Taking Stock : Bi-Weekly Review

US ONLINE SHOPPING CLIMBS RECORD HIGH

Thanks to thanksgiving online consumers in US were estimated to spend $5.1B on the holiday. This comes in despite record $75B online spending YTD fuelling inflation in core sectors.

Shoppers were recorded spending at a pace of $3.5M per minute on thanksgiving. Most shoppers were also forced online as big retailers like Walmart and Target closed physical stores. Electronics and apparel were among the top categories with online purchases for electronics doubling since September. Oculus headsets, watches, Nintendo switch being the top sellers.

Read full story here: https://bit.ly/3oEESBT

DIDI’S US DELISTING REVIVES FEARS

?September saw China’s strict regulatory measures towards its burgeoning tech industry successfully discourage investor sentiment with imposed restructuring on Ant Group.

One quarter later, Chinese regulators have called for delisting of Didi from NYSE over concerns on sensitive data leakage. Post delisting some alternatives for Didi include raising float in Hong Kong, privatization or government investment that could give the state effective control over the firm. Such an exodus of a recent IPO - Didi - could further reinforce fears amongst American investors.

Read full story here: https://reut.rs/3pBBRlc

DEMAND SLOWS FOR APPLE’S IPHONE

During the last quarter earnings in October, Apple Inc. CEO expressed his concern over global supply crunch that costed the company $6B in sale revenues.

But now, Apple has warned its suppliers of dwindling demand for its iPhone 13 that started shipping in September 2021. iPhone being the flagship product accounts for half of Apple’s revenue at $365B in last fiscal year. Such weakening has also hurt Apple’s partners like TSMC and IQE. These firms make semiconductor chips and wafers for Apple’s iPhones.

Read full story here: https://yhoo.it/3oMJRRn

ENERGY & GEOPOLITICS

OPEC+ DECIDES TO CONTINUE WITH OIL OUTPUT HIKE

Despite repeated COVID waves since 2020 and unforeseen detection of Omicron strain last week OPEC+ has agreed to go ahead with a 400k barrels per day hike starting January 2022. Week prior on November 23rd Biden along with fellow major oil consuming countries systematically released oil from their strategic reserves, thereby, mounting pressure on the oil producing countries. However, this hike could also discourage any further increase in shale production.?

Read full story here: https://reut.rs/3DH8aEa

COVID UPDATE

OMICRON POSES THREAT TO SUPPLY CHAIN & INFLATION

The Organization of Economically Developed Countries (OECD) revised inflation estimates upwards across the G20 nations. Such upward revisions are predicated on Omicron’s added uncertainty in delaying the return to pre-pandemic normality. However, despite the possibility of lockdowns and potential job losses, US Fed Chair on November 30th surprisingly called for a faster winding down of bond purchases to curb further surge in inflation.

Read full story here: https://bit.ly/3oAc4KR

STOCK IN FOCUS

ADVANCED MICRO DEVICES. (AMD)

AMD produces semiconductor products and devices. The company offers microprocessors, embedded microprocessors, chipsets, graphics, video, and multimedia products and supplies them to third-party foundries. It also provides assembling, testing, and packaging services. It might be worthwhile to keep AMD on your watchlist.

Strong global outlook

Global chip scarcity and aggressive capital allocation poses little threat to credit quality to the sector. Strong demand bias and a positive ratings trajectory are driving an improved fundamental outlook. Strong Capex and M&A will leave semiconductor companies poised for long-term growth and stronger business positions. With nearly $100 Bn of M&A deals in the pipeline, the sector is poised to benefit from enhanced inorganic growth synergies.

AMD’s superior technology poised to shape the chip industry future

AMD is expected to pose a serious threat to its competitors on the back of manufacturing chips with small node sizes. In July 2020, Intel’s 7-nanometer (7nm) chip was unsuccessful, and the company announced to delay the rollout of this chip till 2023. AMD is on its way to produce 3nm and 5nm chips. According to Fast Technology, AMD has booked its share of 5nm and 3nm capacity with TSMC for the next 2 years to satisfy growing consumer demand.

UPCOMING GLOBAL EVENTS

FRIDAY, DEC 10

US - Inflation Rate YoY NOV

US - Michigan Consumer Sentiment Prel DEC

RECOMMENDATIONS

BOOKS

• “Big Mistakes” by Michael Batnick
• “The Big Short” by Michael Lewis

“To contract new debts is not the way to pay old ones.” – George Washington

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