- 2024-08-11
- 192 comments
Wall St to Lujiazui: BOJ Hints No Hike Soon; Chill for Battery & Chip Sectors? A
Here is the translation of the provided content into English: 1.
The Bank of Japan hints at no rush to raise interest rates, and the market worries that the yen may further depreciate.
Haruhiko Kuroda reiterated the Bank of Japan's stance yesterday, stating that if the data supports it, the central bank will raise interest rates again, but not in a hurry.
If the economic activity and price prospects outlined in the outlook report are realized, the Bank of Japan will adjust the degree of easing.
Maintaining a neutral interest rate is ideal if the price trend is around 2%.
The Bank of Japan will closely monitor market movements with a high sense of urgency.
Some analysts believe that his remarks indicate that the possibility of the Bank of Japan taking policy action at next month's meeting is very small.
Many economists expect the Bank of Japan to wait until December or January next year to raise interest rates again, as the central bank has already raised rates twice this year.
It is worth noting that although the Federal Reserve has started an easing cycle, the yen has reached a short-term high against the US dollar.
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Options and spot trading of the US dollar against the yen show a strong trend in the short term, and changes in options exposure indicate that the market expects the US dollar to continue to strengthen, especially near the level of 144.50-145.00.
In addition, the leadership election of Japan's ruling party to be held this Friday has also caused market concerns.
Analysts believe that the election of former Japanese Minister of the Environment, Shinjiro Koizumi, may have a neutral impact on the yen, but the victory of other candidates, such as Sanae Takaichi, may have an adverse impact on the yen, as she supports the use of fiscal and monetary tools to stimulate the economy.
2.
European battery leader struggles against industry winter, pausing expansion and cutting global workforce by 20%!
Northvolt, a leading battery company in Europe, will cut its global workforce by 20%, reduce spending on other projects, and pause expansion to alleviate increasingly severe financial issues.
The company's own capacity technology issues, coupled with the slowdown in demand for electric vehicles and external challenges such as intensified international competition, have jointly created the current predicament for Northvolt.
According to Swedish media, the company is now seeking 7.5 billion Swedish kronor ($737 million) in funding to pay its September wages.
In June, due to quality issues in delivery, BMW abandoned a 2 billion euro contract with Northvolt.
Subsequently, Volkswagen also complained about Northvolt's slow delivery speed.
However, both companies reaffirmed on Monday that they will continue to support Northvolt.
Currently, Volkswagen holds about 20% of Northvolt's shares, and BMW holds about 2.8%, but neither company has commented on whether they will continue to hold or further expand their investment in Northvolt.
Currently, Northvolt's battery production is less than 1 gigawatt-hour, while its goal is to produce batteries for more than one million vehicles per year, with a total output of 60 gigawatt-hours.
Financially, the company lost $1.2 billion last year and $285 million the year before.
As of the end of 2023, it has $2.13 billion in cash on hand.
The company hopes to increase battery cell production to generate more revenue, but this goal has not yet been achieved.
3.
Chip industry winter warning?
Morgan Stanley is bearish, but analysts disagree: the possibility of oversupply is not high!
Morgan Stanley has recently made a pessimistic forecast for the global chip industry in its report.
Morgan Stanley believes that the AI bubble is about to burst and is concerned about the prospects of SK Hynix and Samsung Electronics, thinking that their revenue growth and profit margins will face greater challenges.
Morgan Stanley downgraded SK Hynix's rating from "buy" to "sell" and cut its target price from 260,000 won to 120,000 won; at the same time, it cut Samsung Electronics' target price by 27.6% to 76,000 won.
This move led to a decline in the stock prices of the two companies.
However, Morgan Stanley's pessimistic forecast has not been accepted by all analysts.
Analyst Min-sung Hwang from Samsung Securities pointed out that SK Hynix's HBM production capacity is expected to increase from 130,000 wafers per month at the end of the year to 150,000 wafers by the end of next year, and the company will only produce products that are expected to be contracted.
He also questioned why Nvidia would seek additional supplies from Samsung Electronics if HBM really faces oversupply.
TrendForce also said that due to the expected increase in the average selling price of DRAM overall by 2025, and the improvement in HBM penetration rate is expected to help stabilize the DRAM market, the industry outlook is not so pessimistic.
Nomura Securities also believes that considering that some chip manufacturers may experience production interruptions, actual oversupply is unlikely to occur.
However, many analysts agree with Morgan Stanley's point that the demand for DRAM from mobile devices and personal computers is slowing down.
Some South Korean securities firms have lowered their expectations for the third-quarter earnings of domestic chip manufacturers.
Regarding the outlook for SK Hynix's stock price, analysts have different views.
Mirae Asset Securities maintains SK Hynix's target price at 260,000 won and expects the company's operating profit to grow by 71% next year.
Analysts from Mirae Asset also said that SK Hynix will perform well even in the chip industry winter, given the rising profitability of HBM.
4.
AI ETF is here!
Aiming to replicate the investment capabilities of Wall Street giants like Buffett.
A financial technology company called Intelligent Alpha has launched an ETF driven by a chatbot - Intelligent Livermore ETF (LIVR), whose investment decisions are generated by three famous large language models: ChatGPT, Gemini, and Claude.
The goal is to imitate the thinking of legendary investors such as Warren Buffett, Stanley Druckenmiller, and David Tepper, and to replicate the investment capabilities of Wall Street giants.
Specifically, Intelligent Alpha will provide specific instructions to the chatbots, guiding them to imitate the style of investment masters, and then create corresponding investment portfolios.
The chatbots will select 60 to 90 global companies, covering multiple industries, themes, and regions.
In fact, LIVR has already started testing last year, with ChatGPT generating the investment portfolio.
After seeing its investment performance exceed the S&P 500 index, the investment portfolio was further expanded, and LIVR officially began trading last week, with a management fee of 0.69%.
Intelligent Alpha also plans to launch a series of AI-driven products, including customized investment portfolios and hedge funds for retail and institutional investors.Shenwan Hongyuan Securities Research Institute Executive General Manager Qian Qimin: The possibility of intelligent systems replacing investors and investment advisors is quite large.
The intelligent systems rely on large language models, and the AI investment trend is expected to continue, with practical application being the key for the future.
⑤Bank of America is bullish: AI will bring new demand to the global oil market!
Due to concerns about a global oversupply of crude oil next year, the crude oil market has recently been filled with a pessimistic atmosphere.
However, analysts at Bank of America pointed out in their latest report that, as investors start to worry about OPEC+ planning to increase more supply and global oil demand may grow weakly, the short positions in the recent oil market have approached a record level.
Such pessimistic sentiment may be exactly a "short squeeze."
Bank of America believes that the AI revolution may bring new demand to the global oil market.
Analysts estimate that with AI-driven data center demand becoming part of the next "productivity revolution," the growth of U.S. electricity demand in the next 7 years will accelerate from 0.2% to 2%.
At the same time, if global GDP grows as expected, energy demand may also grow.
It is estimated that the global GDP will grow by 3.3% in 2025, and as long as the global economy can grow as scheduled, avoiding unexpected risks such as hard landing or trade wars, global energy consumption may increase by 6 million to 9 million barrels of oil per day, equivalent to a year-on-year increase in global energy demand by 3%.
In addition, as the Federal Reserve further relaxes policy and lowers interest rates, it may also help to significantly boost the world economy in the next few quarters.
Bank of America expects that the Federal Reserve will reduce interest rates below 3% by the end of next year, which may significantly stimulate demand for oil and cyclical commodities.
Moreover, geopolitical factors may also bring upward potential to oil prices.
However, contrary to Bank of America's optimistic expectations, the current overall bearish sentiment on oil prices among Wall Street investors is a reality.
In response, Bank of America believes that the risks of trade wars, OPEC+ price wars, or economic hard landings may temporarily push oil prices below $60 per barrel, but after reaching this level, the oil market may quickly move towards balance.
Mi Yuan Investment Equity Investment Director Jian Jia: Despite the current concerns about oversupply in the crude oil market, the analysis by Bank of America provides a different perspective, suggesting that the development of AI technology and global economic growth may stimulate new oil demand, thereby supporting oil prices.
In addition, the Federal Reserve's loose policy may further stimulate the economy and demand for commodities.
However, this optimistic expectation is in stark contrast to the widespread bearish sentiment in the market, indicating that market sentiment is complex and changeable, and investors should remain cautious and closely monitor market dynamics and macroeconomic indicators.
Shenwan Hongyuan Securities Research Institute Executive General Manager Qian Qimin: The AI computing power will greatly increase energy demand, and the potential surge in energy demand in the future should not be overlooked.