In today’s briefing:
- Ohayo Japan | ECB Cuts as Eyes Turn to Fed
- US Banks and New Capital Rules – GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best
- TMT Daily – EVs, CATL, AMD V NVDA, Samsung V TSM Tokyo Electron, ASML, Telco, Shopify, Match, Bumble
- Japan Morning Connection: Shiseido May Squeeze off the Lows
- [Blue Lotus Daily]:ATAT US/TCOM US/AAPL US/1810 HK/981 HK/XPEV US/1211 HK/9863 HK/NIO US/ LI US
- Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?
- Japan’s Malls up 2.7% but New Builds Down
- [Blue Lotus Daily-TMT Update]:PDD US/BABA US/SE US/JD US/
- Mat-Chem Notes – Weakness of Industrial, Ag, and EV Markets Leaves Few Options
Ohayo Japan | ECB Cuts as Eyes Turn to Fed
- U.S. stocks climbed Thursday after a key inflation report showed the producer-price index rose 0.2% in August, in line with expectations
- The European Central Bank cut its deposit rate by 25 basis points to 3.5% amid slowing inflation and weak economic growth
- Sumitomo Corporation is launching a renewable energy business in India, investing 100 billion yen with a local partner to develop solar and wind power plants
US Banks and New Capital Rules – GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best
- The Fed’s Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new
- JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of ‘importance to system’ so that JPM is ranked as first and State Street the lowest
- Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared
TMT Daily – EVs, CATL, AMD V NVDA, Samsung V TSM Tokyo Electron, ASML, Telco, Shopify, Match, Bumble
- EV demand slump prompts CATL production cuts, lithium prices fall below breakeven
- What happened to Nvidia’s MOAT? AMD is gaining inference traction
- Samsung issues at 2nm and 4nm and TSM continues to widen tech leadership. TSM as a Monopsony could hurt TEL and ASML in time
Japan Morning Connection: Shiseido May Squeeze off the Lows
- US homebuilders outperformance after Freddie Mac reported 30-year mortgages were at 18-month lows a positive for Sumitomo Forestry and Sekisui House.
- Shin-Etsu should also see upside given its US PVC exposure, with the stock looking oversold after heavy foreigner selling MTD.
- Shiseido’s first new product launch in 4-years for ‘Elixir’ range, along with reports that its domestic business is picking up, may be enough to spark a squeeze off multi-year lows.
[Blue Lotus Daily]:ATAT US/TCOM US/AAPL US/1810 HK/981 HK/XPEV US/1211 HK/9863 HK/NIO US/ LI US
- ATAT US/TCOM US: Hotel demand grow steadily in 1st week of September, with leisure travel being the main driver(+/+)
- AAPL US/1810 HK/981 HK: Pre-registrations for iPhone 16 series in China well below prior models.(-/+/+)
- AAPL US/1810 HK/981 HK: Huawei Mate XT receives positive commentary for design (-/-/+)
Silicon Wafers. Recovery Is Nigh Yet Valuations Have Slumped To 5 Year Lows. But Why?
- During Q224, the top 4 silicon wafer manufacturers saw their revenues increase 12.3% QoQ to ~$2.5 billion. This was down 3% YoY.
- Silicon wafer area shipments in Q224 amounted to 3,035 million square inches (MSI), an increase of 7.1% QoQ but a decline of 8.9% YoY.
- The Silicon wafer segment is entering a recovery phase. Yet, you can buy the key players today for the same price you would have paid 5 years ago. That’s nice..
Japan’s Malls up 2.7% but New Builds Down
- Shopping malls have finally recovered to pre-Covid sales levels now that consumers are travelling freely (at least inside Japan) and spending more on discretionary items in some segments.
- But development of new malls is slow due to falling demand from tenants, saturation in the best locations, higher costs and the labour shortage.
- The outlook remains muted, with little prospect of a major change in investment schedules although some larger developments are in the pipeline.
[Blue Lotus Daily-TMT Update]:PDD US/BABA US/SE US/JD US/
- PDD US/BABA US: PDD’s updated ad-tool to launch this week (+/-)
- BABA US: Freshippo private-brand food products to launch in Australia supermarket eBest (/)
- PDD US/SE US : Temu remains most-downloaded app in LATAM during August (+/-)
Mat-Chem Notes – Weakness of Industrial, Ag, and EV Markets Leaves Few Options
- WTR-CMI last week. In a down week for the market, with both the S&P 500 and Russell 2000 declining 4.2% and 5.7%, respectively, 29 of the 30 stocks in our WTR-CMI Index likewise saw their prices fall 4.0%, with AVD being the only exception, appreciating 9.1% for the week.
- YTD, the S&P 500, heavily weighted toward tech and internet stocks, has increased 13.4%, while our WTR-CMI Index has increased 7.2%, outperforming the broader Russell 2000’s 3.2% rise, despite lithium stocks’ 50%- plus declines.
- Recycled plastics market gaining acceptance. LYB announced the acquisition of German APK AG, a mechanical plastics recycler to bolster its circular economy and low-carbon credentials, while AVTN launched a pigment additive for plastics used in automotive plications made from recycled tires, as an alternative to carbon black, again aiming at helping its customers reduce their carbon impact while improving its own circular economy efforts.
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