Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul><li>Upwards revisions to Euro area labour costs and a jump in negotiated wage settlements extend cost growth inconsistent with a sustainable return to the 2% inflation target.</li><li>The ECB hopes this will subside swiftly in 2025, with productivity growth and squeezed profit margins helping contain inflation. But these hopes seem set to be disappointed.</li><li>Persistent wage pressures should prevent a 50bp rate cut in December and limit further cuts. Less dovish fundamentals feed bullish Euro seasonality, magnified by positioning.</li></ul><p></p>

Upwards revisions to Euro area labour costs and a jump in negotiated wage settlements extend cost growth inconsistent with a sustainable return to the 2% inflation target.The ECB hopes this will subside swiftly in 2025, with productivity growth and squeezed profit margins helping contain inflation. But these hopes seem set to be disappointed.Persistent wage pressures should prevent a 50bp rate cut in December and limit further cuts. Less dovish fundamentals feed bullish Euro seasonality, magnified by positioning.

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Thematic (Sector/Industry)

<ul>
<li>Revenues of $7.05 billion were marginally higher than midpoint of $6.93 billion, up 4% QoQ and up 5% YoY.  Guided current quarter at $7.15 billion +1.5% QoQ , +10.5% YoY</li>
<li>Most WFE share prices have retreated to early 2022 levels, matching with when annual revenues first exceeded the $100 billion level</li>
<li>After a 44% growth spurt in 2021, we have had three years with mostly no growth. We expect the same in 2025. Invest accordingly</li>
</ul>


Revenues of $7.05 billion were marginally higher than midpoint of $6.93 billion, up 4% QoQ and up 5% YoY.  Guided current quarter at $7.15 billion +1.5% QoQ , +10.5% YoY
Most WFE share prices have retreated to early 2022 levels, matching with when annual revenues first exceeded the $100 billion level
After a 44% growth spurt in 2021, we have had three years with mostly no growth. We expect the same in 2025. Invest accordingly


For Its WFE Q324 Season Finale, AMAT Returns ASML's Favour & Sinks Semis Yet Again

<ul><li>October's final Euro area inflation print confirmed its surprisingly steep rise to 2% y-o-y. Strength was not only broad across countries but components with median rates rising.</li><li>Underlying inflation pressures were broadly above expectations and target-consistent levels. Upwardly revised labour cost growth won’t help sustain 2% HICP inflation.</li><li>Confirmed price and wage inflation strength adds to hawkish GDP and unemployment news, curbing the case for 50bp to remain less likely than the dovish market hopes.</li></ul><p></p>

October's final Euro area inflation print confirmed its surprisingly steep rise to 2% y-o-y. Strength was not only broad across countries but components with median rates rising.Underlying inflation pressures were broadly above expectations and target-consistent levels. Upwardly revised labour cost growth won’t help sustain 2% HICP inflation.Confirmed price and wage inflation strength adds to hawkish GDP and unemployment news, curbing the case for 50bp to remain less likely than the dovish market hopes.

<ul>
<li>The pace of recovery in 200 millimeters appears to have been very weak. Customers continue to respect LTA prices but we have to push out delivery timing which impacts volumes.</li>
<li>China appears to have developed their own capability to fabricate wafers. Quality does not necessarily appear to be very good but there is strong pressure to comply with “Buy China” </li>
<li>The recovery in legacy applications has been surprisingly slow. At this stage we don't know whether it is a slow recovery or in fact that there won't be a recovery.</li>
</ul>


The pace of recovery in 200 millimeters appears to have been very weak. Customers continue to respect LTA prices but we have to push out delivery timing which impacts volumes.
China appears to have developed their own capability to fabricate wafers. Quality does not necessarily appear to be very good but there is strong pressure to comply with “Buy China” 
The recovery in legacy applications has been surprisingly slow. At this stage we don't know whether it is a slow recovery or in fact that there won't be a recovery.


SUMCO Despairs On Legacy Rebound, EVs, China, Visibility Etc...

Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

<ul>
<li>Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.</li>
<li>In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.</li>
<li>The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.</li>
</ul>


Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.
In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.
The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.


Cyprus
Insights on Cyprus

EA Wages Are Too Inflationary For 50bp

Upwards revisions to Euro area labour costs and a jump in negotiated wage settlements extend cost growth inconsistent with a sustainable return to...

Phil Rush

For Its WFE Q324 Season Finale, AMAT Returns ASML's Favour & Sinks Semis Yet Again

AMAT's so-so quarter & outlook tanked semis as earnings season ends, just like ASML did when it began. Most WFE share prices are now back at early...

William Keating

EA Inflation Doesn’t Need A 50bp Cut

October's final Euro area inflation print confirmed its surprisingly steep rise to 2% y-o-y. Strength was not only broad across countries but...

Phil Rush

SUMCO Despairs On Legacy Rebound, EVs, China, Visibility Etc...

There isn't much point in speculating about things we don't understand. We don't know whether it is a slow recovery or if there won't be a...

William Keating

2025 High Conviction Idea: Gold

Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook. It's also on the verge of staging...

Cam Hui