVIDIA, and Qualcomm (QCOM), which are all looking to defer the delivery of their 3nm generation devices," DigiTimes' Monica Chen and Jessie Shen reported, citing industry sources.Thirdly, there is the complicated issue of semiconductor trade, tariffs, and subsidies. The WSJ is reporting that TSMC is pushing back on some subsidy conditions. With plans to invest $40 billion in two chip factories in Arizona, TSMC is arguing that some of the conditions Washington has attached to subsidies are "unacceptable."As TSMC looks for up to $15 billion in government subsidies, The Wall Street Journal's Yang Jie reports the company is concerned about rules that could require it to share profits from the factories and provide detailed information about operations.Bottom line on TSM: This key global player in semiconductor innovation is a core part of any tech investor's portfolio. But after blistering industry growth, the headwinds substantiate the pause. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Foxconn In Talks To Build $9 Billion Factory In Saudi Arabia Dear liberals: Pretty soon, your iPhone could be assembled in a country where homosexuality is punishable by death, and religious dissidents are sometimes beheaded. In what could be a victory for Crown Prince Mohammad bin Salman's effort to attract tech companies to help diversify Saudi Arabia's economy away from oil and gas, Foxconn, the Taiwanese consumer tech giant that's one of Apple's biggest contractors, has reportedly submitted a proposal to build a $9 billion factory in the Kingdom. WSJ reports that the kingdom "is reviewing an offer from the company, formally known as Hon Hai Precision Industry, to build a dual-line foundry for surface-mount technology and wafer fabrication in Neom, a tech-focused city-state the kingdom is developing in the desert." For those who aren't familiar with Neom, here's what the BBC has to say about the planned futuristic tech-centric city in the desert. The Kingdom plans to use its massive sovereign wealth fund to finance the effort. Glow-in-the dark beaches. Billions of trees planted in a country dominated by the desert. Levitating trains. A fake moon. A car-free, carbon-free city built in a straight line over 100 miles long in the desert. These are some of the plans for Neom - a futuristic eco-city that is part of Saudi Arabia's pivot to go green. But is it all too good to be true? Neom claims to be a "blueprint for tomorrow in which humanity progresses without compromise to the health of the planet". It's a $500bn (£366bn) project, part of Saudi Arabia's Vision 2030 plan to wean the country off oil - the industry that made it rich. The factory isn't a done deal - at least not yet. The Saudis are reportedly still conducting due diligence and "benchmarking the offer against others Foxconn has made for similar projects globally". The Saudis are also reportedly in talks with the UAE about potentially building the factory there. Foxconn has long been looking to diversify its factory capacity away from China. But Riyadh wants the company to guarantee that it would direct "at least two-thirds of the foundry’s production into Foxconn’s existing supply chain...to ensure there are buyers for its products and the project is ultimately profitable." But if the company meets all the Saudis requirements, the kingdom is prepared to co-invest, while also offering low-interest loans, and other incentives. Of course, just because Foxconn is planning to invest, doesn't mean it will. Let's not forget how the company supposedly promised to build a large factory in Wisconsin, but ended up with a project that was much smaller than it initially promised. The Kingdom has struggled to recruit western businesses for Neom Although, as we noted above, we would be curious to see how Apple reacts to Foxconn's decision to possibly assemble the company's phones in the kingdom. Tyler Durden Mon, 03/14/2022 - 22:00.....»»

Member firms of the Foxconn (Hon Hai Precision Industry) camp have completed their initial deployments in the third-generation compound semiconductor SiC (silicon carbide) field, with Taisic Materials engaged in the upstream crystal growth and substrate production, Gigastorage planning to handle SiC wafer cutting, grinding and polishing, and Hon Hai itself on track to operate a SiC wafer foundry at a 6-inch fab purchased from Macronix International in addition to its deep presence in consumer, industrial, automotive and low-orbit satellite applications......»»

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) Q1 2023 Earnings Call Transcript April 20, 2023 Taiwan Semiconductor Manufacturing Company Limited beats earnings expectations. Reported EPS is $1.31, expectations were $1.2. Jeff Su Good afternoon, everyone, and welcome to TSMC’s First Quarter 2023 Earnings Conference Call. This is Jeff Su, TSMC’s Director of Investor Relations and your […] Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) Q1 2023 Earnings Call Transcript April 20, 2023 Taiwan Semiconductor Manufacturing Company Limited beats earnings expectations. Reported EPS is $1.31, expectations were $1.2. Jeff Su Good afternoon, everyone, and welcome to TSMC’s First Quarter 2023 Earnings Conference Call. This is Jeff Su, TSMC’s Director of Investor Relations and your host for today.TSMC is hosting our earnings conference call via live audio webcast through the company’s website at www.tsmc.com, where you can also download the earnings release materials. [Operator Instructions]. The format for today’s event will be as follows: first, TSMC’s Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the first quarter 2023, followed by our guidance for the second quarter 2023. Afterwards, Mr. Huang, and TSMC’s CEO, Dr. C.C. Wei, will jointly provide the company’s key messages. Then we will open the line for questions and answers. As usual, I would like to remind everybody that today’s discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears in our press release. And now I would like to turn the call over to TSMC’s CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance.Wendell Huang Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with the financial highlights for the first quarter 2023. After that, I will provide the guidance for the second quarter 2023. First quarter revenue decreased 18.7% sequentially in NT or 16.1% in U.S. dollar as our first quarter business was impacted by weakening macroeconomic conditions and softening end market demand, which led customers to adjust their demand accordingly. Gross margin decreased 5.9 percentage points sequentially to 56.3%, mainly reflecting lower capacity utilization and a less favorable foreign exchange rate, partially offset by a more stringent cost controls. Total operating expenses accounted for 10.8% of net revenue, which is lower than the 12% implied in our first quarter guidance mainly due to stringent expense control and lower employee profit sharing. Operating margin was 45.5%, down 6.5 percentage points from the previous quarter. Overall, our first quarter EPS was TWD 7.98 and ROE was 27.5%. Now let’s move on to revenue by technology. 5-nanometer process technology contributed 31% of wafer revenue in the first quarter, while 7-nanometer accounted for 20%. Advanced Technologies, defined as 7-nanometer and below, accounted for 51% of wafer revenue. Moving on to revenue contribution by platform. HPC declined 14% quarter-over-quarter and accounted for 44% of our first quarter revenue. Smartphone declined 27% to account for 34%. IoT declined 19% to account for 9%. Automotive increased 5% to account for 7% and DCE decreased 5% to account for 2%. Moving on to the balance sheet. We ended the first quarter with cash and marketable securities of TWD 1.59 trillion or USD 52 billion. On the liability side, current liabilities decreased by TWD 71 billion, mainly due to the decrease of TWD 65 billion in accounts payable. On financial ratio, accounts receivable turnover days decreased 2 days to 34 days, while days of inventory increased 3 days to 96 days. Regarding cash flow and CapEx. During the first quarter, we generated about TWD 385 billion in cash from operations, spent TWD 302 billion in CapEx and distributed TWD 71 billion for second quarter 2022 cash dividend. Overall, our cash balance increased TWD 42 billion to TWD 1.39 trillion at the end of the quarter. In U.S. dollar terms, our first quarter capital expenditures totaled $9.94 billion. I have finished my financial summary. Now let’s turn to our current quarter guidance. We expect our business in the second quarter to continue to be impacted by customers’ further inventory adjustment. Based on the current business outlook, we expect our second quarter revenue to be between to USD 15.2 billion and USD 16 billion, which represents a 6.7% sequential decline at the midpoint. Based on the exchange rate assumption of USD 1 to TWD 30.4, gross margin is expected to be between 52% and 54%, operating margin between 39.5% and 41.5%. This concludes my financial presentation. Now let me turn to our key messages. I will start by making some comments on our first quarter ’23 and second quarter ’23 profitability. Compared to fourth quarter, our first quarter gross margin decreased by 590 basis points sequentially to 56.3% primarily due to a lower capacity utilization. Compared to our first quarter guidance, our actual gross margin exceeded the high end of the range provided 3 months ago, by 80 basis points, mainly due to more stringent cost control efforts. We have just guided our second quarter gross margin to be 53% at the midpoint mainly due to a lower capacity utilization rate and higher electricity costs in Taiwan. After last year’s electricity price increase of 15% in the second half of 2022, TSMC’s electricity price in Taiwan has increased by another 17% starting April 1 this year. This is expected to take out 60 basis points from our second quarter gross margin. We expect the impact from higher electricity costs to continue throughout the second half of this year and dilute our full year gross margin by about 50 basis points. In 2023, our gross margin faces challenges from lower capacity utilization due to semiconductor cyclicality, the ramp-up of N3, overseas fab expansion and inflationary costs, including higher utility costs in Taiwan. To manage our profitability in 2023, we will work diligently on internal cost improvement efforts while continuing to sell our value. Excluding the impact of foreign exchange rate, which we have no control over, we continue to forecast a long-term gross margin of 53% and higher is achievable. Next, let me talk about 2023 capital budget. Every year, our CapEx is spent in anticipation of the growth that will follow in future years. As I’ve stated before, given the near-term uncertainties, we continue to manage our business prudently and tighten up our capital spending where appropriate. That said, our commitment to support customers’ structural growth remains unchanged, and our disciplined CapEx and capacity planning remains based on the long-term market demand profile. Thus we expect our 2023 capital budget to be between USD 32 billion and USD 36 billion. With this level of CapEx spending in 2023, we reiterate that TSMC remains committed to a sustainable and steadily increasing cash dividend on both an annual and quarterly basis. Photo by Yogesh Phuyal on Unsplash We will continue to work closely with our customers to plan our long-term capacity and invest in leading edge, and specialty technologies to support their growth while delivering profitable growth to our shareholders. Now let me turn the microphone over to C.C.C. C. Wei Thank you, Wendell. Good afternoon, everyone. First, let me start with our near-term demand and inventory. 3 months ago, we said we expect fabless semiconductor inventory to start gradually reducing 4Q 2022 and we forecast a sharper reduction throughout the first half of 2023. However, due to weakening macroeconomic conditions and softening end market demand fabless semiconductor inventory continued to increase in the fourth quarter and exited 2022 at a much higher level than we expected. In addition, the recovery in end market demand from channels reopening is also lower than our expectation. Therefore, the fabless semiconductor inventory adjustment in first half ’23 is taking longer than our prior expectation. It may extend into third quarter this year before rebalancing to a healthier level. For the full year of 2023, we do our forecast for the semiconductor market, excluding memory, to decline mid-single-digit percent while foundry industry is forecast to decline high single-digit percent. We now expect our full year 2023 revenue to decline low to mid-single-digit percent in U.S. dollar terms and our business to do better than both semiconductor ex memory and foundry industries, supported by our strong technology leadership and differentiation. We concluded our first quarter with revenue of USD 6.7 billion, which is towards the low end of our guidance range, provided in U.S. dollar terms. Moving into second quarter 2023, we expect our business to continue to be impacted by customers for the inventory adjustment. We now expect our revenue in the first half of 2023 to decline by about 10% over the same period last year in U.S. dollar terms as compared to mid- to high single-digit percent decline previously. Having said that, we believe we are passing through the bottom of the cycle of TSMC business in the second quarter. While we forecast only a gradual recovery, for the semiconductor ex memory industry in second half 2023, TSMC’s business in the second half of this year is expected to be stronger than the first half, supported by customers’ new product launches. Next, let me talk about our N3 and N3E status. Our 3-nanometer technology is the first in the semiconductor industry to high-volume production with good yield. As our customers’ demand for N3 exceeds our ability to supply, we expect N3 to be fully utilized in 2023 supported by both HPC and smartphone applications. Sizable N3 revenue contribution is expected to start in third quarter and N3 will contribute mid-single-digit percentage of our total wafer revenue in 2023. N3 will further extend our N3 family with enhanced performance, power and yield and offer complete platform support for both HPC and smartphone applications. N3E has passed the qualification and achieve performance and yield targets and volume production is scheduled for second half ’23. Despite the ongoing inventory correction, we continue to observe a high level of customer engagement at both N3 and N3E with a number of tape-outs more than 2x that of N5 in the first and second half year — in the second year, I’m sorry. Our 3-nanometer technology is the most advanced semiconductor technology in both PPA and transistor technology. Thus we expect customers a strong multi-yield demand for our N3 technologies and are confident that our 3-nanometer family will be another large and long-lasting node for TSMC. Now I will talk about our N2 status. Our N2 technology development is progressing well and on track for volume production in 2025. Our N2 top neurosis transistor structure to provide our customers with the best performance, cost and technology maturity. Our nanosheet technology has demonstrated excellent power efficiency and our N2 deliver full node performance and power benefits to address the increasing need for energy-efficient computing. At N2, we are observing a high level of customer interest and engagement from both HPC and the smartphone applications. Our 2-nanometer technology will be the most advanced semiconductor technology in the industry in both density and energy efficiency when it is introduced, and will further extend our technology leadership well into the future. Finally, I will talk about TSMC’s global footprint and talent development status. As we have said before, we are expanding our global manufacturing footprint to increase customer trust, expand our future growth potential and reach for more global talents. In Arizona, despite some challenges in obtaining permits our fourth fab is scheduled to begin production of N4 processing technology in late 2024. In Japan, we are building a specialty technology fab the volume production is scheduled for late 2024. In Europe, we are engaging with customer and partners to evaluate the possibility of building a specialty fab focusing on automotive specific technologies based on the demand from customers and level of government support. In China, we are expanding 28-nanometer in Nanjing as planned to support our customer in China, and we continue to follow all rules and regulation fully. At the same time, we continue to invest in Taiwan and expand our capacity to support our customers’ growth. In Kaohsiung, our fab construction continues, but we have adjusted our previous 28-nanometer expansion plan to now focus on capacity expansion for more advanced nodes, and we will remain flexible going forward. In terms of talent development, a key to TSMC’s success is adherence to our core value of integrity, commitment, innovation and customer trust and our discipline and spirit of working together as 1 team. In both the U.S. and Japan, we recruiting from the top local colleges and universities and our progress is well on track. We have hired more than 900 US employees today in Arizona and more than 370 in Japan. We also plan to hire more than 6,000 employees in Taiwan in 2023. All of our hirings are to support our future growth potential. In addition to providing extensive training program for new overseas employees, many of them are brought to Taiwan for [indiscernible] experience in our fabs so that they can further their technical skills, while being emerged in TSMC’s operation, environment and culture. As we expand our global footprint, our priority work continue to be identified, attract and hire talent whose core values and principles are aligned with TSMC’s so that we can establish TSMC culture in all our employees, no matter where we operate. This concludes our key message. Thank you for your attention.Jeff Su Thank you, C.C. This concludes our prepared statements. Before we begin the Q&A session, I would like to remind everybody to please limit your Should you wish to raise your question in Chinese, I will translate it to English before our management answers your question. [Operator Instructions]. Now let’s begin the Q&A session. Operator, can we please proceed with the first caller on the line? See also 15 States with the Largest Declines in Unemployment and Kevin O’Leary’s Stock Portfolio: 10 Stock Picks for 2023. Question-and-Answer Session Operator: Yes, Jeff. The first one to ask a question, Gokul Hariharan from JPMorgan.Gokul Hariharan First of all, can I talk — can I ask a bit about the near-term demand dynamics? Could you talk a little bit about what you’re seeing by segments? Is the inventory correction trend largely similar across HPC, smartphone, IoT and auto? Or are you seeing any different dynamics in these segments, especially auto, you saw some shortage still in the last quarter. And maybe also talk a little bit about 7-nanometer. Previously, we had an expectation, 7-nanometer will start recovering in second half of this year. Do we think 7-nanometer will still be recovering in second half? That’s my first question.Jeff Su Okay. Thank you, Gokul. Let me — please allow me to summarize your first question. So Gokul’s first question is more focusing on the near-term dynamics. He wants to know basically about the inventory trend across different segments and also the end demand status across the different segments, including auto. And then also, what about particularly for TSMC 7-nanometer status in terms of the utilization recovery.C. C. Wei Okay. Gokul, let me answer the question. We observed the PC and smartphone market continue to be soft at the present time, while automotive demand is holding steady for TSMC and it is showing signs of soften into second half of 2023. I’m talking about automotive. On the other hand, we have recently observed incremental upside in AI-related demand, which helps the ongoing inventory digestion. What is the second question?Jeff Su The second part is on 7-nanometer. We had really — previously said 7-nanometer utilization is lower. Do we expect this to pick up or recover in the second half?C. C. Wei It will be recovered but slowly. As I said, most of the N6 and N7’s technology loading still in HPC and smartphone. However, looking into the future, some of the specialties such as RF, connectivity, WiFi, all those kind of things will start to build up the loading their demand. And we expect in the long term, 7-nanometers loading will become more healthier. Did I answer the question?Gokul Hariharan Yes. That’s very clear. My second question, I just wanted to get TSMC’s opinion on competitive landscape. Your IDM competitor is getting into foundry. Intel has been claiming that they will be attaining process parity and then process leadership by 2025 and talking about engaging with several fabless companies. How does TSMC see this competitive threat? And how do you benchmark TSMC N3 and N2, which is coming in 2025 with Intel’s offerings over the next, let’s say, 2 to 3 years? And maybe I think TSMC has not commented about foundry market share for quite some time. So could you talk a little bit about what you see, N3 market share, in the next couple of years with TSMC now that you’re ramping up that node as well.Jeff Su Okay. Thank you, Gokul. Let me summarize your second question. A lot of it is related to the competitive landscape. I think Gokul’s question is specifically in terms of IDM that has been claimed meaning it will achieve process parity in terms of technology with TSMC and absolute process leadership. So he wants to know and they’re also talking about engaging with several large fabless customers. So Gokul would like to know how do we see or comment on this competitive threat. How do we benchmark our N3 or our N2 process technologies versus this IDMs offerings for the next 2 to 3 years. And lastly, if we have any comment on what market share we believe we can achieve.C. C. Wei That’s a long question. Gokul, this is C.C. Wei again. Let me say that, as usual, we don’t comment on our competitors’ status, but then we emphasize again on our 3-nanometer and 2-nanometer. Our 3-nanometer is the first in the semiconductor industry to high-volume production. And I believe it is the most advanced semiconductor technology in both PPA and transistor technology. And for 2-nanometer technology, that was, again, to be the most advanced semiconductor technology in the industry and when we introduce into mass production. And this one, we’re fully confident that we will further extend our leadership position well into the future. As for the market share we are very confident that we continue to have a very high market share. And I cannot tell you that the real number, but very high percentage.Gokul Hariharan Okay. Maybe if I ask- thanks C.C. for that, if I ask, is N3 — your expectation that N3 market share will be higher than N5 at the same time based on what you see today?C. C. Wei Very hard to answer your question, but let me say that it’s well very similar in a very high percentage.Jeff Su Okay. Thank you, Gokul. Operator, can we move on to the next participant, please.Operator The next one to ask questions, Bruce Lu from Goldman Sachs.Bruce Lu I want to ask about AI, for the machine learning AI, which management has been saying that, that is a key growth driver......»»

While Stocks like ASML and LRCX are good long-term bets on the Semiconductor Equipment - Wafer Fabrication industry, only ASML is likely to see continued growth this year. The primary drivers of wafer fab equipment (WFE) demand are the strength of semiconductor demand and the existing capacity level. Other factors, such as constraints on selling semiconductors to China, the possibility of a recession, inflationary pressures and rising interest rates that impact consumer spending, or the diversion of consumer funds to leisure and/or travel activity affect one or both of the primary factors. Gartner is not very optimistic about semiconductor demand in 2023. Beginning in the fourth quarter, it was seeing overall inventory surplus although there were shortages in some segments. Most of the inventory glut was in memory, a situation it expects will continue through 2023. Memory demand is more dependent on consumer and computing gadgets, which makes it somewhat dependent on consumer purse strings.Analog demand is also expected to see inventory increases this year because of weakening supply and additional 300mm capacity. Overall, inventories will continue to increase this year, with a corresponding pressure on prices. As a result, worldwide semiconductor revenue will decline 6.5% this year (previous 3.6% decline), followed by a big rebound (16.3% growth) in 2024.   Enterprise demand is expected to hold up better, despite concerns related to the slowing economy because companies generally invest for the long term and place their orders well in advance. Additionally, because of the length of equipment sales cycles, macro concerns usually don’t hurt the outlook immediately. This time too, chances are that equipment demand will pick up before it drops off (at least for some players). Gartner expects both capex and WFE spending to drop 19% in 2023. After three solid years, SEMI expects semiconductor manufacturing equipment revenue to decline 22% in 2023, driven by weakening chip demand and higher inventory of consumer and mobile devices. The 21% rebound in 2024 is attributed to strengthening demand for chips in high performance computing (HPC) and auto. In 2024, Taiwan is expected to be the top spender, followed by Korea, China, Americas, EMEA, Japan and Southeast Asia, in that order. Social distancing and the at-home economy have accelerated digitization, driving up chip demand. And digitization has become a broader trend as companies prioritize their technology investments. Developments in auto, industrial, clean energy, IoT, healthcare, online services and defense segments are positive for long-term semiconductor demand, and in turn, for equipment spending.  A number of countries are moving to onshore semiconductor production as a strategic necessity, which is also a long-term positive for equipment demand. But there are cyclical challenges to those ambitions this year. Despite this underlying strength, macro and geopolitical considerations, including restrictions on trading with China are likely to weigh on stocks like ASML Holding (ASML) and Lam Research (LRCX).Industry DescriptionThis industry includes suppliers of manufacturing equipment, services and software for semiconductor wafer fabrication. Wafer fabrication involves the treatment of a silicon wafer to successive layers of conductive and semiconductive material using stencil-like structures called reticles.After each deposition of material on the surface, the excess material is etched away and the wafer exposed to a light source to implant the design. The back-end process involves cutting up the individual die, packaging for protection/use, attachment of electrical leads and sorting. The industry depends on semiconductor demand, which primarily comes from cloud (growth is decelerating), ecommerce (relative softness), PCs (post-pandemic crash), smartphones (moderating demand), IoT, AI, HPC (strong), automotive and industrial (relatively steady) and comm infrastructure (5G-driven).Factors Shaping the IndustryExport regulations remain one of the biggest concerns right now. The increasing polarization between the two largest economies makes this a longer-term concern. Samsung, SK hynix and TSMC have approvals but Gartner expects their China expansion plans to be conservative. Additionally, semi equipment makers generate substantial business from Chinese players, so the separation will be painful. It remains to be seen when fabs coming up at other locations can offset the business lost in China. While the fab construction subsidies in the CHIPS Act are bringing additional capacity to the U.S., and the European Chips Act and countries like China, India, Japan, South Korea and Taiwan are also have aggressively wooing chipmakers to set up fabs, this is a bad time in the cycle to be building. Because of the huge investment involved, companies generally build capacity only in times of high demand. Otherwise, excess capacity only depresses prices and hurts profits. Successive rate hikes are gradually bringing down inflation in some industries, while labor market strength keeps a recession at bay. Until the labor market weakens sufficiently, the rate hikes and energy cost inflation will only increase input cost, offsetting the relief from supply chains normalizing. And in case the labor markets soften and we do enter a recession, demand for several end devices that use semiconductors will be hit. Rate hikes also affect other economies, leading to a global slowdown. This hurts semiconductor companies and equipment makers that are usually global players. Geopolitical tensions continue to simmer all over the world. There is the Ukraine war that is a general negative for the industry, especially for those making equipment using neon and other gases, the bulk of which are produced in the Ukraine and Russia. The threat of nuclear war is an added concern. China removing draconian COVID restrictions is a plus, but its increasing possessiveness about Taiwan is not. This is a big concern for the semiconductor industry in particular, given the amount of production that happens in the region. There is the financial crisis in the UK and several other countries as well as inflation the world over. This kind of upheaval is not conducive to economic growth that can spur semiconductor demand. That said, the increasing use of electronics in communications and defense, and the role of semiconductors in helping companies to pull out of any economic slowdown makes semiconductor demand resilient in the long term. Semiconductor demand is the primary driver of equipment purchases, although new fabs also play a big role. In fact, many new fabs are expected to come online over the next decade, which is a big positive for long term WFE demand. In the short term however, it’s a concern that memory typically makes up the largest part of WFE spending, because that’s the segment with the inventory glut and the resultant price weakness. Technology transitions, such as the move toward larger wafer sizes (fab upgrades to 300mm, plus 200mm demand), shrinking nodes (7nm and below), memory chip advancements (increasing layers are adding complexity), denser packaging (MEMS), etc. Materials research, device complexities, the need for greater manufacturing integration and new applications are also important factors. Other inflections will· come from new chip architectures like workload-specific ASICs; next-generation NAND; new materials in gate, contact and interconnect; advanced patterning; and advanced packaging. The increased complexity of building modern chips is good for equipment makers.Zacks Industry Rank Indicates Near-Term WeaknessThe Zacks Semiconductor Equipment -Wafer Fabrication Industry is a stock group within the broader Zacks Computer And Technology Sector. It carries a Zacks Industry Rank #200, which places it in the bottom 20% of nearly 250 Zacks-classified industries.Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates that market conditions are not conductive to growth.The industry’s positioning in the bottom 50% of Zacks-ranked industries is because the earnings outlook of constituent companies in aggregate has declined substantially over the past year. The industry’s aggregate earnings estimate revision for 2023 represents a 19.5% decline from Apr 2022. The 2024 revision amounts to a 21.6% decline.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Leads on Shareholder ReturnsLooking at the Zacks Semiconductor-Wafer fab Equipment industry’s performance over the past year, it appears that the industry has traded at a premium to the S&P 500 since November last year although it has at times traded at a discount to both the index and the broader technology sector prior to that. The industry’s strong performance over the past year despite the weak outlook may be attributed to its long-term prospects and the relative stability that comes from the long sales cycles and contracts. These factors add to its attractiveness in uncertain times. So we see that the stocks in this industry have collectively gained 6.6% over the past year, while the S&P 500 Composite lost 8.2% and the Zacks Computer and Technology Sector lost 10.0%.One-Year Price PerformanceImage Source: Zacks Investment ResearchIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E) ratio, a commonly used method of valuing semiconductor equipment stocks, we see that the industry is currently trading at a 23.38X multiple, at a 4.1% discount to its high point of 24.37X over the past year. It is, however, trading at a 2.4% premium to the sector’s 22.84X and a 26.5% premium to the S&P 500’s 18.48X.Over the past year, the industry has traded as high as 24.37X, as low as 14.87X and at a median of 20.17X, as the chart below shows.Forward 12 Month Price-to-Earnings (P/E) RatioImage Source: Zacks Investment Research2 Stocks with Good Longer-term ProspectsWith the pandemic in the rearview mirror, it’s understood that the huge boost in semiconductor sales from the operating-from-home economy will not repeat, although the hybrid mode of operation has longer-term positive implications for the semiconductor and allied industries. Semiconductor demand will also be boosted by their expanding application across sectors and production in new geographies.Equipment demand is more stable than chips, because semiconductor manufacturing equipment is high-value and so, a part of the long-term planning process. That said, geopolitical tensions that disrupt the supply chain and increase cost, and therefore profitability could continue of even worsen.Given the somewhat mixed prospects, most of the stocks in this industry currently have a #3 (Hold) rating. Below, we are taking a closer look at two of them:ASML Holding NV (ASML): This is one of the world’s largest suppliers of advanced semiconductor equipment consisting of lithography, metrology and inspection systems for memory and logic chipmakers.Management has said that while there is continued uncertainty on account of inflation, rising interest rates, risk of recession and geopolitical developments related to export controls, customer optimism for a rebound in the second half, the typically long lead times and the strategic nature of lithography investments add up to continued strength in 2023.The Zacks Consensus Estimate for 2023 has increased 72 cents (3.7%) from 60 days ago. The Zacks Consensus Estimate for 2024 has dropped 14 cents (0.6%) during the same period. Despite the fact that geopolitical concerns are considerable for ASML, analysts are highly optimistic. In fact this is the only equipment company that is expected to generate strong double-digit revenue and earnings growth in both 2023 and 2024.The shares are up 6.9% over the past year.Lam Research Corporation (LRCX): Lam Research is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Its primary focus is the memory segment from which it generates 60% of its revenue. The rest is roughly even between foundry and logic. It is highly exposed to China, generating over 30% of revenue from the region.Lam had a strong 2022, but 2023 is expected to be challenging, as equipment spending is set to plunge in the March quarter due to an inventory correction, particularly in the NAND and DRAM memory segments, to which it is highly exposed. Trade restrictions on China are also an overhang. The rest of the year is likely to be relatively flat and the longer-term outlook is of course excellent. Semiconductor content increases in existing devices and increased application in several markets, rising device complexity and larger die sizes remain long-term positives.This stock has gained 5.1% over the past year. The Zacks Consensus Estimates for 2023 and 2024 (ending June) is unchanged in the last 60 days, although they were lowered after the company reported December quarter earnings. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

While stocks like ASML and LRCX are good long-term bets on the Semiconductor Equipment - Wafer Fabrication industry, only ASML is likely to see continued growth this year. The primary drivers of wafer fab equipment (WFE) demand are the strength of semiconductor demand and the existing capacity level. Other factors, such as constraints on selling semiconductors to China, the possibility of a recession, inflationary pressures and rising interest rates that impact consumer spending, or the diversion of consumer funds to leisure and/or travel activity affect one or both of the primary factors. Estimates from Gartner on global semiconductor demand reflect these concerns. The research firm estimates that semiconductor revenue grew a mere 1.1% in 2022 versus its 7.4% estimate. And this estimate is down from 13.6% growth expected earlier. The expected decline in 2023 revenue is now 3.6%, which is down more than a percentage point from the prior estimate of 2.5%. Gartner does, however, say that the weakness is on the memory side where an inventory glut is leading to weak pricing. Memory demand is more dependent on consumer and computing gadgets, which makes it somewhat dependent on consumer purse strings. Enterprise demand is expected to hold up better, despite concerns related to the slowing economy because companies generally invest for the long term and place their orders well in advance. Additionally, because of the length of equipment sales cycles, short-term concerns usually don’t hurt the outlook immediately. Gartner expects 2022 semi equipment spending to increase 18% with related service revenue growing 24%. The 2023 estimate is not available yet. After three solid years, SEMI expects semiconductor manufacturing equipment revenue to decline 15.9% in 2023. This is mainly on account of WFE, which is expected to decline 16.8% this year before rebounding 17.2% in 2024. Foundry and logic (accounting for over half the shipments) will decline 9% in 2023.Back-end equipment, including testing, assembly and packaging are expected to decline double digits this year followed by double-digit growth in the next. The decline in spending will be broad-based across most geographies although China is expected to be the largest spender this year with Taiwan regaining the top spot next year. Social distancing and the at-home economy have accelerated digitization, driving up chip demand. And digitization has become a broader trend as companies prioritize their technology investments. Developments in auto, industrial, clean energy, IoT, healthcare, online services and defense segments are positive for long-term semiconductor demand, and in turn, for equipment spending.  A number of countries are moving to onshore semiconductor production as a strategic necessity, which is also a long-term positive for equipment demand. Despite this underlying strength, macro and geopolitical considerations, including restrictions on trading with China are likely to weigh on stocks like ASML Holding (ASML) and Lam Research (LRCX).About the IndustryIndustry players offer wafer fabrication equipment and services. Wafer fabrication involves the treatment of a silicon wafer (usually 200mm or 300mm in size) to successive layers of conductive and semiconductive material using stencil-like structures called reticles.After each deposition of material on the surface, the excess material is etched away and the wafer exposed to a light source to implant the design. The back-end process involves cutting up the individual die, packaging for protection/use, attachment of electrical leads and sorting.The industry depends on semiconductor demand, which primarily comes from cloud (growth is decelerating), ecommerce (relative softness), PCs (post-pandemic adjustments continue), smartphones (moderating demand), IoT (strong demand), automotive and industrial (relatively steady), AI and HPC (strong), comm infrastructure.Factors Shaping the IndustryNew export regulations are one of the biggest concerns right now. The increasing polarization between the two largest economies makes this a longer-term concern. Of course, China will only use foreign equipment/chips/resources until it can make its own. Therefore, business that would have gone away several years down the line now looks set to disappear right away. Semi equipment makers do substantial business in China, so the separation will be painful.Successive rate hikes have not had the desired effect on inflation in most industries, mainly because of strength in labor markets. Until the labor market weakens sufficiently, the rate hikes and energy cost inflation will only increase input cost, offsetting the relief from supply chains normalizing. And in case the labor markets soften and we do enter a recession, demand for several end devices that use semiconductors will be hit. Rate hikes also affect other economies, leading to a global slowdown. This hurts semiconductor companies and equipment makers on account of their being global players.Geopolitical tensions continue to simmer all over the world. There is the Ukraine war that is a general negative for the industry, especially those making equipment using neon and other gases the bulk of which are produced in the Ukraine and Russia. The threat of nuclear war is an added concern. China removing draconian COVID restrictions is a plus, but its increasing possessiveness about Taiwan is not. This is a big concern for the semiconductor industry in particular, given the amount of production that happens in the region. There is the financial crisis in the UK and several other countries, some of which appear to be going under. There is inflation the world over. This kind of upheaval is not positive for economic growth that can spur semiconductor demand. That said, the increasing use of electronics in communications and defense, and their role in helping companies to pull out of the mess means that semiconductor demand is likely to suffer less in the face of a global meltdown.Semiconductor demand is the primary driver of equipment purchases, although new fabs also play a big role. In fact, many new fabs are expected to come online over the next decade, which is a big positive for long term WFE demand. In the short term, however, it’s a concern that memory typically makes up the largest part of WFE spending, because that’s the segment with the inventory glut and the resultant price weakness.Technology transitions, such as the move toward larger wafer sizes (fab upgrades to 300mm, plus 200mm demand), shrinking nodes (7nm and below), memory chip advancements (4D NAND as increasing layers are adding complexity), denser packaging (MEMS), etc. Materials research, device complexities, the need for greater manufacturing integration and new applications are also important factors. Other inflections will· come from new chip architectures like workload-specific ASICs; next-generation 4D NAND; new materials in gate, contact and interconnect; advanced patterning; and advanced packaging. The increased complexity of building modern chips is good for equipment makers.Zacks Industry Rank Indicates Some Near-term UncertaintyThe Zacks Semiconductor Equipment -Wafer Fabrication Industry is a stock group within the broader Zacks Computer And Technology Sector. It carries a Zacks Industry Rank #94, which places it in the top 38% of nearly 250 Zacks-classified industries.Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, is a positive.The industry’s positioning in the top 50% of Zacks-ranked industries is because the earnings outlook of constituent companies in aggregate has remained relatively steady since last October. However, the industry’s aggregate earnings estimate revision for 2023 represents a 19.6% decline from Jan 2022. The 2024 revision amounts to a 12.0% decline from January although there’s an increase of 1.7% from October.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Lagging on Shareholder ReturnsThe Zacks Semiconductor-Wafer fab Equipment Industry has traded at a discount to the S&P 500 through the past year and also dropped below the broader technology sector at times. But it has moved up since October and is currently trading at a premium to both the industry and the S&P 500. The industry’s long-term prospects and the relative stability that comes from the long sales cycles and contracts makes it attractive in uncertain times. So we see that the stocks in this industry have collectively lost 7.8% over the past year, while the S&P 500 Composite lost 11.1% and the Zacks Computer and Technology Sector 21.7%.One-Year Price PerformanceImage Source: Zacks Investment ResearchIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E) ratio, which is a commonly used method of valuing semiconductor equipment companies, we see that the industry is currently trading at 23.76X, close to its high point of 23.92X relatively close to the sector’s 22.18X multiple. It is however well above the S&P 500’s 18.29X.Over the past year, the industry has traded as high as 23.92X, as low as 14.87X and at a median of 20.17X, as the chart below shows.Forward 12 Month Price-to-Earnings (P/E) RatioImage Source: Zacks Investment Research2 Stocks with Good Longer-term ProspectsWith the pandemic in the rearview mirror, it’s understood that the huge boost in semiconductor sales from the operating-from-home economy will not repeat, although the hybrid mode of operation has longer-term positive implications for the semiconductor and allied industries. Semiconductor demand will also be boosted by their expanding application across sectors and production in new geographies (given their strategic value).Equipment demand is more stable than chips, because semiconductor manufacturing equipment is high-value and so, a part of the long-term planning process. That said, geopolitical tensions may disrupt the supply chain and increase cost, which will impact profitability.Given the somewhat mixed prospects, all of the stocks in this industry currently have a #3 (Hold) rating. Below, we are taking a closer look at two of them:ASML Holding NV (ASML): This is one of the world’s largest suppliers of advanced semiconductor equipment consisting of lithography, metrology and inspection systems for memory and logic chipmakers.Management has said that while there is continued uncertainty on account of inflation, rising interest rates, risk of recession and geopolitical developments related to export controls, customer optimism for a rebound in the second half, the typically long lead times and the strategic nature of lithography investments add up to continued strength in 2023.The Zacks Consensus Estimate for 2023 has dropped in the last seven days, but remains above the levels estimated 60 days ago. The Zacks Consensus Estimate for 2024 has increased consistently in the last 30 days. Despite the fact that geopolitical concerns are considerable for ASML, analysts are highly optimistic. In fact this is the only equipment company that is expected to generate strong double-digit growth rates in both 2023 and 2024.The shares are down 3.5% over the past year.Price and Consensus: ASMLImage Source: Zacks Investment Research Lam Research Corp. (LRCX): Lam Research is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Its primary focus is the memory segment from which it generates 60% of its revenue. The rest is roughly even between foundry and logic. It is highly exposed to China, generating over 30% of revenue from the region.Lam had a strong 2022, but is headed into a challenging 2023, as equipment spending is set to plunge in the March quarter due to an inventory correction, particularly in the NAND and DRAM memory segments, to which it is highly exposed. Trade restrictions with China are also an overhang. The rest of the year is likely to be relatively flat and the longer-term outlook is of course excellent. Semiconductor content increases in existing devices and increased application in several markets, rising device complexity and larger die sizes remain long-term positives.This stock has lost 18.3% of its value over the past year. The Zacks Consensus Estimate for 2023 (ending June) earnings is down 1.1% in the last 60 days. The estimate for 2024 is up 2.3%.Price and Consensus: LRCXImage Source: Zacks Investment Research Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in?  If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.>>Send me my free report on the top 5 EV stocksWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

The longer-term outlook for the Zacks Semiconductor Equipment ??? Wafer Fabrication industry is solid while the near-term outlook is supply constrained. Valuation continues to deteriorate. The primary drivers of wafer fab equipment demand are the underlying strength of semiconductor demand and the existing capacity level. Social distancing and the at-home economy have accelerated digitization, driving up chip demand. And digitization has become a broader trend as companies prioritize their technology investments. Developments in auto, industrial, clean energy, IoT, healthcare, online services and defense segments will ensure continued strength in semiconductor demand, thus driving equipment spending.  A number of countries are moving to onshore semiconductor production as a strategic necessity, which is a long-term positive. Market researchers also see continued strength. Updated estimates from Gartner are not yet available and its prior estimates call for 10.7% growth in semiconductor equipment spending in 2022. Gartner expects WFE spending to come down in 2023 and 2024 as purchased equipment is digested. SEMI recently updated its estimates for global fab equipment spending. The firm sees 8% growth in 2022 on top of the 7% growth in 2021. Foundry is expected to remain the biggest segment in 2022 with a 53% share followed by memory, which will account for 33% as 158 existing fabs increase capacity, accounting for 85% of total equipment spend. Spending will increase 6% in 2023, with foundry remaining by far the largest segment with 53% share followed by memory with 34%. There with be capacity increases at 129 existing fabs (83% of total spending). Taiwan, the biggest spender, is expected to increase investment by 52% in 2022, followed by Korea, which will increase by 7% and then China, which will reduce by 14%.  Record investments are expected in Taiwan, Korea and Southeast Asia in 2023. The Americas will increase by 19% this year and 13% in the next. Despite the underlying strength, macro and geopolitical considerations, and supply constraints are weighing on stocks like ASML Holding ASML and Advanced Energy Industries AEIS.About The IndustryWafer fabrication is a process during which a silicon wafer (usually 200mm or 300mm in size) is treated with successive layers of conductive and semiconductive material using stencil-like structures called reticles. After each deposition of material on the surface, the excess material is etched away and the wafer exposed to a light source to implant the design. This is the front end process. The back-end process is involved in cutting up the individual die, packaging for protection and use, attaching of electrical leads and sorting. Semiconductor demand primarily comes from cloud (where there is continued strength), ecommerce (relative softness), PCs (softening after huge sales during the pandemic), smartphones (moderating demand), IoT (strong demand), automotive and industrial (chip shortage), and artificial intelligence, HPC, communications infrastructure (5G-related strength).Factors Shaping The IndustryCOVID has been both good and bad for the semiconductor industry, since it pushed up demand in some segments while depressing demand in others. Researchers are in agreement about the positive overall impact on WFE. The surge in semiconductor demand obviously has a direct impact on the WFE industry, and the biggest positive is that this equipment takes time to produce and sell. So the pandemic-related demand will boost equipment spending for a couple of years at least. The war in Ukraine is a general negative for the industry, especially those making equipment using neon and other gases the bulk of which are produced in the Ukraine and Russia. Even for those that don’t directly source a lot of their requirement from these countries, the general scarcity of supply is increasing prices of the commodity, which can result in weaker margins. Semiconductor demand is the primary driver of equipment purchases, although new fabs also play a big role. In fact, many new fabs are expected to come online over the next few years, which will make this a major driver in 2022 and beyond. According to SEMI, 10 new fabs will break ground in 2022, of which 7 are leading edge, together generating demand for $140 billion worth of equipment over the next few years. This is in addition to the 19 in 2021, of which leading edge (300mm) number 15. It generally takes two years from ground-breaking to equipping, so the current strength in equipment demand has a long tail. It is also worth keeping in mind that equipment demand tends to be relatively stable in times of short-term challenges because they are made with a longer-term objective. Memory typically makes up the largest part of WFE spending, but of the 29 new fabs mentioned here, 15 are meant for high-volume foundry production with 30,000 to 220,000 wspm capacity and 4 relate to memory production with 100,000 to 400,000 wspm capacity. China continues to play a big role (as both consumer and manufacturer of chips) because of the government’s initiative to make the country a major producer of semiconductors. While there are political pressures from across the world, particularly from the U.S., the Chinese are very determined to get there and have their own global relationships and partners. Since the west doesn’t want to sell it the most advanced equipment, it is investing heavily in its own equipment technology and there are concerns that it may have stolen some intellectual property. But because this is likely to take a few years, it’s a positive that of the 29 new fabs breaking ground in 2021 and 2022, 8 will be built in China. Because they will have to use imported equipment. Technology transitions, an important consideration for equipment purchases, will continue to respond to the move toward larger wafer sizes (fab upgrades to 300mm, as well as continued demand for 200mm), shrinking nodes (7nm and below), memory chip advancements (4D NAND as increasing layers are adding complexity), denser packaging (MEMS) and so forth. Materials research, device complexities, the need for greater manufacturing integration and new applications are also important factors. Other inflections will come from new chip architectures like workload-specific ASICs; next-generation 4D NAND; new materials in gate, contact and interconnect; advanced patterning; and advanced packaging. The increased complexity of building modern chips is good for equipment makers.Zacks Industry Rank Indicates Dismal ProspectsThe Zacks Semiconductor Equipment -Wafer Fabrication Industry is a stock group within the broader Zacks Computer And Technology Sector. It carries a Zacks Industry Rank #223, which places it in the bottom 11% of more than 250 Zacks industries.Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates relative stability going forward.The industry’s positioning in the bottom 50% of Zacks-ranked industries is a result of the weakening in the earnings outlook of constituent companies in aggregate. The industry’s aggregate earnings estimate revision for 2022 represents a 3.7% decline from Jul 2021, while the 2023 revision amounts to a 5.6% increase.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Lagging On Shareholder ReturnsThe Zacks Semiconductor-Wafer fab Equipment Industry outperformed the S&P 500 in the last six months of last year, but has lagged the index through most of this year. It has performed similarly with respect to the broader technology sector. The main reasons for the negativity in 2022 are supply chain concerns, as exacerbated by the geopolitical crisis as well as recession fears that have impacted the whole market. So we see that the stocks in this industry have collectively lost 32.4% over the past year, while the S&P 500 Composite lost 13.5% and the Zacks Computer and Technology Sector 27%.One-Year Price PerformanceImage Source: Zacks Investment ResearchIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E) ratio, which is a commonly used method of valuing semiconductor equipment companies, we see that the industry is currently trading at 15.86X (the lowest point over the past year) and also trails the S&P 500’s 16.29X. It is also below the sector’s forward-12-month P/E of 19.48X.Over the past year, the industry has traded as high as 28.47X, as low as 15.86X and at the median of 24.00X, as the chart below shows.Forward 12 Month Price-to-Earnings (P/E) RatioImage Source: Zacks Investment Research2 Stocks With Solid Longer-term ProspectsWith pandemic concerns waning, it’s understood that the huge boost in semiconductor sales from the operating-from-home economy will not repeat, although the hybrid mode of operation has longer-term positive implications for the semiconductor and allied industries. Semiconductor demand will also be boosted by their expanding application across sectors and countries and current demand reflects this. Equipment demand is more stable than chips, because semiconductor manufacturing equipment is high-value and so, a part of the long-term planning process. That said, geopolitical tensions may disrupt the supply chain and increase cost, which will impact profitability.The industry has however been beaten down over the last few months and is certainly worth more than its current value reflects, which could be a reason for considering these #3 (Hold) ranked stocks.ASML Holding NV (ASML): This is one of the world’s largest suppliers of advanced semiconductor equipment systems consisting of lithography, metrology and inspection related systems for memory and logic chipmakers.ASML Holding continues to see very strong demand well in excess of its available capacity. It is therefore in the process of expanding capacity and adjusting with its supply chain partners.The Zacks Consensus Estimate for 2022 is down 0.6% in the last 30 days while the 2023 estimate is down 0.7%. Geopolitical concerns are considerable for ASML, which is making analysts incrementally cautious.The shares are down 35.1% over the past year.Being one of the leading players in the semi equipment space with major customers across important markets, the company is a beneficiary of strengthening demand in the industry.Price and Consensus: ASMLImage Source: Zacks Investment Research Advanced Energy Industries (AEIS): Advanced Energy Industries is a global supplier of precision power conversion, measurement and control solutions. It is currently focused on power-conversion solutions, including direct current, pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation into the semiconductor, flat panel display and industrial markets.Advanced Energy is seeing strong momentum across end markets, particularly for its dielectric etch, RPS and panel-level packaging products. Improving prospects in enterprise computing and 5G, as well as improving component supplies are positives.This stock has lost 24.8% of its value over the past year. The Zacks Consensus Estimates for 2022 earnings is up 0.8% in the last 30 days. The estimate for 2023 is down 0.6%.Price and Consensus: AEISImage Source: Zacks Investment Research Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis Report Advanced Energy Industries, Inc. (AEIS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

SK Siltron, a semiconductor wafer manufacturer affiliated with SK Group, reportedly is planning to invest KRW1 trillion (US$807 million) to expand its silicon wafer production capacity by the first half of 2024......»»

The Zacks Semiconductor Equipment ??? Wafer Fabrication industry is seeing strong demand but significant supply constraints. Valuations continue to decline for a number of reasons including macro concerns, making AMAT and LRCX worth owning today. The primary drivers of wafer fab equipment demand are the underlying strength of semiconductor demand and the existing capacity level. Social distancing and the at-home economy have accelerated digitization, driving up chip demand. And digitization has become a broader trend as companies prioritize their technology investments. Developments in auto, industrial, clean energy, IoT, healthcare, online services and defense segments will ensure continued strength in semiconductor demand, thus driving equipment spending.  China’s determination to be self-reliant in chips is currently a big driver of equipment sales. But increasing pressure from the West to contain its progress, has the country racing to make its own. In the interim, and barring regulatory roadblocks from the American side, this remains a tailwind for the industry. Other countries deciding to onshore production as a strategic necessity is a long-term positive. Market researchers also see continued strength. The most recent estimate from Gartner has WFE revenue growth at 35.8% in 2021 and 10.7% in 2022. There are three drivers: continued spending on leading edge logic by IDMs and foundries and capacity increases at memory producers. Trailing edge investment to alleviate supply chain constraints is not a driver going forward. Gartner expects WFE spending to come down in 2023 and 2024 as purchased equipment is digested. SEMI sees 10% growth in 2022 on top of the 39% growth in 2021 with 46% of 2022 spending coming from foundry, 37% from memory (as DRAM declines and 3D NAND nudges higher) and the rest from logic equipment. Microcontrollers (+47%) and power devices (+33%) are expected to be the strongest categories this year. Korea (+14%), Taiwan (+14%) and China (-20%) remain the biggest spenders, together accounting for 73% of WFE spending.  EMEA and Japan are expected to grow a respective 145% and 29%. Despite the growth prospects, macro and geopolitical considerations are weighing down stocks like Applied Materials (AMAT), Lam Research (LRCX) and Applied Materials (AMAT).About The IndustryWafer fabrication is a process during which a silicon wafer (usually 200mm or 300mm in size) is treated with successive layers of conductive and semiconductive material using stencil-like structures called reticles. After each deposition of material on the surface, the excess material is etched away and the wafer exposed to a light source to implant the design. This is the front end process. The back-end process is involved in cutting up the individual die, packaging for protection and use, attaching of electrical leads and sorting.Fabrication equipment demand is dependent on the level of semiconductor demand and the level of installed capacity.Semiconductor demand primarily comes from cloud, ecommerce and PCs (COVID-related acceleration), smartphones (moderating demand), IoT (strong demand), automotive and industrial (chip shortage), artificiFactors Shaping The IndustryCOVID has been both good and bad for the semiconductor industry, since it pushed up demand in some segments while depressing demand in others. Researchers are in agreement about the positive overall impact on WFE. This is not only because of the surge in semiconductor demand, which has a direct impact on the WFE industry, but also the fact that manufacturing operations in general have suffered less than services during this crisis. One lasting impact of the pandemic is the approach to inventory building. Customers are now leaning toward a more cautious (and expensive) just-in-case approach rather than the cheaper but riskier just-in-time approach. The war in Ukraine is a general negative for the industry, especially those making equipment using neon and other gases the bulk of which are produced in the Ukraine and Russia. Even for those that don’t directly source a lot of their requirement from these countries, the general scarcity of supply is increasing prices of the commodity, which can result in weaker margins. Semiconductor demand is the primary driver of equipment purchases, although new fabs also play a big role. In fact, many new fabs are expected to come online over the next few years, which will make this a major driver in 2022 and beyond. According to SEMI, 10 new fabs will break ground in 2022, of which 7 are leading edge, together generating demand for $140 billion worth of equipment over the next few years. This is in addition to the 19 in 2021, of which leading edge (300mm) number 15. It generally takes two years from ground-breaking to equipping, so the current strength in equipment demand has a long tail. It is also worth keeping in mind that equipment demand tends to be relatively stable in times of short-term challenges because they are made with a longer-term objective. Memory typically makes up the largest part of WFE spending, but of the 29 new fabs mentioned here, 15 are meant for high-volume foundry production with 30,000 to 220,000 wspm capacity and 4 relate to memory production with 100,000 to 400,000 wspm capacity. China continues to play a big role (as both consumer and manufacturer of chips) because of the government’s initiative to make the country a major producer of semiconductors. While there are political pressures from across the world, particularly from the U.S., the Chinese are very determined to get there and have their own global relationships and partners. Since the west doesn’t want to sell it the most advanced equipment, it is investing heavily in its own equipment technology and there are concerns that it may have stolen some intellectual property. But because this is likely to take a few years, it’s a positive that of the 29 new fabs breaking ground in 2021 and 2022, 8 will be built in China. Because these will have to be imported. Technology transitions, an important consideration for equipment purchases, will continue to respond to the move toward larger wafer sizes (fab upgrades to 300mm, as well as continued demand for 200mm), shrinking nodes (7nm and below), memory chip advancements (3D NAND processes are maturing, driving down cost, increasing layers are adding complexity), denser packaging (MEMS) and so forth. Materials research, device complexities, the need for greater manufacturing integration and new applications are also important factors. Other inflections will come from new chip architectures like workload-specific ASICs; new 3D structures like gate-all-around transistors, backside power distribution, next-generation 3D NAND and 3D DRAM; new materials in gate, contact and interconnect; new ways to shrink from EUV lithography to advanced patterning; and advanced packaging from 2.5D silicon interposers to 3D chiplets and hybrid bonding. The increased complexities of building modern chips is good for equipment makers.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Semiconductor Equipment -Wafer Fabrication industry is a stock group within the broader Zacks Computer And Technology sector. It carries a Zacks Industry Rank #115, which places it in the top 46% of more than 250 Zacks industries.Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates relative stability going forward.The industry’s positioning in the top 50% of Zacks-ranked industries is a result of the strength in the earnings outlook of constituent companies in aggregate. The industry’s aggregate earnings estimate revision for 2022 represents a 26.9% increase from Mar 2021, while the 2023 revision amounts to a 30% increase.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Outperforming On Shareholder ReturnsThe Zacks Semiconductor-Wafer fab Equipment Industry has outperformed both the broader technology sector and the S&P 500 through most of the past year. But as a reaction to investor concerns around growth names and the tech sector in particular, it has softened this year. So we see that the stocks in this industry have collectively gained 4.2% over the past year, while the S&P 500 Composite gained 6.1% and the Zacks Computer and Technology Sector lost 4.3%.One-Year Price PerformanceImage Source: Zacks Investment ResearchIndustry???'s Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E) ratio, which is a commonly used method of valuing semiconductor equipment companies, we see that the industry is currently trading at 19.98X (the lowest multiple over the past year). This is just above the S&P 500’s 18.56X and below the sector’s forward-12-month P/E of 22.29X.Over the past year, the industry has traded as high as 31.11X, as low as 19.98X and at the median of 27.73X, as the chart below shows.Forward 12 Month Price-to-Earnings (P/E) RatioImage Source: Zacks Investment Research2 Stocks With Room To RunWith pandemic concerns waning, it’s understood that the huge boost to sales from the operating-from-home economy will not repeat, although the hybrid mode of operation has longer-term positive implications for the semiconductor and allied industries. Particularly because it will play out gradually across the world, leading to sustained strength in demand.Semiconductor demand will also be boosted by their expanding application across sectors and countries and current demand reflects this. Equipment demand is also more stable than chips, because semiconductor manufacturing equipment is high-value and so, a part of the long-term planning process.That said, geopolitical tensions may disrupt the supply chain and increase cost, which will impact profitability. Additionally, with so much capacity added in 2021 and 2022, it remains to be seen what the demand scenario looks like in the next few years.The industry has however been beaten down over the last few months and is certainly worth more than its current value reflects, which could be a reason for considering these #3 (Hold) ranked stocks.Applied Materials (AMAT): This is one of the world’s largest suppliers of fabrication equipment for semiconductors, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules.Management has said that Applied Materials is seeing very strong order growth and is close to being ‘sold out for the year’ and that the outlook for 2023 is also very strong. It has also been transferring its parts and service revenue to the subscription model, locking in customers for the longer term.The Zacks Consensus Estimate for 2022 (ending October) is down 8 cents in the last 30 days while the 2023 estimate is up 47 cents, which could be increased conservatism stemming from the geopolitical crisis or a sign that some order/s got pushed out.The shares are up 7.6% over the past year.Being one of the leading players in the semi equipment space with major customers across important markets, the company is a beneficiary of strengthening demand in the industry, including in the red-hot China market.Price and Consensus: AMATImage Source: Zacks Investment ResearchLam Research Corporation (LRCX): Lam Research supplies wafer fabrication equipment for deposition, etching, cleaning and metrology, as well as related services that are used by semiconductor manufacturers in the front-end of the semiconductor manufacturing process.  The company has significant exposure to the memory segment (approximately two-thirds of its business), followed by foundry and then logic.SEMI expects 37% growth in 2022 with DRAM declining but 3D NAND moving higher. Management expects WFE spending of around $100 billion this year. Foundry/logic remains the strongest product segment for Lam.The company has been adding capacity in the U.S., Korea, Taiwan and Malaysia to cater to demand that remains extremely strong. But a string of problems including COVID-19, labor shortages, freight and logistics, cost escalation, and supply chain constraints are increasing cost.This stock has lost 9.9% of its value over the past year. The Zacks Consensus Estimates for 2022 earnings is down $1.63 (4.8%) in the last 60 days. The estimate for 2023 is up $1.27 (3.4%).Price and Consensus: LRCXImage Source: Zacks Investment Research Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022? Last year's 2021 Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buysAccess Zacks Top 10 Stocks for 2022 today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

FREMONT, Calif., Feb. 25, 2022 (GLOBE NEWSWIRE) -- ACM Research, Inc. ("ACM" or the "Company") (NASDAQ:ACMR), a leading supplier of wafer processing solutions for semiconductor and advanced wafer-level packaging applications, today reported financial results for its fourth quarter and fiscal year ended December 31, 2021. "2021 was an exceptional and transformative year for ACM, with solid financial performance, operational excellence, and execution of our strategic plan," said ACM's President and Chief Executive Officer Dr. David Wang. "Our results demonstrate the effectiveness of ACM's multi-product strategy, with strong growth from our flagship cleaning tools, and significant increases from electrochemical plating and advanced packaging products." Dr. Wang continued, "We expanded our customer base, ramped production of new products, and secured orders for evaluation tools from several major semiconductor manufacturers. In November, we raised $545 million in net proceeds through the STAR Market IPO of our subsidiary ACM Research Shanghai. We plan to deploy this capital to accelerate the introduction of new products, add resources to win new major global customers, and continue construction of our Lingang R&D center and production facility. We believe that the STAR Market listing, combined with the listing of ACM's Class A common stock on the Nasdaq Global Market, provides a strong foundation to accelerate our mission to become a global player in the semiconductor equipment industry." "Looking forward to 2022, we anticipate solid growth from our core cleaning products, a continuation of our strong electrochemical plating product cycle, and the initial ramp of our furnace products. We are committed to gaining additional share of the $8 billion market addressed by our current product offerings, and we believe we are on track to double our addressable market opportunity with the upcoming introduction of two new product categories."                   Three Months Ended December 31,   GAAP   Non-GAAP(1)     2021       2020       2021       2020     (dollars in thousands, except EPS) Revenue $ 95,142     $ 45,562     $ 95,142     $ 45,562   Gross margin   47.8 %     43.2 %     47.9 %     43.3 % Income from operations $ 19,126     $ 5,432     $ 20,420     $ 6,737   Net income attributable to ACM Research, Inc. $ 15,565     $ 8,529     $ 18,069     $ 6,230   Basic EPS $ 0.80     $ 0.46     $ 0.93     $ 0.34   Diluted EPS (2) $ 0.70     $ 0.39     $ 0.81     $ 0.29                                                     Year Ended December 31,   GAAP   Non-GAAP(1)     2021       2020       2021       2020     (dollars in thousands, except EPS) Revenue $ 259,751     $ 156,624     $ 259,751     $ 156,624   Gross margin   44.2 %     44.4 %     44.4 %     44.5 % Income from operations $ 38,702     $ 21,492     $ 43,819     $ 27,120   Net income attributable to ACM Research, Inc. $ 37,757     $ 18,780     $ 42,267     $ 23,798   Basic EPS $ 1.96     $ 1.03     $ 2.20     $ 1.31   Diluted EPS (2) $ 1.73     $ 0.89     $ 1.94     $ 1.12                                   (1)   Reconciliations to U.S. generally accepted accounting principles ("GAAP") financial measures from non-GAAP financial measures are presented below under "Reconciliation of GAAP to Non-GAAP Financial Measures." Non-GAAP financial measures exclude stock-based compensation and, with respect to net income (loss) attributable to ACM Research, Inc. and basic and diluted EPS, also exclude non-cash change in fair value of financial liabilities and unrealized gain on trading securities. (2)   Diluted EPS includes an impact of $108,000 in the fourth quarter and the full year 2021 from dilutive shares of ACM Research (Shanghai), Inc. Outlook For fiscal year 2022, the Company expects revenue to be in the range of $365 million to $405 million, an increase from guidance provided in a press release announcement made on January 4, 2022. This expectation assumes, among other factors, improvement with respect to the global COVID-19 pandemic and stability in US-China trade policy. The range of ACM's 2022 outlook reflects, among other things, various spending scenarios for the production ramps of key customers, the absence of unexpected disruptions in ACM's supply chain, and the timing of acceptances for first tools under evaluation in the field. Operating Highlights and Recent Announcements Shipments. Total shipments in 2021 were $372 million, versus $182 million in 2020. Total shipments in the fourth quarter of 2021 were $117 million, versus $67 million in the fourth quarter of 2020 and $99 million in the third quarter of 2021. Total shipments include deliveries for revenue in the quarter and deliveries of first tool systems awaiting customer acceptance for potential revenue in future quarters. Orders for Ultra ECP map and Ultra ECP ap copper plating systems. In February 2022, ACM announced it had received volume purchase orders for 13 Ultra ECP map and 8 Ultra ECP ap copper plating systems, of which 10 tools are repeat orders from a top-tier Chinese foundry. The orders represent the first volume purchase order of ACM's Ultra ECP map systems. The customer has qualified the Ultra ECP map tool in 65 nm to 28 nm processes, where its performance met or exceeded requirements, and has ordered a significant number of tools for its production lines. Orders for Ultra C wb Wet bench Tools. In February 2022, ACM announced it had received volume purchase orders for 29 Ultra C wb wet bench tools for 300 mm wafer applications. The orders are from multiple China-based customers, and include repeat orders for 16 tools from an emerging foundry customer to support its ongoing fab expansion. Shipments are scheduled in two phases, beginning in the first half of 2022. Introduced Compound Semiconductor Tools. This new comprehensive tool set supports compound semiconductor manufacturing, which addresses growing demand from electric vehicle, 5G communication and AI markets. ACM's 150mm-200mm bridge systems support front-end cleaning and a wide range of advanced wafer-level packaging applications for compound semiconductors, including gallium arsenide (GaAs), gallium nitride (GaN) and silicon carbide (SiC) processes. The wet process portfolio includes coater, developer, photoresist (PR) stripper, wet etcher, cleaner and metal plating tools. In January 2022, ACM announced it had delivered one Ultra C wet etch tool and two electrochemical plating (ECP) GIII tools and received a purchase order for two Ultra C PR wet stripping systems from a leading global integrated device manufacturer. Orders for SAPS Single-Wafer-Cleaning Tools. In December 2021, ACM announced it had received orders for Ultra C SAPS V 12-chamber cleaning tools from a major U.S.-based global semiconductor manufacturer. Both tools are expected to be installed in the prospective customer's U.S. facilities for use in its advanced processes. The orders, scheduled for delivery in the first half of 2022, include an evaluation tool to further confirm the tool's cleaning performance and a production tool intended for a high-volume manufacturing line. Completion of ACM Shanghai's STAR Market IPO and Shares Listing. ACM Shanghai completed its IPO process and started trading on the Shanghai Stock Exchange's Sci-Tech innovAtion boaRd (the STAR Market), under the stock code: 688082, on November 18, 2021. In its IPO ACM Shanghai issued 43,355,753 shares, representing 10% of the total 433,557,100 shares outstanding after the IPO. The shares were issued at a public offering price of RMB 85.00 per share, and the gross proceeds of the IPO totaled RMB 3.685 billion (US$577 million based on November 17, 2021 currency exchange rates). Full Year 2021 Financial Summary Revenue for 2021 was $259.8 million, up 66% from 2020, reflecting a 44% increase in revenue from single wafer cleaning, Tahoe and semi-critical cleaning equipment, a 149% increase in revenue from ECP, furnace and other technologies, and a 210% increase in revenue from advanced packaging (excluding ECP), services and spares. Gross margin for 2021 was 44.2%, versus 44.4% in 2020. Non-GAAP gross margin, which excludes stock-based compensation, was 44.4%, versus 44.5% in 2020. Gross margin was within the range of 40% to 45% reflected in the Company's long-term business model. The Company expects gross margin to vary from period to period due to a variety of factors, such as sales volume and product mix. Operating expenses for 2021 were $76.2 million, compared to $48.1 million in 2020. Non-GAAP operating expenses, which exclude the effect of stock-based compensation, were $71.4 million, compared to $42.7 million in 2020. The increase in operating expenses for 2021 was due to higher research and development spending on new products.   Operating income for 2021 was $38.7 million, compared to $21.5 million in 2020. Operating income as a percent of revenue was 14.9% in 2021 versus 13.7% in 2020. Non-GAAP operating income, which excludes the effect of stock-based compensation, was $43.8 million, compared to $27.1 million in 2020. Unrealized gain on trading securities for 2021 was $0.6 million. The gain reflects the change in market value of ACM Shanghai's indirect investment in STAR Market IPO shares of Semiconductor Manufacturing International Corporation (SMIC), which began trading in mid-July 2020. The value was marked-to-market at year-end and is excluded from non-GAAP results. Net income attributable to ACM Research, Inc. for 2021 was $37.8 million, compared to $18.8 million in 2020. Non-GAAP net income attributable to ACM Research, Inc. in 2021, excluding the effect of stock-based compensation, non-cash change in fair value of financial liabilities, and unrealized gain on trading securities, was $42.3 million as compared to $23.8 million in 2020. Tax items (compared to a normalized tax rate), and the effects of foreign-exchange fluctuations on operating results provided net benefits of $4.9 million and $0.9 million in 2021 and 2020, respectively. Net income per diluted share attributable to ACM Research, Inc. for 2021 was $1.73, compared to $0.89 in 2020. Non-GAAP net income per diluted share, which excludes the effect of stock-based compensation, non-cash change in fair value of financial liabilities, and unrealized gain on trading securities, was $1.94 in 2021, compared to $1.12 in 2020. Tax items and effects of foreign-exchange fluctuations on operating results provided net benefits per share of $0.23 and $0.04 in 2021 and 2020, respectively. Cash and cash equivalents at December 31, 2021 were $563.1 million, versus $71.8 million at December 31, 2020. In addition, at December 31, 2021, ACM Shanghai's STAR Market equity investment in SMIC at December 31, 2021 had a fair value of $29.5 million. Fourth Quarter 2021 Financial Summary Revenue in the fourth quarter of 2021 was $95.1 million, up 109% year over year, reflecting a 68% increase in revenue from single wafer cleaning, Tahoe and semi-critical cleaning equipment, a 386% increase in revenue from ECP, furnace and other technologies, and a 189% increase in revenue from advanced packaging (excluding ECP), services and spares. Gross margin in the fourth quarter of 2021 was 47.8%, up from 43.2% in the same period of 2020. Non-GAAP gross margin, which excludes stock-based compensation, was 47.9%, versus 43.3% in 2020. Gross margin exceeded the high end of the range of 40% to 45% set forth in the Company's long-term business model. The Company expects gross margin to vary from period to period due to a variety of factors, such as sales volume and product mix. Operating expenses in the fourth quarter of 2021 were $26.3 million, up from $14.2 million in the fourth quarter of 2020. Non-GAAP operating expenses, which exclude the effects of stock-based compensation, were $25.1 million, compared to $13.0 million in the fourth quarter of 2020. The increase in operating expenses for the fourth quarter of 2021 was due to higher research and development spending on new products.   Operating income in the fourth quarter of 2021 was $19.1 million, up from $5.4 million in the fourth quarter of 2020. Operating income as a percent of revenue was 20.1% in the fourth quarter of 2021 versus 11.9% in the same period of 2020. Non-GAAP operating income, which excludes the effect of stock-based compensation, was $20.4 million, compared to $6.7 million in the fourth quarter of 2020. Unrealized loss on trading securities was $1.2 million in the fourth quarter of 2021. The loss reflects the change in market value of ACM Shanghai's indirect investment in STAR Market IPO shares of SMIC, which began trading in mid-July 2020. The value was marked-to-market at quarter-end and is excluded from non-GAAP results. Net income attributable to ACM Research, Inc. in the fourth quarter of 2021 was $15.6 million, compared to $8.5 million in the fourth quarter of 2020. Non-GAAP net income attributable to ACM Research, Inc. in the fourth quarter of 2021, excluding the effect of stock-based compensation, and unrealized gain on trading securities, was $18.1 million as compared to $6.2 in the fourth quarter of 2020. Equity income in net income of affiliates contributed $3.6 million in the fourth quarter of 2021, due in part to an investment-related gain from ACM Shanghai's participation in a limited partnership, as compared to $0.1 million in the fourth quarter of 2020. Tax-related items (compared to a normalized tax rate) and the effects of foreign-exchange fluctuations on operating results provided a net benefit of $0.2 million and $0.9 million in the fourth quarters of 2021 and 2020, respectively. Net income per diluted share attributable to ACM Research, Inc. in the fourth quarter of 2021 was $0.70, compared to $0.39 in the fourth quarter of 2020. Non-GAAP net income per diluted share, which excludes the effect of stock-based compensation and unrealized gain on trading securities, was $0.81 in the fourth quarter of 2021, compared to $0.29 in the fourth quarter of 2020. Tax items and effects of foreign-exchange fluctuations on operating results provided a net benefit per share of $0.01 and $0.04 in the fourth quarters of 2021 and 2020, respectively. Conference Call Details A conference call to discuss results will be held on Friday, February 25, 2022, at 8:00 a.m. Eastern Time (9:00 p.m. China Time). Dial-in details for the call are as follows. Please reference conference ID 9396606.   Phone Number Toll-Free Number United States +1 (661) 567-1217 +1 (833) 562-0137 Hong Kong +852 5819 4851 +852 8009 66253 Mainland China +86 8008700169+86 4006828609   A recording of the webcast will be available on the investor page of the ACM website at www.acmrcsh.com for one week following the call. Use of Non-GAAP Financial Measures ACM presents non-GAAP gross margin, operating expenses, operating income, net income (loss) attributable to ACM Research, Inc. and basic and diluted earnings per share as supplemental measures to GAAP financial measures regarding ACM's operational performance. These supplemental measures exclude the impact of stock-based compensation, which ACM does not believe is indicative of its core operating results. In addition, non-GAAP net income attributable to ACM Research, Inc. and basic and diluted EPS exclude non-cash change in fair value of financial assets and liabilities and unrealized gain on trading securities, which ACM also believes are not indicative of its core operating results. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided below under "Reconciliation of Non-GAAP to GAAP Financial Measures." ACM believes these non-GAAP financial measures are useful to investors in assessing its operating performance. ACM uses these financial measures internally to evaluate its operating performance and for planning and forecasting of future periods. Financial analysts may focus on and publish both historical results and future projections based on the non-GAAP financial measures. ACM also believes it is in the best interests of investors for ACM to provide this non-GAAP information. While ACM believes these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures may not be reported by competitors, and they may not be directly comparable to similarly titled measures of other companies due to differences in calculation methodologies. The non-GAAP financial measures are not an alternative to GAAP information and are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. They should be used only as a supplement to GAAP information and should be considered only in conjunction with ACM's consolidated financial statements prepared in accordance with GAAP. Forward-Looking Statements Certain statements contained in the second, third and fourth paragraphs of this press release, under the heading "Outlook" above, and in the third and fifth bullet under "Operating Highlights and Recent Announcements" above are not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the intent, belief and current expectations with respect to: the demand for ACM's tools, including specifically in fiscal year 2022; the expansion in 2022 of ACM's product offering, production capacity and base of major customers; and the timing and ability of ACM to secure orders from new customers. Those statement are expectations only, reflect management's current views, are based on certain assumptions, and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, the following, any of which could be exacerbated even further by the continuing COVID-19 outbreak in China and globally: anticipated customer orders or identified market opportunities may not grow or develop as anticipated; customer orders already received may be postponed or canceled; ACM may be unable to obtain the qualification and acceptance of its delivered tools when anticipated or at all, which would delay or preclude ACM's recognition of revenue from the sale of those tools; suppliers may not be able to meet ACM's demands on a timely basis; ACM's technologies and tools may not gain market acceptance; ACM may be unable to compete effectively by, among other things, enhancing its existing tools, adding additional production capacity and engaging additional major customers; volatile global economic, market, industry and other conditions could result in sharply lower demand for products containing semiconductors and for the Company's products and in disruption of capital and credit markets; trade regulations, currency fluctuations, political instability and war may materially adversely affect ACM due to its substantial non-U.S. customer and supplier base and its substantial non-U.S. manufacturing operations. ACM cannot guarantee any future results, levels of activity, performance or achievements. ACM undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in its expectations regarding these forward-looking statements or the occurrence of unanticipated events. About ACM Research, Inc. ACM develops, manufactures and sells semiconductor process equipment for single-wafer or batch wet cleaning, electroplating, stress-free polishing and thermal processes that are critical to advanced semiconductor device manufacturing, as well as wafer-level packaging. The Company is committed to delivering customized, high performance, cost-effective process solutions that semiconductor manufacturers can use in numerous manufacturing steps to improve productivity and product yield. © ACM Research, Inc. SAPS, ULTRA C and the ACM Research logo are trademarks of ACM Research, Inc. For convenience, these trademarks appear in this press release without ™ symbols, but that practice does not mean that ACM will not assert, to the fullest extent under applicable law, its rights to the trademarks. For investor and media inquiries, please contact:     In the United States: The Blueshirt Group   Yujia Zhai   +1 (860) 214-0809   yujia@blueshirtgroup.com     In China: The Blueshirt Group Asia   Gary Dvorchak, CFA   +86 (138) 1079-1480   gary@blueshirtgroup.com ACM RESEARCH, INC.   Condensed Consolidated Balance Sheets               December 31, 2021   December 31, 2020     (Unaudited)     (In thousands, except share and per share data)   Assets         Current assets:         Cash and cash equivalents $ 563,067   $ 71,766   Trading securities   29,498     28,239   Accounts receivable, less allowance for doubtful accounts of $0 as of December 31, 2021 and December 31, 2020   105,553     56,441   Income tax recoverable   1,082     -   Other receivables   18,979     9,679   Inventories   218,116     88,639   Prepaid expenses   16,639     5,892           Total current assets   952,934     260,656   Property, plant and equipment, net   14,042     8,192   Land use right, net   9,667     9,646   Operating lease right-of-use assets, net   4,182     4,297   Intangible assets, net   477     554   Deferred tax assets   13,166     11,076   Long-term investments   12,694     6,340   Other long-term assets   45,017     40,496                            Total assets   1,052,179     341,257   Liabilities and Stockholders' Equity         Current liabilities:         Short-term borrowings   9,591     26,147   Current portion of long-term borrowings   2,410     1,591       Accounts payable   101,350     35,603   Advances from customers   52,824     17,888   Deferred revenue   3,180     1,343   Income taxes payable   254     31   FIN-48 payable   2,282     83   Other payables and accrued expenses   31,735     18,805   Current portion of operating lease liability   2,313     1,417               Total current liabilities   205,939     102,908       Long-term borrowings   22,957     17,979   Long-term operating lease liability   1,869     2,880       Deferred tax liability   1,302     1,286       Other long-term liabilities   8,447     8,034  .....»»

Futures Drift Amid Global Risk-Off Sentiment US equity futures are flat, bond yields are lower, the dollar is higher, and commodities (ex-Ags) are weaker as the excitement over the Saudi 1mmb/d production cut fizzles and as hedge fund shorts once again take the upper hand. Ags are higher led by wheat on headlines from Ukraine, where a dam was damaged in an explosion. As of 7:45am ET, S&P futures were unchanged with the Nasdaq fractionally in the red as well, with Apple down 0.4% in premarket trading on concern the ludicrous price ($3500) of its much-anticipated mixed-reality headset will crater demand. European semiconductor firms slid after Taiwan Semiconductor — the main chipmaker to Apple — said capital spending will be at the lower end of its guidance range. Overall, there appears to be a mild risk-off tone pre-market,  With the S&P 500 on the edge of a new bull market, there’s a sense among traders that markets have run up too fast on the hype for artificial intelligence. The balance of the week is light on macro data points so markets may trade in a tight range into CPI/Fed next week. In premarket trading, tech Mega caps were mixed pre-mkt as investors digest AAPL’s developer day. AAPL is down 0.7% in early trading after the iPhone maker launched its much- anticipated mixed-reality headset at an eye-popping price of $3,499. While analysts were optimistic about the product and technology, they acknowledged that the price point was high and that it would limit the number of shipments in the near- term. Chevron fell 1%, while declines in Shell and BP weighed on Europe’s main stock benchmark after crude gave up all its gains spurred by news of Saudi Arabia’s supply cut. Other notable premarket movers: Mobileye shares declined 5.2% in premarket trading after chipmaker Intel said it will sell part of its holdings in the Israeli automated driving technology maker. Unity Software shares jump as much as 5.7% in premarket trading, extending Monday’s 17% gain after Apple said it’s working with the video-game engine maker for its new Vision Pro headset. Blue Bird dropped 8.5% in postmarket trading Monday after holders Coliseum Capital and American Securities offered 5 million shares in the school-bus maker via BofA Securities, Barclays, Jefferies, BMO Capital Markets and Piper Sandler. HealthEquity Inc. (HQY US) gained 6% postmarket after the healthcare savings account provider boosted its year profit and revenue forecast. First quarter profit and sales topped estimates. “Our stance towards equities is a cautious one,” said Steven Bell, chief economist for EMEA at Columbia Threadneedle Investments, noting the asset class doesn’t look cheap and earnings growth forecasts look too optimistic. “We don’t expect a dramatic decline, but bonds look more attractive on a relative basis.” European stocks slipped into the session as energy, telecom and autos underperform. Euro Stoxx 50 falls 0.4%. Stoxx 600 drops 0.1%, FTSE MIB lags regionals, sliding 0.6%. Meanwhile, the euro weakened and German bonds gained Tuesday after the European Central Bank said euro-area consumer inflation expectations eased significantly in April. Here are the most notable premarket movers: Idorsia shares soared as much as 21%, the most on record, before paring the gain. The Swiss biotech started exclusive negotiations with an undisclosed party regarding its Asia Pacific businesses. Banca Monte dei Paschi gained as much as 3.6% after la Repubblica reported that BPER Banca could be a possible suitor for the lender, citing unidentified sources. BAT shares fluctuated before trading up 0.3% after the company reaffirmed its full-year revenue forecast in constant currency. The unchanged outlook is “broadly reassuring” given the disappointing US performance, according to Investec. Chemring shares rose as much as 10.6% after the defense company reported half-year results and kept its forecasts for 2023 unchanged. Jefferies said that the update was strong and shows more organic revenue growth potential. ASML shares slumped as much as 1.8% after TSMC said its capex budget this year will be near the lower end of its guidance range, denting hopes that a recent boom in demand for artificial intelligence computing chips would encourage chipmakers to boost capacity. Other European semiconductor equipment makers also fell. Boohoo shares dropped as much as 2.7% after the online fast-fashion retailer was downgraded to neutral from outperform at Davy. The broker said Boohoo is better placed to “survive” Shein than Asos, but now has a smaller comparative advantage. Shares of Swiss utility BKW fell as much as 12%, the most on record, after UBS cut its recommendation to sell from buy, citing falling energy prices and the stock’s recent rally. Deutsche Pfandbriefbank fell as much as 5.5% after Citi downgraded the stock to sell and moved its price target to a Street-low of €6.1, based on the German lender’s real estate exposure. Earlier in the session, Asian stocks rose to a three-month high, helped by a rally in Chinese developers. There are signs that Beijing is taking steps to bolster the economy, with authorities asking some of the biggest banks to lower their deposit rates. Elsewhere, stocks traded mixed with price action rangebound following on from the subdued performance stateside where participants 'sold the news' following Apple's headset announcement and with sentiment clouded by weak data releases. Hang Seng and Shanghai Comp. were somewhat varied with the former boosted by strength in property names, although the mainland was less decisive and lagged amid mixed US-China rhetoric. Nikkei 225 was initially pressured after disappointing Household Spending and Labour Earnings data which briefly dragged the index beneath the psychological 32,000 level where it then found support and staged a recovery amid dip buying. Australia's ASX 200 was led lower by underperformance in the consumer-related sectors and top-weighted financial industry, with losses later exacerbated after the RBA delivered a surprise 25bps rate hike to lift the Cash Rate Target to 4.10% and it also kept the door open for further policy tightening. Indian stocks ended little changed on Tuesday, while gauges of small- and mid-sized companies extended their record runs as investors looked to rotate allocations following the end of the earnings season.  The S&P BSE Sensex Index was little changed as was the NSE Nifty 50 Index. BSE’s small and midcap indexes rallied for the 12th consecutive session and scaled new records despite momentum being overbought based on the 14-day RSI.  The key gauges traded lower for a large part of the session on Tuesday before erasing losses in the final 30 minutes of trade, helped by a recovery in banking stocks. The benchmark Sensex has traded close to its previous peak over the last few sessions but so far has failed to climb to a new record.  The Sensex and Nifty have risen about 3.2% and 2.7% this year but trail the 8% rally in small and mid-cap gauges. Elsewhere, Australia unexpectedly hiked on Tuesday and kept the door open to further increases, sparking a rally in the country’s currency. In FX, the Bloomberg Dollar Spot Index was up near session highs, recovering from early weakness; AUD and JPY are the strongest performers in G-10 FX, NOK and GBP underperform. The EUR/USD dropped -0.2% after after the latest ECB survey shows consumers’ inflation expectations fell significantly in April. AUD/USD leads gains, rallying as much as 1% after the RBA increased its cash rate by a quarter percentage point and said further tightening may be needed. Only 10 of 30 economists surveyed by Bloomberg predicted the rate hike In rates, German bonds outperform Treasuries and gilts across the curve as yields drop, led by short-end bunds.  Treasuries are slightly richer across the curve, following wider gains in bunds after an ECB survey shows consumers’ inflation expectations fell significantly in April.  Yields are richer by 1bp-2bp across the curve with intermediates outperforming slightly, steepening 5s30s by 1bp on the day; 10- year yields around 3.66%, richer by 2bp vs Monday’s close with bunds outperforming by 3.5bp in the sector.  The two-year Treasury yield slips 1bps to 4.45%, 10-year yield down 2bps to 3.66%, slightly steepening the 2-year/10-year curve. German curve sharply bull-steepens over early London session following consumer inflation expectations data — Germany 2-year yields remain richer by 8bp on the day with 2s10s spread steeper by 2.5bp, 5s30s by 4bp. Dollar IG issuance slate includes NAB 2Y/5Y and ADB 2Y/10Y; twelve companies priced $20.1b Monday, surpassing weekly volume projection in a single day; desks project around $80b for the month of June. In commodity markets, wheat surged after Ukraine said Russian forces blew up a giant dam in the country’s south, unleashing a torrent of floodwater that threatens thousands of people and poses a potential threat to Black Sea grain supplies. Meanwhile, crude drifted  2.2% lower to trade near $70.58. Most base metals trade in the green; LME nickel rises 1.4%, outperforming peers. LME aluminum lags, dropping 1.1%. Spot gold is little changed at $1,962/oz Looking ahead, the US session has no economic data releases or Fed speakers scheduled, amid quiet period ahead of June FOMC meeting.     Market Snapshot S&P 500 futures little changed at 4,277.50 MXAP up 0.3% to 164.13 MXAPJ down 0.2% to 514.04 Nikkei up 0.9% to 32,506.78 Topix up 0.7% to 2,236.28 Hang Seng Index little changed at 19,099.28 Shanghai Composite down 1.1% to 3,195.34 Sensex down 0.3% to 62,586.79 Australia S&P/ASX 200 down 1.2% to 7,129.64 Kospi up 0.5% to 2,615.41 STOXX Europe 600 little changed at 459.93 German 10Y yield little changed at 2.34% Euro down 0.1% to $1.0702 Brent Futures down 2.1% to $75.12/bbl Gold spot down 0.2% to $1,958.11 U.S. Dollar Index little changed at 104.02 Top Overnight News Australia's central bank surprised the mkt and raised interest rates by a quarter-point to an 11-year high, and warned that further tightening may be required to ensure that inflation returns to target. RTRS Chinese authorities asked the nation’s biggest banks to lower their deposit rates for at least the second time in less than a year, according to people familiar with the matter, marking an escalated effort to boost the world’s second-largest economy. BBG China will likely further cut banks' reserve ratio and interest rates in the second half of this year to support the economy, the China Securities Journal reported on Tuesday, citing policy advisors and economists. RTRS Underlying price pressures in the euro zone may prove more difficult to tame but monetary policy is showing signs of effectiveness and further rate hikes must be done step by step, Dutch central bank chief Klaas Knot said on Tuesday. RTRS Eurozone inflation expectations decreased significantly according to the latest ECB survey, reversing most of the increases seen in the previous month. ECB Something unusual has happened to the price of butter in Germany this year — it has fallen sharply even as the cost of many other foods kept rising at double-digit rates. Following a dip in energy prices, surging food costs have become the main source of inflation for the eurozone consumers. They are up 20% since the start of last year, causing alarm among politicians and central bankers. But economists and industry executives increasingly believe the factors behind a fall in the price of German butter — down almost 30% since in December as dairy producers’ costs have fallen — will soon begin to have a broader impact. FT A major dam and power station in a Russian-occupied part of Ukraine were destroyed Tuesday, with both sides accusing each other of being responsible for an incident that has caused serious flooding, put thousands of homes at risk and potentially threatened the safety of Europe’s largest nuclear power plant. WSJ Eight years after he first announced he was running for president, Chris Christie is readying for a return to the national stage. The brash former governor of New Jersey is expected to launch his second presidential run on Tuesday with a town hall-style event in Manchester, New Hampshire, some 300 miles north of his home state. FT Citadel brought back retired portfolio manager Drew Gillanders to expand the fund's equities trading in Europe. The 51-year-old, who worked at Citadel between 2019 and 2022, will report to co-CIO Pablo Salame. BBG Recession risk has receded as the debt ceiling crisis fades and the banking sector stabilizes. Although labor market rebalancing and inflation progress have been encouraging, a firmer growth outlook will likely prompt the Fed to hike again in July (and push several other DM central banks in a more hawkish direction too). GIR A more detailed summary of global markets courtesy of Newsquawk APAC stocks traded mixed with price action mostly rangebound following on from the subdued performance stateside where participants 'sold the news' following Apple's headset announcement and with sentiment clouded by weak data releases. ASX 200 was led lower by underperformance in the consumer-related sectors and top-weighted financial industry, with losses later exacerbated after the RBA delivered a surprise 25bps rate hike to lift the Cash Rate Target to 4.10% and it also kept the door open for further policy tightening. Nikkei 225 was initially pressured after disappointing Household Spending and Labour Earnings data which briefly dragged the index beneath the psychological 32,000 level where it then found support and staged a recovery amid dip buying. Hang Seng and Shanghai Comp. were somewhat varied with the former boosted by strength in property names, although the mainland was less decisive and lagged amid mixed US-China rhetoric. Top Asian News RBA surprisingly raised the Cash Rate Target by 25bps to 4.10% (exp. 3.85%), while it reiterated that the Board remains resolute in its determination to return inflation to the target and some further tightening of monetary policy may be required. It also repeated that inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range. RBA stated that this further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe, as well as noted that recent data indicates that the upside risks to the inflation outlook have increased and the Board has responded to this. China has reportedly asked the largest banks to cut deposit rates to boost the economy, according to Bloomberg sources. State-owned lenders including Bank of China, ICBC, and Bank of Communications were advised to cut rates on a range of products, including demand deposits by 5bps and 3yr and 5yr time deposits by at least 10bps. Former ByteDance executive claimed the Chinese Communist Party accessed TikTok's Hong Kong user data, according to WSJ. It was separately reported that Vietnam's ministry found TikTok violations during its inspection. BoJ Governor Ueda said BoJ is to continue QQE until the inflation target is achieved, and added inflation and inflation expectations are heightening, according to Reuters. European equities trade with little in the way of firm direction as incremental catalysts for the region remain light. Equity sectors in Europe are mixed with Health Care top of the leaderboard whilst Energy lags to the downside with WTI and Brent both below Friday’s closing levels despite efforts by OPEC+. US equity futures are hugging the unchanged mark with the ES around 20 points shy of the 4300 mark after venturing as high as 4305.75 yesterday. Top European News ECB's Knot said inflation is still way too high but the worst is behind us; underlying pressures will prove more difficult to bring down. He said they are seeing first signs that monetary policy tightening is being transmitted to the real economy, and will keep tightening policy until we see inflation return to 2% target, but this will be done step by step. ECB Consumer Expectations Survey (Apr): Inflation Expectations: 4.1% 12-months ahead (Mar 5.0%), 3yr ahead 2.5% (Mar 2.9%). Nominal Income: 1.1% over the next 12-months (Mar 1.3%). Nominal Spending: 3.8% over the next 12-months (Mar 4.1%) Barclaycard said UK May consumer spending rose 3.6% Y/Y and noted that higher food prices limited discretionary spending, according to Reuters. FX DXY edged higher throughout the European morning and currently resides near session highs above 104.00. JPY is continues to claw back losses at the expense of its US counterpart as yields softened. Aussie remains the clear G10 outperformer in wake of another largely unexpected 25 bp rate rise from the RBA overnight. Euro eased back from circa 1.0732 against the Dollar to sub-1.0700 and the base of 1bln option expiries between the round number and 1.0695. PBoC set USD/CNY mid-point at 7.1075 vs exp. 7.1080 (prev. 7.0904) Fixed Income Debt futures have racked up bigger and longer-lasting gains on a combination of bullish or supportive factors ranging from geopolitical developments, disinflationary vibes and a deeper reversal in oil that should have dovish implications for price pressures ahead. Bunds have been up to 135.57 for a 100+ tick flip from Eurex trough to peak. Gilts probed 97.00 within a 97.06-96.35 range in wake of a well received 2053 DMO tap US Treasuries are above 114-00 between 114-06+/113-24 overnight parameters. UK sells GBP 2.5bln 3.75% 2053 Gilt: b/c 2.58x (Prev. 2.50x), average yield 4.478% (Prev. 4.083%) & tail 0.5bps (Prev. 0.2bps) Commodities WTI and Brent futures continue trundling lower as the post-OPEC pop faded, with prices now back at levels seen in the run-up to last weekend's confab. Asian refiners are likely to take less oil from Saudi Arabia for July and buy more spot cargoes such as those from the UAE after the surprise price hike and output cut, according to Reuters citing traders. Kazakhstan Energy Minister said the country will go ahead with the USD 16.5bln claim against international oil giants over costs, no plans for out-of-court settlement, according to Reuters. Spot gold is relatively steady around the USD 1,950/oz mark and within recent ranges, with some potential haven support underpinning prices. Base are mostly softer with LME copper still hovering above USD 8,250/t following the recent gains as China looks to bolster its property sector. On that note, iron ore continued to benefit from these tailwinds and printed higher levels in around seven weeks. Shanghai futures exchange says trading of alumina futures will begin on June 9th. Geopolitics RUSSIA-UKRAINE Russia's Federal Security Service (FSB) says Ukraine planning a "dirty bomb" attack in Russia, via RIA. Twitter sources reported that the Nova Kakhovka Dam was blown up in southern Ukraine, while Ukraine's south military command later confirmed that the dam was blown up by Russian forces. Furthermore, a Moscow-backed official said there was no critical danger to the Zaporizhzhia nuclear plant yet from the destruction of the dam, according to Reuters. Russia's Defence Ministry said they destroyed 8 leopard tanks in the Donetsk region and that Ukraine continues with its offensive in Donetsk, while it also noted huge losses were inflicted on Ukrainian forces in Donetsk and that Ukrainian forces are deploying fresh troops in the eastern combat zone, according to Reuters. Ukraine's State Atomic Agency said the destruction of the Kakhova dam poses a risk to the Zaporizhzhia nuclear power plant, but the situation is under control, according to Reuters. Ukraine's Foreign Minister said Ukraine will "probably" only be able to join NATO after the end of the war and said Ukraine has enough weapons to begin its counter-offensive, according to Reuters. OTHER White House said the US is seeing an increasing level of aggressiveness by China's military and the US is prepared to address growing aggressiveness. White House stated the US wants to see Beijing justify what it is doing with increased military and said both recent Chinese intercepts occurred in international space, while it added that it won't be long before someone gets hurt and that unsafe intercepts can lead to miscalculations. South Korea has scrambled air force jets after Russian and Chinese military planes entered its air defence zone, according to joint chiefs; did not violate South Korean air space. US Event Calendar Nothing scheduled DB's Jim Reid concludes the overnight wrap DB Research has just released our latest World Outlook featuring our updated views on economics and markets. We’ve called this edition “The Waiting Game…” because we maintain our call for a US recession in Q4 as the lags from tighter monetary policy really start to hit. As we've felt for a while, you have to respect the lag and be patient. Markets on the other hand are anything but and want instant gratification. That's what makes it an interesting time now and for the next few months ahead. To recap we think this hard landing is the logical next step in a succession of all-too foreseeable events since the pandemic: the biggest increase in the money supply in decades, followed by the highest inflation in decades, and then the most aggressive series of rate hikes in decades. A hard landing is just the next phase of this. If you're looking for hope we are optimistic about the prospects of AI changing the nature of our economies in the years ahead. We desperately need a new source of growth given weak productivity and poor demographics. And although AI is unlikely to help us out of this cycle, its promise is a hope we cling onto as we move deeper into the 2020s after a very challenging start to the decade. Finally in terms of adverts, Steve Caprio on my credit team has an update to our view this morning (link here). He posits that while the consensus view among clients is for a summer squeeze, we see little reason to chase the market and so we retain our defensive positioning across ratings and tenors. Markets certainly stopped chasing and squeezing yesterday, in part thanks to a weak ISM services print that helped to ramp up fears about a recession. Earlier in the day it had looked rather different, and at one point the S&P 500 was even on track to close in bull market territory, having risen by over 20% since its closing low last October. But the negative data surprise ultimately dominated, and that led to a decent risk-off move that meant the index fell short of that milestone by the close. In terms of the release, the ISM services for May came in at 50.3 (vs. 52.4 expected), so just above the 50-mark that separates expansion from contraction and the second lowest since the pandemic, only beating a strange out of the blue plunge in December. The sub-components didn’t look too promising either, with new orders down to 52.9, whilst employment at 49.2 was in contractionary territory for the first time since December. Other releases out yesterday were a bit weaker-than-expected too, with April’s factory orders only up by +0.4% (vs. +0.8% expected), alongside downward revisions to the previous month. Treasuries rallied on the back of the ISM, and the 10yr yield gave up its initial rise to fall by almost -8bps intraday straight after the release, before closing -0.1bps down on the day at 3.683%. Another contributing factor was that the weak data led to growing expectations that the Fed would pause their rate hikes at their meeting next week, with only a 24.5% chance of a hike now priced in down from 30.5% at the end of last week. Ultimately, markets are increasingly coalescing around the idea that the Fed will skip a meeting in June before delivering another hike in July, which is in line with the updated call from our US economists in the World Outlook. This morning in Asia, yields on 10yr USTs (+1.73 bps) are slightly higher again as we go to print. Sovereign bonds in Europe lost ground more consistently yesterday after ECB President Lagarde continued to signal more rate hikes ahead at the European Parliament. Among others, Lagarde said that the ECB’s “future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive”. And in turn, that helped to cement investors in their conviction that the ECB would proceed with another 25bp hike next week. As a result, yields on 10yr bunds (+6.9bps), OATs (+6.3bps) and BTPs (+6.8bps) all moved higher on the day. For equities, it was an up-and-down day, and in the end the S&P 500 (-0.20%) closed lower, after being +0.40% at the day’s highs. In addition to the weaker US data, specific factors appeared to weigh during the day. Oil majors reversed their initial gains from the OPEC+ news over the weekend, while Apple closed -0.76% lower, after being up over 2% intra-day at one point. This comes as the world’s largest technology company unveiled their new “mixed reality” headset with a sticker price of $3499. With tech stocks slipping, the NASDAQ (-0.09%) was largely flat on the day, though its YTD gains still stand at +26.40%. Back in Europe, the more negative tone continued to take hold, with the STOXX 600 (-0.48%) getting the week off to a rough start. In part, that reflected a surge in European natural gas prices (+24.9%) following their recent declines. And that occurred alongside a broader spike in energy prices, following the decision from Saudi Arabia to cut its oil output by 1 million barrels per day. However a late drop in risk sentiment near the US close meant Brent crude (+0.76%) ended the day at $76.71/bbl, whilst WTI (+0.57%) closed at $71.89/bbl with both contracts trading comfortably off their intraday highs. Overnight, the Reserve Bank of Australia (RBA) lifted its official interest rate by +25bps to 4.1%, a level not seen since early 2012 amid concerns inflation is taking too long to come down. Markets overall had anticipated no change for this month but a number of economists (including DB's) had made a late call for a hike in recent days so it wasn’t a total surprise. Markets have repriced terminal 20bps higher in the few minutes between the hike and us going to press. Looking ahead, speeches from the RBA Governor Philip Lowe and Deputy Governor Michele Bullock scheduled for tomorrow will be the key to gaining any hints for future rate hikes from the central bank. DB still think they have two more hikes in the pipeline in August and then September. Asian equity markets are extending their recent gains this morning even with the western world risk off yesterday. As I type, the Hang Seng (+0.43%) and the Nikkei (+0.41%) are edging higher while the CSI (+0.09%) and the Shanghai Composite (+0.05%) are just above flat. Meanwhile, markets in South Korea are closed for a holiday. US stock futures are flat to down with those tied to the S&P 500 (-0.02%) and NASDAQ 100 (-0.03%) struggling to gain traction. Early morning data showed that Japanese household spending remained weak, dropping -4.4% y/y in April (v/s -2.4% expected) and recording its sharpest decline since July 2021, underlining a patchy economic recovery. It followed a -1.9% contraction in the preceding month. Other data showed that cash earnings/nominal wages, grew +1.0% y/y in April (v/s +1.8% expected), smaller than expected and an upwardly revised +1.3% rise logged in March. Meanwhile, real wages fell -3.0% y/y in April (v/s -2.0% expected; -2.3% in March), marking the 13th straight month of year-on-year declines, as persistently high inflation is outstripping nominal pay growth. In the political sphere, the 2024 US presidential field is continuing to take shape, and yesterday saw former Vice President Mike Pence jump in on the Republican side. According to the FiveThirtyEight average, Pence is currently polling in third place for the primary on 5.4%, but is still well behind former President Trump on 53.9%, and Florida Governor Ron DeSantis on 21.1%. Separately, former New Jersey Governor and 2016 candidate Chris Christie is expected to announce his candidacy today as well. Finally, when it came to yesterday’s other data, the final Euro Area PMIs were a bit weaker than expected. For instance, the Euro Area composite PMI for May came in at 52.8 (vs. flash 53.3), and the services PMI was revised down to 55.1 (vs. flash 55.9), adding to a trend of negative European data surprises since late April. In the meantime, data showed that PPI inflation in the Euro Area fell to just +1.0% in April (vs. +1.7% expected), which is its lowest level since January 2021, and down from a peak of +43.4% back in August. To the day ahead now, and data releases include German factory orders and Euro Area retail sales for April, along with the German and UK construction PMIs for May. Otherwise, the ECB will be releasing their Consumer Expectations Survey, with our own European dbDIG survey suggesting that the ECB survey should show an easing of inflation expectations. Tyler Durden Tue, 06/06/2023 - 08:03.....»»

Here Are Goldman's Top Takeaways From Its Semiconductor Conference As Tech Execs Focused On AI  Last week, Goldman Sachs hosted the 2nd Annual Global Semiconductor Conference in New York, where they gained valuable insight into where the industry is headed from management and IR teams from the semiconductor device, equipment, and materials companies. Conversations were also held with Todd Fisher, the person the Biden-Harris Administration appointed to lead the CHIPS for America offices.  Goldman's Toshiya Hari said there was a lot of focus on artificial intelligence from participants, including Intel, Marvell, Micron, Renesas, and Advantest. Management teams of these companies overwhelmingly believe AI will be 'long-term' growth drivers, though some said it might take time for the growth to be realized.   There were signs from Intel and Micron that the PC bust cycle might be stabilizing. As well as signs the memory industry is finally "bottoming."  Fisher provided more clarity on the Biden administration's long-term goals of building out America's domestic chip production while pointing out there is "no bias either way in the treatment of a domestic or international applicant as the goal of the program is to encourage companies to invest in R&D and for IP to reside in the United States."  Here's Goldman's Hari summary of the top ten takeaways from the chip conference:  1) Focus on AI:  There was an immense focus on AI throughout our conference with Intel, Marvell, Micron, Renesas, and Advantest, in particular, speaking to the near- and long-term opportunity set associated with this growing theme. Intel highlighted how Sapphire Rapids (i.e. 4th generation Xeon scalable processors based on Intel 7 technology) is well-suited for AI workloads (note Nvidia selected Sapphire Rapids as the standard server CPU in its DGX H100 system last year), while management also shared that its pipeline for Gaudi (i.e. Habana's training and inference accelerator) had increased ~2.5x in the preceding 90-day period. Marvell reiterated what it had disclosed the prior week on its earnings call — namely, that optical DSPs and custom compute processors are expected to lead to a more than doubling of AI revenue in FY2024 and FY2025 from a base of ~$200mn in FY2023. Micron stated that although AI revenue is difficult to quantify and it currently makes up a small percentage of total revenue, they see AI as a significant long-term growth driver given the implications for content growth. While there is a range, Micron believes AI servers can embed 8x the amount of DRAM and 3x the amount of NAND compared to a traditional server. Renesas highlighted the medium- to long-term growth potential in MCUs, particularly at the edge (i.e. multi-billion dollar SAM), their recent acquisition of Reality AI, a predictive AI company, that will augment its MCU capabilities particularly across industrial applications (e.g. HVAC), as well as its ongoing investments in CXL memory accelerators. For Advantest, while HPC/AI-related demand is unlikely to move the needle on CY2023 tester demand, per management, the company sees HPC/AI as a medium- to long-term growth driver given a) the expected increase in transistor count, b) the potential increase in test intensity as the industry accelerates the adoption of advanced packaging, and c) the company's confidence in defending its dominant share position in this market segment. 2) Signs of stabilization in the PC market:  Signs of stabilization are emerging in the PC market with Intel raising the mid-point of its 2Q revenue outlook from $12.0bn to $12.25bn (+5% qoq, -20% yoy) based on strong linearity in Client Computing (i.e. PC) and Data Center and AI so far in the quarter and Micron reiterating its expectation for customer inventory in PCs (and smartphones) to be at or near normal levels exiting the CY2Q. While sell-in of components in CY2H and beyond will depend on PC sell-through, we expect, at a minimum, the under-shipping of components relative to end-demand that has persisted over the past ~9 months to subside soon. 3) Memory fundamentals bottoming:  While Micron's disclosure that the recent ruling by the Cyberspace Administration of China (CAC) could have a high-single-digit (%) impact on total revenue, up from the low- to high-single-digit (%) range provided by management on 5/22, weighed on the stock last week, our constructive view on the Memory cycle predicated on demand stabilization and supply-side discipline (i.e. capex and production cuts) remains intact. Between DRAM and NAND, we continue to expect a sharper and more sustained recovery in DRAM given relative inventory levels (i.e. DRAM < NAND) and relative industry consolidation as measured by HHI (i.e. DRAM > NAND). In NAND, we fear that suppliers with relatively weak balance sheets could re-accelerate bit production once pricing has recovered to above cash cost. 4) Benign pricing in analog/MCU/power semis: In broad-based MCU, analog and power semis, Microchip and Infineon, in contrast to growing investor skepticism, pointed to stable industry trends. Microchip reaffirmed its June quarter (+2-3% qoq) and September quarter (unlikely to be down qoq) revenue outlook, while Infineon reiterated its confidence in its auto semis growth outlook with underlying unit demand still solid in Europe/US. On pricing, Infineon stated that pricing remains resilient across all divisions, and is even increasing in certain pockets where demand is strong. Similarly, Microchip spoke to stable near-term pricing and shared its view that industry pricing is likely to be less deflationary going forward than in the past given higher capital intensity across mature process nodes. 5) TEL presents bullish CY2024 WFE market outlook:  While the majority of Wafer Fab Equipment (WFE) suppliers have yet to comment on CY2024, Tokyo Electron (TEL) reiterated its view that the WFE market in CY2024 could recover to a level similar to CY2022 (which implies a ~25% yoy increase), driven by a data center upgrade cycle and a recovery in Memory spending following this year's sharp inventory adjustment. Note that our own expectations for the WFE market in CY2024 are more subdued at +7% yoy based on a double-digit yoy increase in Memory and a stable outlook in advanced Logic/Foundry, partially offset by a decline across mature/specialty nodes. 6) Gate-All-Around to drive advanced Logic/Foundry spend:  Applied Materials, ASML, ASM International, and Tokyo Electron all highlighted Gate-All-Around (GAA) as a potential driver of higher spending in advanced Logic/Foundry over the coming several years. ASM International highlighted that it will begin to receive GAA orders in 4Q23 and that it expects growth in its Epitaxy business to be catalyzed by the transition to GAA. Applied Materials, on its recent earnings call, stated that the GAA inflection will create an incremental opportunity of ~$1bn for every 100k wafer starts of capacity and that it expects to gain 5% of transistor market share in the transition from FinFET to GAA, particularly in product areas including Epitaxy and Selective Removal, in our view. 7) Constructive long-term outlook on mature node capital investments:  Applied Materials reiterated that its ICAPS (IoT, Communications, Automotive, Power and Sensors) business is on track to grow in CY2023 at a faster pace than in CY2022 given strength across China, Japan, Europe, and the US While we expect capital spending across mature/specialty nodes to remain cyclical, we subscribe to the view that capital intensity in the trailing-edge will stay elevated vis-a-vis the past 5-10 years as the used equipment market the IDMs and foundry suppliers used to leverage has since declined in size. Note TEL stated that they expect WFE demand associated with mature process nodes could reach ~$50bn by CY2030, up from ~$30bn in CY2023, while ASML addressed skepticism surrounding spending on mature/specialty nodes in China by sharing that ordered lithography tools are being installed in cleanrooms (rather than only being ordered for strategic/geopolitical purposes and stored). 8) Industry wafer starts to recover in 2H:  Entegris reaffirmed its CY2023 market outlook — specifically, a mid-teens (%) yoy decline in MSI and a ~20% yoy decline in industry capex. That said, the company expects a modest recovery in 2H23 driven by advanced Logic/Foundry on growth in AI and the introduction of new consumer electronics products. Management remains confident in its ability to deliver consistent outgrowth — 6-7% points this year — as customers' execute to their respective technology transitions (e.g. Gate-All-Around) and in turn consume more of Entegris' products on a per-wafer basis. 9) Near-term caution on wafer volumes but ASP outlook intact:  SUMCO shared a relatively cautious outlook for its silicon wafer business as the ongoing inventory correction in Memory is likely to drive a hoh decline in shipments in 2H. On a positive note, management stated that wafer pricing continues to track largely in-line with what had been agreed in LTAs and that the current expectation is for wafer pricing to increase ~10% yoy in CY2024. 10) CHIPS Act:  from the CHIPS for America program, we hosted Todd Fisher who had spent 30 years in the finance and investment industry, including nearly 25 years at KKR & Co. Inc., prior to joining the Department of Commerce in 2021. Related to the CHIPS Act, Mr. Fisher shared the US Government's long-term goals, including a) at a high level, the pursuit of economic and national security, and at a micro level, b) the construction of at least two new leading-edge Logic/Foundry eco-systems in the US by the end of the decade, as well as c) the creation of a resilient supply chain as it pertains to mature process nodes and specialty technologies. Interestingly, Mr. Fisher noted that there is no bias either way in treatment of a domestic or international applicant as the goal of the program is to encourage companies to invest in R&D and for IP to reside in the United States. In his concluding remarks, Mr. Fisher summarized the six criteria under which applications are evaluated: 1) impact to economic and national security (the most significant), 2) financial viability, 3) commercial viability (including potential long-term implications for industry supply/demand), 4) technical feasibility, 5) workforce, and 6) broader impacts (with a significant discussion around R&D). The explosion of interest in AI might be a growth driver of the semiconductor sector in two ways: building demand for innovative technologies and increasing chip demand.  More details in the full Goldman note are available to pro subscribers in the usual place. Tyler Durden Mon, 06/05/2023 - 20:00.....»»

The wave of layoffs hitting tech companies and beyond shows no signs of slowing down. Spotify is the latest to make job cuts. Spotify announced it would lay off 2% of its workforce, following job cuts the brand announced back in January.Onur Dogman/SOPA Images/LightRocket via Getty Images Spotify is the latest company to announce layoffs. In recent months, layoffs have expanded beyond tech, media, and finance as Gap and Whole Foods announced cuts. See the full list of layoffs so far in 2023. A wave of layoffs that hit dozens of US companies toward the end of 2022 shows no sign of slowing down into 2023.Spotify is the latest company to announce layoffs, according to a memo sent to employees from the company.In the memo, the vice president of Spotify's podcast business Sahar Elhabashi explained the layoffs would impact around 200 employees. A Spotify spokesperson told Insider the layoffs would impact employees a part of Spotify's podcast business and its supporting functions, including talent acquisition and financial roles. This is the second round of layoffs the company has announced this year: In January, Spotify's CEO said the company would cut 6% of its staff.The recent layoffs are a part of the brand's decision to change how it works with podcast partners around the globe and would help the brand "support the creator community better," the memo read.The news comes less than a week after cryptocurrency exchange company Binance announced it was considering staff cuts, and on the heels of recent layoffs at companies including  JPMorgan Chase, LinkedIn and Shopify.  These companies join a large number of major corporations that have made significant cuts in the new year: Tech companies, including Meta and Google, and finance behemoths, like Goldman Sachs, announced massive layoffs in the first weeks of 2023 amid a continued economic downturn and stagnating sales.The downsizing followed significant reductions that companies including Meta and Twitter made last year. The layoffs have primarily affected the tech sector, which is now hemorrhaging employees at a faster rate than at any point during the pandemic, the Journal reported. According to data cited by the Journal from Layoffs.fyi, a site tracking layoffs since the start of the pandemic, tech companies slashed more than 187,000 in 2023 alone — compared to 80,000 in March to December 2020 and 15,000 in 2021. But it's not just tech companies that are cutting costs, with the major job reductions that have come from the Gap, along with FedEx, Dow, and Wayfair.Here are notable job cuts so far in 2023: Spotify: laying off 2% of workforceSpotify announced it would lay off 2% of its workforce, following job cuts the brand announced back in January.Onur Dogman/SOPA Images/LightRocket via Getty ImagesSpotify announced that the music and podcast streaming app would lay off about 200 employees, or 2% of its workforce. The layoffs will impact employees across Spotify's podcasting business and its supporting functions, including talent acquisition and financial roles, a Spotify spokesperson told Insider.In the memo sent to employees, the vice president of Spotify's podcast business Sahar Elhabashi explained the layoffs were a part of the brand's decision to change how it works with podcast partners around the globe. The "fundamental pivot from a more uniform proposition will allow us to support the creator community better," the memo read."The company will support these individuals with generous severance packages, including extended Healthcare coverage and immediate access to outplacement support," the statement read. This announcement arrives on the tail of additional layoffs the music streaming service made back in January. In a memo to Spotify employees, CEO Daniel Ek said the company would cut 6% of its staff, about 600 people. "While we have made great progress in improving speed in the last few years, we haven't focused as much on improving efficiency. We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization," he wrote. As part of those changes, Dawn Ostroff, the company's chief content and advertising officer, who spent more than $1 billion signing exclusive podcast deals with Joe Rogan, the Obamas, and Prince Harry and Meghan Markle, has departed. Binance: potential layoffsBinance, one of the world's largest cryptocurrency exchanges by volume, is considering staff cuts as the company prepares for the next bull cycle and evaluates its "talent density," a Binance spokesperson told Insider. "As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic," the spokesperson said.The statement came after a series of tweets from independent journalist Colin Wu on May 31 that indicated forthcoming layoffs at the company. "This is not a case of rightsizing, but rather, re-evaluating whether we have the right talent and expertise in critical roles," the Binance statement continued. "This will include looking at certain products and business units to ensure our resources are allocated properly to reflect the evolving demands of users and regulators." JPMorgan: About 500 jobsJPMorgan recently began cuts of about 500 employees, CNBC and CNN reported.ReutersJPMorgan announced on March 26 that it is slashing 500 roles, CNBC reported.The cuts are expected to spread across JPMorgan's retail and commercial banking, asset and wealth management, and corporate and investment banking operations, according to CNBC.The reported layoffs come just a day after reports that JPMorgan laid off 1,000 First Republic employees, or about 15% of its workforce. JPMorgan, the largest bank in the US, got even larger earlier this month when it acquired the assets of failing First Republic after it was seized by regulators.LinkedIn: 716 rolesRyan Roslansky, CEO of LinkedIn, said the company would be cutting 716 roles on Tuesday.Courtesy of Ryan RoslanskyLinkedIn announced earlier this month that it would be cutting 716 roles from its global workforce in a message from CEO Ryan Roslansky.Roslansky also noted that company will also be discontinuing InCareer, a local jobs app in China, as it refocuses on helping companies in China hire, market, and train abroad. The decision comes on the heels of LinkedIn's 20th anniversary last week. "While we're making meaningful progress creating economic opportunities for our members and customers and experiencing record engagement on the platform, we're also seeing shifts in customer behavior and slower revenue growth," Roslansky said.Shopify: 20% of workforceDavid Fitzgerald/Sportsfile via Getty ImagesShopify is slashing 20% of its workforce and selling off most of its logistics business to supply chain company Flexport, the company announced on May 4. The cuts confirmed growing concern of layoffs among staffers in recent weeks, following the cancellation of several team-building offsite events and analyst speculation that Shopify would alter its logistics arm, Insider reported."I recognize the crushing impact this decision has on some of you, and did not make this decision lightly," Shopify CEO Tobi Lütke said in a note to employees and shareholders.He continued: "This is a consequential and hard week. It's the right thing for Shopify but it negatively affects many team members who we admire and love working with."Morgan Stanley: 3,000 jobsReutersMorgan Stanley is cutting 3,000 jobs by the end of the quarter, Bloomberg reported, citing sources familiar with the matter. One person told the outlet that the company's banking and trading teams will be most impacted.The cuts will affect about 5% of the firm's workforce, excluding financial advisers and personnel in the wealth management division, Bloomberg noted. A spokesperson for the bank did not immediately respond to Insider's request for comment and declined to comment to Bloomberg. However, CEO James Gorman noted last month that underwriting and mergers activity has been "subdued" and that he doesn't expect a rebound before the second half of 2023 or even 2024, Bloomberg noted. The firm last cut 1,600, or around 2% of its staff in December, Bloomberg noted. Dropbox: 16% of staffDrew Houston, cofounder and CEO of Dropbox, told employees Thursday that the company was eliminating 500 jobs.Matt Winkelmeyer / Getty ImagesCloud storage firm Dropbox said Thursday that it would be reducing its global workforce by 16%, or 500 jobs.In a message to staff sent Thursday, CEO Drew Houston said the cuts are being made, in part, from slowing business growth and the expansion of AI products. "Today's changes were the result of taking a hard look at our strategic priorities and organizational structure as a leadership team, and aligning to principles of sustainable financial growth, efficiency, and flexibility to invest in our future. We're also streamlining how the company is organized," Houston said.  Gap: more than 2,000 jobs since late last yearGap posters in Birmingham, England.Mike Kemp/Getty ImagesClothing retailer Gap is cutting 1,800 positions in its headquarters and upper management as part of a restructuring plan meant to cut costs, the retailer said Thursday.Gap said that the cuts are expected to help the company see $300 million in annualized savings."We are taking the necessary actions to reshape Gap Inc. for the future — simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience," the company's chairman and interim CEO Bob Martin said in a statement given to Insider.In September, Gap slashed 500 jobs from its corporate ranks in a push to save $250 million annually, the Wall Street Journal reported. Jenny Craig: potential mass layoffsA man enters a Jenny Craig facility June 19, 2006 in Niles, Illinois.Tim Boyle/Getty ImagesWeight loss company Jenny Craig notified staffers of potential mass layoffs on April 27, as a result of the company "winding down physical operations," according to an internal email reviewed by NBC News.According to NBC News, the company has been in the process of selling and anticipates the pending sale "will likely impact all employees in some manner," an FAQ document sent to employees read. "We do not know the exact employees/groups whom will be impacted, and if any employees may be retained," the document said, per NBC News. "As a result, we would suggest that you anticipate that your employment may be impacted and begin to seek other employment." 3M: 6,000 jobsMike Roman, CEO of 3M.Xinhua News Agency / Contributor/Getty ImagesOn Tuesday, the Scotch tape and Post-It Notes manufacturer said it will be cutting 6,000 positions across all parts of the company with the goal of streamlining operations, simplifying supply chain, and reducing layers of management, according to The Wall Street Journal.The company's chief executive Mike Roman said Tuesday that the cuts would eliminate 10% of 3M's global workforce and ultimately save the company between $700 to $900 million in pretax costs, the Journal said. 3M last announced cuts in January when it said it was removing 2,500 manufacturing positions.Lyft: 1,072 rolesReutersIn an SEC filing on Thursday, Lyft said it was cutting roles for 1,072 employees, or about 26% of its corporate workforce. In the filing, the company also said it is scaling back on hiring and has eliminated over 250 open positions. The news comes just weeks after David Risher took the helm as Lyft's new CEO, part of an executive shakeup that involved cofounders Logan Green and John Zimmer moving into board roles. A spokesperson for Lyft previously told Insider, "David has made clear to the company that his focus is on creating a great and affordable experience for riders and improving drivers' earnings."The spokesperson added, "To do so requires that we reduce our costs and structure our company so that our leaders are closer to riders and drivers. This is a hard decision and one we're not making lightly. But the result will be a far stronger, more competitive Lyft." Deloitte: 1,200 jobsAlex Tai/SOPA Images/LightRocket via Getty ImagesDeloitte announced on April 21 it was cutting 1,200 jobs, or about 1.5% of its US staff, the Financial Times reported. The cuts will largely be concentrated in the financial advisory business as a result of a decline in mergers and acquisitions, per internal communications viewed by the FT. Whole Foods: Several hundred corporate employeesMary Meisenzahl/InsiderWhole Foods announced on April 20 it was letting go of several hundred corporate employees, amounting to less than 0.5% of the company's workforce, CNBC reported.The cuts are a result of a structural reorganization of global and regional support teams, which will be downsized from nine to six, but will not cause store closures, according to CNBC.In a memo to employees viewed by CNBC, Whole Foods executives wrote "simplifying our work and improving how we operate is critical as we grow." "As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes," the memo read, per CNBC. It continued: "With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores."BuzzFeed News: 15% of staffBuzzFeed News headquarters.Drew Angerer / Getty ImagesBuzzFeed announced on April 20 that it was shuttering its BuzzFeed News division, laying off 15% of its staff, or 180 employees, in the process. In a memo to staff shared with Insider's Lucia Moses, CEO Jonah Peretti admitted to mistakes like over-investing in the news arm and failing to successfully integrate BuzzFeed and Complex after the latter was acquired in 2021. "I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances," he wrote. "Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better."Ernst & Young: 3,000 positionsEY spends $500 million annually on learning for its employees.TOLGA AKMEN / Contributor / GettyErnst & Young announced on April 17 it was laying off 3,000 US employees, or about 5% of its total US staff.The decision came after the financial auditor nixed a proposed reorganization that would break up its consulting and accounting businesses, Reuters reported. According to the Financial Times, which first reported the layoffs, the cuts will address "overcapacity" and will largely impact the company's consulting business. Opendoor: 560 jobsOpendoor announced it was cutting 560 jobs on Tuesday.Opendoor Technologies/GlassdoorOn Tuesday, home flipping giant Opendoor said it was cutting 560 jobs, or 22% of its workforce, citing a souring housing market. A spokesperson for Opendoor told Insider by email,"We've been weathering a sharp transition in the housing market – the steepest and fastest rate increase by the Fed in 40 years, the more than doubling of mortgage rates from historic lows, and the hit to home affordability have driven an approximately 30% decline in new listings from peak levels last year."The spokesperson noted that the cuts have been made to "better align our operational costs with the anticipated near-term market opportunity, while maintaining our critical technology investments that will continue to drive the business long term."Impacted team members will receive severance pay, extended health benefits, and job transition support. Opendoor last made cuts in November 2022, laying off 550 workers or about 18% of its staff.  McKinsey: About 1,400 employeesFABRICE COFFRINI/AFP via Getty ImagesMcKinsey & Company will cut an estimated 1,400 positions, or 3% of its total workforce, Bloomberg reported on March 29.The layoffs are part of the consulting firm's efforts to reorganize support teams and pare down an employee base that has grown rapidly in recent years, per the outlet. "The painful result of this shift is that we will have to say goodbye to some of our firm functions colleagues, while helping others move into new roles that better align to our firm's strategy and priorities," Bob Sternfels, global managing partner, wrote in a note to staff seen by Bloomberg. He continued: "Starting now, where local regulations allow, we will begin to notify colleagues who will depart our firm or be asked to change roles."David's Bridal: 9,236 employeesShoppers head for David's Bridal in Sunset Hill, Mo. Tuesday, May 10, 2005.James A. Finley/AP ImagesDavid's Bridal is laying off more than 9,000 workers across the US, according to a WARN notice filed with the Pennsylvania Department of Labor and Industry on April 14. "We are evaluating our strategic options and a sale process is underway," David's Bridal spokesperson Laura McKeever told the Philadelphia Inquirer. "At this time, there are no updates to share."The company is considering filing for bankruptcy in the near future, according to an April 7 report from the New York Times. David's Bridal also filed for bankruptcy in 2018. Virgin Orbit: 85% of staffersSir Richard Branson, founder of Virgin Orbit.Mark GreenbergVirgin Orbit disclosed in a March 30 filing with the Securities and Exchange Commission that it is slashing 85% of its staff, or about 675 employees.The company, which operates within the Virgin Group and provides launch services for satellites, is also ceasing operations "for the foreseeable future," CNBC reported. "Unfortunately, we've not been able to secure the funding to provide a clear path for this company," Virgin Orbit CEO Dan Hart said, according to audio of a company all-hands obtained by CNBC.     Electronic Arts: About 780 employeesLucy Nicholson/ReutersElectronic Arts — the video game company best known for its "The Sims," "FIFA," and "Madden NFL" franchises — is letting go of 6% of its staff, or about 780 employees, the company announced on March 24. "As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams," Electronic Arts CEO Andrew Wilson wrote in a blog post to staffers. Wilson said the cuts began early this quarter and will continue through the beginning of the next fiscal year.  Amazon: 9,000 more jobsAmazon CEO Andy Jassy announced on Monday that the company would be eliminating another 9,000 roles, on top of the 18,000 announced in January.Richard Brian/ReutersAmazon announced on March 20 that it would cut 9,000 jobs from its workforce over the coming weeks. The cuts come on the heels of the 18,000 roles the company announced it was cutting back in January. In a message to employees shared on Amazon's site, CEO Andy Jassy noted that the impacted positions are largely in the Amazon Web Services, People Experience and Technology Solutions, Advertising, and Twitch departments. In the memo, Jassy said the company staggered its layoff announcements because "not all of the teams were done with their analyses in the late fall." He added, "rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Roku: 200 staffersRoku CEO Anthony Wood speaks during Tribeca X - 2021 Tribeca Festival on June 18, 2021 in New York City.Photo by Arturo Holmes/Getty Images for Tribeca FestivalRoku is cutting an additional 200 roles, or 6% of its workforce, Reuters reported on March 30. The cuts come after the streaming device manufacturer previously laid off 200 employees in November 2022. The company is expected to complete the cuts by the end of the second quarter, and also plans to leave and sublease office facilities in an attempt to reduce costs, according to Reuters. Walmart: About 200 employeesA Walmart store.Bruce Bennett/Getty ImagesWalmart asked about 200 workers at five fulfillment centers to find employment elsewhere in the company in the next 90 days or else be laid off, Reuters reported on March 23.The cuts are a response to the reduction of evening and weekend shifts at select Walmart facilities, including those in Chino, California; Davenport, Florida; Bethlehem, Pennsylvania; Pedricktown, New Jersey; and Fort Worth, Texas, per Reuters. "We recently adjusted staffing levels to better prepare for the future needs of customers," a Walmart spokesperson told Reuters in a statement.  Accenture: 19,000 positionsJoan Cros/Corbis via Getty ImagesAccenture is slashing 19,000 roles, or 2.5% of its total workforce, according to a Security and Exchange Commission filing on March 23.The tech consultancy company said the layoffs will take place over the next 18 months and half of the cuts will impact staffers in "non-billable corporate functions," per the filing.  "While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs," Accenture wrote in the filing. Indeed: 2,200 staffersIndeed CEO Chris HyamsPhoto by Niall Carson/PA Images via Getty ImagesIndeed CEO Chris Hyams announced on March 22 that the online networking platform will cut 2,200 jobs, or about 15% of its staff. In a note sent to employees, Hyams wrote the reductions will impact "nearly every team, function, level, and region" across the company in an effort to reduce redundancy and increase efficiency. "I am heartbroken to share that I have made the difficult decision to reduce our headcount through layoffs. This is a decision I truly hoped I'd never have to make," he wrote. Meta: 10,000 workersMeta CEO Mark ZuckerbergMark Lennihan/APRoughly 10,000 Meta workers will find out that their jobs have been cut between March and May, according to an announcement by the company's founder and CEO, Mark Zuckerberg. Zuckerberg also said the company would close around 5,000 open roles that haven't yet been filled as part of the company's effort to downsize. "My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead," Zuckerberg wrote in a post on Facebook announcing the layoffs. In the post, Zuckerberg said that members of Meta's recruiting team would learn about the fate of their jobs in March, while tech workers would find out in late April, and business groups would find out in May. "In a small number of cases, it may take through the end of the year to complete these changes," he wrote. The job cuts come less than 5 months after Meta slashed 11,000 workers, or about 13% of its workforce, in November. At the time, Zuckerberg called the layoffs a "last resort."  SiriusXM: 475 rolesJennifer Witz, CEO of SiriusXM said the company was cutting 475 roles on March 6.Cindy Ord / Staff/ Getty ImagesThe radio company said March 6th that it was cutting 8% of its staff or 475 roles according to a statement posted on the company's website from CEO Jennifer Witz.In the statement, Witz said "nearly every department" across the company will be impacted. She also noted that those impacted will be contacted directly and will have the opportunity to speak with a leader from their department as well as a member of the company's People + Culture team. Impacted employees will also be provided with exit packages that include severance, transitional health insurance benefits, Employee Advocacy Program continuation, and outplacement services, Witz noted.Citigroup: hundreds of jobsCiti CEO Jane FraserPatrick T. Fallon/AFP via Getty ImagesCiti plans to cut hundreds of jobs, with many focused on the company's investment bank division. The total headcount cut will reportedly amount to less than 1% of Citi's more than 240,000 workers and are part of Citi's normal course of activities.Citi's cuts were first reported by Bloomberg. In January, Citi's CFO told investors the company remained "focused on simplifying the organization, and we expect to generate further opportunities for expense reduction in the future."Citi declined Insider's request to provide comment on the record. Waymo: reported 209 roles so farWaymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 8% of the unit's staff has been cut this year.Peter Prado/Insider; Vaughn Ridley/Sportsfile via Getty ImagesAlphabet's self-driving car unit Waymo has reportedly laid off a total of 209 employees this year in two rounds of cuts, according to The Information. Waymo reportedly laid off 137 employees on March 1, according to The Information. Waymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 209 employees— approximately 8% of the company's staff— have been cut this year, according to an internal email seen by The Information.Waymo did confirm the cuts to Insider but did not specify the number of roles impacted or the date the first round of cuts occurred.  Thoughtworks: reported 500 employeesThoughtworks laid off 500 employees on February 28. That day, CEO Guo Xiao said in the company's earnings release that it was "pleased" with its performance in the fourth quarter of 2022.Screenshot of Guo Xiao from the Thoughtworks website.Thoughtworks, a software consultancy firm, reportedly laid off 500 employees or 4% of its global workforce, according to TechCrunch. TechCrunch noted that the company "did not dispute" the figure when reached for comment on March 1. According to TechCrunch, Thoughtworks "initially informed" the affected employees about the decision on February 28. That same day, Thoughtworks reported that its revenue had increased 8.3% between the fourth quarter of 2022 and the fourth quarter of 2021. The company also reported a more than 21% year over year revenue increase for 2022. In the company's earnings release, Thoughtworks' CEO Guo Xiao said, "We are pleased with our performance in the fourth quarter and our clients continue to look to us to help them navigate these uncertain times and tackle their biggest technology challenges."General Motors: reported 500 salaried jobsGM CEO Mary Barra.Patrick T. Fallon/Getty ImagesGeneral Motors plans to cut 500 executive-level and salaried positions, according to a report from The Detroit News. The layoffs come only one month after CEO Mary Barra told investors and reporters on the company's earnings call, "I do want to be clear that we're not planning layoffs." In a memo to employees, seen by Insider, GM's chief people officer wrote, "we are looking at all the ways of addressing efficiency and performance. This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration." Employees who are getting laid off were informed on Feb. 28. General Motors confirmed the layoffs to Insider but did not confirm a specific number of employees getting cut. Twitter: about 200 employeesElon Musk is Twitter's CEO and ownerREUTERS/Jonathan ErnstThe layoffs reportedly haven't stopped at Twitter under Elon Musk. The social media company reportedly laid off 200 more employees on a Saturday night in late February, according to the New York Times. Some workers reportedly found out they had lost their jobs when they couldn't log into their company emails.Musk laid off 50% of Twitter's workforce in November after buying the company for $44 billion. Yahoo: 20% of employeesSOPA Images / Getty ImagesYahoo announced it will eliminate 20% of its staff, or more than 1,600 people, as part of an effort to restructure the company's advertising technology arm, Axios reported on February 9.Yahoo CEO Jim Lanzone told Axios that the cuts are part of a strategic overhaul of its advertising unit and will be  "tremendously beneficial for the profitability of Yahoo overall."    Disney: 7,000 jobsBob Iger, CEO of DisneyCharley Gallay/Stringer/Getty ImagesFresh off his return as Disney CEO, Bob Iger announced February 8 that Disney will slash 7,000 jobs as the company looks to reduce costs. Iger, who returned to the position in November 2022 to replace his successor Bob Chapek after first leaving in 2020, told investors the cuts are part of an effort to help save an estimated $5.5 billion. "While this is necessary to address the challenges we are facing today, I do not make this decision lightly," Iger said. "I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I am mindful of the personal impact of these changes."DocuSign: 10%Igor Golovniov/SOPA Images/LightRocket/Getty ImagesDocuSign plans to slash 10% of employees as part of a restructuring plan "designed to support the company's growth, scale, and profitability objectives," the electronic signature company wrote in a Securities and Exchange Commission filing on Feb. 16. The company said the restructuring plan is expected to be complete by the second quarter of fiscal 2024, per the filing. Affirm: 19% of its workforceAffirm co-founder and CEO Max LevchinAffirmAffirm announced on February 8 it plans to slash 19% of its workforce, after reporting declining sales that missed Wall Street expectations. Affirm co-founder and CEO Max Levchin said in a call with investors that the technology company "has taken appropriate action" in many areas of the business to navigate economic headwinds, including creating a "smaller, therefore, nimbler team.""I believe this is the right decision as we have hired a larger team that we can sustainably support in today's economic reality, but I am truly sorry to see many of our talented colleagues depart and we'll be forever grateful for their contributions to our mission," he said.  GoDaddy: 8% of workersGoDaddy's CEO Aman Bhutani in September 2019Don Feria/Invision/AP ImagesGoDaddy, the website domain company, announced on February 8 it will cut 8% of its global workforce. "Despite increasingly challenging macroeconomic conditions, we made progress on our 2022 strategic initiatives and continued our efforts to manage costs effectively," GoDaddy CEO Aman Bhutani wrote in an email to staffers."The discipline we embraced was important but, unfortunately, it was not sufficient to avoid the impacts of slower growth in a prolonged, uncertain macroeconomic environment."Zoom: 15% of staffZoom CEO Eric Yuan.AP Photo/Mark LennihanZoom CEO Eric Yuan announced in a memo to workers that the company would reduce its headcount by 15%, or about 1,300 employees, on February 7. He attributed the layoffs to "the uncertainty of the global economy and its effect on our customers" but also said the company "made mistakes" as it grew. "We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably toward the highest priorities," Yuan said. In the memo, Yuan also announced that he would cut his salary by 98% in 2023 and forgo his corporate bonus. In addition, other members of the executive leadership team will also reduce their base salaries by 20% this year, according to Yuan. eBay: 500 jobseBay CEO Jamie Iannone told employees Tuesday that the company would be eliminating 500 roles.Harry Murphy/Sportsfile for Web Summit via Getty ImagesOn Tuesday, e-commerce giant eBay told employees that it would be eliminating 500 roles, or about 4% of its workforce, according to a message included in a regulatory filing on Tuesday. In the message, CEO Jamie Iannone wrote "Today's actions are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform."He added, "this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape." Dell: 5% of workforceDell is eliminating approximately 5% of its workforce. The company's co-chief operating officer Jeff Clarke told employees in a memo, "market conditions continue to erode with an uncertain future."Kevork Djansezian / Staff/Getty ImagesOn February 6, Dell said in a regulatory filing that it would be eliminating about 5% of its workforce. The percentage amounts to approximately 6,650 roles based on numbers that Dell provided Insider. In a memo sent to employees posted on Dell's website, co-chief operating officer Jeff Clarke, said "market conditions continue to erode with an uncertain future." He also noted in the memo that the company had paused hiring, limited employee traveling, and decreased spending on outside services. He added, however, "the steps we've taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough."Pinterest: 150 jobsBen Silbermann is the founder and executive chair of Pinterest. He was the company's CEO until June 2022.Horacio Villalobos/Getty ImagesPinterest said it would cut 150 workers, or less than 5% of its workforce, on February 1, the company confirmed to Insider.  "We're making organizational changes to further set us up to deliver against our company priorities and our long-term strategy," a company representative said.The social media company was recently the target of activist investor Elliott Management, agreeing to add one of the firm's representatives to its board last month.   Rivian: 6% of jobsRivian CEO RJ Scaringe.Carlos Delgado/Associated PressRivian's CEO RJ Scaringe announced the EV company would cut 6% of its workforce in a memo to employees, the company confirmed to Insider. This is the company's second round of job cuts in the last 6 months after Scaringe announced a separate 6% workforce reduction in July 2022. In his memo to staff, Scaringe said Rivian needs to focus its resources on ramping up production and reaching profitability. BDG Media: 8% of staffScreengrab of Gawker's homepageGawkerBDG Media announced on February 1 that it was shutting down pop-culture site Gawker and laying off 8% of its staff, according to Axios. BDG owns Bustle, Elite Daily, and other lifestyle and news websites. "After experiencing a financially strong 2022, we have found ourselves facing a surprisingly difficult Q1 of 2023," CEO Bryan Goldberg wrote in a memo to staff seen by Axios. Splunk: 325 jobsGary Steele took over as Splunk's CEO in April 2022.YouTube/ProofpointSoftware and data platform Splunk is the latest in a long list of tech companies to announce layoffs in recent months. On February 1, the company said it would lay off 4% of its staff and scale back the use of consultants to cut costs, according to a filing viewed by Insider. The layoffs will reportedly be focused on workers in North America, and CEO Gary Steele told employees Splunk would continue to hire in "lower-cost areas."Intel: 343 jobsIntel CEO Pat Gelsinger.Pool Eric Lalmand/Getty ImagesIntel notified California officials per WARN Act requirements it plans to layoff 343 workers from its Folsom campus, local outlets reported on January 30. "These are difficult decisions, and we are committed to treating impacted employees with dignity and respect," Intel said in a statement to KCRA 3, noting that the cost-cutting comes as the company is faces a "challenging macro-economic environment." On February 1, the company announced CEO Pat Gelsinger will take a 25% pay cut, while other members of the executive team will take salary reductions in amounts ranging from 5% to 15%.  FedEx: more than 10% of top managersFedEx workers in New York City on March 16, 2021.Alexi Rosenfeld/Getty ImagesFedEx informed staffers on February 1 it plans to slash more than 10% of top managers in an effort to reduce costs.  "This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions," CEO Raj Subramaniam wrote in a letter to staff, which was shared with Insider's Emma Cosgrove. While the exact number of employees impacted was not specified, a FedEx spokesperson told Insider that since June 2022 the company has reduced its workforce by more than 12,000 staffers through "headcount management initiatives." "We will continue responsible headcount management throughout our transformation," the spokesperson said. PayPal: 7% of total workforceDan Schulman, president and CEO of PayPal announced that the company would be cutting 7% of its total workforce on January 31.PaypalPayPal announced on January 31 that it plans to cut 2,000 workers or approximately 7% of the company's total workforce over the coming weeks. In a statement announcing the layoffs on PayPal's website, CEO and president Dan Schulman cited the "challenging macro-economic environment." He added, "While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do."HubSpot: 7% of staffYamini Rangan is HubSpot's CEO.Matt Winkelmeyer/ Getty ImagesHubSpot's CEO Yamini Rangan announced that the company would lay off 500 workers, according to an email seen by Insider. "We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected. The year was challenging due to a perfect storm of inflation, volatile foreign exchange, tighter customer budgets, and longer decision making cycles," Rangan wrote to employees. IBM: 1.5% of staffIBM's CEO Arvind KrishnaBrian Ach / Stringer / Via GettyIBM plans would cut 1.5% of its staff, roughly 3,900 workers. The layoffs were first reported by Bloomberg but confirmed by Insider.The company said the cuts would cost IBM about $300 million and is related entirely to businesses the company has spun off. Bloomberg reports that CFO James Kavanaugh said the company is still hiring in "higher-growth areas." Hasbro: 15% of workersA Jenga game by Hasbro Gaming.Thomson ReutersHasbro reportedly plans to cut 1,000 workers after warning that the 2022 holiday season was weaker than expected, according to the toy and game company. The company said the layoffs come as it seeks to save between $250 million to $300 million per year by the end of 2025. "While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses," Chris Cocks, Hasbro's CEO said. Dow: 2,000 global employeesThe Dow Chemical logo is shown on a building in downtown Midland, home of the Dow Chemical Company corporate headquarters, December 10th, 2015 in Midland, MichiganBill Pugliano/Getty ImagesDow Inc. announced on January 26 that it will lay off 2,000 global employees, a move that indicates mass layoffs are spreading beyond just the technology sector, the Wall Street Journal reported. It's part of a $1 billion cost-cutting effort intended to help amid "challenging energy markets," Dow CEO Jim Fitterling said in a press release. The chemical company also  will shut down select assets, mostly in Europe, per the release."We are taking these actions to further optimize our cost structure and prioritize business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe," Fittlering said.   SAP: Up to 3,000 positionsSAP CEO Christian KleinULI DECK/POOL/AFP via Getty ImagesSoftware company SAP said on January 26 it will slash up to 3,000 jobs globally in response to a profit slump, with many of the cuts coming outside of its headquarters in Berlin, the Wall Street Journal reported.  The layoffs will impact an estimated 2.5% of the company's workforce and are part of a cost-cutting initiative aiming at reaching an annual savings of $382 million in 2024, according to the Journal. "The purpose is to further focus on strategic growth areas," said Luka Mucic, SAP's chief financial officer, per the Journal.   3M: 2,500 jobs cut3M3M, which makes Post-It notes, Scotch tape, and N95 masks, said it plans to cut 2,500 manufacturing jobs worldwide. CEO Mike Roman called it "a necessary decision to align with adjusted production volumes." "We expect macroeconomic challenges to persist in 2023. Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders," he said in a press release. Google: around 12,000 employeesBrandon Wade/ReutersSundar Pichai, CEO of Google parent company Alphabet, informed staffers on January 20 that the company will lay off 12,000 employees, or 6% of its global workforce. In a memo sent to employees and obtained by Insider, Pichai said the layoffs will "cut across Alphabet, product areas, functions, levels and regions" and were decided upon after a "rigorous review." Pichai said the company will hold a townhall meeting to further discuss the cuts, adding he took "full responsibility for the decisions that led us here" "Over the past two years we've seen periods of dramatic growth," Pichai wrote in the email. "To match and fuel that growth, we hired for a different economic reality than the one we face today." Vox: 7% of staffThe layoffs were reportedly announced in a memo from CEO Jim Bankoff.Vox MediaVox Media, the parent company of publications like Vox, The Verge, New York magazine, and Vulture, is laying off roughly 133 people, or 7% of its staff, according to a report by Axios. The cuts come just a few months after the media company laid off 39 roles in July. The decision was reportedly announced in a note to staff from CEO Jim Bankoff, who wrote that while the company is "not expecting further layoffs at this time, we will continue to assess our outlook, keep a tight control on expenses and consider implementing other cost savings measures as needed," according to Axios.Vox Media's layoffs come at a time when advertisers are tightening their belts in anticipation of an economic slowdown, taking a toll on the media industry. Capital One: more than 1,100 tech workersBrian Ach/AP ImagesCapital One slashed 1,100 technology positions on January 18, a company spokesperson told Insider. The cuts impacted workers in the "Agile job family," a department which was eliminated and its responsibilities integrated into "existing engineering and product manager roles," per the spokesperson. "Decisions that affect our associates, especially those that involve role eliminations, are incredibly difficult," the Capital One spokesperson said in the statement. "This announcement is not a reflection on these individuals or the work they have driven on behalf of our technology organization," the spokesperson continued. "Their contributions have been critical to maturing our software delivery model and our overall tech transformation."The eliminations came after the bank had invested heavily in tech efforts in recent years, including launching a new software business focused on cloud computing in June 2022. "This decision was made solely to meet the evolving skills and process enhancements needed to deliver on the next phase of our tech transformation," the spokesperson said.  WeWork: About 300 employeesReutersWeWork announced on January 19 it will cut about 300 positions as it scales back on coworking spaces in low-performing regions, Reuters reported. The layoffs come after the company said in November 2022 it planned to exit 40 locations in the US as part of a larger cost-cutting effort. The company announced the cuts in a press release listing its fourth-quarter earnings call date, stating only the reductions are "in connection with its portfolio optimization and in continuing to streamline operations."  Wayfair: more than 1,000 employeesPavlo Gonchar/SOPA Images/LightRocket via Getty ImagesWayfair is expected to lay off more than 1,000 employees, about 5% of its workforce, in the coming weeks in response to slumping sales, the Wall Street Journal reported on January 19.The cuts mark the second round of layoffs in six months for the online furniture and home goods company, after it nixed 900 staffers in August 2022. Though the company experienced significant growth during the pandemic-driven home improvement boom, sales began to stagnate as social distancing policies loosened and Americans began returning to offices."We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth. This year, that growth has not materialized as we had anticipated," Wayfair CEO Niraj Shah wrote in a letter to employees announcing the August 2022 layoffs, per CNN. In its most recent quarter, the Wayfair reported that net revenue decreased by $281 million, down 9% from the same period the year prior.  Microsoft: 10,000 workersMicrosoft CEO Satya NadellaStephen Brashear/Getty ImagesMicrosoft announced on January 18 that it planned to reduce its workforce by 10,000 jobs by the end of the third quarter of this year. CEO Satya Nadella attributed the layoffs to customers cutting back in anticipation of a recession. However, Nadella also told workers that the company still plans to grow in some areas, despite the firings, writing that the company will "continue to hire in key strategic areas." Microsoft's layoff announcement comes as the tech giant is reportedly in talks to invest $10 billion in OpenAI, which created the AI chatbot ChatGPT. On February 13, the company laid off staff at LinkedIn—which it acquired in 2016— according to The Information. The cuts were in the recruiting department, though the total number laid off is not immediately clear, The Information reported.Crypto.com: 20% of staffCrypto.com CEO Kris MarszalekCrypto.comCrypto.com announced on January 13 that it would let go of a fifth of its workforce amid a sagging crypto market and fallout from FTX's collapse. This is the second major round of firings for Crypto.com, which also had layoffs in July. "The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It's for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success," CEO Kris Marszalek wrote in a memo to employees. BlackRock: up to 3% of global workforceBlackRock CEO Larry FinkSpencer Platt/Getty ImagesBlackRock is cutting up to 500 roles in its first round of firings since 2019. Staff members were notified on January 11 about whether they were laid off. "Taking a targeted and disciplined approach to how we shape our teams, we will adapt our workforce to align even more closely with our strategic priorities and create opportunities for the immense talent inside the firm to develop and prosper," CEO Larry Fink and President Rob Kapito wrote in a memo to employees. Goldman Sachs: an estimated 6.5% of its global workforceGoldman Sachs is laying off an expected 3,200 employees.Photo by Michael M. Santiago/Getty ImagesGoldman Sachs began laying off employees on Jan. 11, with cuts expected to impact an estimated 6.5% of the company's global workforce — or roughly 3,200 staffers — a source told Insider. The company previously slashed roles on its media and tech teams in September 2022, and it was expected to issue further reductions in the first half of January. The cost-cutting efforts from the investment banking giant mirror reductions from competitors including Morgan Stanley and Citi, which also laid off employees in 2022. "We continue to see headwinds on our expense lines, particularly in the near term," Goldman Sachs CEO David Solomon said at a conference in December. "We've set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set."   BNY Mellon: 1,500 jobsBNY Mellon CEO Robin VinceBNY MellonBNY Mellon is planning to cut approximately 3% of its workforce, or 1,500 jobs, according to the Wall Street Journal, which cited people familiar with the matter. The cuts will be primarily aimed at talent management roles, according to the report. BNY Mellon will reportedly plan to invest more in junior staff. Verily (part of Alphabet): reportedly 15% of workersAlphabet CEO Sundar PichaiJerod Harris/Getty ImagesVerily, which is Alphabet's healthcare unit, is laying off more than 200 employees, according to an email seen by the Wall Street Journal. The Journal reports that the company will also scale down the number of projects it works on in an effort to cut costs."We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model," Verily's CEO, Stephen Gillet, wrote in the email, according to the Journal.This is the first significant layoff done by Google's parent company, which had so far avoided the massive waves of job cuts done by other big tech giants like Amazon and Meta. DirecTV: 10% of management staffDirecTV.Karen Bleier/AFP/Getty ImagesDirecTV employees were told in the first week of January that the company would lay off several hundred workers in management roles.The satellite TV business has faced slowing revenues as more people choose to cut the cord and pay for streaming services over cable TV. "The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming. We're adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements," a spokesperson for DirecTV told Insider. Coinbase: 950 workersCEO Brian Armstrong cited the downward trend in cryptocurrency prices and the broader economy as reasons for the layoffs.Patrick Fallon/Getty ImagesCoinbase announced on Tuesday, Jan. 10, that would lay off another 20% of its staff. The cuts came after the crypto company laid off over 1,000 employees in July. In a memo to employees, CEO Brian Armstrong said, "in hindsight, we could have cut further at that time," referencing the layoffs in July. Armstrong partially attributed the company's weakness to the "fallout from unscrupulous actors in the industry," likely referencing the alleged fraud that took place at FTX late last year under then-CEO Sam Bankman-Fried. Armstrong predicted "there could still be further contagion" from FTX in the crypto markets but assured remaining employees that Coinbase is well capitalized. Amazon: 18,000 employeesAmazon CEO Andy Jassy initially announced the company's latest round of layoffs in November.AmazonAmazon is in the midst of the most significant round of layoffs in the company's history. In a memo to employees, CEO Andy Jassy said the company would cut more than 18,000 workers in total — far more than what was initially expected based on reporting by the New York Times. Jassy cited "the uncertain economy" and rapid hiring as reasons for the layoffs. While most of Amazon's 1.5 million staff have warehouse jobs, the layoffs are concentrated in Amazon's corporate groups. Amazon's layoffs began late last year, though the Wall Street Journal reports cuts will continue through the first few weeks of 2023.Amazon's 18,000 jobs cuts are the largest of any major tech company amid the wave of recent layoffs.  Salesforce: 10% of its staffSalesforce said in the first month of 2023 that it would enact big job cuts.Noam Galai/Getty ImagesSalesforce co-CEO Marc Benioff announced on Jan. 4 that the software company plans to layoff 10% of its workforce — an estimated 7,000 employees — and close select offices as part of a restructuring and cost-cutting plan. "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff wrote in an email to staff. "With this in mind, we've made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks."He continued: "As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that."Everlane: 17% of corporate employeesEverlane founder and executive chair Michael Preysman.Lars Ronbog/Getty Images for Copenhagen Fashion SummitEverlane is slashing 17% of its 175-person corporate workforce, and 3% of its retail staff."We know there will be some bumpiness over the next few weeks as we navigate a lot of change at once. We ask for your patience as we do right by our departing team members," CEO Andrea O'Donnell wrote to employees, according to an internal memo seen by Insider. In a statement to Insider, a company spokesperson said the decision was intended to "improve profitability in 2023 and continue our efforts to help leave the fashion industry cleaner than we found it."The e-commerce clothing company previously laid off nearly 300 workers, mostly in retail in March 2020 amid the outbreak of the Covid-19 pandemic.Vimeo: 11% of its workforceAnjali Sud, CEO of Vimeo, speaks during the company's direct listing on Nasdaq, Tuesday, May 25, 2021, in New York.AP Photo/Mark LennihanVimeo CEO Anjali Sud told employees on Jan. 4 that the company would layoff 11% of its staff, the video platform's second major round of layoffs in less than a year, after cutting 6% of employees in July"This was a very hard decision that impacts each of us deeply," Sud wrote in an email to staff. "It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment."A spokesperson told Insider reduction is intended to assist with ongoing economic concerns and improve the company's balance sheet. Compass: size of layoffs not immediately disclosedCompass is letting go of more employees after two rounds of layoffs in the past eight months.CompassCompass CEO Robert Reffkin told staffers on Jan. 5 it would conduct more layoffs, following two previous rounds in the past eight months, as the brokerage continues to struggle with significant financial losses. "We've been focused over the last year on controlling our costs," Reffkin wrote in an email to employees. "As part of that work, today we reduced the size of some of our employee teams. While decisions like these are always hard, they are prudent and allow us to continue to build a long-term, successful business for all of you."While the size of the layoffs was not immediately disclosed, the brokerage let go of 450 corporate employees in June 2022, followed by an additional 750 people from its technology team in October 2022.   Stitch Fix: 20% of salaried jobsStitch Fix is laying off salaried employees.SOPA ImagesStitch Fix announced on Jan. 5 that it plans to slash 20% of its salaried workforce, the Wall Street Journal reported.The cuts come in tandem with the announcement that CEO Elizabeth Spaulding is stepping down, after less than 18 months at the helm of the struggling retail company."First as president and then as CEO, it has been a privilege to lead in an unprecedented time, and to chart the course for the future with the Stitch Fix team," Spaulding said in a statement. "It is now time for a new leader to help support the next phase."Stitch Fix founder Katrina Lake — who formerly served as chief executive and sits on the board of directors — will become interim CEO, the company said in a press release. Read the original article on Business Insider.....»»

The wave of layoffs hitting tech companies and beyond shows no signs of slowing down. JPMorgan is cutting 500 jobs, and about 1,000 from newly acquired First Republic. JPMorgan confirmed to CNN it was cutting 500 employees within its own bank, as well as 1,000 staffers from newly acquired First Republic Bank.Chris Hondros/Getty Images JPMorgan is the latest US company to conduct layoffs, reportedly slashing about 500 employees. Over the past few months, layoffs have expanded outside of tech, media, and finance as Gap and Whole Foods announced cuts. See the full list of layoffs so far in 2023. A wave of layoffs that hit dozens of US companies toward the end of 2022 shows no sign of slowing down into 2023.America's largest bank, JPMorgan Chase, is the latest US company to announce layoffs. CNBC was first to report that the finance giant was cutting about 500 jobs across several divisions, and a JPMorgan spokesperson confirmed the cuts to CNN later on Friday.The news comes weeks after Linkedin announced cuts of its own. The business networking platform informed employees in a memo posted May 8 that it would be cutting 716 roles from its global workforce and discontinue InCareer, its localized jobs app in China. These companies join a large number of major corporations that have made significant cuts in the new year: Tech companies, including Meta and Google, and finance behemoths, like Goldman Sachs, announced massive layoffs in the first weeks of 2023 amid a continued economic downturn and stagnating sales.The downsizing followed significant reductions that companies including Meta and Twitter made last year. The layoffs have primarily affected the tech sector, which is now hemorrhaging employees at a faster rate than at any point during the pandemic, the Journal reported. According to data cited by the Journal from Layoffs.fyi, a site tracking layoffs since the start of the pandemic, tech companies slashed more than 187,000 in 2023 alone — compared to 80,000 in March to December 2020 and 15,000 in 2021. But it's not just tech companies that are cutting costs, with the major job reductions that have come from the Gap, along with FedEx, Dow, and Wayfair.Here are notable job cuts so far in 2023: JPMorgan: About 500 jobsJPMorgan recently began cuts of about 500 employees, CNBC and CNN reported.ReutersJPMorgan announced this week that it is slashing 500 roles, CNBC reported.The cuts are expected to spread across JPMorgan's retail and commercial banking, asset and wealth management, and corporate and investment banking operations, according to CNBC.The reported layoffs come just a day after reports that JPMorgan laid off 1,000 First Republic employees, or about 15% of its workforce. JPMorgan, the largest bank in the US, got even larger earlier this month when it acquired the assets of failing First Republic after it was seized by regulators.LinkedIn: 716 rolesRyan Roslansky, CEO of LinkedIn, said the company would be cutting 716 roles on Tuesday.Courtesy of Ryan RoslanskyLinkedIn announced earlier this month that it would be cutting 716 roles from its global workforce in a message from CEO Ryan Roslansky.Roslansky also noted that company will also be discontinuing InCareer, a local jobs app in China, as it refocuses on helping companies in China hire, market, and train abroad. The decision comes on the heels of LinkedIn's 20th anniversary last week. "While we're making meaningful progress creating economic opportunities for our members and customers and experiencing record engagement on the platform, we're also seeing shifts in customer behavior and slower revenue growth," Roslansky said.Shopify: 20% of workforceDavid Fitzgerald/Sportsfile via Getty ImagesShopify is slashing 20% of its workforce and selling off most of its logistics business to supply chain company Flexport, the company announced on May 4. The cuts confirmed growing concern of layoffs among staffers in recent weeks, following the cancellation of several team-building offsite events and analyst speculation that Shopify would alter its logistics arm, Insider reported."I recognize the crushing impact this decision has on some of you, and did not make this decision lightly," Shopify CEO Tobi Lütke said in a note to employees and shareholders.He continued: "This is a consequential and hard week. It's the right thing for Shopify but it negatively affects many team members who we admire and love working with."Morgan Stanley: 3,000 jobsReutersMorgan Stanley is cutting 3,000 jobs by the end of the quarter, Bloomberg reported, citing sources familiar with the matter. One person told the outlet that the company's banking and trading teams will be most impacted.The cuts will affect about 5% of the firm's workforce, excluding financial advisers and personnel in the wealth management division, Bloomberg noted. A spokesperson for the bank did not immediately respond to Insider's request for comment and declined to comment to Bloomberg. However, CEO James Gorman noted last month that underwriting and mergers activity has been "subdued" and that he doesn't expect a rebound before the second half of 2023 or even 2024, Bloomberg noted. The firm last cut 1,600, or around 2% of its staff in December, Bloomberg noted. Dropbox: 16% of staffDrew Houston, cofounder and CEO of Dropbox, told employees Thursday that the company was eliminating 500 jobs.Matt Winkelmeyer / Getty ImagesCloud storage firm Dropbox said Thursday that it would be reducing its global workforce by 16%, or 500 jobs.In a message to staff sent Thursday, CEO Drew Houston said the cuts are being made, in part, from slowing business growth and the expansion of AI products. "Today's changes were the result of taking a hard look at our strategic priorities and organizational structure as a leadership team, and aligning to principles of sustainable financial growth, efficiency, and flexibility to invest in our future. We're also streamlining how the company is organized," Houston said.  Gap: more than 2,000 jobs since late last yearGap posters in Birmingham, England.Mike Kemp/Getty ImagesClothing retailer Gap is cutting 1,800 positions in its headquarters and upper management as part of a restructuring plan meant to cut costs, the retailer said Thursday.Gap said that the cuts are expected to help the company see $300 million in annualized savings."We are taking the necessary actions to reshape Gap Inc. for the future — simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience," the company's chairman and interim CEO Bob Martin said in a statement given to Insider.In September, Gap slashed 500 jobs from its corporate ranks in a push to save $250 million annually, the Wall Street Journal reported. Jenny Craig: potential mass layoffsA man enters a Jenny Craig facility June 19, 2006 in Niles, Illinois.Tim Boyle/Getty ImagesWeight loss company Jenny Craig notified staffers of potential mass layoffs on April 27, as a result of the company "winding down physical operations," according to an internal email reviewed by NBC News.According to NBC News, the company has been in the process of selling and anticipates the pending sale "will likely impact all employees in some manner," an FAQ document sent to employees read. "We do not know the exact employees/groups whom will be impacted, and if any employees may be retained," the document said, per NBC News. "As a result, we would suggest that you anticipate that your employment may be impacted and begin to seek other employment." 3M: 6,000 jobsMike Roman, CEO of 3M.Xinhua News Agency / Contributor/Getty ImagesOn Tuesday, the Scotch tape and Post-It Notes manufacturer said it will be cutting 6,000 positions across all parts of the company with the goal of streamlining operations, simplifying supply chain, and reducing layers of management, according to The Wall Street Journal.The company's chief executive Mike Roman said Tuesday that the cuts would eliminate 10% of 3M's global workforce and ultimately save the company between $700 to $900 million in pretax costs, the Journal said. 3M last announced cuts in January when it said it was removing 2,500 manufacturing positions.Lyft: 1,072 rolesReutersIn an SEC filing on Thursday, Lyft said it was cutting roles for 1,072 employees, or about 26% of its corporate workforce. In the filing, the company also said it is scaling back on hiring and has eliminated over 250 open positions. The news comes just weeks after David Risher took the helm as Lyft's new CEO, part of an executive shakeup that involved cofounders Logan Green and John Zimmer moving into board roles. A spokesperson for Lyft previously told Insider, "David has made clear to the company that his focus is on creating a great and affordable experience for riders and improving drivers' earnings."The spokesperson added, "To do so requires that we reduce our costs and structure our company so that our leaders are closer to riders and drivers. This is a hard decision and one we're not making lightly. But the result will be a far stronger, more competitive Lyft." Deloitte: 1,200 jobsAlex Tai/SOPA Images/LightRocket via Getty ImagesDeloitte announced on April 21 it was cutting 1,200 jobs, or about 1.5% of its US staff, the Financial Times reported. The cuts will largely be concentrated in the financial advisory business as a result of a decline in mergers and acquisitions, per internal communications viewed by the FT. Whole Foods: Several hundred corporate employeesMary Meisenzahl/InsiderWhole Foods announced on April 20 it was letting go of several hundred corporate employees, amounting to less than 0.5% of the company's workforce, CNBC reported.The cuts are a result of a structural reorganization of global and regional support teams, which will be downsized from nine to six, but will not cause store closures, according to CNBC.In a memo to employees viewed by CNBC, Whole Foods executives wrote "simplifying our work and improving how we operate is critical as we grow." "As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes," the memo read, per CNBC. It continued: "With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores."BuzzFeed News: 15% of staffBuzzFeed News headquarters.Drew Angerer / Getty ImagesBuzzFeed announced on April 20 that it was shuttering its BuzzFeed News division, laying off 15% of its staff, or 180 employees, in the process. In a memo to staff shared with Insider's Lucia Moses, CEO Jonah Peretti admitted to mistakes like over-investing in the news arm and failing to successfully integrate BuzzFeed and Complex after the latter was acquired in 2021. "I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances," he wrote. "Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better."Ernst & Young: 3,000 positionsEY spends $500 million annually on learning for its employees.TOLGA AKMEN / Contributor / GettyErnst & Young announced on April 17 it was laying off 3,000 US employees, or about 5% of its total US staff.The decision came after the financial auditor nixed a proposed reorganization that would break up its consulting and accounting businesses, Reuters reported. According to the Financial Times, which first reported the layoffs, the cuts will address "overcapacity" and will largely impact the company's consulting business. Opendoor: 560 jobsOpendoor announced it was cutting 560 jobs on Tuesday.Opendoor Technologies/GlassdoorOn Tuesday, home flipping giant Opendoor said it was cutting 560 jobs, or 22% of its workforce, citing a souring housing market. A spokesperson for Opendoor told Insider by email,"We've been weathering a sharp transition in the housing market – the steepest and fastest rate increase by the Fed in 40 years, the more than doubling of mortgage rates from historic lows, and the hit to home affordability have driven an approximately 30% decline in new listings from peak levels last year."The spokesperson noted that the cuts have been made to "better align our operational costs with the anticipated near-term market opportunity, while maintaining our critical technology investments that will continue to drive the business long term."Impacted team members will receive severance pay, extended health benefits, and job transition support. Opendoor last made cuts in November 2022, laying off 550 workers or about 18% of its staff.  McKinsey: About 1,400 employeesFABRICE COFFRINI/AFP via Getty ImagesMcKinsey & Company will cut an estimated 1,400 positions, or 3% of its total workforce, Bloomberg reported on March 29.The layoffs are part of the consulting firm's efforts to reorganize support teams and pare down an employee base that has grown rapidly in recent years, per the outlet. "The painful result of this shift is that we will have to say goodbye to some of our firm functions colleagues, while helping others move into new roles that better align to our firm's strategy and priorities," Bob Sternfels, global managing partner, wrote in a note to staff seen by Bloomberg. He continued: "Starting now, where local regulations allow, we will begin to notify colleagues who will depart our firm or be asked to change roles."David's Bridal: 9,236 employeesShoppers head for David's Bridal in Sunset Hill, Mo. Tuesday, May 10, 2005.James A. Finley/AP ImagesDavid's Bridal is laying off more than 9,000 workers across the US, according to a WARN notice filed with the Pennsylvania Department of Labor and Industry on April 14. "We are evaluating our strategic options and a sale process is underway," David's Bridal spokesperson Laura McKeever told the Philadelphia Inquirer. "At this time, there are no updates to share."The company is considering filing for bankruptcy in the near future, according to an April 7 report from the New York Times. David's Bridal also filed for bankruptcy in 2018. Virgin Orbit: 85% of staffersSir Richard Branson, founder of Virgin Orbit.Mark GreenbergVirgin Orbit disclosed in a March 30 filing with the Securities and Exchange Commission that it is slashing 85% of its staff, or about 675 employees.The company, which operates within the Virgin Group and provides launch services for satellites, is also ceasing operations "for the foreseeable future," CNBC reported. "Unfortunately, we've not been able to secure the funding to provide a clear path for this company," Virgin Orbit CEO Dan Hart said, according to audio of a company all-hands obtained by CNBC.     Electronic Arts: About 780 employeesLucy Nicholson/ReutersElectronic Arts — the video game company best known for its "The Sims," "FIFA," and "Madden NFL" franchises — is letting go of 6% of its staff, or about 780 employees, the company announced on March 24. "As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams," Electronic Arts CEO Andrew Wilson wrote in a blog post to staffers. Wilson said the cuts began early this quarter and will continue through the beginning of the next fiscal year.  Amazon: 9,000 more jobsAmazon CEO Andy Jassy announced on Monday that the company would be eliminating another 9,000 roles, on top of the 18,000 announced in January.Richard Brian/ReutersAmazon announced on March 20 that it would cut 9,000 jobs from its workforce over the coming weeks. The cuts come on the heels of the 18,000 roles the company announced it was cutting back in January. In a message to employees shared on Amazon's site, CEO Andy Jassy noted that the impacted positions are largely in the Amazon Web Services, People Experience and Technology Solutions, Advertising, and Twitch departments. In the memo, Jassy said the company staggered its layoff announcements because "not all of the teams were done with their analyses in the late fall." He added, "rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Roku: 200 staffersRoku CEO Anthony Wood speaks during Tribeca X - 2021 Tribeca Festival on June 18, 2021 in New York City.Photo by Arturo Holmes/Getty Images for Tribeca FestivalRoku is cutting an additional 200 roles, or 6% of its workforce, Reuters reported on March 30. The cuts come after the streaming device manufacturer previously laid off 200 employees in November 2022. The company is expected to complete the cuts by the end of the second quarter, and also plans to leave and sublease office facilities in an attempt to reduce costs, according to Reuters. Walmart: About 200 employeesA Walmart store.Bruce Bennett/Getty ImagesWalmart asked about 200 workers at five fulfillment centers to find employment elsewhere in the company in the next 90 days or else be laid off, Reuters reported on March 23.The cuts are a response to the reduction of evening and weekend shifts at select Walmart facilities, including those in Chino, California; Davenport, Florida; Bethlehem, Pennsylvania; Pedricktown, New Jersey; and Fort Worth, Texas, per Reuters. "We recently adjusted staffing levels to better prepare for the future needs of customers," a Walmart spokesperson told Reuters in a statement.  Accenture: 19,000 positionsJoan Cros/Corbis via Getty ImagesAccenture is slashing 19,000 roles, or 2.5% of its total workforce, according to a Security and Exchange Commission filing on March 23.The tech consultancy company said the layoffs will take place over the next 18 months and half of the cuts will impact staffers in "non-billable corporate functions," per the filing.  "While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs," Accenture wrote in the filing. Indeed: 2,200 staffersIndeed CEO Chris HyamsPhoto by Niall Carson/PA Images via Getty ImagesIndeed CEO Chris Hyams announced on March 22 that the online networking platform will cut 2,200 jobs, or about 15% of its staff. In a note sent to employees, Hyams wrote the reductions will impact "nearly every team, function, level, and region" across the company in an effort to reduce redundancy and increase efficiency. "I am heartbroken to share that I have made the difficult decision to reduce our headcount through layoffs. This is a decision I truly hoped I'd never have to make," he wrote. Meta: 10,000 workersMeta CEO Mark ZuckerbergMark Lennihan/APRoughly 10,000 Meta workers will find out that their jobs have been cut between March and May, according to an announcement by the company's founder and CEO, Mark Zuckerberg. Zuckerberg also said the company would close around 5,000 open roles that haven't yet been filled as part of the company's effort to downsize. "My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead," Zuckerberg wrote in a post on Facebook announcing the layoffs. In the post, Zuckerberg said that members of Meta's recruiting team would learn about the fate of their jobs in March, while tech workers would find out in late April, and business groups would find out in May. "In a small number of cases, it may take through the end of the year to complete these changes," he wrote. The job cuts come less than 5 months after Meta slashed 11,000 workers, or about 13% of its workforce, in November. At the time, Zuckerberg called the layoffs a "last resort."  SiriusXM: 475 rolesJennifer Witz, CEO of SiriusXM said the company was cutting 475 roles on March 6.Cindy Ord / Staff/ Getty ImagesThe radio company said March 6th that it was cutting 8% of its staff or 475 roles according to a statement posted on the company's website from CEO Jennifer Witz.In the statement, Witz said "nearly every department" across the company will be impacted. She also noted that those impacted will be contacted directly and will have the opportunity to speak with a leader from their department as well as a member of the company's People + Culture team. Impacted employees will also be provided with exit packages that include severance, transitional health insurance benefits, Employee Advocacy Program continuation, and outplacement services, Witz noted.Citigroup: hundreds of jobsCiti CEO Jane FraserPatrick T. Fallon/AFP via Getty ImagesCiti plans to cut hundreds of jobs, with many focused on the company's investment bank division. The total headcount cut will reportedly amount to less than 1% of Citi's more than 240,000 workers and are part of Citi's normal course of activities.Citi's cuts were first reported by Bloomberg. In January, Citi's CFO told investors the company remained "focused on simplifying the organization, and we expect to generate further opportunities for expense reduction in the future."Citi declined Insider's request to provide comment on the record. Waymo: reported 209 roles so farWaymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 8% of the unit's staff has been cut this year.Peter Prado/Insider; Vaughn Ridley/Sportsfile via Getty ImagesAlphabet's self-driving car unit Waymo has reportedly laid off a total of 209 employees this year in two rounds of cuts, according to The Information. Waymo reportedly laid off 137 employees on March 1, according to The Information. Waymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 209 employees— approximately 8% of the company's staff— have been cut this year, according to an internal email seen by The Information.Waymo did confirm the cuts to Insider but did not specify the number of roles impacted or the date the first round of cuts occurred.  Thoughtworks: reported 500 employeesThoughtworks laid off 500 employees on February 28. That day, CEO Guo Xiao said in the company's earnings release that it was "pleased" with its performance in the fourth quarter of 2022.Screenshot of Guo Xiao from the Thoughtworks website.Thoughtworks, a software consultancy firm, reportedly laid off 500 employees or 4% of its global workforce, according to TechCrunch. TechCrunch noted that the company "did not dispute" the figure when reached for comment on March 1. According to TechCrunch, Thoughtworks "initially informed" the affected employees about the decision on February 28. That same day, Thoughtworks reported that its revenue had increased 8.3% between the fourth quarter of 2022 and the fourth quarter of 2021. The company also reported a more than 21% year over year revenue increase for 2022. In the company's earnings release, Thoughtworks' CEO Guo Xiao said, "We are pleased with our performance in the fourth quarter and our clients continue to look to us to help them navigate these uncertain times and tackle their biggest technology challenges."General Motors: reported 500 salaried jobsGM CEO Mary Barra.Patrick T. Fallon/Getty ImagesGeneral Motors plans to cut 500 executive-level and salaried positions, according to a report from The Detroit News. The layoffs come only one month after CEO Mary Barra told investors and reporters on the company's earnings call, "I do want to be clear that we're not planning layoffs." In a memo to employees, seen by Insider, GM's chief people officer wrote, "we are looking at all the ways of addressing efficiency and performance. This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration." Employees who are getting laid off were informed on Feb. 28. General Motors confirmed the layoffs to Insider but did not confirm a specific number of employees getting cut. Twitter: about 200 employeesElon Musk is Twitter's CEO and ownerREUTERS/Jonathan ErnstThe layoffs reportedly haven't stopped at Twitter under Elon Musk. The social media company reportedly laid off 200 more employees on a Saturday night in late February, according to the New York Times. Some workers reportedly found out they had lost their jobs when they couldn't log into their company emails.Musk laid off 50% of Twitter's workforce in November after buying the company for $44 billion. Yahoo: 20% of employeesSOPA Images / Getty ImagesYahoo announced it will eliminate 20% of its staff, or more than 1,600 people, as part of an effort to restructure the company's advertising technology arm, Axios reported on February 9.Yahoo CEO Jim Lanzone told Axios that the cuts are part of a strategic overhaul of its advertising unit and will be  "tremendously beneficial for the profitability of Yahoo overall."    Disney: 7,000 jobsBob Iger, CEO of DisneyCharley Gallay/Stringer/Getty ImagesFresh off his return as Disney CEO, Bob Iger announced February 8 that Disney will slash 7,000 jobs as the company looks to reduce costs. Iger, who returned to the position in November 2022 to replace his successor Bob Chapek after first leaving in 2020, told investors the cuts are part of an effort to help save an estimated $5.5 billion. "While this is necessary to address the challenges we are facing today, I do not make this decision lightly," Iger said. "I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I am mindful of the personal impact of these changes."DocuSign: 10%Igor Golovniov/SOPA Images/LightRocket/Getty ImagesDocuSign plans to slash 10% of employees as part of a restructuring plan "designed to support the company's growth, scale, and profitability objectives," the electronic signature company wrote in a Securities and Exchange Commission filing on Feb. 16. The company said the restructuring plan is expected to be complete by the second quarter of fiscal 2024, per the filing. Affirm: 19% of its workforceAffirm co-founder and CEO Max LevchinAffirmAffirm announced on February 8 it plans to slash 19% of its workforce, after reporting declining sales that missed Wall Street expectations. Affirm co-founder and CEO Max Levchin said in a call with investors that the technology company "has taken appropriate action" in many areas of the business to navigate economic headwinds, including creating a "smaller, therefore, nimbler team.""I believe this is the right decision as we have hired a larger team that we can sustainably support in today's economic reality, but I am truly sorry to see many of our talented colleagues depart and we'll be forever grateful for their contributions to our mission," he said.  GoDaddy: 8% of workersGoDaddy's CEO Aman Bhutani in September 2019Don Feria/Invision/AP ImagesGoDaddy, the website domain company, announced on February 8 it will cut 8% of its global workforce. "Despite increasingly challenging macroeconomic conditions, we made progress on our 2022 strategic initiatives and continued our efforts to manage costs effectively," GoDaddy CEO Aman Bhutani wrote in an email to staffers."The discipline we embraced was important but, unfortunately, it was not sufficient to avoid the impacts of slower growth in a prolonged, uncertain macroeconomic environment."Zoom: 15% of staffZoom CEO Eric Yuan.AP Photo/Mark LennihanZoom CEO Eric Yuan announced in a memo to workers that the company would reduce its headcount by 15%, or about 1,300 employees, on February 7. He attributed the layoffs to "the uncertainty of the global economy and its effect on our customers" but also said the company "made mistakes" as it grew. "We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably toward the highest priorities," Yuan said. In the memo, Yuan also announced that he would cut his salary by 98% in 2023 and forgo his corporate bonus. In addition, other members of the executive leadership team will also reduce their base salaries by 20% this year, according to Yuan. eBay: 500 jobseBay CEO Jamie Iannone told employees Tuesday that the company would be eliminating 500 roles.Harry Murphy/Sportsfile for Web Summit via Getty ImagesOn Tuesday, e-commerce giant eBay told employees that it would be eliminating 500 roles, or about 4% of its workforce, according to a message included in a regulatory filing on Tuesday. In the message, CEO Jamie Iannone wrote "Today's actions are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform."He added, "this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape." Dell: 5% of workforceDell is eliminating approximately 5% of its workforce. The company's co-chief operating officer Jeff Clarke told employees in a memo, "market conditions continue to erode with an uncertain future."Kevork Djansezian / Staff/Getty ImagesOn February 6, Dell said in a regulatory filing that it would be eliminating about 5% of its workforce. The percentage amounts to approximately 6,650 roles based on numbers that Dell provided Insider. In a memo sent to employees posted on Dell's website, co-chief operating officer Jeff Clarke, said "market conditions continue to erode with an uncertain future." He also noted in the memo that the company had paused hiring, limited employee traveling, and decreased spending on outside services. He added, however, "the steps we've taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough."Pinterest: 150 jobsBen Silbermann is the founder and executive chair of Pinterest. He was the company's CEO until June 2022.Horacio Villalobos/Getty ImagesPinterest said it would cut 150 workers, or less than 5% of its workforce, on February 1, the company confirmed to Insider.  "We're making organizational changes to further set us up to deliver against our company priorities and our long-term strategy," a company representative said.The social media company was recently the target of activist investor Elliott Management, agreeing to add one of the firm's representatives to its board last month.   Rivian: 6% of jobsRivian CEO RJ Scaringe.Carlos Delgado/Associated PressRivian's CEO RJ Scaringe announced the EV company would cut 6% of its workforce in a memo to employees, the company confirmed to Insider. This is the company's second round of job cuts in the last 6 months after Scaringe announced a separate 6% workforce reduction in July 2022. In his memo to staff, Scaringe said Rivian needs to focus its resources on ramping up production and reaching profitability. BDG Media: 8% of staffScreengrab of Gawker's homepageGawkerBDG Media announced on February 1 that it was shutting down pop-culture site Gawker and laying off 8% of its staff, according to Axios. BDG owns Bustle, Elite Daily, and other lifestyle and news websites. "After experiencing a financially strong 2022, we have found ourselves facing a surprisingly difficult Q1 of 2023," CEO Bryan Goldberg wrote in a memo to staff seen by Axios. Splunk: 325 jobsGary Steele took over as Splunk's CEO in April 2022.YouTube/ProofpointSoftware and data platform Splunk is the latest in a long list of tech companies to announce layoffs in recent months. On February 1, the company said it would lay off 4% of its staff and scale back the use of consultants to cut costs, according to a filing viewed by Insider. The layoffs will reportedly be focused on workers in North America, and CEO Gary Steele told employees Splunk would continue to hire in "lower-cost areas."Intel: 343 jobsIntel CEO Pat Gelsinger.Pool Eric Lalmand/Getty ImagesIntel notified California officials per WARN Act requirements it plans to layoff 343 workers from its Folsom campus, local outlets reported on January 30. "These are difficult decisions, and we are committed to treating impacted employees with dignity and respect," Intel said in a statement to KCRA 3, noting that the cost-cutting comes as the company is faces a "challenging macro-economic environment." On February 1, the company announced CEO Pat Gelsinger will take a 25% pay cut, while other members of the executive team will take salary reductions in amounts ranging from 5% to 15%.  FedEx: more than 10% of top managersFedEx workers in New York City on March 16, 2021.Alexi Rosenfeld/Getty ImagesFedEx informed staffers on February 1 it plans to slash more than 10% of top managers in an effort to reduce costs.  "This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions," CEO Raj Subramaniam wrote in a letter to staff, which was shared with Insider's Emma Cosgrove. While the exact number of employees impacted was not specified, a FedEx spokesperson told Insider that since June 2022 the company has reduced its workforce by more than 12,000 staffers through "headcount management initiatives." "We will continue responsible headcount management throughout our transformation," the spokesperson said. PayPal: 7% of total workforceDan Schulman, president and CEO of PayPal announced that the company would be cutting 7% of its total workforce on January 31.PaypalPayPal announced on January 31 that it plans to cut 2,000 workers or approximately 7% of the company's total workforce over the coming weeks. In a statement announcing the layoffs on PayPal's website, CEO and president Dan Schulman cited the "challenging macro-economic environment." He added, "While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do."HubSpot: 7% of staffYamini Rangan is HubSpot's CEO.Matt Winkelmeyer/ Getty ImagesHubSpot's CEO Yamini Rangan announced that the company would lay off 500 workers, according to an email seen by Insider. "We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected. The year was challenging due to a perfect storm of inflation, volatile foreign exchange, tighter customer budgets, and longer decision making cycles," Rangan wrote to employees. IBM: 1.5% of staffIBM's CEO Arvind KrishnaBrian Ach / Stringer / Via GettyIBM plans would cut 1.5% of its staff, roughly 3,900 workers. The layoffs were first reported by Bloomberg but confirmed by Insider.The company said the cuts would cost IBM about $300 million and is related entirely to businesses the company has spun off. Bloomberg reports that CFO James Kavanaugh said the company is still hiring in "higher-growth areas." Hasbro: 15% of workersA Jenga game by Hasbro Gaming.Thomson ReutersHasbro reportedly plans to cut 1,000 workers after warning that the 2022 holiday season was weaker than expected, according to the toy and game company. The company said the layoffs come as it seeks to save between $250 million to $300 million per year by the end of 2025. "While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses," Chris Cocks, Hasbro's CEO said. Dow: 2,000 global employeesThe Dow Chemical logo is shown on a building in downtown Midland, home of the Dow Chemical Company corporate headquarters, December 10th, 2015 in Midland, MichiganBill Pugliano/Getty ImagesDow Inc. announced on January 26 that it will lay off 2,000 global employees, a move that indicates mass layoffs are spreading beyond just the technology sector, the Wall Street Journal reported. It's part of a $1 billion cost-cutting effort intended to help amid "challenging energy markets," Dow CEO Jim Fitterling said in a press release. The chemical company also  will shut down select assets, mostly in Europe, per the release."We are taking these actions to further optimize our cost structure and prioritize business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe," Fittlering said.   SAP: Up to 3,000 positionsSAP CEO Christian KleinULI DECK/POOL/AFP via Getty ImagesSoftware company SAP said on January 26 it will slash up to 3,000 jobs globally in response to a profit slump, with many of the cuts coming outside of its headquarters in Berlin, the Wall Street Journal reported.  The layoffs will impact an estimated 2.5% of the company's workforce and are part of a cost-cutting initiative aiming at reaching an annual savings of $382 million in 2024, according to the Journal. "The purpose is to further focus on strategic growth areas," said Luka Mucic, SAP's chief financial officer, per the Journal.   Spotify: 6% of the workforceDaniel Ek, Spotify cofounder and CEOGreg Sandoval/Business InsiderIn a memo to Spotify employees, CEO Daniel Ek said the company would cut 6% of its staff, about 600 people. "While we have made great progress in improving speed in the last few years, we haven't focused as much on improving efficiency. We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization," he wrote. As part of the changes, Dawn Ostroff, the company's chief content and advertising officer, who spent more than $1 billion signing exclusive podcast deals with Joe Rogan, the Obamas, and Prince Harry and Meghan Markle, has departed. 3M: 2,500 jobs cut3M3M, which makes Post-It notes, Scotch tape, and N95 masks, said it plans to cut 2,500 manufacturing jobs worldwide. CEO Mike Roman called it "a necessary decision to align with adjusted production volumes." "We expect macroeconomic challenges to persist in 2023. Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders," he said in a press release. Google: around 12,000 employeesBrandon Wade/ReutersSundar Pichai, CEO of Google parent company Alphabet, informed staffers on January 20 that the company will lay off 12,000 employees, or 6% of its global workforce. In a memo sent to employees and obtained by Insider, Pichai said the layoffs will "cut across Alphabet, product areas, functions, levels and regions" and were decided upon after a "rigorous review." Pichai said the company will hold a townhall meeting to further discuss the cuts, adding he took "full responsibility for the decisions that led us here" "Over the past two years we've seen periods of dramatic growth," Pichai wrote in the email. "To match and fuel that growth, we hired for a different economic reality than the one we face today." Vox: 7% of staffThe layoffs were reportedly announced in a memo from CEO Jim Bankoff.Vox MediaVox Media, the parent company of publications like Vox, The Verge, New York magazine, and Vulture, is laying off roughly 133 people, or 7% of its staff, according to a report by Axios. The cuts come just a few months after the media company laid off 39 roles in July. The decision was reportedly announced in a note to staff from CEO Jim Bankoff, who wrote that while the company is "not expecting further layoffs at this time, we will continue to assess our outlook, keep a tight control on expenses and consider implementing other cost savings measures as needed," according to Axios.Vox Media's layoffs come at a time when advertisers are tightening their belts in anticipation of an economic slowdown, taking a toll on the media industry. Capital One: more than 1,100 tech workersBrian Ach/AP ImagesCapital One slashed 1,100 technology positions on January 18, a company spokesperson told Insider. The cuts impacted workers in the "Agile job family," a department which was eliminated and its responsibilities integrated into "existing engineering and product manager roles," per the spokesperson. "Decisions that affect our associates, especially those that involve role eliminations, are incredibly difficult," the Capital One spokesperson said in the statement. "This announcement is not a reflection on these individuals or the work they have driven on behalf of our technology organization," the spokesperson continued. "Their contributions have been critical to maturing our software delivery model and our overall tech transformation."The eliminations came after the bank had invested heavily in tech efforts in recent years, including launching a new software business focused on cloud computing in June 2022. "This decision was made solely to meet the evolving skills and process enhancements needed to deliver on the next phase of our tech transformation," the spokesperson said.  WeWork: About 300 employeesReutersWeWork announced on January 19 it will cut about 300 positions as it scales back on coworking spaces in low-performing regions, Reuters reported. The layoffs come after the company said in November 2022 it planned to exit 40 locations in the US as part of a larger cost-cutting effort. The company announced the cuts in a press release listing its fourth-quarter earnings call date, stating only the reductions are "in connection with its portfolio optimization and in continuing to streamline operations."  Wayfair: more than 1,000 employeesPavlo Gonchar/SOPA Images/LightRocket via Getty ImagesWayfair is expected to lay off more than 1,000 employees, about 5% of its workforce, in the coming weeks in response to slumping sales, the Wall Street Journal reported on January 19.The cuts mark the second round of layoffs in six months for the online furniture and home goods company, after it nixed 900 staffers in August 2022. Though the company experienced significant growth during the pandemic-driven home improvement boom, sales began to stagnate as social distancing policies loosened and Americans began returning to offices."We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth. This year, that growth has not materialized as we had anticipated," Wayfair CEO Niraj Shah wrote in a letter to employees announcing the August 2022 layoffs, per CNN. In its most recent quarter, the Wayfair reported that net revenue decreased by $281 million, down 9% from the same period the year prior.  Microsoft: 10,000 workersMicrosoft CEO Satya NadellaStephen Brashear/Getty ImagesMicrosoft announced on January 18 that it planned to reduce its workforce by 10,000 jobs by the end of the third quarter of this year. CEO Satya Nadella attributed the layoffs to customers cutting back in anticipation of a recession. However, Nadella also told workers that the company still plans to grow in some areas, despite the firings, writing that the company will "continue to hire in key strategic areas." Microsoft's layoff announcement comes as the tech giant is reportedly in talks to invest $10 billion in OpenAI, which created the AI chatbot ChatGPT. On February 13, the company laid off staff at LinkedIn—which it acquired in 2016— according to The Information. The cuts were in the recruiting department, though the total number laid off is not immediately clear, The Information reported.Crypto.com: 20% of staffCrypto.com CEO Kris MarszalekCrypto.comCrypto.com announced on January 13 that it would let go of a fifth of its workforce amid a sagging crypto market and fallout from FTX's collapse. This is the second major round of firings for Crypto.com, which also had layoffs in July. "The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It's for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success," CEO Kris Marszalek wrote in a memo to employees. BlackRock: up to 3% of global workforceBlackRock CEO Larry FinkSpencer Platt/Getty ImagesBlackRock is cutting up to 500 roles in its first round of firings since 2019. Staff members were notified on January 11 about whether they were laid off. "Taking a targeted and disciplined approach to how we shape our teams, we will adapt our workforce to align even more closely with our strategic priorities and create opportunities for the immense talent inside the firm to develop and prosper," CEO Larry Fink and President Rob Kapito wrote in a memo to employees. Goldman Sachs: an estimated 6.5% of its global workforceGoldman Sachs is laying off an expected 3,200 employees.Photo by Michael M. Santiago/Getty ImagesGoldman Sachs began laying off employees on Jan. 11, with cuts expected to impact an estimated 6.5% of the company's global workforce — or roughly 3,200 staffers — a source told Insider. The company previously slashed roles on its media and tech teams in September 2022, and it was expected to issue further reductions in the first half of January. The cost-cutting efforts from the investment banking giant mirror reductions from competitors including Morgan Stanley and Citi, which also laid off employees in 2022. "We continue to see headwinds on our expense lines, particularly in the near term," Goldman Sachs CEO David Solomon said at a conference in December. "We've set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set."   BNY Mellon: 1,500 jobsBNY Mellon CEO Robin VinceBNY MellonBNY Mellon is planning to cut approximately 3% of its workforce, or 1,500 jobs, according to the Wall Street Journal, which cited people familiar with the matter. The cuts will be primarily aimed at talent management roles, according to the report. BNY Mellon will reportedly plan to invest more in junior staff. Verily (part of Alphabet): reportedly 15% of workersAlphabet CEO Sundar PichaiJerod Harris/Getty ImagesVerily, which is Alphabet's healthcare unit, is laying off more than 200 employees, according to an email seen by the Wall Street Journal. The Journal reports that the company will also scale down the number of projects it works on in an effort to cut costs."We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model," Verily's CEO, Stephen Gillet, wrote in the email, according to the Journal.This is the first significant layoff done by Google's parent company, which had so far avoided the massive waves of job cuts done by other big tech giants like Amazon and Meta. DirecTV: 10% of management staffDirecTV.Karen Bleier/AFP/Getty ImagesDirecTV employees were told in the first week of January that the company would lay off several hundred workers in management roles.The satellite TV business has faced slowing revenues as more people choose to cut the cord and pay for streaming services over cable TV. "The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming. We're adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements," a spokesperson for DirecTV told Insider. Coinbase: 950 workersCEO Brian Armstrong cited the downward trend in cryptocurrency prices and the broader economy as reasons for the layoffs.Patrick Fallon/Getty ImagesCoinbase announced on Tuesday, Jan. 10, that would lay off another 20% of its staff. The cuts came after the crypto company laid off over 1,000 employees in July. In a memo to employees, CEO Brian Armstrong said, "in hindsight, we could have cut further at that time," referencing the layoffs in July. Armstrong partially attributed the company's weakness to the "fallout from unscrupulous actors in the industry," likely referencing the alleged fraud that took place at FTX late last year under then-CEO Sam Bankman-Fried. Armstrong predicted "there could still be further contagion" from FTX in the crypto markets but assured remaining employees that Coinbase is well capitalized. Amazon: 18,000 employeesAmazon CEO Andy Jassy initially announced the company's latest round of layoffs in November.AmazonAmazon is in the midst of the most significant round of layoffs in the company's history. In a memo to employees, CEO Andy Jassy said the company would cut more than 18,000 workers in total — far more than what was initially expected based on reporting by the New York Times. Jassy cited "the uncertain economy" and rapid hiring as reasons for the layoffs. While most of Amazon's 1.5 million staff have warehouse jobs, the layoffs are concentrated in Amazon's corporate groups. Amazon's layoffs began late last year, though the Wall Street Journal reports cuts will continue through the first few weeks of 2023.Amazon's 18,000 jobs cuts are the largest of any major tech company amid the wave of recent layoffs.  Salesforce: 10% of its staffSalesforce said in the first month of 2023 that it would enact big job cuts.Noam Galai/Getty ImagesSalesforce co-CEO Marc Benioff announced on Jan. 4 that the software company plans to layoff 10% of its workforce — an estimated 7,000 employees — and close select offices as part of a restructuring and cost-cutting plan. "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff wrote in an email to staff. "With this in mind, we've made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks."He continued: "As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that."Everlane: 17% of corporate employeesEverlane founder and executive chair Michael Preysman.Lars Ronbog/Getty Images for Copenhagen Fashion SummitEverlane is slashing 17% of its 175-person corporate workforce, and 3% of its retail staff."We know there will be some bumpiness over the next few weeks as we navigate a lot of change at once. We ask for your patience as we do right by our departing team members," CEO Andrea O'Donnell wrote to employees, according to an internal memo seen by Insider. In a statement to Insider, a company spokesperson said the decision was intended to "improve profitability in 2023 and continue our efforts to help leave the fashion industry cleaner than we found it."The e-commerce clothing company previously laid off nearly 300 workers, mostly in retail in March 2020 amid the outbreak of the Covid-19 pandemic.Vimeo: 11% of its workforceAnjali Sud, CEO of Vimeo, speaks during the company's direct listing on Nasdaq, Tuesday, May 25, 2021, in New York.AP Photo/Mark LennihanVimeo CEO Anjali Sud told employees on Jan. 4 that the company would layoff 11% of its staff, the video platform's second major round of layoffs in less than a year, after cutting 6% of employees in July"This was a very hard decision that impacts each of us deeply," Sud wrote in an email to staff. "It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment."A spokesperson told Insider reduction is intended to assist with ongoing economic concerns and improve the company's balance sheet. Compass: size of layoffs not immediately disclosedCompass is letting go of more employees after two rounds of layoffs in the past eight months.CompassCompass CEO Robert Reffkin told staffers on Jan. 5 it would conduct more layoffs, following two previous rounds in the past eight months, as the brokerage continues to struggle with significant financial losses. "We've been focused over the last year on controlling our costs," Reffkin wrote in an email to employees. "As part of that work, today we reduced the size of some of our employee teams. While decisions like these are always hard, they are prudent and allow us to continue to build a long-term, successful business for all of you."While the size of the layoffs was not immediately disclosed, the brokerage let go of 450 corporate employees in June 2022, followed by an additional 750 people from its technology team in October 2022.   Stitch Fix: 20% of salaried jobsStitch Fix is laying off salaried employees.SOPA ImagesStitch Fix announced on Jan. 5 that it plans to slash 20% of its salaried workforce, the Wall Street Journal reported.The cuts come in tandem with the announcement that CEO Elizabeth Spaulding is stepping down, after less than 18 months at the helm of the struggling retail company."First as president and then as CEO, it has been a privilege to lead in an unprecedented time, and to chart the course for the future with the Stitch Fix team," Spaulding said in a statement. "It is now time for a new leader to help support the next phase."Stitch Fix founder Katrina Lake — who formerly served as chief executive and sits on the board of directors — will become interim CEO, the company said in a press release. Read the original article on Business Insider.....»»

Futures Slide As Debt Ceiling Talks Enter 11th Hour, European PMIs Crumble US equity futures are lower, as treasuries also dropped across the curve, with the two-year yield rising for an eighth day, after the latest round of talks between Joe Biden and Kevin McCarthy Monday ended without a deal, while Eurozone manufacturing activity shrank at the fastest pace since the pandemic shuttered factories three years ago, threatening to sap momentum from an economy driven by services. The dollar rose as did bitcoin, gold fell again while oil reversed earlier losses and jumped to session highs after Saudi Arabia's energy minister told oil speculators to “watch out” just over a week before the OPEC+ alliance is due to meet.  At 7:45am ET, US equity futures dropped 0.2% to session lows, dropping back under  4,200, whlie the Nasdaq was shocking in the red perhaps finally realizing where the 10Y yield is. Lowe’s slipped 1.5% in pre-market trading after cutting its sales outlook. In Europe, a rout in luxury-goods makers including Hermes International and LVMH dragged the Stoxx 600 lower after Deutsche Bank AG analysts warned the sector is crowded and valuations are lofty. Tokyo’s Topix index fell for the first time in eight days, with semiconductor-related stocks turning lower on news that Japan’s tighter export controls will take effect July 23. In premarket trading, one of the last major retailers left to report Lowe's slumped after it cut its comparable sales forecast for the full year. Here are the other notable premarket movers: Yelp shares jump 11% in premarket trading after TCS Capital Management said it believes “several buyers” would pay a premium for the company as the activist investor confirmed it had written to the board urging the exploration of a sale.  Zoom fluctuated in US premarket trading. The video communications platform boosted its revenue guidance for the full year and management outlined plans to incorporate artificial intelligence into its products. PacWest shares surged in premarket trading Tuesday, set to extend Monday’s gains. The surge was fueled by the bank’s sale of a $2.6 billion portfolio of 74 real estate construction loans to Kennedy Wilson for about $2.4 billion. Microvast plunged as much as 24%, following the US Energy Department’s cancellation of a planned $200 million grant to the lithium-ion battery maker amid criticism over ties to China. Chimerix shares jump 5% in premarket after Baird Equity Research initiates coverage on the biopharmaceutical company with an outperform recommendation. The broker said Chimerix has a lead agent for the treatment of H3 K27M-mutant glioma that is potentially first in class. Tegna shares rose 2.3% in extended trading after the company announced share a share buyback plan and said its merger with Standard General was terminated. The neverending debt drama continued overnight after Joe Biden and House Speaker Kevin McCarthy called their discussions on Monday productive, but an agreement remains elusive. That left traders on tenterhooks with only a few days left before June 1, when Treasury Secretary Janet Yellen said her department may run out of cash. Any deal would have to be approved by Congress before then. “I think a default is very unlikely as I don’t think either Democrats and Republicans want it, but we could get close to it and the deadline,” Fabiana Fedeli, chief investment officer for equities and multi-asset at M&G Plc, said on Bloomberg TV. “The closer we get to the deadline the more nervous clients will get. You could have a move towards safer havens, perhaps the long end of yield curve" she warned. Today’s macro focus will be May PMIs at 9.45am, where consensus estimates the Mfg PMI to print to dip to 50.0 from 50.2 while the Services PMI is also expected to drop to 52.5 from 53.6 prior. European stocks slumped as a rout in luxury-goods makers including Hermes International and LVMH dragged local markets lower after Deutsche Bank AG analysts warned the sector is crowded and valuations are lofty. The Stoxx 600 was down 053% with consumer products, retailers and industrials the worst-performing sectors. Among individual stock movers, Vivendi SE tumbled after billionaire Vincent Bollore sold shares of the media conglomerate, a sign that he’s isn’t planning a buyout. Swiss asset manager Julius Baer Group Ltd. sank after disappointing results. Here are the most notable European movers: European paper and pulp manufacturers gain after their Brazilian peer Suzano raised June pulp prices in Asia by $30 per ton, according to a Bloomberg report Qiagen rise as much as 3.3% after Morgan Stanley upgraded the diagnostics and laboratory technology firm to overweight from equal-weight, saying the firm’s outlook is being undervalued Cranswick shares rise as much as 5.9%, making it the top performer in the FTSE 250 Index on Tuesday, after the meat supplier reported sales and profit for the full year that beat estimates SSP Group shares rise as much as 5.2% after the food-service company reported first-half revenue that beat estimates. Analysts highlighted new business wins and SSP’s trading momentum Banca Profilo shares jump as much as 9.1% after Twenty First Capital Sas reaches an agreement with Banca Profilo’s controlling shareholder Arepo BP SpA to buy a 29% stake in the bank Crayon gains as much as 16% after the Norwegian IT firm reported 1Q results, including gross profit growth of 31%. DNB says gross profit, Ebitda and operating free cash flow all beat estimates BW LPG shares gain as much as 10%, hitting a record high, after the Norwegian LPG carrier firm’s 1Q results beat expectations, with DNB calling the report solid and a proposed dividend “hefty” Julius Baer shares decline as much as 8.5%, the most in a year, after it reported assets under management of CHF429 billion as of the end of April, which analysts said was below expectations Vivendi falls in Paris trading after billionaire Vincent Bollore sold shares in the media conglomerate, damping optimism among speculators that he would launch a buyout offer RS Group shares decline as much as 5.6%, hitting the lowest since June 2022, after the outlook from the industrial and electronic products distributor pointed to a slowdown in its broader markets Earlier in the session, Asian stocks were mized as participants digested the latest from the debt limit negotiations with the meeting between US President Biden and House Speaker McCarthy said to be productive but still lacked any major breakthrough. China’s CSI 300 Index falls 1.4% to close at its lowest since Jan. 4, with losses steepening in afternoon trading led by telecoms and financials. Benchmark about 1% away from wiping out 2023 gains; Shanghai Composite drops 1.5%. Hang Seng Index down as much as 1.6%, Hang Seng Tech Tech -1.5%. Mainland stocks was pressured after Chinese press reports noted expectations for the PBoC’s benchmark lending rates to remain unchanged for some time and after the US denied it was planning to lift sanctions on China's defence minister. Tokyo’s Topix index fell for the first time in eight days, with semiconductor-related stocks turning lower on news that Japan’s tighter export controls will take effect July 23. Toyota Motor Corp. tumbled in the final minute of trading. Japan's Nikkei 225 initially climbed to its highest level since August 1990 and was on course to match its longest win streak in around four years, before eventually deteriorating in afternoon trade. ASX 200 was kept afloat but with the upside capped by weakness in the consumer sectors and after Australia’s Flash Manufacturing PMI remained in a contraction. Key stock gauges in India rose for the third successive day amid continued buying by overseas investors and gains in the Adani pack. The NSE Nifty 50 Index advanced 0.2% to 18,348 in Mumbai, while the S&P BSE Sensex closed higher by 18.1 points at 61,981.79. Adani Group stocks clocked third straight day of gains following the observations made by a Supreme Court-appointed panel in relation to stock price manipulation. Adani Ports recovered all of its post-Hindenburg Report losses during the day. of consumer-facing firms and lenders were also contributors to the rally in Nifty 50 and the Sensex indexes, and helped them outperform most Asian peers. The MSCI Asia-Pacific Index closed 0.6% lower.   Adani Enterprises contributed the most to the Nifty 50’s gain, surging 13.2%. Out of 50 shares in the Nifty index, 28 rose, while 22 fell. In FX, the dollar index rose 0.2%, hovering near its two-month high, after talks between Joe Biden and Kevin McCarthy Monday ended without a deal, though they called their discussions productive and vowed to keep negotiating. The Japanese yen is the best performer among the G-10’s, rising 0.2% versus the greenback. The Norwegian krone is the weakest. GBP/USD fell as much as 0.5% to 1.2373, its lowest since April 21 after disappointing PMI prints; EUR/GBP trades 0.1% higher at 0.8703. In rates, treasuries added to Monday’s losses with front-end underperforming led by two-year Treasury yields rising another 5bps to 4.36% and flattening the curve even as stock futures also dropped as European names stumbled after euro-zone manufacturing activity shrank at the fastest pace since the pandemic. Treasury yields cheaper by up to 7bp across front-end of the curve with 2s10s, 5s30s spreads flatter by ~4bp on the day; 10- year yields around 3.745%, cheaper by ~ 3bp with gilts following suit, lagging by 1bp and 5.5bp in the sector. European bonds are also in the red and Gilts also fell, underperforming their European counterparts, as UK services PMI data showed cost pressures in the services sector increased at the fastest pace in three months. The Treasury auction cycle begins 2-year note sale, and Fed Chair Powell reportedly will make an unscheduled appearance.   $42b 2-year note auction at 1pm New York time begins cycle that also includes 5- and 7-year sales Wednesday and Thursday. WI 2-year yield at 4.335% is ~37bp cheaper than last month’s, which tailed by 0.3bp. In commodities, crude futures rose with Brent trading near $76.70 of session highs after Saudi Arabia's energy minister threatened bearish oil speculators. Spot gold falls 0.6% to $1,960. Bitcoin is bid and has convincingly surmounted the USD 27k handle to a USD 27.47k peak as we await a busy US agenda where the debt ceiling, Powell and PMIs are all potential macro movers. To the day ahead now, and the main highlight will be the flash PMIs from Europe and the US. Other US data releases include new home sales for April, and the Richmond Fed’s manufacturing index for May. From central banks, we’ll hear from ECB Vice President de Guindos, the ECB’s Muller, Villeroy and Nagel, the Fed’s Logan and the BoE’s Haskel. Market Snapshot S&P 500 futures little changed at 4,202.75 MXAP down 0.4% to 162.32 MXAPJ down 0.4% to 514.15 Nikkei down 0.4% to 30,957.77 Topix down 0.7% to 2,161.49 Hang Seng Index down 1.3% to 19,431.25 Shanghai Composite down 1.5% to 3,246.24 Sensex up 0.4% to 62,180.82 Australia S&P/ASX 200 little changed at 7,259.89 Kospi up 0.4% to 2,567.55 STOXX Europe 600 down 0.3% to 467.52 German 10Y yield little changed at 2.46% Euro down 0.1% to $1.0799 Brent Futures down 0.2% to $75.87/bbl Gold spot down 0.6% to $1,960.23 U.S. Dollar Index up 0.16% to 103.37 Top Overnight News Saudi Arabia’s top energy official issued another warning to oil short-sellers, just over a week before the OPEC+ alliance is due to meet. “I keep advising them that they will be ouching — they did ouch in April,” Saudi Energy Minister Prince Abdulaziz bin Salman said at the Qatar Economic Forum in Doha on Tuesday. “I would just tell them: Watch out!” BBG Japan’s flash PMIs improve in May, with manufacturing rising to 50.8 (up from 49.5 in April) and services jumping to 56.3 (up from 55.4 in April). S&P Taiwan’s industrial production sinks by far more than anticipated in April, coming in -22.8% (vs. the Street -13% and down from -16% in March) (Bloomberg); shipping container production slumps dramatically amid a steep pullback in the global transport industry as consumers globally cut back on discretionary goods purchases. FT The US said it has no plans to lift sanctions on Chinese Defense Minister Li Shangfu, appearing to backtrack on comments made a day earlier by President Joe Biden while he attended the Group of Seven summit in Japan. BBG Europe’s flash PMIs for May are mixed, with a steep drop in manufacturing (44.6, down from 45.8 in April and below the Street’s 46 consensus) while services hold in better (55.9, down from 56.2 in April but ahead of the Street’s 55.5 forecast). S&P Biden/McCarthy meeting is called “productive” and “better than any other”, but a deal still hasn’t been reached, while the “X-date” fast approaches (Yellen reiterated the June 1 ceiling breach date). Politico Private equity groups are increasingly selling shares in portfolio companies at a discount to the price at which they went public, in a sign they do not expect stock market valuations to regain their previous highs soon. Private equity-backed follow-ons in the US are up 180 per cent year on year, but almost two-thirds of the deals were priced below the companies’ IPO. FT Deere will sell $36 billion of medium-term notes through John Deere Financial. It filed to sell notes ranking as senior or subordinated due nine months or more from the date of issue. BBG Activist investor TCS Capital Management has built a stake in Yelp and is calling on the service-recommendation site to explore strategic alternatives including a sale, people familiar with the matter said. WSJ HF VIPS: Mega-cap tech remains at the top of Goldman's list of popular hedge fund long positions. MSFT, AMZN, META, and GOOGL remain the top four stocks in the VIP list this quarter, with the Info Tech and Comm Services sectors accounting for nearly half of the list. The VIP list contains the 50 stocks that appear most often among the top 10 holdings of fundamental hedge funds. The basket has outperformed the S&P 500 in 58% of quarters since 2001 with an average quarterly excess return of 37 bp. 13 new constituents: AER, AVGO, DDOG, FCNCA, GDDY, IAC, ISEE, JPM, LLY, NEWR, SPOT, TTWO, WMT. Read Ben Snider and team’s HF trend monitor HERE. A more detailed look at global markets courtesy of Newsquawk APAC stocks were indecisive as participants digested the latest from the debt limit negotiations with the meeting between US President Biden and House Speaker McCarthy said to be productive but still lacked any major breakthrough. ASX 200 was kept afloat but with the upside capped by weakness in the consumer sectors and after Australia’s  Flash Manufacturing PMI remained in a contraction. Nikkei 225 initially climbed to its highest level since August 1990 and was on course to match its longest win streak in around four years, before eventually deteriorating in afternoon trade. Hang Seng and Shanghai Comp. were subdued following Hong Kong’s failure to sustain the early tech-led momentum from China’s approval of 86 domestic online games in May, while the mainland was pressured after Chinese press reports noted expectations for the PBoC’s benchmark lending rates to remain unchanged for some time and after the US denied it was planning to lift sanctions on China's defence minister. Top Asian News Chinese press reports stated that the PBoC's Loan Prime Rates are expected to remain unchanged for some time and noted the LPR faces little downside due to the economic recovery and banks' tight NIM. Russian PM Mishustin said on his visit to China that Russia-China ties will positively impact both countries and 2023 trade turnover between the countries could reach USD 200bln, according to TASS and RIA. European bourses are pressured, Euro Stoxx 50 -0.5%, with the exception of the FTSE 100 +0.1% which is deriving some support from regional banking names on post-PMI hawkish BoE implications. Back to Europe, bourses came under pressure from the region's PMIs as it has hawkish ECB implications and with the Manufacturing sector still under marked pressure. Sectors are somewhat mixed with Real Estate bolstered while Luxury names are tarnished after a cautious note from Deutsche Bank. Stateside, futures are essentially flat with the ES pivoting 4200 as we await more substantive debt ceiling updates and remarks from Fed's Powell. Lowe's Companies Inc (LOW) Q1 2023 (USD): adj. EPS 3.67 (exp. 3.44), Revenue 22.35bln (exp. 21.6bln); SSS -4.3% (exp. -3.2%); updates outlook EU is seeking to reimpose a EUR 14.3bln tax demand on Apple (AAPL), via FT; Competition Commissioner Vestager is looking to overturn the EU's 2020 legal defeat over a tax bill to Ireland. Top European News UK Chancellor Hunt will meet with food manufacturers today to ask for help from the industry to ease the pressure on households and steps up pressure on supermarkets to rein in soaring prices, according to FT. Hungary is accelerating discussions with Brussels to release nearly a third of its EU funding after a long stand-off, but officials warned funds will likely remain frozen because of differences over reform efforts, according to FT. FX DXY underpinned after productive US debt ceiling discussions as the index meanders around a Fib at 103.330. Yen regains poise with some traction from upbeat Japanese PMIs and USD/JPY running into supply ahead of 139.00. Aussie underperforms either side of 0.6650 as iron ore slides and the Yuan depreciates below 7.0000. Kiwi loses traction on the eve of RBNZ irrespective of hawkish shift in pricing, with NZD/USD at the lower end of 0.6302-0.6254 bounds. Euro keeps tabs on 1.0800 as strength in EZ services counters manufacturing deficiencies, but Pound waning on 1.2400 handle as UK PMIs miss consensus across the board. PBoC set USD/CNY mid-point at 7.0326 vs exp. 7.0327 (prev. 7.0157) Fixed Income Debt futures plumb new cycle lows as bearish momentum continues to build. Bunds down to 133.69, Gilts 97.22 and T-note 113-09 ahead of US prelim PMIs, new home sales and Fed's Logan all ahead of USD 42bln 2 year supply. Mixed EU PMIs largely shrugged aside along with UK and German auctions awaiting more talks on the US debt ceiling. Commodities Crude benchmarks are in close proximity to the unchanged mark after Monday's circa. USD 0.40/bbl firmer settlement with the complex focused on Energy Officials at the Qatar Economic Forum. Currently, WTI and Brent are incrementally softer and around the mid-point of USD 71.71-72.62/bbl and USD 75.65-76.53/bbl parameters. Saudi Energy Minister says I keep telling speculators they will be "ouching" and they did hurt in April, I would tell them to watch out. Russian Deputy PM Novak says growth of Russian energy shipments to China at 40% in 2023, via Interfax. Spot gold slips as the USD remains underpinned though the yellow metal remains above Friday's USD 1954/oz trough; base metals similarly dented on the USD and with continued attention on China's recent sub-par metrics. Debt Ceiling News US President Biden said that he is optimistic they will make some progress on the debt ceiling and that they need a bipartisan agreement and sell it to constituencies, while he added that they need to cut spending and should look at tax loopholes and that the wealthy pay their fair share, according to Reuters. US President Biden later commented that he concluded a productive meeting with House Speaker McCarthy about the need to prevent a default and reiterated once again that default is off the table, while they will continue to discuss the path forward. US House Speaker McCarthy said after the meeting with President Biden that he felt they had a productive discussion but don't have an agreement yet and that staff will continue discussions with negotiators instructed to come back together and find common ground. McCarthy also noted the tone of the conversation was better than any previous time and believes they can get a deal done. Furthermore, he is confident that President Biden wants a deal, while they both agreed that they want to reach an agreement and will talk daily until they get this done. White House debt limit negotiators returned to Capitol Hill to resume talks but later declined to comment after the talks concluded for the night, according to Bloomberg. US Treasury Secretary Yellen reiterated that debt-limit measures could still run out as soon as June 1st and that it is highly likely cash will run out by early June, according to a statement from the Treasury Department. "Sources close to McCarthy said the House could pass a short-term boost if there was a deal and the Treasury Department needed a very brief patch to avoid default, But barring that, don’t expect it to happen", according to Punchbowl. Geopolitics Twitter source noted a drone attack was said to have targeted the departments of the Ministry of Internal Affairs and FSB in Russia's Belgorod, while air raid alerts sounded in central and western Ukraine due to Shahed drone activity. Russia's Belgorod regional Governor said a counter-terrorism operation continues and a return to homes in the region's Gaivoron district is not possible yet, according to Reuters. Hungarian PM Orban says the nation will continue to block EU Ukraine aid and the 11th sanctions package; says Ukraine must stop backlisting OTP Bank. US event calendar 08:30: May Philadelphia Fed Non-Manufactu, prior -22.8 09:45: May S&P Global US Manufacturing PM, est. 50.0, prior 50.2 09:45: May S&P Global US Services PMI, est. 52.5, prior 53.6 09:45: May S&P Global US Composite PMI, est. 53.0, prior 53.4 10:00: May Richmond Fed Index, est. -8, prior -10 10:00: April New Home Sales MoM, est. -2.6%, prior 9.6% 10:00: April New Home Sales, est. 665,000, prior 683,000 Central Bank Speakers 09:00: Fed’s Logan DB's Jim Reid concludes the overnight wrap Since it’s AI week, it’s probably worth mentioning that there was a very brief selloff in markets yesterday after unconfirmed reports circulated on Twitter about an explosion near the US Pentagon. For all of a few minutes after the US open, that saw the S&P 500 shed around a quarter of a per cent, whilst yields on 10yr Treasuries moved about 4bps lower as well, even though nothing had been officially confirmed. The tweet was deleted shortly after and the Pentagon confirmed that no explosion had taken place, meaning that markets snapped back those moves in short order. But given the suggestions that the initial photo might have been AI-generated, it just shows the potential pitfalls for markets if fake news driven by AI can cause concrete movements in asset prices. That could be a growing issue over the months and years ahead, particularly if the technology is able to provide increasingly convincing images and that’s before we get to deep fakes. Indeed who knows if it’s really us typing this. Actually typing is a bit more difficult than normal this morning as I burnt my hand yesterday. File this under first world problems but a power cut/surge blew our boiling water tap yesterday. As we don’t have a kettle I had to make a coffee by putting a pan in the oven (normal for our type of oven when cooking). I took it out carefully with the oven glove and then went over to get my cup. In the 10 seconds I was away I forgot the pan was piping hot and picked it up to pour and scolded my hand. That’s how you maybe prove this isn’t AI as no robot would be so stupid. Anyway, whilst AI might be the long-term focus right now, in the short term the main issue for investors continues to be the debt ceiling, as the clock ticks towards a potential deadline in early June. Last night’s meeting between Biden and McCarthy seemed to be constructive with Speaker McCarthy saying, “The tone tonight was better than any other time we have had discussions” and President Biden adding “that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement.” This meeting came shortly after Treasury Secretary Yellen’s announcement that it was now “highly likely” that the Treasury would run out of cash in early June with a default possible as soon as June 1. Prior to that meeting President Biden and Speaker McCarthy told reporters that a deal needed to get done in the next few days to avoid hitting the debt ceiling, with the latter saying “decisions have to start being made.” With the issue still not resolved at yesterday’s close, markets grew increasingly alarmed about the potential implications of a default, and yields on short-term T-bills continued to rise. For instance, the 1-month T-bill yield surged by +13.2bps yesterday to 5.46%, which was just under the highs reached early last week. This morning we've reversed yesterday's losses on the overnight headlines from Biden and McCarthy As investors were focusing on the debt ceiling, US Treasuries came under further pressure from a collection of hawkish Fed speakers yesterday. That started with St Louis Fed President Bullard (non-voter), one of the most hawkish FOMC members, who said that “I think we’re going to have to grind higher with the policy rate”, and that his thinking was for “two more moves this year”. Earlier in the day, Minneapolis Fed President Kashkari (voter) had also sounded open to another hike in June, saying that “I think right now it’s a close call, either way, versus raising another time in June or skipping.” Later on however, San Francisco Fed President Daly (non-voter) didn’t give an obvious signal, saying that there was still a lot of time to collect information ahead of the June meeting. With Fed speakers sounding more hawkish, investors continued to dial up their expectations for the fed funds rate over the months ahead. For instance, the chances of a June hike moved back up to 22.5%. And the rate priced in for the December meeting was up +6.1bps to a post-SVB high of 4.696% (just above the midpoint of its intra-day range of 3.40% to 5.56% this year), which speaks to the increasing scepticism that the Fed will be able to cut rates this calendar year. In turn, that meant yields on 10yr Treasuries rose for a 7th consecutive session, rising +4.2bps to 3.715%. That’s the longest string of increases in over a year, having been at just 3.38% before this current run began a week and a half ago. Equities were more resilient than bonds yesterday though also seemed to be waiting for the resolution of the Biden-McCarthy talks last night. The S&P 500 closed largely unchanged (+0.02%) but tech stocks again outperformed as the NASDAQ (+0.50%) hit another post-August high, which takes its YTD gains to +21.54%. Back in Europe, equities were broadly flat as well, with the STOXX 600 up +0.01%. However, there was a massive outperformance in Greece, where the Athens Stock Exchange General Index surged +6.09% after Sunday’s election. That was the index’s best daily performance since 9 November 2020, back when Pfizer announced that their vaccine had an effectiveness of over 90%, and global risk assets soared as investors saw a path out of the pandemic. Similarly, the Greek 10yr government bond yield came down -14.2bps, which contrasted with the rest of Europe where yields on 10yr bunds (+3.1bps), OATs (+2.8bps) and BTPs (+4.2bps) all moved higher. In Asia the Nikkei (+0.64%) is leading gains, pushing towards a fresh 33-year high aided by a weaker yen and stronger PMI data (more below) while the KOSPI (+0.62%) is also trading in the green. Elsewhere, Chinese stocks are losing ground with the Shanghai Composite (-0.58%), the CSI (-0.53%), and the Hang Seng (-0.34%) all edging lower. Outside of Asia, US stock futures are reflecting a more positive tone on the debt ceiling talks with the S&P 500 (+0.21%) and NASDAQ 100 (+0.28%) trading up as we type. Coming back to Japan, the manufacturing sector witnessed an expansion for the first time in 7 months as the PMI came in at 50.8 in May, up from a reading of 49.5 in April, as output and new orders rose for the first time in 13 months. At the same time, service-sector activity expanded at the strongest pace on record in May, advancing to 56.3, from 55.4 in April, indicating that the post-COVID recovery is showing signs of continuing momentum. Elsewhere, Australia’s manufacturing sector continued to contract in May, with the PMI remaining unchanged at 48.0, marking the joint-lowest reading since May 2020. The survey also showed that the services PMI fell from 53.7 in April to 51.8 in May with the composite index edging lower from 53.0 in April to 51.2 in May. Finally, there were some fresh developments in the 2024 US presidential race yesterday, as Senator Tim Scott announced his candidacy on the Republican side. But so far at least, polls continue to suggest that former President Trump is the overwhelming frontrunner for the nomination ahead, with the RealClearPolitics average currently placing Trump at 56%, and Florida Governor Ron DeSantis in second place on 19%. Speaking of DeSantis, several media outlets including CNN and CBS have reported sources saying that he’ll will formally announce a run tomorrow, so the field of candidates is beginning to emerge now. To the day ahead now, and the main highlight will be the flash PMIs from Europe and the US. Other US data releases include new home sales for April, and the Richmond Fed’s manufacturing index for May. From central banks, we’ll hear from ECB Vice President de Guindos, the ECB’s Muller, Villeroy and Nagel, the Fed’s Logan and the BoE’s Haskel. Tyler Durden Tue, 05/23/2023 - 08:09.....»»

Futures Flat As Fractured Debt Ceiling Discussions Resume US futures are flat as we start a new week and inch closer to the debt ceiling x-date: as a reminder, according to Janet Yellen the US could be in default in just 10 days. At 8:00am ET , S&P futures were up 0.1%, near session highs, after trading in a narrow range overnight; the tech-heavy Nasdaq was pressured by losses on semiconductor stocks after China said products from Micron Technology had failed a cybersecurity review. Micron shares dropped more than 5% in New York premarket trading, dragging down other chipmakers, including Nvidia and Qualcomm.  Asian markets are higher, while European stocks trade near session lows. Bond yields are higher, rebounding from session lows, while the USD is slightly in the green with commodities also erasing earlier losses. MegaCap Tech names are up slightly pre-market. McCarthy and Biden spoke on Sunday and will resume negotiations today. Fed’s Kashkari, a Fed dove turned hawk (and soon to turn dove again) is now open to holding rates steady in June; OIS now sees more than 80% odds of a pause at the June mtg. Biden expected ties with China to improve very shortly and considers lifting sanctions on Chinese Defense Minister. In premarket trading, Micron dropped 4.3%, leading fellow US semiconductor stocks, lower, after China said that the memory- chipmaker’s products have failed to pass a cybersecurity review in the country and banned it as a supplier. Meta Platforms fell more than 1.5%, after being hit with a record €1.2 billion ($1.3 billion) European Union privacy fine. Apple slipped 1% as Loop Capital downgrades to hold, saying it sees a revenue downside risk. WeWork gained 4.8% as the beleaguered real estate company recouped some of the declines from last week’s four-session losing streak; for context it is trading at 22 cents a share. Here are some other notable premarket movers: Avrobio soars 63% on plans to sell its cystinosis gene therapy program for $87.5 million in cash. DraftKings gains 3.1% after UBS upgrades its rating  to buy based on stronger revenue growth and greater flow through to Ebitda. Foot Locker is down 2.3% as Citi downgraded its rating to neutral following the athletic retailer’s significant guidance cut on Friday. Intercept Pharmaceuticals shares tumble 15% after the company’s obeticholic acid failed to win the support of a panel of FDA advisers. Meta Platforms shares are down 1% as the company was hit by a record $1.3 billion European Union privacy fine and given a deadline to stop shipping users’ data to the US after regulators. Nike slips 2.1% after Williams Trading cuts the recommendation on the sportswear company to sell on the expectation that the US business will remain challenged through at least the first half of fiscal 2024. PacWest Bancorp one of the regional US lenders that was engulfed in turmoil earlier this month, rises 4% after agreeing to sell a $2.6 billion portfolio of 74 real estate construction loans as part of its plan to shore up liquidity. Revolve Group (RVLV) declines 2.5% after TD Cowen downgrades its recommendation on the e- commerce retailer, saying the company’s growth has cooled and that it sees limited near-term catalysts. VectivBio rises 39% after agreeing to be purchased by Ironwood for $17/share in an all-cash transaction. Zions Bancorp gains 2% as Hovde Group initiated coverage with an outperform, saying “misplaced fears” drove a discounted valuation. The question for investors is whether US politicians will be able to reach a deal to raise the debt limit before the government runs out of money. Stocks gave up gains late on Friday after Republicans temporarily walked out. The urgency of the situation was underscored on Sunday by Treasury Secretary Janet Yellen, who said the chances are “quite low” that the US can pay all its bills by mid-June. “There is a lot of showmanship around the debt ceiling,” said Sarah Hewin, senior economist at Standard Chartered Plc in London. “The closer we get to June 1 without a resolution, the greater the risk of an accident so there is a lot of potential for markets to get concerned." The debt-ceiling risks as well as concern for the US economy have induced investors to boost bearish positions on the S&P 500 to the highest since 2007. European stocks are lower as investors remain hesitant amid the ongoing US debt-ceiling negotiations. The Stoxx 600 is down 0.3%, trading near session lows with telecommunication and utilities the best-performing sectors. Greek markets were a bright spot after Sunday’s national election resulted in a strong showing for Prime Minister Kyriakos Mitsotakis, signaling that investment-friendly policies will continue. Here are the most notable European movers: Ryanair shares rise as much as 2.5% after it reported a beat on net income in its FY results, driven by the low-cost airline’s better-than-expected pricing in 4Q, up around 26% versus 2019, says Citi. Analysts also welcome the confident outlook. Dassault Systemes shares gain as much as 3.6% to the highest level since September. Stifel says in a note that strong software sales at Siemens, which reported earnings last week, bode well for Dassault Systemes. Man Group shares rise as much as 2%, touching the highest since May 2, after BNP Paribas Exane raised the hedge fund manager to neutral from underperform on a more balanced risk-reward. Begbies Traynor shares rise as much as 2.3% after the restructuring advisory firm releases a pre-close statement which Canaccord says indicates a strong finish to the year. Polymetal shares slump as much as 37% after the London- listed gold miner’s Russian unit was sanctioned by the US. Top Russian gold miner Polyus PJSC and Polymetal JSC, Polymetal International’s Russian unit, were targeted. Dechra shares fall as much as 8.7%, the most since February, after the UK pharmaceuticals firm said it has experienced a “more volatile and challenging” trading environment during the January to April period than previously predicted. The benchmark Athens Stock Exchange General Index jumped to its highest level in almost a decade. The premium investors demand to hold Greek 10-year debt compared with super-safe bonds of Germany, fell to the lowest in more than a year while the cost of insuring exposure to Greek debt fell sharply, according to data from S&P Markit. The MSCI Asia-Pacific Index closed higher by 0.7% for the day. A sub-gauge for technology stocks gained 2.2%, its biggest jump since March 31, tracking similar gains in peers in Asia and the US. Metal stocks surged after US President Joe Biden hinted at improving ties with China, which lifted outlook for the sector. Investors are keen to see however on how China’s economy is faring after its knee-jerk rebound following the removal of Covid curbs. Iron ore futures dropped for the third day in a row on signs of disappointing steel demand from the construction sector, while the most recent batch of industrial and retail sales data was unexpectedly soft.  Hang Seng and Shanghai Comp. traded higher albeit with the mainland choppy after mixed commentary from the G7 and frictions related to China’s ban on Micron from key infrastructure, while the PBoC provided no surprises and kept its benchmark lending rates unchanged with the 1-year and 5-year LPRs kept at 3.65% and 4.30%, respectively. Nikkei 225 was indecisive as the momentum from its recent rally to 33-year highs initially waned and with the mood also clouded by the surprise contraction in Machinery Orders, although the index later caught a second wind and broke above the 31,000 level. Indian stocks rose after a rally in technology and base metal firms helped key stock gauges end higher for the second successive day on Monday. The S&P BSE Sensex rose 0.4% to 61,963.68 in Mumbai, while the NSE Nifty 50 Index advanced 0.6% to 18,314.40. Shares of Adani Group soared, extending their gains from Friday, after the SEBI told a Supreme Court-appointed panel that it found no conclusive evidence of stock price manipulation in the conglomerate’s stocks. Flagship Adani Enterprises jumped 18.9% and the market value of the entire group swelled by $9.7 billion. Infosys Ltd. contributed the most to the index gain, increasing 1.9%. ASX 200 was subdued amid weakness in financials although losses were cushioned amid the improving trade environment between Australia and its largest trading partner as evidenced by an 89% rise in coal exports to China. In FX, the Bloomberg Dollar Spot Index is down 0.1% while the Swiss franc is the clear outperformer among the G-10s, rising 0.5% versus the greenback. The Aussie dollar is the weakest.  Money markets bet on 5bps of Fed tightening in June but add to easing wagers beyond after Minneapolis Fed President Neel Kashkari said in an interview with Dow Jones that he may support holding interest rates at current levels in June. His comments echoed remarks from Fed Chair Jerome Powell that gave a clear signal he is inclined to pause interest-rate increases next month. “Cracks may be showing in the FOMC’s rate hike path, and markets are pricing the new information in,” said Mingze Wu, an FX trader at StoneX Group. In rates, treasuries are flat with the US 10-year yield unchanged at 3.67%, with yields rising modestly from session lows of 3.65%; 2s10s, 5s30s spreads are steeper by ~1bp. Bunds and gilts are also in the green. Sentiment continues to take cues from debt-ceiling negotiations, with President Joe Biden and Republican House Speaker Kevin McCarthy planning to meet Monday. On Sunday, Secretary Janet Yellen said the chances are “quite low” that the US can pay all its bills by mid-June.  IG issuance slate includes NWB 5Y SOFR; expectations are for $15b to $20b in new bond sales this week, concentrated on Monday. Treasury auctions this week include 2-, 5- and 7-year sales over Tuesday, Wednesday and Thursday. Three-month dollar Libor -1.80bp at 5.37471%. In commodities, crude futures are little changed with WTI trading near $71.55. Spot gold rises 0.1% to around $1,980 Bitcoin is essentially unchanged trading around $27K, as specifics remain somewhat light and the broader markets focus on a number of moving parts but primarily the US debt ceiling, with Biden and McCarthy to speak today at some point. There is nothing on today's economic calendar, later this week we get the latest FOMC minutes release, revisions to 2Q GDP and the PCE deflator. Market Snapshot S&P 500 futures little changed at 4,205.00 MXAP up 0.7% to 163.16 MXAPJ up 0.5% to 515.79 Nikkei up 0.9% to 31,086.82 Topix up 0.7% to 2,175.90 Hang Seng Index up 1.2% to 19,678.17 Shanghai Composite up 0.4% to 3,296.47 Sensex up 0.3% to 61,926.65 Australia S&P/ASX 200 down 0.2% to 7,263.25 Kospi up 0.8% to 2,557.08 STOXX Europe 600 up 0.2% to 469.60 German 10Y yield little changed at 2.41% Euro little changed at $1.0802 Brent Futures little changed at $75.52/bbl Gold spot down 0.0% to $1,976.92 U.S. Dollar Index little changed at 103.23 Top Overnight News China said it uncovered “relatively serious” cybersecurity risks in Micron products sold in the country, and warned makers of key infrastructure to avoid using the company’s memory chips. BBG The EU has said the bloc will push ahead with plans to jointly buy hydrogen and critical raw materials after its first attempt at aggregated gas purchases was oversubscribed. FT China left its 5 and 1-year Loan Prime Rates unchanged, a move that was widely expected. RTRS Ukrainian President Volodymyr Zelenskiy suggested his country was losing control of Bakhmut after months of fierce fighting but downplayed Russian claims it now fully occupied the eastern city. BBG G-7 leaders struggled to win over swing nations being courted by China and Russia at a weekend summit in Japan. A surprise visit from Volodymyr Zelenskiy gave him a chance to appeal to those who've been neutral on the war. He met with India's Narendra Modi and Indonesia's Joko Widodo, but a meeting with Brazil's Lula da Silva fell through. BBG Treasury Secretary Janet Yellen said the US is unlikely to reach mid-June and still be able to pay its bills, underscoring the urgency of the White House reaching a deal with Republicans to raise the debt limit. BBG Auto inventory levels are back on the rise following years of shortages thanks to normalizing supply chain conditions and improved production. WSJ Fed now seen cutting rates in Q1:24 instead of Q4:23 according to an updated survey from the National Association for Business Economics (NABE). RTRS Minneapolis Fed President Neel Kashkari said he is open to doing nothing at the June meeting given that inflation is coming down and amid all the bank uncertainty, but opposes any declaration stating rate hikes are definitively done. WSJ Outflows from US equities, inflows to other assets. Cash, Bonds, and non-US stocks offer compelling alternatives to US stocks...   A more detailed look at global markets courtesy of Newsquawk APAC stocks were mostly positive but with price action rangebound amid cautiousness as the debt limit deadline draws closer and following last week’s more balanced comments from Fed Chair Powell. ASX 200 was subdued amid weakness in financials although losses were cushioned amid the improving trade environment between Australia and its largest trading partner as evidenced by an 89% rise in coal exports to China. Nikkei 225 was indecisive as the momentum from its recent rally to 33-year highs initially waned and with the mood also clouded by the surprise contraction in Machinery Orders, although the index later caught a second wind and broke above the 31,000 level. Hang Seng and Shanghai Comp. traded higher albeit with the mainland choppy after mixed commentary from the G7 and frictions related to China’s ban on Micron from key infrastructure, while the PBoC provided no surprises and kept its benchmark lending rates unchanged with the 1-year and 5-year LPRs kept at 3.65% and 4.30%, respectively. Top Asian News PBoC 1-Year Loan Prime Rate (May) 3.65% vs. Exp. 3.65% (Prev. 3.65%); 5-Year Loan Prime Rate (May) 4.30% vs. Exp. 4.30% (Prev. 4.30%) China’s cyberspace regulator said its review found that Micron Technology’s (MU) products have serious network security problems causing risks to China’s information infrastructure and announced that operators of critical information infrastructure in China should stop purchasing Micron Technology’s products, according to Reuters. US Commerce Department said they firmly oppose China's restrictions on Micron (MU) which have no basis in fact and that China's action along with recent raids targeting other US firms is inconsistent with China's assertions that it is opening its markets. It also stated that the US will engage directly with Chinese authorities to detail the US position and clarify China's actions, while the US will also engage with key allies and partners to ensure close coordination to address distortions of the memory chip market caused by China's actions. Japan Business Lobby Keidanren Chief says this years inflation is facilitated by a weak JPY and energy cost increase, does not expect inflation from 2024 onward to be "that extreme". European bourses are mixed/flat, Euro Stoxx 50 -0.1% with the focus on upcoming debt ceiling discussions amid numerous broader incremental updates/developments ahead of Central Bank speak. Sectors are similarly mixed and lacking in breadth while Ryanair and Volvo are bolstered post earnings and a sizeable truck order respectively. Stateside, futures are contained but diverging slightly with the ES & NQ under modest pressure given the below Meta update and attention on Micron (-6.2% pre-market) after China's cyberspace review (see APAC section); conversely, the RTY is holding just above the neutral mark. Meta (META) has been fined USD 1.3bln over data transfers to the US. Initially reported via the WSJ and subsequently confirmed by the IDPC. Meta -0.8% in pre-market. Subsequently, Meta says it will appeal the fine and there is no immediate disruption to Facebook within Europe. JPMorgan (JPM) raises FY23 Net Interest Income view to USD 84.0bln ex-CIB markets (prev. it was guiding for USD 81bln, market-dependent). Top European News UK PM Sunak reportedly opened the door into a sleaze probe on Home Secretary Suella Braverman and will discuss the speeding points row with the Prime Minister’s Independent Adviser on Ministers' Interests Laurie Magnus, according to The Sun’s Political Editor Cole. Greece’s ruling New Democracy Party held a significant lead against rivals in the early vote count and is set to win 145 of the 300 seats in parliament vs 71 seats for the leftist Syriza party, although a second round of voting is the most likely outcome with no clear majority, according to Politico and Reuters. There were also comments from PM Mitsotakis who said the election victory shows that New Democracy has the people’s approval to rule as a one-party government and that the mandate is a strong government, while he added that only strong governments can dare the changes needed. Click here for newsquawk analysis. Since, Mitsotakis has called for a new vote potentially on June 25th. Moody’s affirmed Portugal at Baa2; Outlook Revised to Positive from Stable. German DIHK survey shows that the despite the economy showing resilience in a challenging environment thus far in 2023, growth will remain muted; maintains the forecast for economic stagnation this year. FX Franc outperforms as bond yields retreat and US debt ceiling impasse rolls on, USD/CHF eyeing 0.9850 from a peak just shy of 0.9000. DXY hovering around 103.000 ahead of more Fed speakers that may err towards June rate pause like Chair Powell and Kashkari. Euro pivots Fib and 100 DMA close to 1.0800 vs Greenback, but capped by expiries. Yen contains losses beneath 138.00 against Buck irrespective of bleak Japanese machinery orders. Kiwi elevated awaiting 25 bp hike from RBNZ, as NZD/USD hovers near 0.6300 and AUD/NZD cross sits sub-1.0600. PBoC set USD/CNY mid-point at 7.0157 vs exp. 7.0141 (prev. 7.0356) Commodities Crude benchmarks are softer intraday but have lifted off APAC lows with catalysts light and the move is perhaps a factor of broader macro concern over the US debt limit. Currently, WTI and Brent are lower by around USD 0.20/bbl but remain towards the top-end of circa. USD 1.50/bbl parameters. Spot gold is little changed while base metals are slightly softer given the firmer USD, the yellow metal is being cushioned from USD-pressure somewhat by the broader risk tone. EU plans more joint purchasing after the success of the common gas scheme, according to FT Fixed Income Bonds push recovery envelope further before waning around 2.40% in Bunds, just shy of 99.00 in Gilts and 114-00 for the 10 year T-note. GGBs and PGBs underpinned by political and positive ratings outlook respectively while the EU receives a relatively warm welcome for 2028 and 2034 debt offerings. Geopolitics Russia said its troops have taken control of the Ukrainian city of Bakhmut and Russian President Putin congratulated the Wagner group and the Russian army for the ‘liberation’ of the city, while Wagner group chief Prigozhin said they captured the entire territory of Bakhmut as promised and will be leaving the conflict zone on May 25th, according to TASS, Interfax and Reuters. Ukrainian President Zelensky said he is confident Ukraine will get F-16 fighter jets from the West and said Kyiv’s peace formula has the potential to stop future aggressors. Zelensky also stated he is grateful for American support and the training mission which will give them a stronger battlefield position, while he appeared to have confirmed the loss of Bakhmut in which he noted that the city is destroyed and responded that he thought ‘no’ when asked if Bakhmut was still in Ukraine’s hands, according to Reuters. Ukrainian Deputy Defence Minister said Kyiv’s troops have partly encircled Bakhmut along the flanks and still control part of the city, while a top Ukrainian general said Ukraine controls an insignificant part of the city but added it is enough to enter the city when the situation changes and that Ukraine’s advances on flanks around Bakhmut are effectively nearing a tactical encirclement of Russian forces, according to Reuters. US President Biden said Russians have suffered over 100k casualties in Bakhmut and that he has flat assurance from Ukrainian President Zelensky that Ukraine will not use F-16s to go into Russian geographic territory. President Biden also made it clear he is not prepared to trade certain items with China because of concern it would build weapons of mass destruction and he is not going to ease China sanctions but added that they are currently under negotiation on whether to lift sanctions on China’s Defence Minister, according to Reuters. Russia’s Deputy Foreign Minister commented regarding Western plans to supply F-16s to Ukraine that the West is pursuing an escalatory path fraught with colossal risks for them. Russia's ambassador to the US said the transfer of F-16 fighters to Ukraine would raise questions about NATO's involvement in the conflict and said any Ukrainian strikes on Crimea are attacks on Russia and that Washington should be aware of Russia's response, according to Reuters. Explosions were reported in Odesa and Zaporizhzhia Oblast amid drone activity, while it was also reported that Russia launched an overnight air attack on Ukraine's Dnipro, according to the Governor. Taiwan President Tsai said they have shown the world the determination to defend themselves and that the world’s support for a democratic Taiwan is unprecedented, while she said they will maintain the status quo of peace and stability in the Taiwan Strait and said no one can change the status quo with the use of force. Furthermore, Tsai said the US arms aid for Taiwan addresses weapon delivery delays related to the pandemic and commented that they welcome visitors to Taiwan from Hong Kong, Macau and China. US, Japan and South Korea’s leaders discussed how to take trilateral cooperation to new heights including in the face of North Korea’s illicit nuclear and missile threats, while US President Biden invited the Japanese and South Korean leaders for a trilateral meeting in Washington, according to Reuters citing the White House. South Korean President Yoon announced that South Korea and Germany will sign a military information-sharing pact and will closely cooperate on North Korean denuclearisation, while Yoon said that South Korea will carefully review the list of non-lethal weapons requested by Ukrainian President Zelensky, according to Reuters. Sudan’s army and paramilitary RSF agreed to a 7-day humanitarian truce and ceasefire on Saturday which takes effect after 48 hours, according to Reuters sources. Russia's Wagner group founder says their forces will be leaving Ukraine's Bakhmut region from May 25th until June 1st. "The Irish minister for foreign affairs Micheal Martin has said Ireland is open to changes that could see a shift away from the veto on some EU foreign policy and defence issues.", according to RTE's Connelly. G7 G7 Final Communique stated they will support Ukraine for as long as it takes and called on China to press Russia to stop its military aggression immediately, while it noted that a growing China that plays by international rules would be of global interest and that the G7 is not seeking a policy designed to harm China or hinder its economic progress and are not decoupling nor turning inwards. G7 also stated that there is no legal basis for China’s expansive maritime claims in the South China Sea and they oppose China’s militarisation activities in the region, while the G7 nations established a new initiative to counter economic coercion dubbed the Coordination Platform on Economic Coercion. US President Biden said the G7 is united in its approach to China and that they are not looking to de-couple from China but are looking to de-risk and diversify which means resisting economic coercion. Biden also stated they should have an open hotline with China and that everything changed after the spy balloon incident but thinks there will be another shift and expects relations with China to thaw soon which will allow more conversations. Furthermore, President Biden said they will not tell China what it can do but will put Taiwan in a position to defend itself and noted there is agreement among US allies that if China were to do something on Taiwan unilaterally, there would be a response, according to Reuters. China’s Foreign Ministry said China expresses strong dissatisfaction regarding the G7 Final Communique and lodged solemn representations with summit host Japan, while China's Vice Foreign Minister summoned the Japanese ambassador over actions at the G7, according to Reuters. China’s Embassy in Britain urged for the G7 to disregard Cold War mentality and to stop interfering in other countries' affairs and called on the British side to stop slandering and smearing China to avoid further damage to China-UK relations, according to Reuters. German Chancellor Scholz said they want de-risking and to diversify but added that nobody has an interest to curb growth in China and that they will make sure big investments in China from the US, Japan, Britain, France, Italy and Germany will continue so that they have supply chains in China and export goods to China, according to ZDF. US Event Calendar   Nothing major scheduled Central Bank Speakers 08:30: Fed’s Bullard Speaks on US Economy and Monetary Policy 11:05: Fed’s Bostic and Barkin Discuss Technology- Enabled... 11:05: Fed’s Daly Speaks at NABE/Bank of France Economic Symposium DB's Jim Reid concludes the overnight wrap This morning Head of DB Research David Folkerts-Landau has launched our AI week on my Thematic team with a 2-3 pager on why the AI hype cycle is in overdrive but why it's (mostly) justified. Three things are different this time: the general nature of the technology, the low barriers to entry and the unprecedented speed of adoption. This will lead to waves of repercussions for society, and if harnessed correctly, productivity gains. See David's intro to the series here. Henry and I will be publishing the first full note in the series later this morning looking at what history tells us about what major technological advancements over the last few centuries have meant for jobs. In every technological cycle there are always fears of human labour being extremely vulnerable. This time is no different, but history suggests a different outcome. Look out for our piece later. I'll highlight it in my CoTD later. Moving onto this week, clearly the debt ceiling will dominate. The latest is that President Biden and House Speaker Kevin McCarthy will meet at the White House today to resume negotiations. There was a slightly more positive tone from both sides after a phone call between the two yesterday. This follows the GOP walking out on talks late Friday. Yellen said over the weekend that the chances that the US can pay its bills by mid-June are "quite low". Outside of this story, the highlights for the week ahead include the global flash PMIs tomorrow and the US PCE inflation release on Friday. The details of the University of Michigan Survey the same day are going to be interesting as 5-10yr inflation expectations spiked from 2.9% to 3.2% earlier this month in the prelim reading, a level that hasn't been exceeded since 2007. This often gets revised down in the final print but if not, it could mark a firming of inflation at the consumer level. Watch for any upward revisions to Q1 US GDP on Thursday after recent better than expected data. Also on the data front we have UK inflation on Wednesday (last month shocked to the upside at 10.1% - 8.2% expected this week), various sentiment data in Europe and the Tokyo CPI in Japan on Friday. From central banks, as the June FOMC slowly comes into view and with an increasing possibility of a hike that was all but ruled out 1-2 weeks ago, there are lots of Fed speakers, especially early in the week (see in the calendar at the end), and also the release of the FOMC meeting minutes on Wednesday. This might help show how high the bar is for the Fed to add more hikes. Although earnings season is drawing to a close, Nvidia on Wednesday could be worth watching. Nvidia is up +112% in 2023 and has a market cap of $773bn highlighting why AI is becoming a huge topic and one that also moves macro markets. Nvidia is trading on heroic valuations which time will tell if they are justified. The day by day weekly calendar is at the end as usual for a fuller list of what's coming up. Asian equity markets have shrugged off Friday’s GOP talks walkout losses on Wall Street following comments by President Biden during the G-7 summit that he sees US-China relations improving “very shortly”. Across the region, the Hang Seng (+1.32%) is leading gains with the KOSPI (+0.83%), the CSI (+0.39%), the Shanghai Composite (+0.11%) and the Nikkei (+0.10%) also up. S&P 500 futures (-0.03%) are trading just below flat with 10yr USTs -2.3bps lower, trading at 3.65%, as we go to press. Early morning data showed that Japanese core machinery orders unexpectedly dropped -3.9% m/m in March (v/s +0.4% expected, -4.5% in February), contracting for the second month in a row. Elsewhere, the People’s Bank of China (PBOC) kept their benchmark lending rates unchanged for a ninth straight month, keeping the one-year loan prime rate intact at 3.65% while the five-year rate, a reference for mortgages, was also held at 4.3%, as expected. Looking at last week now and there were a number of fascinating themes. For most of the week there was growing optimism that US leaders were getting closer to reaching a deal on the US debt ceiling. However, on Friday, debt limit talks hit a wall as the GOP negotiators walked out on negotiations. This turn in events erased some of the earlier positive sentiment, and the x-date sensitive 1M T-bills sold off, with yields rising +2.6bps on Friday to 5.325%, leaving 1M yields down -9.5bps on the week. At one point Friday, 1M yields rose as much as +10.8bps to over 5.40% before coming back in over the last two hours of trading. This all came while Chairman Powell stated in a speech on Friday that “rates may not need to rise as high given credit stress”, with the Fed to remain data dependent. In his prepared remarks he noted that “we can afford to look at the data and the evolving outlook to make careful assessments,” which seemed to indicate a pause in June is the most likely scenario. This was in some contrast to the more hawkish sentiment that came from Fed speak earlier in the week. Turning back to the banking sector, CNN reported that Treasury Secretary Yellen told bank CEOs that more mergers of large lenders may be needed looking ahead as sector stress continues. Off the back of all this, the Fed rate priced in for June’s meeting by Fed fund futures fell back -4.3bps to 5.124% on Friday, although remained +2.6bps up on the week. The expected rate for July also slipped -1.0bps on Powell’s comments but gained +12.8bps in weekly terms, with markets seeing a Fed pause increasingly on the cards but not a July cut anymore. There was a -1.1bps fall for the expected rate for the final meeting of the year in December, but it was up +25.3bps on the week, pricing in -48.9bps of rate cuts by year end. Against this backdrop, US fixed income whipsawed on Friday, with US 10yr yields down at the open before gaining +2.7bps to 3.673% after news on the debt ceiling, and up +21.0bps on the week, its greatest weekly increase since the week before last Christmas. US 30yr yields also climbed +2.3bps on Friday, up +13.8bps in weekly terms. The more policy sensitive 2yr yields traded largely flat on Powell’s comments, up +1.4bps on Friday, and +27.9bps in weekly terms. 10yr bund yields fell back -1.8bps on Friday, but were likewise up +15.1bps week-on-week. With these developments, a risk-off sentiment weighed on US equity markets on Friday. The S&P 500 fell back -0.14% on Friday, although earlier gains left the index up +1.65% week-on-week. The NASDAQ slipped -0.24% on Friday but gained +3.04% last week as the tech sector outperformed. The likes of NVIDIA, Tesla and Meta were up +10.32%, +7.24% and +5.06% week-on-week respectively. Renewed concerns over banking sector stresses following earlier comments from Powell and Yellen saw the S&P 500 banks -0.71% on Friday (+4.63% on the week). The regional banking KBW index also fell -0.98% but was up +5.81% week-on-week after strong risk-on sentiment earlier in the week. Over in Europe, markets finished the week up, with the STOXX gaining +0.72% on the week (+0.66% on Friday). The German Dax closed up +2.27% week-on-week (+0.69% on Friday) to all-time highs, its largest weekly up-move since before the mid-March banking stress. Finally, turning to commodities, oil saw its best week since early April, breaking its four-week streak of weekly losses, as risk sentiment improved following debt ceiling reassurances from the White House. Wildfires in Alberta, Canada, had also disrupted oil output, adding tightness to supply. Brent crude gained +1.90% on a weekly basis (-0.37% on Friday), up to $75.58/bbl. WTI crude gained +2.16% last week despite the pullback (-0.43%) on Friday. Tyler Durden Mon, 05/22/2023 - 08:18.....»»

Futures Rise Amid Debt Ceiling Optimism US equity futures rose to start the week as investors monitored a subtle optimistic shift in debt-ceiling talks. Both S&P 500 and Nasdaq 100 contracts added 0.4% at 7:30 a.m. ET, following similar increases in the Estoxx50 over the early London session. A subdued market reaction to the US fiscal standoff suggests that investors expect politicians to negotiate a solution after President Joe Biden voiced optimism over the weekend that a deal could be reached. Still, Treasury Secretary Janet Yellen has warned that the the world’s biggest economy risks a catastrophic default as soon as June 1 if the debt limit isn’t suspended or raised. Treasury yields ticked higher while the Bloomberg dollar index dropped to session lows; oil prices are flat, doing little to rebound from the past four weeks of losses. Gold is edging higher this morning, while iron ore and copper also gain. In premarket trading, Meta shares rose 1.1% as Loop Capital upgraded the social media giant’s stock to buy from hold saying that the company’s revenue picture looks increasingly positive. Meanwhile, Alphabet fell 0.9% as Loop cut the tech giant’s stock to hold from buy, saying concerns surrounding the company’s ability to maintain its dominant position through the ongoing artificial intelligence transformation will weigh on its valuation. Analyst Rob Sanderson says “consider search competition from Microsoft a lesser threat than risk of displacement from behavioral change as users interact more with AI assistants to find information." Here are some other notable premarket movers: Oneok shares drop 5.8% in US premarket trading as analysts say the US pipeline operator’s $18.8 billion deal to buy Magellan Midstream Partners was a surprise given their different focus areas, with Magellan more exposed to crude and refined products while Oneok transports natural gas. NeoGames shares more than doubled after Aristocrat Leisure announced the proposed acquisition of the iLottery and iGaming solutions and services company for $29.50 a share in cash. Cryptocurrency-exposed stocks rose as Bitcoin gained for a third consecutive session, its longest streak since late April. Eli Lilly & Co.’s price target was raisedatMorgan Stanley to a Wall Street high of $507 from $478 per share, as analysts took stock of the recent positive clinical data for its experimental Alzheimer’s drug. After a quiet weekend on the news front, attention remained glued to debt ceiling negotiations, especially since there are now just two weeks until the earliest possible X-date. “It could be argued that the risks appear somewhat overstated, given how regularly we’ve seen this scenario play out over the last few years,” said Michael Hewson, chief analyst at CMC Markets in London. “Nonetheless, the uncertainty being generated by events in Washington is prompting a more defensive bias.” House Speaker Kevin McCarthy and other congressional leaders are planning to hold further talks on Tuesday. They were previously scheduled to meet on Friday, but postponed it as staff level discussions continued throughout the weekend. “When you look from afar in Europe at American politics right now it is difficult to see how they get to common ground, but the alternative is so bad maybe it forces that ground to be found,” said Luke Hickmore, investment director at Abrdn. “The risks are still there for sure.” The showdown in Washington is just one of many risks keeping investors sidelined, from recession to cracks in the banking system to disappointed hopes for a turn to easier monetary policy. The S&P 500’s decline of 0.3% last week marked the sixth straight week without a 1% move — the longest stretch of inertia since late 2019. “There’s quite a fair bit of ongoing risk in the market,” Audrey Goh, senior cross asset strategist at Standard Chartered Wealth Management Group, said in an interview on Bloomberg Television. “The debt-ceiling talks are still in the making, at the same time we’ve also got inflation still quite elevated. There could be further downside from here where equity markets are concerned.” The VIX held near the lowest since 2021, even as Morgan Stanley’s Michael Wilson said he expects the debate around raising the US government’s $31.4 trillion borrowing limit to trigger some sharp swings in equity markets. European stocks rose tracking US equity futures: the Stoxx 600 is up 0.3% with miners, consumer products and utilities the strongest performing sectors. Here are the biggest movers Monday: Evotec gains as much as 6.4%, the most on the Stoxx 600 and the benchmark’s health-care subindex. Citi says today’s numbers “provides comfort” and last week’s Sandoz deal adds “significant credibility” Alstom shares rise as much as 4.8% as JPMorgan raises its PT on the French train maker, saying its “significantly positive” free cash flow forecast helps to ease balance sheet concerns Axa rises as much as 3.2%, with analysts saying the insurer’s quarter results are encouraging, with strong pricing in Property & Casualty premiums and a positive surprise in its capital guidance Siemens Energy rises as much as 3.6%, outperforming the wider Stoxx Energy Index, with Citi saying today’s results to be taken positively, highlighting a 20% beat on orders and a 10% beat on revenue Diploma rises as much as 2.9% after the UK components and seals distributor’s 1H results topped expectations, with good organic growth, a beat on margins and a strong outlook, analysts said Currys shares rise as much as 7.6% after the UK electronics-and-appliances retailer raised its profit forecast for the year. Analysts noted the better-than-expected sales performance in the UK Bayer declines as much as 2.6%, extending losses to a fourth consecutive session, after Berenberg says Germany-based pharmaceutical and agrochemicals company may issue a profit warning in 2H Lotus Bakeries shares fall as much as 3% after KBC Securities cuts the Belgian food producer to hold from accumulate. The broker sees short-term upside as “too limited” after recent strength Asos shares drop as much as 12% after JPMorgan slashed its price target on the UK online fast fashion retailer, citing concerns about the medium-term outlook and a lack of visibility AFRY shares drop as much as 3.4% after the Swedish engineering consultancy firm loses its clean sweep of positive ratings following a downgrade to hold from buy by Nordea In other markets, the Turkish lira weakened as the country’s presidential election looked set for a runoff vote in two weeks. Losses were cushioned by state banks that earlier intervened to support the exchange rate, according to people familiar with the matter. The Thai baht rallied after pro-democracy parties emerged as the biggest winners in Sunday’s election. Earlier in the session, Asian equities gained, with a late rally in Chinese stocks putting the regional benchmark on track for its first advance in five days. The MSCI Asia Pacific Index rose as much as 0.7%, led by financials and communication services shares. Thailand’s benchmark was the worst performer in Asia following elections on Sunday, owing to uncertainty over talks between opposition parties to form a coalition government. China’s benchmark CSI 300 Index jumped the most since Feb. 20. Financials rallied following a state media reported that the Shanghai stock exchange will host a seminar to discuss topics including boosting the sector’s valuation. Gauges in Hong Kong also climbed, with Tencent being a key contributor ahead of its earnings scheduled for Wednesday. Market watchers will be keenly watching the latest China figures on industrial output, retail sales and fixed-asset investment Tuesday to gauge the momentum of the nation’s economic recovery. Focus will also be on US debt-ceiling talks as President Joe Biden, House Speaker Kevin McCarthy and other congressional leaders plan to meet to discuss budget negotiations to avoid a default. In Japan, the key Topix gauge inched closer to reaching its highest level since 1990, with the nation’s biggest banks predicting their highest profits in years. Goldman Sachs is predicting more upside for Japanese stocks, which extended their recent outperformance versus global peers amid strong earnings and renewed weakness in the yen. “We note the solid fundamentals compared with stocks on overseas markets, and we also think that expectations for structural changes/reforms could push Japanese equities up even further,” Goldman strategists Kazunori Tatebe and Bruce Kirk wrote in a note. Indian stocks advanced to trade near their all-time highs as falling wholesale prices helped makers of consumer goods amid hopes of a recovery in demand.  The S&P BSE Sensex rose 0.5% to 62,345.71 in Mumbai, while the NSE Nifty 50 Index advanced by a similar measures. Both are less than 2% away from their record levels set in early December. They have increased about 8% since March. The stock market reacted after data showed India’s wholesale prices contracted for the first time in almost three years, tracking softening global commodity prices. Companies, especially consumer goods and staples firms, which have struggled to report volume growth on weak demand, could find support. The broader market gains also countered worries over ruling Bharatiya Janata Party’s election defeat in southern Karnataka state, where opposition Congress party secured a majority last week. “While the election results may introduce some ‘political risk’ to markets and rejuvenate the opposition, we note that Mr Modi enjoys very high approval rating on the national level,” Kotak Institutional Equities analysts led by Sajeev Prasad wrote in a note, referring to Prime Minister Narendra Modi. Shares of billionaire Gautam Adani’s group declined amid concerns over potential equity dilution after boards of two firms approved proposals to raise as much as $2.6 billion In FX, the Bloomberg Dollar Spot Index is down 0.1%. The Australian dollar is the strongest of the G-10 currencies, rising 0.5% against the greenback. The Japanese yen is the weakest while the Turkish lira has also dropped as the presidential election appears to be heading for a runoff vote. In rates, treasuries fall with the US 10-year yield rising 2bps to 3.48%. Bunds are also in the red with German 10-year borrowing costs rising 3bps to 2.31%. Italian 10-year yields have dropped 1bps after Fitch affirmed their BBB rating on Friday. Treasuries were cheaper across the curve, following wider losses in bunds, amid contained risk-on sentiment. Treasury yields are cheaper by 1bp to 2bps across the curve with 10-year yields around 3.48%, trading ~0.5bp richer vs. bunds. IG issuance slate includes five deals already with a weekly total of around $30b expected — the majority of issuance is expected to be front loaded, according to dealers.  US auctions this week include $15b 20-year bond sale Wednesday and 10-year TIPS Thursday In commodities, Crude futures advance with WTI rising 0.4% to trade near $70.30. Spot gold adds 0.3% to around $2,017. Bitcoin rises 1.6%. Finally, after a tumultuous week at one of the largest crypto exchanges which had temporarily paused withdrawals mid-week, Bitcoin fell back -10.5% on the week (and -5.18% on Friday itself). Ethereum likewise fell back -3.82% on Friday to bring the weekly loss to -10.16% as the impact of its major Shapella update continues to be felt. Market Snapshot S&P 500 futures up 0.4% to 4,155.00 STOXX Europe 600 up 0.3% to 466.75 MXAP up 0.6% to 161.75 MXAPJ up 0.7% to 513.95 Nikkei up 0.8% to 29,626.34 Topix up 0.9% to 2,114.85 Hang Seng Index up 1.8% to 19,971.13 Shanghai Composite up 1.2% to 3,310.74 Sensex up 0.8% to 62,497.75 Australia S&P/ASX 200 up 0.1% to 7,267.13 Kospi up 0.2% to 2,479.35 German 10Y yield little changed at 2.29% Euro up 0.2% to $1.0875 Brent Futures up 0.3% to $74.38/bbl Gold spot up 0.5% to $2,020.20 U.S. Dollar Index down 0.16% to 102.52 Top Overnight News from Bloomberg China's rate swaps program with Hong Kong began, giving overseas funds easier access to onshore derivatives. The long-anticipated Swap Connect comes after global investors cut holdings of Chinese sovereigns by $169 billion in the last five quarters. An advantage of the channel will be lower trading costs, Linklaters said, though analysts say it may not deter short-term outflows. BBG Sweden’s April inflation cools by more than anticipated, taking pressure off the central bank to continue hiking rates (core inflation came in at +8.4% Y/Y in April, down from +8.9% in March and below the Street’s +8.7% forecast). BBG Eurozone inflation and GDP to outperform prior expectations according to new European Commission forecasts (GDP is now seen +1.1% and +1.6% in ’23 and ’24, respectively, up from +0.9% and +1.5% previously; inflation is now seen +5.8% and +2.8% in ’23 and ’24, respectively, up from +5.6% and +2.5% previously). WSJ Debt ceiling talks are making modest progress, and issues on the table have “narrowed” in the last few days (a final deal is unlikely to happen before Biden’s trip to the G7 in Japan, but could be in place when he gets back). FT Iraq does not expect OPEC+ to make further cuts to oil output at its next meeting in June, its oil minister Hayan Abdel-Ghani said, in the first indication from an OPEC minister about a potential decision as oil prices slide. RTRS Supermarket chains are increasingly pushing back against aggressive price increases from consumer staples companies, a trend that will help consumer spending power but could jeopardize margin expansion and earnings projections at some firms. FT M&A Monday. Newmont sealed its $19.2 billion acquisition of Newcrest in the gold mining industry's largest transaction. Oneok will buy Magellan Midstream for $18.8 billion in cash and stock to create one of the biggest US oil and gas pipeline operators. And Microsoft's $69 billion purchase of Activision Blizzard is expected to win EU approval today, which may provide fodder for its legal challenge of the UK's decision to block the deal. BBG Stocks are preparing for an upside breakout, and its time investors started preparing – US disinflation and the end of Fed tightening will be powerful tailwinds for equities. Barron's Quant hedge funds are buying stocks at one of the fastest paces in the last 10 years while human traders and PM sit on the sidelines due to macro worries. FT Institutions have pulled a net $333.9 billion from stocks over the past 12 months, according to S&P Global Market Intelligence data, while individual investors have yanked another $28 billion. Billions have flowed into cash equivalents, driving total assets in money markets to a record $5.3 trillion as of May 10, according to the Investment Company Institute. WSJ A more detailed look at global markets courtesy of Newsquawk APAC stocks traded mixed following the subdued performance last Friday on Wall St where risk sentiment was hampered by a disappointing University of Michigan Survey and US debt ceiling concerns, while participants in the region brace for this week’s key economic releases including the latest Chinese activity data due tomorrow. ASX 200 was rangebound amid losses in the top-weighted financial sector and weakness in tech although the downside in the index was cushioned by resilience in mining stocks and several M&A-related headlines. Nikkei 225 outperformed with many of the biggest gainers in the index driven by earnings results. Hang Seng and Shanghai Comp. were mixed with Hong Kong choppy and the mainland pressured after reports that G7 Leaders will discuss shared principles on China’s economic coercion and with the US to look at how outbound investment assessment can complement export controls to prevent the transfer of sensitive technologies to China. Top Asian News PBoC Monetary Policy Implementation Report (Q1): Inflation may rebound gradually in H2 2023. Prudent monetary policy will be precise and forceful; will keep policy reasonably ample. Click here for more detail. PBoC says should not exaggerate temporary fall in CPI; GDP growth-inflation gap is due to delays in demand. US official said the G7 Leaders’ statement is to discuss shared principles on China’s economic coercion and the US will look at how outbound investment assessment can complement export controls to prevent the transfer of sensitive technologies to China, while the statement will also discuss tools used to counter economic security threats including those posed by China, according to Reuters. China jailed US citizen John Shing-Wan Leung for life on espionage charges, according to AFP. BoJ Governor Ueda said he told G7 counterparts that Japan’s economy is picking up and its core CPI is likely to slow the pace of increase towards the middle of the current fiscal year, while he said the BoJ is continuing with easy monetary policy to sustainably and stably achieve the price target, according to Reuters. Japanese PM Kishida is to order the government and BoJ to assess the wage outlook to determine if recent wage hikes would be sustainable, according to Nikkei. Thailand’s pro-democracy opposition took an early lead in polling results in which the Pheu Thai party had about 23% of votes and was closely followed by the Move Forward party with about 22.5% of votes in what was seen as a rebuke against the military-aligned government with the United Thai Nation party and ruling Palang Pracharath party seen trailing at 8% and 10% of votes, respectively, according to FT. It was later reported that the Thailand Election Commission announced that with 99% of votes counted, Move Forward have 151 seats and Pheu Thai have 141 seats. Indian PM Modi’s BJP lost control of the state assembly in the crucial election in the southern state of Karnataka which was closely watched ahead of the national poll that takes place in under a year, according to FT. European bourses are firmer, Euro Stoxx 50 +0.3%, but with magnitudes modest amid limited specific newsflow. Sectors are predominantly in the green though Chemicals & Real Estate lag while for bourses the IBEX 35 -0.2% is the clear laggard given pressure in BBVA -4.6% after inconclusive Turkish election results. Stateside, futures are firmer with the ES +0.2% sitting just above the 4150 mark with Fed speak due today before the week's US data/retail earnings and debt ceiling negotiations. Top European News UK will begin trade talks with Switzerland in an effort to boost services trade, according to Bloomberg. Bank of England is to water down rules for lenders to boost competitiveness, according to The Telegraph. ECB’s de Guindos said rate hikes are in their final stretch and warned that higher borrowing costs could put stress on banks’ asset quality and push up bad debt levels, according to Il Sole 24 Ore. ECB’s Kazimir said they may need to keep raising rates longer than previously thought to help tame inflationary pressures and he thinks there are more meetings ahead where they will decide on hiking rates. EU Commission increases 2023/24 EZ Inflation and GDP forecasts; click here for more detail. Italy is to overhaul plan for EUR 200bln in EU Covid recovery funds, according to FT Fitch affirmed Italy at BBB; Outlook Stable, affirmed Sweden at AAA; Outlook Stable and affirmed Denmark at AAA; Outlook Stable. FX DXY drifts after running into resistance just above a Fib, at 102.750 and then losing this upside to sub-102.50 with peers broadly firmer. Aussie regroups as risk appetite recovers, base metals bounce and NAB delivers hawkish RBA call, AUD/USD eyes 0.6700 from just shy of 0.6650. Yen retreats between 135.61-136.32 parameters as BoJ Governor Ueda reaffirms the need to keep an ultra-accommodative stance at the G7. Euro and Sterling rangy vs Dollar within 1.0846-80 and 1.2446-98 respective bands after more weak Eurozone data and ahead of a BoE speech. Swedish Crown underperforms after sub-forecast inflation metrics and Turkish Lira in limbo after inconclusive first-round election result leaves current President Erdogan in contention to prevail. PBoC set USD/CNY mid-point at 6.9654 vs exp. 6.9658 (prev. 6.9481) Fixed Income Debt is off worst levels, but still under pressure after extending intraday boundaries on both sides. Bunds, Gilts and T-note within 136.06-135.61, 100.82-43 and 115-15/08+ respective ranges. Hawkish Central Bank vibes overshadow weak data awaiting Empire State survey, NY Fed credit and debit report, Fed speakers and BoE's Pill. Commodities WTI and Brent are modestly firmer having pared back initial APAC downside given the session's relatively-flimsy risk tone. Currently, the benchmarks are towards the top end of circa. USD 1/bbl parameters with WTI and Brent topping out at USD 70.42/bbl and USD 74/51/bbl respectively. G7 and the EU will reportedly agree to ban the restart of Russian gas pipelines, according to FT; on this, desks write that it can be seen as more of a symbolic move as it won't change flows. Gazprom continued shipping gas to Europe via Ukraine with the volume on Saturday seen at 40.4mln cubic metres and the volume on Sunday seen at 40.3mln cubic metres, according to Reuters. Spot gold edges higher and eyes its 10 DMA (USD 2,025.34/oz) after briefly dipping under its 21 DMA overnight at USD 2,008.06/oz, but remains within Friday's parameters thus far, while base metals are bid after last week's pressure. Turkish Election Turkish President Erdogan’s share of votes is below the 50% threshold needed to win in the first round of the Presidential Election with 49.2% although he was still ahead of main opposition candidate Kilicdaroglu who has 45.0% of the votes after 99% of votes were counted. It was also reported that Erdogan's AK Party received the most votes in the parliamentary election with over 35% of votes after more than 92% of votes were counted. Turkish President Erdogan said the preliminary results show his side is far ahead and both domestic and abroad vote counts will continue, while he added that the opposition are trying to fool people by saying they are ahead, while he added that if there is a run-off, he will respect that. Turkish presidential candidate Kilicdaroglu said President Erdogan did not get the result he wanted. Furthermore, Kilicdaroglu said he will accept a run-off and thinks he will win in the run-off, while the third Turkish Presidential candidate said he is not closer to supporting either side in the presidential run-off vote. Geopolitics Ukrainian President Zelensky visited Rome on Saturday to meet with Italian President Mattarella, Italian PM Meloni and the Pope where Matterella told Zelensky that Italy is by his side and Meloni said that they will support Ukraine for the entire time that it is necessary. Zelensky also visited Germany and met with Chancellor Scholz who said that Germany will support Ukraine for as long as it takes and ensured that aid to Ukraine will continue in the coming years, while Scholz gave Germany’s full support to Ukraine’s journey towards membership in the European Union. Furthermore, Germany announced to provide a new EUR 2.7bln military aid package to Ukraine and President Zelensky then travelled to France for talks with French President Macron. France is to send dozens of armoured vehicles and light tanks including AMX-10RC armoured fighting vehicles to Ukraine in the coming weeks, according to Reuters. Ukrainian President Zelensky said that they are ready to discuss proposals for peace but must be based on Ukraine’s peace plan and noted that Ukrainians believe in the success of the coming counteroffensive, while he also stated that they can make the defeat of Russia inevitable this year, according to Reuters. Ukraine said its troops are gradually advancing in two directions in the suburbs of Bakhmut and that the situation in the city centre is more complicated, while Russia said Ukraine made mass attempts to break through its defences in north and south Bakhmut which were repelled and that Russian forces conducted long-range strikes on the city Ternopil which targeted Ukrainian deployment site and depots, according to Reuters, RIA and Interfax. Ukrainian President Zelensky reportedly proposed in private to conduct attacks on Russian territory and possibly invade border cities to be in a better position to negotiate peace, according to US documents leaked online cited by Washington Post. However, Zelensky told reporters on Sunday that Ukraine had no plans to attack Russian territory and was only interested in regaining occupied land. Ukrainian official said the Chinese envoy is to visit Kiev on Tuesday and Wednesday, according to Sky News Arabia. Russian Kremlin says President Putin will hold a meeting of the security council on Monday, the meeting has been moved from the usual Friday slot. G7 leaders plan to increase pressure on Russia with steps on sanctions evasion, energy production and exports aiding war efforts, while Ukrainian President Zelensky is expected to address G7 leaders virtually or in person, according to officials cited by Reuters. UK Chancellor Hunt said the impact of sanctions on the Russian economy has not been as effective as military support for Ukraine and that economic pressure on Russia is more of a ‘slow burn’ with the pressure to eventually bite, while he noted that G7 members talked about the need to stop the sanctions leakage, according to Reuters. Egypt brokered a ceasefire agreement between Israel and Palestinians on Saturday. However, it was reported the following day that Israel conducted an air strike on a militant post in Gaza after a rocket was fired at Israel due to a “technical error”, according to Hamas Aqsa Radio. US Event Calendar 08:30: May Empire Manufacturing, est. -4.0, prior 10.8 16:00: March Net Foreign Security Purchases, prior $71b Central Banks 07:30: Fed’s Bostic Speaks on CNBC 08:30: Fed’s Goolsbee Speaks on CNBC 08:45: Fed’s Bostic Has Opening Remarks at Financial Markets... 09:15: Fed’s Kashkari Takes Part in a Moderated Discussion 14:00: Fed’s Bostic Speaks on Bloomberg TV 15:00: Fed’s Bostic Holds Media Availability 17:00: Fed’s Cook Gives Commencement Address at UC Berkeley DB's Jim Reid concludes the overnight wrap As a British person and someone who has proudly worked at a German bank for nearly 19 years, I have to confess that I threw my sofa pillow across the room in disgust at just after midnight on Saturday. Yes the UK and Germany were the bottom two acts in the Eurovision Song Contest. How can two countries that combined have given the world The Beatles, The Rolling Stones, Elton John, David Bowie, Led Zepplin, Pink Floyd, oh and Nena scores so badly. It's an outrage. At least both got more than "Nul Points". Anyone who watched will know why the UK didn't do well. They had to follow Croatia who were one of the most extraordinary acts I have seen for many a year. I was in a state of shock after. I've just about recovered but fortunately the week ahead doesn't have a whole calendar filled with big likely events. There are no blockbuster US data releases, but US retail sales (tomorrow) and a selection of US housing data will be the highlights. Elsewhere we see the monthly China economic activity data dump (tomorrow), GDP and CPI reports from Japan (Wednesday and Friday), along with labour market reports in the UK (tomorrow). In addition, there are a lot of central bank speakers, especially from the Fed. Fed Chair Powell and ECB President Lagarde both speak on Friday with the latter also up tomorrow. Elsewhere the latest G7 summit starts on Friday in Hiroshima and earnings season still lingers with notable companies reporting being US retailers Walmart and Home Depot, along with China's tech giants Alibaba and Tencent. In more detail now let's start with US retail sales tomorrow. Our economists expect the headline to print at +0.7% in April, up from -0.6% previously, or +0.5% vs -0.4% ex autos. Headline will likely be boosted by strong auto sales in the month. The gain in ex-autos sales is likely to be gas price related and our economists expect a flat reading on retail control (unch. vs. -0.3%), which is the direct input into GDP for goods spending. So consumption is likely grinding lower after a strong start to the year. Investors will get a read on the US consumer from US retailers which report earnings, including Walmart (Thursday), Target (Wednesday) and Home Depot (tomorrow). Tomorrow's NAHB housing market index (DB at 44 vs. 46) starts the week for US housing data and will be followed by Wednesday's housing starts and permits and then Thursday's existing home sales. Thursday's jobless claims will be more important than usual for a couple of reasons. Firstly it is the survey week for the next payrolls release and secondly we saw it confirmed on Friday that a decent slug of the recent rise in claims were likely due to fraudulent filings in Massachusetts. This state seems to have accounted for around half the +23% rise in the 4-week moving average claims number from the late January lows. The 4-week moving average for continuing claims is up around 10% this year so the labour market is easing but not quite as much as the raw claims numbers had suggested. Read more about this story here in our economists' debrief of this story. Here in Europe, the UK labour market data tomorrow will be interesting following last week's twelfth consecutive BoE meeting hike. Whether the data shows persistent wage pressures, following the last hot print, will likely contribute to whether a pause is feasible at the next meeting on June 22, although another round of wages and inflation data will be due by then as well. The house view is that they will hike another 25bps in June which will be the last for the cycle but with the risks that there'll be more. See here for more on why as they review last week's hike. Elsewhere in Europe, key indicators include the ZEW survey (tomorrow) and the PPI report (Friday) for Germany and Q1 GDP, trade balance for March (tomorrow) and industrial production (today) for the Eurozone. This week will also be a busy one for the major Asian economies. Starting with Japan, Q1 GDP will be released on Wednesday, trade balance data on Thursday, and the CPI report on Friday. In China, investors will be focused on the latest economic activity signals tomorrow, with the release of retail sales, industrial production and property investment data. Amid base effects, our economists expect +11% and +21% YoY growth in industrial production and retail sales, respectively (vs 3.9% and 10.6% in March). The industrial production print and its contrast with retail sales will be especially in focus given flailing momentum in the former. New home prices data are due on Wednesday. China will also be in the spotlight for corporate earnings this week. Its tech giants, including Alibaba (Thursday), Tencent (Wednesday) and Baidu (Tuesday) will be among the most anticipated reports. The full day-by-day week ahead in at the end as usual. This morning in Asia, equity markets are mostly softer following weak US markets on Friday due to concerns over the US debt ceiling and disappointing economic data. As I check my screens, the Shanghai Composite (-0.94%), the CSI (-0.30%) and the KOSPI (-0.34%) are lower while the Nikkei (+0.40%) and Hang Seng (+0.24%) are slightly higher. US stock futures are pretty flat with those on the S&P 500 (-0.02%) and NASDAQ 100 (-0.03%) marginally down. Early this morning, the People's Bank of China (PBOC) offered to keep the rate on 125 billion yuan ($18 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% for a ninth month. The central bank’s operation added 25 billion yuan more than the amount maturing in May, to keep the economic recovery on track as credit growth slumped. Now, looking back on last week. On Friday, we had the University of Michigan’s long-run inflation expectations come in with an upside surprise, rising to 3.2% from 3% (vs 2.9% expected), their highest since 2011. This number is often revised down so we'll see if that 12-yr high stays. One-year inflation expectations likewise beat expectations at 4.5% (vs 4.4% expected) but had receded from 4.6% in April. Consumer sentiment also fell back 9%, falling from 63.5 to 57.7 (vs 63 expected). Long-run expectations slipped from 60.5 to 53.4 (vs 60.8 expected) as consumers stated they were increasingly concerned that an economic downturn would not be short-lived. After the inflation expectations number, fixed income sold off on both sides of the Atlantic. 10yr US Treasury yields climbed +7.8bps on Friday, to finishing slightly higher (+2.6bps) on the week. The more policy-sensitive 2yr yield rose +7.3bps week-on-week (and +8.8bps on Friday), approaching 4% again at 3.987%. In Europe, German bund yields finished the week slightly lower (-1.5bp) on a weekly basis despite the selloff on Friday (+5.1 bps). With inflation concerns weighing on markets, the S&P 500 fell back -0.16% on Friday, and -0.29% week-on-week. The first back to back weekly declines since February. The NASDAQ relatively underperformed on Friday falling -0.36% but was up +0.40% in weekly terms after a rally mid-week. Whilst US stocks slipped, the STOXX 600 climbed +0.40% and was up by a modest +0.04% week-on-week. In commodities, we closed off the fourth consecutive week of declines in oil as concerns over weak demand hang heavy following the US debt ceiling political standoff and Friday’s weak data. WTI crude fell back -1.82% to $70.04/bbl week-on-week (and -1.17% on Friday), Brent crude followed suit, falling -1.50% week-on-week to $74.17/bbl (and -1.08 % on Friday). Copper prices also fell -4.00% in weekly terms after soft Chinese import and export data earlier in the week, the largest down move since the first week of February. Finally, after a tumultuous week at one of the largest crypto exchanges which had temporarily paused withdrawals mid-week, Bitcoin fell back -10.5% on the week (and -5.18% on Friday itself). Ethereum likewise fell back -3.82% on Friday to bring the weekly loss to -10.16% as the impact of its major Shapella update continues to be felt. Tyler Durden Mon, 05/15/2023 - 08:06.....»»

Futures Rise As Luxury Blowout Lifts European Markets; Dollar, Yields Higher US equity futures advanced to end the week as traders remained fixated on the path of monetary policy while assessing stronger than expected corporate earnings as the season nears its end. Contracts on the S&P 500 rose 0.3% at 8:00 a.m. ET while those on the Nasdaq 100 advanced 0.2%. Swiss luxury-goods maker Richemont soared 7.8% to a record on "spectacular sales growth", fueling a broad rally across European luxury stocks. Risk-on sentiment pushed Treasury yields higher. The Bloomberg dollar index was poised for its biggest weekly gain since March while oil prices declined again, set for their fourth weekly loss. Meanwhile, gold is also on course to end the week lower. Iron ore futures are falling sharply for a second day, but still on track for a weekly gain. In premarket trading, Tesla rose 2% after the electric-car maker raised prices of its Model X and Model S cars in the US, the third change in less than a month, while Musk announced that Twitter would have a new CEO in 6 weeks. Amylyx Pharmaceuticals shares gain 7.5% after the drugmaker’s sales of its amyotrophic lateral sclerosis drug topped analyst estimates. ARS Pharmaceuticals surges 65% after saying an FDA panel voted to  to support a favorable benefit-risk assessment for Neffy to treat severe allergic reaction. Blue Bird Corp. soars 31% after the company boosted its revenue and adjusted Ebitda forecast for the full year. Cidara Therapeutics rises 11% as Cantor Fitzgerald flagged multiple catalysts. Fox Corp. falls 1.8% as Wells Fargo cut the recommendation on the media company’s stock to equal-weight, saying there’s some strategic uncertainty ahead. IonQ drops 10% after the software company posted first-quarter results. Sarepta Therapeutics stock is halted for pending news, while the company’s drug candidate for Duchenne muscular dystrophy is set to face an FDA advisory committee meeting on Friday. SiriusPoint Ltd. falls 15% after Dan Loeb said he’s no longer exploring an acquisition of the company. CuriosityStream shares advanced in extended trading on Thursday, after the entertainment company reported its first-quarter results and gave an outlook. S&P 500 futures traded higher after President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling that was planned for Friday. The delay reflects headway in staff-level discussions, Bloomberg reported citing people familiar with the talks, however a more realistic take came from Punchbowl which said that "the two sides haven’t narrowed down the policies they might want to include in a debt-limit or spending-cut package." “We believe that they will find a deal — we need to remember negotiations have only just started,” said Marie Jacot-Cardoen, chief executive officer of Edmond de Rothschild Asset Management France, on Bloomberg Television. “It is likely political antagonism will increase before deal is reached, but we believe a compromise will be found.” US equities have been mainly trading in a very tight range all month after climbing over the past two amid concerns of a recession and uncertainty surrounding the path of interest rates. Earnings have been better than expected but did little to lift the S&P 500 after they rallied ahead of the season. Investors are also worried about the US debt-ceiling and stability of the banking industry, though efforts to repair ties between Washington and Beijing have been supportive. “The breadth of the US equity market has fallen to multi-decade lows, masking the weaker performance and lower investor conviction in smaller constituents,” said Mark Haefele, chief investment officer of UBS Global Wealth Management. “This suggests crowding and vulnerability, as narrow equity market breadth historically happens in the later stages of a bull market.” Meanwhile, BofA's Michael Hartnett said a prolonged period of economic decline in the US will roil technology stocks at a time when they are attracting a weight of investor money. They expect a recession “to crack credit and tech” just as it did in 2008. Elsewhere, investors remained focused on what major central banks will do next in their rate-hiking campaigns to quell inflation. US data Thursday showed initial jobless claims reached the highest since October 2021 while producer prices rose less than economists expected, suggesting Federal Reserve policy tightening may finally be having an effect. “There’s a chink of light — inflation is beginning to show some signs of easing, boosting hopes the Fed’s rate hiking cycle is near an end and this means companies can start prioritizing growth, rather than servicing debt,” said Angeline Ong, a financial analyst at IG Group. Luxury goods maker Richemont gained 7.8% to a record, fueling a broad rally across European luxury stocks. Europeans stocks are ahead and on course to finish the week in the green as investors welcome signs of easing strains between the US and China and tentative progress in the debt-ceiling negotiations. The Stoxx 600 is up 0.6% with consumer products, financial services and retailers the strongest-performing sectors while retail and autos fall. Here are the most notable European movers: Richemont shares rise as much as 5.6%, hitting a record high, after reporting forecast-beating sales growth and operating profit. Its jewelery division showed “spectacular sales growth,” driving significant improvement in profitability, Vontobel said. Other luxury stocks also gained, with LVMH rising 1.5% Scor shares rose as much as 11% after a strong set of results, with a significant net income beat driven by better performance in both L&H and P&C GSK shares rise as much as 1.7% after the UK pharma group £804 million sells a stake in Haleon, the consumer health- care division it spun off as a separate company last year. It also welcomed Zantac class action dismissal in British Columbia. Beazley shares rise as much as 6.5%, hitting the highest since March 31, after the British insurer’s quarterly results topped expectations for premium growth, while investment income also increased. THG shares drop as much as 23%, after the UK online retailer ended talks with Apollo about an indicative takeover proposal. Soitec shares tumble as much as 9.8%, after JPMorgan downgraded the stock to underweight from neutral and almost halved its price target, noting the wafer maker’s fiscal 2024 outlook was at risk of a slow recovery in demand for chips used in smartphones. Accor falls as much as 3.2% in Paris after an offering of 7m shares priced at €31.81 apiece by holder Qatar Holding via BofA Securities, according to terms seen by Bloomberg. Nordex shares drop as much as 5.6% after the German wind turbine maker reported results that analysts said were disappointing, noting a larger-than-expected loss driven by liquidated damages and extra catch-up costs from the delays in the winter. Earlier in the session, Asian stocks headed for a fourth day of decline, as Chinese shares pulled back further after the nation’s weak inflation and borrowing data showed the economic recovery is waning, adding to growth concerns globally. The MSCI Asia Pacific dropped as much as 0.3% Friday, led lower by material and energy shares. Chinese and Hong Kong benchmarks led declines in the region as traders fret over the slew of worse-than-expected economic data, which underscores ongoing problems in the housing market and sluggish domestic demand after Covid reopening. Chinese tech stocks bucked the broader market’s trend after e-commerce firm JD.com reported better-than-expected results, and geopolitical concerns eased on the news of a meeting between Biden and Xi. US National Security Adviser Jake Sullivan also met with China’s top diplomat Wang Yi. Meanwhile, Japanese shares outperformed the region as investors welcomed another wave of quarterly results from domestic companies. Companies including Honda and KDDI that announced buybacks along with earnings were among the biggest boosts. The Topix rose 0.6% to close at 2,096.39, while the Nikkei advanced 0.9% to 29,388.30.  Keyence Corp. contributed the most to the Topix gain, increasing 2.7%. Out of 2,159 stocks in the index, 1,197 rose and 867 fell, while 95 were unchanged. In addition to the decline in U.S. long-term Treasury yields overnight, “the Japanese market is also benefiting from the sense of undervaluation of Japanese stocks,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank The Asian stock benchmark was poised for a weekly drop amid weaker global growth and a resurgence of banking sector worries. Still, a cooling US job market and softening producer prices added confidence that the Federal Reserve may soon end its tightening campaign.  “The Fed is easily positioned to hold rates at the June meeting and if we see further softening of labor conditions, that will continue to drive this market into pricing in easing before the end of the year,” said Ed Moya, senior market analyst at Oanda Indian stocks closed the week as one of Asia’s best performers, aided by strong buying from overseas investors. Foreign investors bought net $1.1 billion of local equities this week through Thursday, NSDL data showed. The buying comes amid economic resilience and signs that the central bank will stay on hold as inflation moderates. For the week, the BSE-Sensex climbed 1.6% compared to MSCI Asia-Pacific index’s 0.4% loss. Sensex outperformed markets in China, Japan, Australia during the week. On Friday, the S&P BSE Sensex rose 0.2% to 62,027.90 in Mumbai, while the NSE Nifty 50 Index advanced 0.1% to 18,314.80. Australian stocks edged higher sending the S&P/ASX 200 index up 0.1% to close at 7,256.70, boosted by banks and health shares. The benchmark gained 0.5% for the week, snapping three weeks of declines. Asian stocks were mixed and Treasuries held gains as investors weighed signs of cooling in the American jobs market and efforts to repair ties between Washington and Beijing. Treasuries are lower with the US 10-year yield rising 2bps to 3.41% Bunds and Gilts have also declined with 10-year borrowing costs in Germany and the UK rising by 1bps and 2bps respectively. In FX, the Bloomberg Dollar Spot Index is up 0.1% and was set to rise 0.5% this week, the most since the week ended March 10 even as traders weigh the likelihood of a Federal Reserve policy pivot following a soft US inflation report. The Kiwi dollar is the clear underperformer, falling 1% versus the greenback after New Zealand inflation expectations fell. “For the dollar, we are not quite at the tipping point where markets can plausibly expect that the Fed will weigh up steady versus rate cut,” said Sean Callow, senior currency strategist at Westpac Banking Corp. “That probably means ranges on BBDXY hold for now, even if we prefer selling rallies than buying dips” EUR/USD slips 0.1% to 1.0907; it is set to lose 1% this week, its worst performance in nearly two months after a broad rally in the dollar on Thursday knocked most G10 currencies and boosted the dollar GBP/USD edges up 0.2% to 1.2532; the pound brushes off a weaker-than-expected reading of UK GDP USD/JPY rises 0.2% to 134.76 NZD/USD fell 1.1% to 0.6232, extending losses after the nation’s two-year inflation expectations eased to within the Reserve Bank’s target band AUD/USD dropped 0.2% to 0.6688, weighed in part by kiwi sales In rates, treasuries drifted lower during the London session, after Fed’s Bowman said more hikes will be needed if inflation stays too high. Treasuries cheaper by up to 4bp across long-end of the curve with 2s10s spread steeper by ~2bp on the day; 10-year yields around 3.42%. Stronger S&P 500 futures also added to cheapening pressure on Treasury yields. Bunds were also lower after European Central Bank policymaker Luis de Guindos said more hikes may be possible.  IG issuance slate empty so far; two names priced deals Thursday while at least three issuers were said to have stood down due to market conditions. In commodities, crude futures decline with WTI falling 0.6% to trade near $70.45. Spot gold drops 0.4% to around $2,006. Bitcoin is softer on the session and nearing the USD 26k mark with newsflow generally light after a busy macro week ahead of a relatively busy US session. Action which keeps Bitcoin just above the earlier WTD trough. To the day ahead now, and data releases include the UK GDP reading for Q1, along with the University of Michigan’s preliminary consumer sentiment index for May. Otherwise, central bank speakers include ECB Vice President de Guindos, BoE Chief Economist Pill and the Fed’s Daly, Bullard and Jefferson. Market Snapshot S&P 500 futures up 0.4% to 4,160.00 MXAP down 0.2% to 161.24 MXAPJ down 0.6% to 511.37 Nikkei up 0.9% to 29,388.30 Topix up 0.6% to 2,096.39 Hang Seng Index down 0.6% to 19,627.24 Shanghai Composite down 1.1% to 3,272.36 Sensex up 0.3% to 62,098.69 Australia S&P/ASX 200 little changed at 7,256.65 Kospi down 0.6% to 2,475.42 STOXX Europe 600 up 0.6% to 466.41 German 10Y yield little changed at 2.24% Euro little changed at $1.0911 Brent Futures down 0.3% to $74.76/bbl Gold spot down 0.4% to $2,007.55 U.S. Dollar Index little changed at 102.08 Top Overnight News from Bloomberg China will send a special envoy on a trip to Ukraine, Russia, Poland, France, and Germany as of Mon as the gov’t works to help foster a peace agreement. SCMP Turkish presidential candidate Ince drops out of the race, raising the odds of Erdogan being voted out of office this Sunday . FT The European Central Bank may have to continue raising borrowing costs beyond the summer, according to Governing Council member Joachim Nagel. BBG UK economic data for March is mixed, with soft GDP but better-than-anticipated industrial and manufacturing production. RTRS Janet Yellen reiterated the only good outcome in the debt standoff is for Congress to raise the ceiling. Global markets and US households and businesses need to see "we have a Congress that is committed to paying the bills. . . . That we're not a deadbeat country," she told Bloomberg at a G-7 meeting in Japan. BBG Fed’s Bowman warns the central bank should be prepared to continue hiking rates as employment and inflation are still too hot. WSJ If the U.S. defaults on its debt and is unable to pay all its bills this summer, the pain will fall squarely on the defense industry. National security is by far the largest category of discretionary federal spending, with budgets rising over the past two years to counter China’s military expansion and tackle the conflict in Ukraine. WSJ NBCUniversal’s head of advertising, Linda Yaccarino, is in talks to become the new CEO of Twitter, according to people familiar with the situation. WSJ Tesla raised prices of its vehicles in the US, the third change in less than a month, adding $1,000 to Model X and Model S base and plaid cars. It also recalled some 1.1 million cars in China — almost every EV it's ever sold there — over a defect with their acceleration systems. BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks were mostly lower amid a busy slate of earnings releases and after the subdued performance stateside where regional bank fears resurfaced and initial jobless claims disappointed. ASX 200 was lacklustre with the index constrained by weakness in the energy and mining-related sectors after the recent pressure in underlying commodity prices. Nikkei 225 outperformed and rose to its highest since November 2021 with price action largely driven by earnings results including various blue-chip stocks. Hang Seng and Shanghai Comp. were indecisive as talks between US National Security Adviser Sullivan and China's top diplomat Wang Yi provided some encouragement towards a potential Biden-Xi call, although participants also digested weaker-than-expected Chinese loans and financing data. Top Asian News Chinese Foreign Minister Qin Gang is to visit Australia in July for a reciprocal visit as ties between Australia and China ease, according to SCMP. EU Economic Commissioner Gentiloni said we cannot be too dependent on foreign powers and noted that decoupling would be a dangerous risk for the global economy, while he added that he is not talking about closing the trade with China but is instead talking about making supply chains more secure. European bourses are firmer across the board, Euro Stoxx 50 +0.5%, with the Stoxx 600 set to end the week roughly where it commenced it. Sectors are primarily in the green with Consumer Products/Services outperforming post-Richemont's (+5.0%) FY update while Real Estate/Autos lag. The APAC handover was a mixed one with sentiment inching higher since though with no clear driver/firm narrative behind this. Stateside, ES +0.2%, futures are bid but only modestly so as we await data and more Fed speak after Bowman's early-doors commentary while Yellen provided familiar lines on the debt ceiling. Tesla (TSLA) to recall a total of 1,104,622 of imported Model S, Model X, Model 3 and domestic Model 3 and Model Y, according to Chinese market regulator. Elsewhere, WSJ said NBCUniversal's head of advertising Linda Yaccarino was the candidate in talks to become the new CEO of Twitter. Top European News Riksbank's Thedeen says he is surprised as their rate increases have not "bitten" as he expected, the impact on the economy has not been that great, via SvD Näringsliv. "every time we have presented a new interest rate forecast; we have later revised it upwards... It is a sign that monetary policy may not have the desired effect as we have thought." One explanation for why household consumption continues to be above expectations is their belief that rates will soon decrease rapidly. On QE, says he is somewhat "more sceptical" than perhaps some others have been, should be a "relatively high" threshold for implementing it. Northvolt investment within Germany reportedly to be circa. EUR 3-5bln with hundreds of millions expected in subsidies, via Reuters citing sources. *Follows earlier source reports in the FT and commentary from German officials who suggested that no details have been decided on yet. FX Buck broadly underpinned as DXY fastens grip on 102.000 handle and Fed's Bowman says recent CPI and NFP reports do not provide persistent evidence of disinflation. Kiwi undermined by much cooler NZ inflation expectations, NZD/USD sub-0.6250 from just above 0.6300, AUD/NZD cross tops 1.0700 vs 1.0640 low. Yen and Loonie soft against Greenback, but eyeing decent option expiry interest at 135.00 and 1.3500 for support. Pound retains 1.2500+ status despite monthly UK GDP contraction pre-BoE's Pill and Euro treading water near 1.0900 irrespective of more hawkish ECB commentary. PBoC set USD/CNY mid-point at 6.9481 vs exp. 6.9472 (prev. 6.9101) Fixed Income Bonds chop and churn after extending recovery gains to new w-t-d highs on Thursday. Bunds pivot 136.50 and 2.25% yield, Gilt veer towards base of 101.14-68 range and T-note hovers just under 116-00 within 116-07/115-28 confines ahead of more Central Bank speakers, US import/export prices and UoM sentiment Commodities Crude benchmarks are flat after spending the morning slightly softer and only picking up incrementally most recently with no fresh driver behind the move at the time and action overall in familiar ranges. Iraqi oil minister says Iraq didn't get a reply from Turkish Botas on the request to resume oil flow, expects Northern Oil exports to restart on Saturday with pumping of 500,000 barrels per day. Spot gold resides around this week’s lows, and just above the USD 2,000/oz level following yesterday's advances in the Dollar index, whilst fresh macro new flows remain light; base metals mixed, overall. Turkish Defence Minister says parties to the Black Sea grain deal are approaching an agreement on an extension. Subsequently, Russian Kremlin says nothing new to report, for now, after Black Sea grain deal talks in Istanbul; potential conversation with Turkey's Erdogan and Russia's Putin won't help achieve a deal. Geopolitics China's foreign ministry says China representative of Eurasian affairs to visit Ukraine, Poland, France, Germany and Russia from May 15th to promote peace. Israeli PM Netanyahu will hold a security consultation session shortly with senior security chiefs, according to Al Jazeera. From the EU-China strategy paper, WSJ's Norman highlights that "EU-China relations will not develop if China does not push Russia to withdraw from Ukraine..." US Event Calendar 08:30: April Import Price Index YoY, est. -4.8%, prior -4.6%; MoM, est. 0.3%, prior -0.6% April Export Price Index YoY, est. -5.5%, prior -4.8%; MoM, est. 0.2%, prior -0.3% 10:00: May U. of Mich. Expectations, est. 60.8, prior 60.5 May U. of Mich. Sentiment, est. 63.0, prior 63.5 May U. of Mich. Current Conditions, est. 67.5, prior 68.2 May U. of Mich. 1 Yr Inflation, est. 4.4%, prior 4.6% May U. of Mich. 5-10 Yr Inflation, est. 2.9%, prior 3.0% 14:20: Fed’s Daly Gives Commencement Speech 19:45: Fed’s Bullard and Jefferson Take Part in Panel Discussion DB's Jim Reid concludes the overnight wrap Today is an important one, since at lunchtime I have a slot to purchase tickets for the Paris Olympics in 2024. I honestly don't know what will still be available by the time I'm allowed to log on, but last night my wife and I held a strategy meeting to decide what to aim for. First choice is the 100m final, followed by other nights of athletics. Other events were then suggested, but if they're also taken we're then into the danger zone where I've been instructed to use 'common sense' among the alternatives. I can only hope we're still on speaking terms by this evening. Check back with me this time next year to find out my new favorite sport. Markets failed to race away yesterday, as renewed fears of a slowdown led to a decent risk-off move, with investors growing concerned about weak data releases, the US debt ceiling, as well as the ongoing situation with regional banks. That meant the S&P 500 (-0.17%) lost ground, whilst sovereign bonds benefited from the flight to safety as speculation mounted about central bank rate cuts in response. These moves were evident across several asset classes, and the jitters also saw the US Dollar Index (+0.58%) record its best daily performance in six weeks. Starting with the data, there was disappointment in the US from the weekly initial jobless claims, which came in at 264k (vs. 245k expected) in the week ending May 6. That’s their highest level since October 2021, and whilst we should add the usual caveats about not over-interpreting a single data point, it’s worth noting that claims have been on a broadly upward trend since late January. So that adds to the signs that the labour market has been softening in recent months, such as the decline in the number of job openings as well as the quits rate. Alongside jobless claims, yesterday also saw the release of the US PPI release for April. That came in slightly beneath expectations, with headline PPI only up by a monthly +0.2% (vs. +0.3% expected), which took the annual measure down to +2.3% (vs. +2.5% expected). That added to the sense from the previous day’s CPI release that inflation might durably be heading lower, which could support a pivot towards rate cuts later in the year. Those data releases supported a sovereign bond rally yesterday, with yields on 10yr Treasuries down -5.8bps to 3.375%. The 1m T-bill yield was just lower than unchanged at -0.08bps at 5.450%, but intraday the rate rose as high as 5.48% at one point and continues to see a good deal of intraday volatility. That maturity is exposed to potential debt ceiling default risk, which demonstrates how investors are positioning in case there are issues ahead. In terms of the latest on the debt ceiling, last night it was announced that President Biden and congressional leaders had postponed their planned meeting today until early next week. According to a Bloomberg report last night, the delay was due to conversations on government spending and energy permit reform gaining traction, so at first glance it signals that progress is being made. Our credit team put out a note yesterday (link here) that outlines the potential impact the debt ceiling can have on credit market and our spread forecast. For equities, the generally downbeat newsflow meant that the major indices lost ground, with the S&P 500 ending the session -0.17% lower. The main outperformer were the megacap tech stocks, which benefited from the prospect of lower interest rates. In fact, the FANG+ index advanced another +0.90% to a fresh one-year high, which brings its YTD gains to a sizeable +44.52% already. On the other hand, banks continued to struggle and the KBW Banks Index fell a further -1.25%, closing less than 2% above its low from last week. Here in the UK, the focus was on the Bank of England yesterday, who announced another 25bp hike that took Bank Rate up to a post-2008 high of 4.5%. Seven of the nine committee members voted for the move, and the minutes said that for those members, “there had been repeated surprises about the resilience of demand, while the labour market had remained tight.” There were also significant upward revisions to the BoE’s growth projections, and unlike in February they are no longer forecasting a recession. Nevertheless, growth was still expected to be weak by historic standards, at just ¼% in 2023, and then ¾% in 2024 and 2025. Looking forward, our UK economist writes in his recap note (link here) that another hike in June is more likely than not. That’s in line with current market expectations, and this morning investors are pricing in a 78% chance of a 25bp hike in June. Staying on central banks, there was an interesting release yesterday as the ECB published their Consumer Expectations Survey for March. That showed inflation expectations were moving higher again after their recent decline, with the 1yr expectation up to +5.0%, and the 3yr expectation up to +2.9%. We also heard from Bundesbank President Nagel, who held the door open to the prospect that the ECB might still be hiking in September, by saying that “there’s nothing off the table” for that meeting. And President Lagarde herself reiterated that the ECB’s fight against inflation “is not over”. Despite of the hawkish tones from ECB officials however, European markets traded in line with the US for the most part, with yields on 10yr bunds (-6.3bps) coming down, and the STOXX 600 closing unchanged. See our German economists’ latest chartbook as well yesterday for more on the economic situation there (link here). Overnight in Asia, equities have put in a mixed performance this morning amidst competing signals on the state of the global economy. On the one hand, the CSI (-0.59%), the Shanghai Composite (-0.39%), the KOSPI (-0.32%) and the Hang Seng (-0.13%) are trading lower. However, the Nikkei (+0.86%) has posted a decent advance that’s taken the index to its highest level since November 2021. One factor helping to support sentiment has been the meeting between US National Security Adviser Jake Sullivan and China’s top diplomat Wang Yi in Vienna. That was seen as a positive sign that the two sides were trying to ease tensions, and US-listed Chinese stocks on the NASDAQ Golden Dragon China Index (+3.82%) saw their biggest advance in three months yesterday. Looking forward, US equity futures are also in positive territory, with those on the S&P 500 (+0.20%) and NASDAQ 100 (+0.30%) pointing higher. Since this is the last edition before the weekend, one thing to keep an eye on will be the Turkish election that’s taking place on Sunday. Our EM strategists have published a comprehensive preview of the election (link here), where they examine the process, along with what it could mean for the economy, markets, monetary policy and geopolitics. Yesterday saw some further developments in the contest, with presidential candidate Muharrem İnce withdrawing from the election. Finally, another thing we’ve been watching out for is the prospect of an El Niño this year, which is a warming of sea surface temperatures in the eastern pacific, and is unfortunately correlated with a higher frequency of natural disasters like flooding. Yesterday saw the latest monthly update in the US National Weather Service’s forecast, which now sees a more than 90% chance of an El Niño occurring this winter, as well as a 54% chance of that it will be a strong El Niño (up from 41% last month). If there is an El Niño, then that could have important effects on food prices, as well as many emerging-market economies that would be most impacted by potential changes in weather patterns. To the day ahead now, and data releases include the UK GDP reading for Q1, along with the University of Michigan’s preliminary consumer sentiment index for May. Otherwise, central bank speakers include ECB Vice President de Guindos, BoE Chief Economist Pill and the Fed’s Daly, Bullard and Jefferson. Tyler Durden Fri, 05/12/2023 - 08:15.....»»

All advanced military hardware uses microchips, often in many ways, from communications to navigation to targeting and fire control. Components of Russian Kh-101 cruise missiles on display in Kyiv in February.Oleksii Chumachenko/Anadolu Agency via Getty Images Russia has been launching waves of drone and missile attacks against Ukrainian infrastructure. To replenish its stocks of missiles and other weapons, Russia has scrambled to find more microchips. The hunt for those vital components is a sign of what may await the US and China in a protracted war. In October, after weeks of successful Ukrainian counterattacks, Russia changed its strategy and began a campaign of long-range airstrikes.Using waves of exploding drones and salvos of ballistic and cruise missiles, Russia has sought to destroy Ukraine's power grid, overwhelm its military, and terrorize its population.To date, the Russian military has launched thousands of missiles and drones against Ukrainian critical infrastructure and urban centers, killing and wounding hundreds of civilians.But those strikes have depleted Russia's missile stocks, and Western sanctions are making it harder for Moscow to buy or make a small but critical component: microchips.Russia's scramble to find microchips for its weapons hints at struggles the US and China could face in a future war.Russian strikes and microchipsA Ukrainian military official with electronics from a destroyed Russian T-90M tank in Kyiv in March.Oleksii Chumachenko/Anadolu Agency via Getty ImagesWestern-made microchips and processors power many of Russia's weapon systems, even its most advanced missiles and aircraft. For example, the Orlan-10, one of the Russian military's most widely used drones, is able to gather battlefield intelligence thanks to Western-made parts.While Russia's supply of modern precision weapons is dwindling, it is still making missiles. Ukrainian military intelligence said late last year that Russian factories had produced 40 new missiles a month on average since the war started. That may allow for continued attacks, but it is likely too low to meaningfully support any large-scale Russian offensives.Extensive sanctions imposed by Western countries since the war started have hamstrung Russia's weapons production. The situation has gotten so bad that Moscow has begun cannibalizing older weapons and even scavenging non-military hardware, such as fridges and dishwashers, for microchips that could go into missiles and other weapons.That means that as the war drags on the Russian military will have fewer advanced weapons to fight a Ukrainian military that is receiving more advanced hardware from the West.Russia's struggle to find microchips is also a warning in militaries around the world, especially the US and China.Microchips, major tensionsA 300mm wafer used to produce semiconductors at the TSMC stand during a semiconductor conference in China in August 2020.Yang Bo/China News Service via Getty ImagesAll advanced military hardware uses microchips, often in many ways, from communications to navigation to targeting and fire control. Despite the worldwide dependence on microchips, the market is extremely small, especially for the chips needed advanced precision weaponry.To understand how exclusive the microchip market is, one has just to look at a relatively obscure Dutch company: Advanced Semiconductor Materials Lithography.ASML is the only firm that produces extreme ultraviolet, or EUV, lithography machines, which are needed to make advanced microchips. The machines cost as much as $200 million, and only a few firms can afford to buy them and produce highly advanced semiconductors, including Samsung in South Korea, Intel in the US, and TSMC in Taiwan.TSMC is the world's largest semiconductor foundry, producing about 90% of the most advanced semiconductors and one-third of the new computing power produced each year, according to Chris Miller, a professor at Tufts University and author of "Chip War."A US-Chinese clash over Taiwan, or some other disruption, like a Chinese blockade, that halts exports of advanced semiconductors would affect numerous other industries. A protracted war between the US and China over Taiwan would worsen that impact, and both sides would likely face challenges in replacing their cutting-edge weapon systems and munitions as the available supply of microchips shrunk.President Joe Biden tours the TSMC semiconductor manufacturing facility in Phoenix in December.BRENDAN SMIALOWSKI/AFP via Getty Images"In terms of a war or a blockade between China and Taiwan, the impact on not just the tech sector but all of manufacturing would be close to catastrophic," Miller said in a recent interview with The Verge."It certainly would be catastrophic to Apple or to AMD if we were to lose access to TSMC's facilities, but it's also dishwashers, microwaves, and autos that would face tremendous disruptions," Miller added, describing a manufacturing crisis that would feel like the 1929 stock market crash "in terms of its shock."The US and its allies have sought to curtail China's ability to manufacture advanced semiconductors in order to restrict Beijing's artificial intelligence and defense ambitions.The US, Japan, and the Netherlands agreed earlier this year to further limit export of chip manufacturing equipment to China and are seeking further restrictions. The US has also pledged to spend billions to encourage increased domestic production of microchips.For its part, China has moved to bolster its own domestic chip industry and continue its technological development.While tiny in size, microchips have become a major focus for advanced economies, which want to ensure their supplies so their industries can keep working and their militaries can keep fighting.Stavros Atlamazoglou is a defense journalist specializing in special operations, a Hellenic Army veteran (national service with the 575th Marine Battalion and Army HQ), and a Johns Hopkins University graduate. He is working toward a master's degree in strategy and cybersecurity at Johns Hopkins' School of Advanced International Studies.Read the original article on Business Insider.....»»

From the South side of Chicago to the White House and beyond, Michelle Obama has become a global icon of ... Read more From the South side of Chicago to the White House and beyond, Michelle Obama has become a global icon of success and inspiration – but how much has she earned along the way? Let’s delve into the captivating world of Michelle Obama’s net worth. The net worth of Michelle Obama is estimated to be around $70 million. She has earned her wealth through her successful career as a lawyer, author, public speaker, and as the former First Lady of the United States. She received big book advances and signed deals with Netflix and Spotify. Yet, Michelle prioritizes charitable causes and uses her platform to advocate for social issues. If you think that’s all there is to know about Michelle Obama’s net worth, think again! In the following sections, we’ll dive deeper into how Michelle and her husband amassed their fortune and how they invested their money. So, keep reading to discover more about the inspiring former First Lady and her incredible journey to success. Biography of Michelle Obama  From her humble beginnings in the South Side of Chicago to her rise to prominence as one of the most influential women in the world, Michelle has captured the hearts of millions with her intellect, grace, and unwavering commitment to social causes.  Her remarkable journey to success is a story of perseverance, hard work, and dedication to positively impacting the world. In this biography, we’ll look closely at Michelle Obama’s life, from childhood to time in the White House and beyond. Early Life Michelle LaVaughn Robinson Obama was born on January 17, 1964, in Chicago, Illinois. She grew up in a small apartment on the city’s South Side with her parents and older brother. Michelle’s parents, Fraser and Marian Robinson instilled in their children the importance of hard work and education. As a child, Michelle was bright and ambitious and excelled in school. She was also a talented athlete and played basketball, tennis, and other sports. Despite facing discrimination and adversity as a Black girl growing up in a predominantly White neighborhood, Michelle persevered and became a shining example of what can be achieved through hard work and determination. Education Michelle Obama’s education was crucial in shaping her future success. She attended Whitney M. Young Magnet High School, a highly selective school in Chicago, where she excelled academically and participated in various extracurricular activities. Michelle then earned her Bachelor of Arts in Sociology from Princeton University, followed by a Juris Doctor from Harvard Law School. During her time at Harvard, Michelle was highly involved in community service and activism, working on various civil rights and social justice projects. Her education, combined with her passion for positively impacting the world, would later shape her career and advocacy work. Politics Michelle Obama’s impact on politics goes beyond her role as the former First Lady of the United States. During her time in the White House, she became a champion for important issues such as education, healthcare, and the rights of military families.  Michelle also used her platform to advocate for social causes such as women’s rights, LGBTQ+ rights, and racial justice. Her Let’s Move! campaign, which aimed to fight childhood obesity, became a national initiative that helped children across the country live healthier lives. Today, Michelle continues to use her influence to promote civic engagement, inspire the next generation of leaders, and advocate for a more just and equitable world. Career  Michelle Obama has had a diverse career that has spanned several fields. She started as an attorney at the law firm Sidley Austin, where she met her future husband, Barack Obama.  Later, Mrs. Obama worked as an assistant commissioner of planning and development for the City of Chicago’s Department of Planning and Development. After that, she became the executive director for community affairs at the University of Chicago Hospitals, where she established the “Let’s Move!” campaign to address childhood obesity. She has also been a public speaker, delivering inspiring speeches on various topics, including education, women’s rights, and social justice. Michelle is also an accomplished author, having written several books, including her memoir “Becoming,” which has become a bestseller around the world.  Her career is a testament to her dedication and hard work, and she has inspired countless people to pursue their dreams and positively impact the world. Marriage to Barack Obama Michelle Obama and Barack Obama’s marriage is a symbol of love, equality, and partnership. The couple first met in the late 1980s while working at the same law firm, and their connection was immediate. They married in 1992 and have been together, supporting each other’s personal and professional goals.  As the first African American President of the United States, Barack Obama credited his wife for her unwavering support and described her as his “Rock.” Their marriage has been a source of inspiration for many, showing that true love and mutual respect can thrive even in the most challenging of circumstances. Take a Look at Michelle Obama Opens up About Miscarriage, IVF and Marriage Counseling: Life After The White House  After leaving the White House in January 2017, Michelle Obama has continued to be a prominent figure in public life, advocating for issues such as education, health, and women’s rights. She has written two best-selling books, “Becoming” and “Becoming: A Guided Journal for Discovering Your Voice,” which have inspired millions worldwide to find their voice and pursue their dreams. Michelle Obama has also launched several initiatives, including the “Let’s Move!” campaign, which aims to combat childhood obesity, and the “When We All Vote” initiative, which encourages voter registration and participation. In addition, she is a vocal advocate for girls’ education, having launched the “Global Girls Alliance” to support adolescent girls worldwide.  However, Michelle Obama’s life after the White House is a testament to her commitment to making the world a better place, and her impact on society will continue for many years. What Is Michelle Obama’s Income History?  Michelle Obama’s income has varied throughout her career, reflecting changes in her professional pursuits. Before her husband, Barack Obama, became president, Michelle worked as a lawyer and served as an executive at the University of Chicago Medical Center. During this time, her annual income was reported to be around $317,000. After Barack Obama became president in 2009, Michelle reduced her professional obligations and focused on her role as First Lady. Her official salary as First Lady was $0, but she did receive an allowance to cover some of her expenses. According to tax returns released by the Obamas, their combined income was approximately $5.5 million in 2009, largely due to royalties from Barack Obama’s book sales. Since leaving the White House in 2017, Michelle Obama has been a highly visible public figure, speaking at events, writing books, and launching initiatives such as the “Let’s Move!” campaign to promote healthy eating and exercise. According to Forbes, Michelle Obama earned an estimated $36 million between 2018 and 2021, largely from book sales and speaking engagements. Michelle Obama’s annual income has fluctuated over time, reflecting changes in her professional pursuits and the income generated by her family’s various endeavors. However, she has consistently been a highly successful and influential public figure, with significant earning power and many professional opportunities. The following table shows the estimated annual income of Michelle Obama throughout her career, based on publicly available information. YearNet IncomeIncome SourceBefore 2005$317,000University of Chicago Hospital2009-2016$20.5 millionGovernment Salary,  investment income2017-2021$36 millionBook sales and speeches2018$50 millionNetflix2019-2022$70 millionPodcast Hosting, real state investment,  Michelle Obama’s Investments  Apart from her achievements in the public sphere, Michelle Obama has also made strategic investments that have contributed significantly to her net worth. Books & Memoirs One of the significant investments made by Michelle Obama is in her memoir, “Becoming.” The book, released in November 2018, has been a massive commercial success, selling over 15 million copies worldwide. The book’s success has contributed significantly to Michelle Obama’s net worth, as it is estimated that she earned around $60 million from the book’s sales and related merchandise. Real Estate Michelle Obama has also invested in real estate. In 2005, she and her husband, Barack Obama, purchased a house in Chicago for $1.65 million. The house has four bedrooms, a wine cellar, and a four-car garage. In 2017, the Obamas purchased a home in Washington, D.C., for $8.1 million. The house has nine bedrooms, eight and a half bathrooms, a gym, a terrace, and a garden. The house is estimated to be worth around $11.75 million, contributing significantly to Michelle Obama’s net worth. Stocks & Mutual funds Apart from her real estate investments and memoir, Michelle Obama has also invested in stocks and mutual funds. Her financial disclosures reveal that she invests in various companies, including Apple, Microsoft, Amazon, and Facebook. She has also invested in mutual funds such as the Vanguard 500 Index Fund and the Vanguard Balanced Index Fund. Public Speeches In addition to her investments, Michelle Obama, earns a significant income from her public speaking engagements. She has given speeches for various organizations and events, including the Democratic National Convention, the United States of Women Summit, and the Pennsylvania Conference for Women. She earns around $225,000 per speech, contributing significantly to her net worth. However, Michelle Obama has made strategic investments in various areas, including real estate, stocks, and mutual funds, contributing significantly to her net worth. Her successful memoir, “Becoming,” has been a massive commercial success, earning her around $60 million. Her income from public speaking engagements has also contributed to her wealth.  Michelle Obama’s investments exemplify how strategic investments can contribute significantly to an individual’s net worth. How Did Michelle Obama Build Her Net Worth? Michelle Obama has built her net worth through career achievements, book sales, speaking engagements, and investments. Before her time in the White House, Michelle Obama worked as an attorney at a law firm in Chicago and later served as the vice president of community and external affairs for the University of Chicago Hospitals. Her salary in these positions likely contributed significantly to her net worth. Following her time as first lady, Michelle Obama has also earned income through her best-selling memoir “Becoming” and related speaking engagements. The book, released in 2018, quickly became a bestseller and has sold over 15 million copies worldwide. Additionally, Michelle Obama has embarked on a multi-city tour, where she speaks about her experiences and encourages women to become leaders in their communities. In addition to her book and speaking engagements, Michelle Obama has invested in various companies and initiatives. She and her husband, former President Obama, reportedly signed a multi-year production deal with Netflix in 2018. The couple also purchased a home in Washington, D.C., for $8.1 million in 2019. While it is difficult to estimate Michelle Obama’s net worth, various sources suggest it is $70-100 million. Her earnings and investments have allowed her to become one of the most admired women in the world and one of the wealthiest. How Does Michelle Obama Spend Her Money? Michelle has gained popularity for her accomplishments in public service and her sense of style and grace. With such a large fortune of $70 million, many are curious about how she spends her money. So, we will take a closer look at Michelle Obama’s spending habits and gain insight into her financial priorities. Vacation Michelle’s luxurious lifestyle is often the subject of discussion among her fans and followers, and she is known for her extravagant vacations. With an estimated net worth of around $70 million, Michelle Obama has the financial freedom to travel to some of the world’s most beautiful and exotic locations. She is often seen taking trips to places like Hawaii, Martha’s Vineyard, and overseas destinations like Spain and Italy.  Her vacations usually involve stays at high-end hotels and resorts, and her family and close friends often accompany her. Michelle Obama’s love for travel and her willingness to indulge in luxurious experiences is evident in how she spends her money. While her vacation spending may be extravagant for some, it is clear that she values the experience of travel and the opportunity to explore the world. Charity  Michelle Obama is known for her philanthropic efforts and supports various charitable causes. She established the Obama Foundation with her husband, which aims to inspire and empower the next generation of leaders. The foundation’s initiatives include education and leadership programs, community revitalization, and support for veterans and military families. In addition to the Obama Foundation, Michelle supports several other organizations, including the Global Girls Alliance, which promotes girls’ education worldwide, and the Children’s Defense Fund, which advocates for children’s rights and welfare. Through her charitable contributions, Michelle Obama has shown her commitment to positively impacting the world. FAQs Where does Michelle Obama Live Now? Michelle Obama and her husband, former President Obama, reside in their home in the Kalorama neighborhood of Washington, D.C. The Obamas purchased the eight-bedroom, nine-bathroom mansion in 2017 for $8.1 million. The luxurious home features a private courtyard, a terrace, and a backyard, providing ample space for entertaining guests and enjoying the outdoors. What Did Michelle Obama Do for a Living?     Michelle Obama is a former lawyer, healthcare executive, and the wife of the 44th President of the United States, Barack Obama. She is also a bestselling author, public speaker, and philanthropist. As a lawyer, she worked on intellectual property and healthcare issues. Later, she served as an executive at the University of Chicago Medical Center. As First Lady, Michelle focused on education, health, and public service initiatives. She continues to be an influential figure in public life and a role model for many. How Old is Michelle Obama Now? Michelle Obama was born on January 17, 1964, making her 59 years old as of 2023. Despite her age, she continues to be an influential public figure, promoting various causes related to education, health, and social justice. Her achievements and impact on society have made her an inspiration to many, and her legacy is sure to endure for years to come What is Obama’s Daughter’s Net Worth? Malia Obama’s net worth is estimated to be around $100 thousand. The oldest daughter of former President Barack Obama and Michelle Obama, Malia is a graduate of Harvard University and has been involved in various internships and part-time jobs, including working on the set of HBO’s Girls and interning at the Weinstein Company. She has also been involved in activism and social justice work, including attending protests against the Dakota Access Pipeline.  Whereas, the net worth of Sasha Obama, the youngest daughter of former President Barack Obama, is estimated to be around $1 million. Currently a student at the University of Michigan, Sasha has not yet entered the workforce, but her net worth is believed to be the result of her family’s wealth and her own investments.  Did Obama Sell His House in Chicago? No, Barack Obama did not sell his house in Chicago. The Obama family still owns their home in the Kenwood neighborhood of Chicago, which they purchased in 2005. The Obamas reportedly spent over $8 million renovating the home before they moved in.  While the family spends most of their time at their residence in Washington, D.C., they occasionally visit their Chicago home. There have been rumors about the family potentially selling the property, but it remains in their possession as of now. What are Barack Obama’s Personal Cars? Barack Obama is known for his love of cars. Throughout his presidency, he drove in a heavily armored Cadillac nicknamed “The Beast.” However, he owns several personal cars, including a 2005 Chrysler 300C and a 2018 Ford Mustang GT. He has also been seen driving a 2012 Jeep Grand Cherokee and a 1963 Corvette Stingray. Despite his personal car collection, Obama has always been a strong advocate for fuel efficiency and the use of alternative energy sources to reduce the carbon footprint of transportation. Final Thoughts In conclusion, Michelle Obama’s net worth is estimated to be around $70 million, a figure largely accumulated through her successful career as a lawyer and healthcare executive, as well as her book deals and speaking engagements. Despite her wealth, Michelle has remained committed to philanthropic causes and actively supported various charitable organizations. She has also been a vocal advocate for education, health, and public service issues and has used her platform to inspire and empower the next generation of leaders......»»