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To: Rarebird who wrote (88707)7/22/2022 10:30:52 AM
From: Return to Sender
1 Recommendation   of 89347
 
You are right. Can you show a few examples? That would be instructive. We have seen a greater than 20% rally from the bottom of the downtrend. My greatest worry is that the market might no longer be in a bear market.

Common sense tells me I am wrong to think that. But humility leads me to admit I have been wrong all too often. If I am wrong now we will know within a week or so. If this were to be an end up the bear market, or even an extension of a bear market rally with some legs, then the SMH needs to stay above the top of the upper trendline and do it on higher than average volume:



If I am right then I merely have to wait for the next opportunity to go long when we reach the lower trendline and hit that a time or 2. Might take a while!

RtS

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To: Return to Sender who wrote (88708)7/22/2022 10:32:36 AM
From: Elroy
   of 89347
 
Common sense tells me I am wrong to think that. But humility leads me to admit I have been wrong all too often.

Let me help. I've never been wrong in my life! What's the question!!?

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To: Return to Sender who wrote (88708)7/22/2022 11:22:09 AM
From: Rarebird
2 Recommendations   of 89347
 
I think the market is in a sweet spot here between the end of the bond bear (and interest rate bear) and the beginning of the earnings and employment bear. Earnings have come in fine so far. BAC, AXP, C and JPM say the consumer remains strong. AXP reported this morning and they had strong beats on the top and bottom line. The 10 year bond is on the verge of starting a new bull market, which would be very supportive for equities.

I'm looking at SPX $4330-$4350 before labor Day and then the next leg down to about $3500, the 50% retracement between SPX $4800 and SPX $2200 in the fall.

Economy is headed to recession. Some say we are in recession already. That would be strange given consumer spending and monthly employment numbers, which I admit is a lagging indicator.

Key is Fed. This was a Fed induced bear to squash inflation. Recent data shows that inflation is beginning to fall substantially. I expect dramatic declines in inflation over the next few months. Peak inflation is good for bonds and stocks if the economy doesn't fall into deflation.

Getting the Fed to pause and cut rates is key. Look at the bond market. The 10 year is at 2.78% and the two year is at 2.96%. I think the Fed is done at September meeting, if not sooner.

I'm only bullish till Labor Day. Then bearish for a couple of months. Then we will see how aggressive the Fed gets into lowering rates while economy is in the crapper. Bull markets are born in the darkness of the night where things cannot get any worse and the data becomes less worse.

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To: Return to Sender who wrote (88703)7/22/2022 6:04:25 PM
From: Return to Sender
1 Recommendation   of 89347
 
BPNDX Rose 2 to 80 PnF Buy Signals - [PANW WDAY added]

Mon Tues Wed Thur Fri
AAPL AAPL AAPL AAPL AAPL
ABNB ABNB ABNB ABNB ABNB
ADBE ADBE ADBE ADBE ADBE
ADI ADI ADI ADI ADI
ALGN ADSK ADSK ADSK ADSK
AMAT ALGN ALGN ALGN ALGN
AMD AMAT AMAT AMAT AMAT
AMGN AMD AMD AMD AMD
AMZN AMGN AMGN AMGN AMGN
ASML AMZN AMZN AMZN AMZN
AZN ASML ANSS ANSS ANSS
BIIB AVGO ASML ASML ASML
BKNG AZN AVGO AVGO AVGO
CDNS BIIB AZN AZN AZN
CHTR BKNG BIIB BIIB BIIB
COST CDNS BKNG BKNG BKNG
CPRT CHTR CDNS CDNS CDNS
CRWD COST CHTR CHTR CHTR
CTAS CPRT COST COST COST
DLTR CRWD CPRT CPRT CPRT
EA CTAS CRWD CRWD CRWD
FISV DLTR CTAS CTAS CTAS
FTNT EA DDOG DDOG DDOG
GOOGL FISV DLTR DLTR DLTR
IDXX FTNT DOCU DOCU DOCU
ISRG GOOGL DXCM DXCM DXCM
JD IDXX EA EA EA
KDP ISRG EBAY EBAY EBAY
KHC JD FISV FISV FISV
LCID KDP FTNT FTNT FTNT
LRCX KHC GOOGL GOOGL GOOGL
MAR LCID HON HON HON
MCHP LRCX IDXX IDXX IDXX
MELI LULU ILMN ILMN ILMN
META MAR INTU INTU INTU
MNST MCHP ISRG ISRG ISRG
MRNA MELI JD JD JD
MRVL META KDP KDP KDP
MU MNST KHC KHC KHC
NFLX MRNA KLAC KLAC KLAC
NVDA MRVL LCID LCID LCID
OKTA MU LRCX LRCX LRCX
ORLY NFLX LULU LULU LULU
PEP NTES MAR MAR MAR
PYPL NVDA MCHP MCHP MCHP
QCOM NXPI MELI MELI MELI
REGN OKTA META META META
ROST ORLY MNST MNST MNST
SBUX PEP MRNA MRNA MRNA
SGEN PYPL MRVL MRVL MRVL
SIRI QCOM MU MU MU
SNPS REGN NFLX NFLX NFLX
SPLK ROST NTES NTES NTES
SWKS SBUX NVDA NVDA NVDA
TEAM SGEN NXPI NXPI NXPI
TMUS SIRI ODFL ODFL ODFL
TSLA SNPS OKTA OKTA OKTA
TXN SPLK ORLY ORLY ORLY
VRSK SWKS PEP PEP PANW
VRSN TMUS PYPL PYPL PEP
VRTX TSLA QCOM QCOM PYPL

TXN REGN REGN QCOM

VRSK ROST ROST REGN

VRSN SBUX SBUX ROST

VRTX SGEN SGEN SBUX


SIRI SIRI SGEN


SNPS SNPS SIRI


SPLK SPLK SNPS


SWKS SWKS SPLK


TEAM TEAM SWKS


TMUS TMUS TEAM


TSLA TSLA TMUS


TXN TXN TSLA


VRSK VRSK TXN


VRSN VRSN VRSK


VRTX VRTX VRSN


ZM ZM VRTX


ZS ZS WDAY




ZM




ZS

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To: Return to Sender who wrote (88704)7/22/2022 6:08:11 PM
From: Return to Sender
   of 89347
 
BPSOX Unchanged at 26 PnF Buy Signals. I incorrectly wrote 27 yesterday:

Mon Tues Wed Thur Fri
ADI ADI ADI ADI ADI
AMAT AMAT AMAT AMAT AMAT
AMD AMD AMD AMD AMD
ASML ASML ASML ASML ASML
CRUS AVGO AVGO AVGO AVGO
ENTG CRUS CRUS CRUS CRUS
LRCX ENTG ENTG ENTG ENTG
MCHP LRCX KLAC KLAC KLAC
MKSI MCHP LRCX LRCX LRCX
MPWR MKSI MCHP MCHP MCHP
MRVL MPWR MKSI MKSI MKSI
MU MRVL MPWR MPWR MPWR
NVDA MU MRVL MRVL MRVL
ON NVDA MU MU MU
QCOM NXPI NVDA NVDA NVDA
QRVO ON NXPI NXPI NXPI
SLAB QCOM ON ON ON
SWKS QRVO QCOM QCOM QCOM
TER SLAB QRVO QRVO QRVO
TSM SWKS SLAB SLAB SLAB
TXN TER SWKS SMTC SMTC
WOLF TSM TER SWKS SWKS

TXN TSM TER TER

WOLF TXN TSM TSM


WOLF TXN TXN



WOLF WOLF

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To: Return to Sender who wrote (88712)7/22/2022 6:12:09 PM
From: Return to Sender
   of 89347
 
No New 52 Week Highs or Lows Again Today on the NDX. The trend continues. It should be noted that BPNDX at 80 has broken the downtrend there for the BPNDX. That alone should embolden those more bullish and scare anyone from being overly bearish.

JMHO, RtS

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From: Return to Sender7/22/2022 6:16:22 PM
4 Recommendations   of 89347
 


Market Snapshot

briefing.com

Dow 31901.17 -137.61 (-0.43%)
Nasdaq 11834.08 -225.50 (-1.87%)
SP 500 3961.70 -37.32 (-0.93%)
10-yr Note



NYSE Adv 1278 Dec 1841 Vol 826 mln
Nasdaq Adv 1288 Dec 2949 Vol 4.6 bln


Industry Watch
Strong: Real Estate, Utilities, Consumer Staples

Weak: Communication Services, Information Technology, Consumer Discretionary, Financials, Health Care


Moving the Market
-- Mega cap underperformance after Snap's warning last night

-- Global growth concerns after weak overseas PMI data

-- Weaker-than-expected preliminary IHS Markit PMI data







Closing Summary
22-Jul-22 16:25 ET

Dow -137.61 at 31901.17, Nasdaq -225.50 at 11834.08, S&P -37.32 at 3961.70
[BRIEFING.COM] Ahead of the weekend, the stock market opened on a soft note before early highs saw the S&P 500 reach 4,012.44. The major indices were moving mostly sideways off their highs until about 11:00 a.m. ET when selling conviction picked up. The market continued a steady decline but lifted off its lows just before the close.

Despite the softer finish to the day, each major index is up week-to-date with the S&P 500, Dow, and Nasdaq showing gains of 2.6%, 3.3%, and 2.0%, respectively.

Ahead of the open, there were economic releases that played into the existing global growth slowdown narrative. Preliminary July PMI data from Japan, Australia, France, and Germany all showed weaker-than-expected results. Additionally, the July preliminary IHS Markit Manufacturing and Services PMI data for the U.S. came in weaker-than-expected. The services PMI number clocked in below 50, which is the dividing line between expansion and contraction.

Compounding growth concerns from the economic data was the earnings report and warning from Snap (SNAP 9.95, -6.40, -39.1%). The company had worse-than-expected earnings and declined to provide guidance due to uncertain operating conditions. This dragged down other companies that benefit from online advertising, including The Trade Desk (TTD 47.27, -3.72, -7.3%) as well as mega caps Alphabet (GOOG 108.36, -6.68, -5.8%) and Meta Platforms (META 169.27, -13.90, -7.6%).

The mega cap underperformance today, which included Apple (AAPL 154.09, -1.26, -0.8%) and Microsoft (MSFT 260.36, -4.48, -1.7%), was a big directional driver for the broader market. The Vanguard Mega Cap Growth ETF (MGK) closed down 1.8% versus a 0.6% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and a 0.9% loss in the S&P 500.

It wasn't all bad today with American Express (AXP 157.10, +6.92, +4.6%) and Schlumberger (SLB 35.25, +1.62, +4.8%) outperforming after reporting better-than-expected earnings results.

In the early going, buyers weren't completely deterred by the weak economic data and disappointing earnings reports. Shortly after the open advancers led decliners by a 3-to-2 margin at the NYSE while decliners led advancers by the same margin at the Nasdaq. At the close, decliners led advancers by a 7-to-5 margin at the NYSE and an 11-to-5 margin at the Nasdaq.

Eight of 11 S&P 500 sectors closed in the red with losses ranging from 4.3% (communication services) to 0.3% (industrials). Aside from communication services, the top laggard was information technology, which was dragged down by Apple on the Snap news but also Seagate Technology (STX 76.83, -6.78, -8.1%) after they reported worse-than-expected earnings and issued downside guidance. Communication services was the top laggard due to Meta Platforms but also Verizon (VZ 44.45, -3.21, -6.7%) after the company reported worse-than-expected earnings and issued downside guidance.

Energy futures were mixed at the close. WTI crude oil futures fell 1.8% to settle at $94.76/bbl. Natural gas futures rose 5.2% to $8.20/mmbtu. Unleaded gasoline futures fell 4.0% to $3.02/gal.

Treasury yields fell on the heels of the weaker-than-expected global PMI data this morning. The 2-yr note yield settled ten basis points lower at 2.99% while the 10-yr note yield settled 13 basis points lower to 2.78%.

Ahead of Monday's open, Philips (PHG), Newmont Goldcorp (NEM), RPM Inc (RMP), and Squarespace (SQSP) are among the earnings reporters.

Today's economic data was limited to:

  • July IHS Markit Manufacturing PMI - Prelim 52.3; Prior 52.7
  • July IHS Markit Services PMI - Prelim 47.0; Prior 52.7
There will be no U.S. economic data of note on Monday.

  • Dow Jones Industrial Average: -12.2% YTD
  • S&P 400: -15.7% YTD
  • S&P 500: -16.9% YTD
  • Russell 2000: -19.5% YTD
  • Nasdaq Composite: -24.4% YTD



Market on slight incline into the close
22-Jul-22 15:30 ET

Dow -173.20 at 31865.58, Nasdaq -224.28 at 11835.30, S&P -40.78 at 3958.24
[BRIEFING.COM] Heading into the close, the market is trying to lift off its lows.

The consumer discretionary sector (0.6%) is among the weakest performers today but week-to-date it holds the top spot, up 6.9%. The top laggard on the week is communication services, down 1.2%, and down 4.3% on the day.

Treasury yields fell on the heels of the weaker-than-expected PMI data this morning. The 2-yr note settled ten basis points lower at 2.99%. The 10-yr note settled 13 basis points lower to 2.78%.

Ahead of Monday's open, Philips (PHG), Newmont Goldcorp (NEM), RPM Inc (RMP), and Squarespace (SQSP) are among the earnings reporters.

There will be no U.S. economic data of note on Monday.


Crude oil prices pull back
22-Jul-22 15:05 ET

Dow -236.95 at 31801.83, Nasdaq -252.52 at 11807.06, S&P -49.09 at 3949.93
[BRIEFING.COM] The stock market is trading in a narrow range just above session lows.

At this point, only three of the 11 S&P 500 sectors trade in positive territory: utilities (+0.6%), real estate (+0.2%), and consumer staples (+0.2%).

Separately, WTI crude oil futures are near their lows for the day, down 1.7% to $94.76/bbl. At the same time, the energy sector lost ground, down 1.0% on the day but week-to-date it's up 3.4%.


Robert Half underperforms following earnings, averages still making lows
22-Jul-22 14:25 ET

Dow -265.50 at 31773.28, Nasdaq -270.25 at 11789.33, S&P -54.29 at 3944.73
[BRIEFING.COM] The S&P 500 (-1.36%) has made session lows in the last 30 minutes, alongside its counterparts, as investors aren't showing up with much buying conviction to close the week.

S&P 500 constituents Robert Half (RHI 76.74, -5.96, -7.21%), Align Tech (ALGN 263.08, -21.16, -7.44%), and Hasbro (HAS 80.64, -4.16, -4.91%) dot the bottom of the standings. RHI underperforms following earnings, ALGN caught a tgt cut out of Piper Sandler, and HAS slips in sympathy to Mattel's (MAT 22.43, -1.74, -7.20%) post-earnings losses.

Meanwhile, Pittsburgh-based materials name PPG Industries (PPG 127.48, +4.53, +3.68%) is one of today's top performers following last night's Q2 earnings beat.


Gold snaps string of weekly losses
22-Jul-22 14:00 ET

Dow -218.50 at 31820.28, Nasdaq -255.35 at 11804.23, S&P -49.42 at 3949.60
[BRIEFING.COM] With about two hours to go the tech-heavy Nasdaq Composite (-2.12%) holds the steepest losses on Friday afternoon.

Gold futures settled $14.00 higher (+0.8%) to $1,727.40/oz, snapping its five week losing streak with a 1.4% gain on the week.

Meanwhile, the U.S. Dollar Index is down about -0.4% to $106.48.



American Express charges higher on beat-and-raise report, highlighting resiliency of consumer (AXP)
Updated: 22-Jul-22 14:05 ET


Based on American Express's (AXP) better-than-expected Q2 results and improved FY22 revenue guidance, it appears that consumers aren't battening down the hatches on spending just yet, even as inflation takes a toll on monthly budgets. Unsurprisingly, a surge in travel-related spending, including on airline tickets (+148%), lodging (+48%), and restaurants (+90%), drove AXP's solid performance. Although carriers such as Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL), have issued disappointing quarterly reports, it's not because demand is softening. Rather, costs are rising across the board for airlines, while staffing shortages are limiting their ability to increase capacity. Demand, on the other hand, is not an issue as a rebound in corporate travel is now augmenting the red-hot demand for leisure travel.

AXP's beat-and-raise report provides a bullish gauge for Visa (V) and Mastercard (MA), with the former set to issue Q2 results on July 26, and the latter on July 28. However, it's worth pointing out that AXP's customer base is typically more affluent and better suited to withstand economic challenges. In fact, CFO Jeff Campbell alluded to this factor during the earnings conference call, noting that AXP primarily services premium customers who may be less prone to inflationary pressures than other customers. Therefore, it wouldn't be surprising if AXP outperformed V and MA in Q2.

Beyond the upside EPS and revenue numbers, a few other items stood out from AXP's report.

  • Total network volumes increased by a healthy 25% to $394.8 bln. While travel and entertainment spending led the way, spending on goods and services was also strong at +18%. An important aspect to AXP's growth strategy is to win new business from younger customers. In this regard, AXP succeeded again in Q2 as spending by younger customers increased by 48%.
  • Despite setting aside $410 mln in provisions for credit losses, AXP still exceeded EPS expectations by a comfortable margin. That's an impressive feat, but it also indicates that the company is feeling more cautious about customers' ability to pay their bills in the future.
    • So far, though, there's little evidence to suggest that a problem is brewing. In June, AXP's net write-off rate was just 0.8% compared to 0.9% in May, with consumer loans 30 days past due remaining steady at 0.7%.
  • One disappointment, in our view, is that AXP merely reaffirmed its FY22 EPS guidance again. Like last quarter, when the company also easily beat EPS estimates, it kept its outlook the same at $9.25-$9.65. After back-to-back EPS beats, it's somewhat surprising that AXP hasn't boosted its earnings outlook, especially since it lifted its revenue growth forecast to 23-25% from 18-20%.
    • We believe AXP's hesitation to increase its EPS guidance may be related to higher marketing spending, as well as customers capitalizing on travel-related benefits. On that note, total Q2 expenses jumped by 32% yr/yr to $10.4 bln.
The main takeaway is that AXP's strong quarterly report is an encouraging data point for consumer spending and for V and MA, although its more affluent customer base is an important differentiator. The sharp increase in expenses tarnishes its performance a bit since AXP is paying a hefty price to acquire new customers. Overall, though, it's hard to complain too much about a credit card company that generated revenue growth of 31% in this environment.




Verizon's Q2 numbers pale compared to AT&T's already disappointing results, spooking investors (VZ)
Updated: 22-Jul-22 12:53 ET


Following AT&T's (T) downbeat Q2 earnings yesterday, investors expected a similar fate for Verizon (VZ -7%), sending its shares roughly 3% lower. Instead, Verizon encountered an even bumpier path than AT&T. The company experienced fewer postpaid phone and Fios Internet (fiber optic) net adds in Q2. Verizon also trimmed its wireless service revenue growth for FY22 to +8.5-9.5% from +9.0-10.0%, while AT&T increased its outlook.

Although Verizon endured slightly more aggravation than AT&T in Q2, it still encountered many of the same headwinds.

  • Most notably, inflation reared its ugly head in the quarter, creating pronounced softness in consumer wireless volumes. Verizon also saw intensified competition for consumer attention, likely from AT&T. The weakness culminated in Verizon experiencing consumer postpaid phone net losses of 215K.
  • To ease the pain inflation inflicts on consumers, Verizon is rolling out new services and adjusting prices for some legacy metered plans. One example is the company's "Welcome Unlimited" plan launched last week, which lowers costs by removing device subsidies.
    • On a side note, as the US's largest wireless phone service provider, Verizon's new plan may create headaches for wireless device manufacturers, such as Apple (AAPL) and Samsung (SSNLF), which depend on annual phone upgrades. Carriers tend to offer new phones with discounts at a relatively higher monthly fee. With Verizon noting that handset subsidies are not sustainable long term, we think the inflationary environment may spur a shift by major telecoms to move away from this practice.
  • Along with the reduced wireless service revenue forecast, Verizon also slashed its FY22 adjusted earnings guidance to $5.10-5.25 from $5.40-5.55. The company anticipates lower net adds and promotional activity to offset a roughly $1.0 bln benefit from price hikes. Verizon also expects inflationary pressures to accelerate in the second half of FY22, negatively impacting profitability and earnings.
Despite the multiple challenges in Q2, Verizon still delivered numerous highlights. Notably, its Business segment continued to exhibit strength, reporting 227K postpaid phone net adds in Q2. Also, within its broadband business, Verizon boasted net adds of 268K, a 17% jump sequentially in what tends to be a seasonally softer quarter. Another positive standout was Verizon's remarks on what AT&T was seeing regarding delays in the collections of consumer payments. Verizon has not seen any noticeable change in customer payment patterns, commenting that they are, in fact, "slightly better" than what it was seeing pre-COVID.

Nevertheless, these strong points are being overshadowed by Q2 results that, in some cases, were worse than what we saw with AT&T's already disappointing Q2 report. With Verizon pouring significant capital, up 20% through 1H22 yr/yr, into bolstering its 5G network, investors expect better numbers. And now that inflation has only worsened, consumers may choose slower network speeds if it comes at a reduced price compared to 5G plans, creating an additional headwind for Verizon.




Seagate reports surprisingly large miss and guide down as it faces macro issues
Updated: 22-Jul-22 11:38 ET


Seagate Tech (STX -8%) is trading sharply lower after the data storage giant reported a huge earnings miss for Q4 (Jun) and guided Q1 (Sep) well below consensus. The numbers were pretty shocking because STX typically reports upside and this was its largest EPS miss in five years. Also, the downside guidance was quite severe. As a result, STX plans to reduce its manufacturing production plans.

  • So, what happened? The shortfall was mainly caused by COVID lockdowns in Asia, non-HDD component shortages, and global inflationary pressures intensified late in the quarter.
  • It was not all bad news. Mass capacity revenue, which is Seagate's core business, was flat sequentially which was pretty good. Mass capacity includes nearline (which is sort of in between online and offline), video and image application (VIA), and NAS. US cloud data center demand remained strong. However, persistent non-HDD component shortages led to inventory builds, which prevented new data center build-outs from being completed.
  • The inventory issue is unlikely to get rectified soon because STX expects customers will increasingly focus on reducing their bloated inventory levels before purchasing new product. Hence, the weak SepQ guidance.
  • It is also worth noting that its VIA business is being hurt pretty bad because many of the major projects driving demand for VIA (smart cities, smart factories, autonomous driving) are in Asia, particularly in China.
  • And if all that were not enough, demand for STX's legacy business deteriorated rapidly at the end of the quarter due to reduced consumer spending on PCs and external drives. Granted, STX's legacy business is a dying segment, but it remains a key free cash flow contributor. As such, a shortfall here helped fuel STX's decline in non-GAAP operating margin to 16.1% from 18.1% a year ago.
Our first thought is: why is the stock not down more given the awful numbers? For one thing, the main issue seems to be unrelated to demand, which remains brisk especially for its core mass capacity segment. The big miss was mostly caused by the supply chain and COVID restrictions in Asia. STX is confident mass capacity demand will resume once lockdowns ease and inventory levels normalize.

Also, a lot of the weakness was in the legacy business, which investors do not care as much about. That is not the future of the company. We also think investors are happy the robust dividend (current yield 3.6%) was not cut to preserve cash although we did not think it was in danger given that STX maintained its dividend even during the pandemic. Finally, this report is unwelcome news for peer Western Digital (WDC) because STX's issues are more industry-based, so we think this lowers expectations for WDC's earnings report on August 5.




Snap comes apart after discouraging Q2 report, sending online ad-related names down with it (SNAP)
Updated: 22-Jul-22 11:23 ET


Heading into Snap's (SNAP) Q2 earnings report, there was some hope that the worst was now behind the social media company after it lowered its guidance in late May. In fact, the stock had rallied by nearly 20% this week as investors bet that shares had already hit rock bottom. With SNAP collapsing by 65% year-to-date, that view is certainly understandable. Unfortunately, things have taken a much darker turn for SNAP after the company posted dismal Q2 results and refrained from providing guidance for Q3 due to "uncertainties related to the operating environment." Consequently, SNAP is getting crushed this morning and is taking other online advertising-related names down with it, including Meta Platforms (META), Pinterest (PINS), Google (GOOG), and The Trade Desk (TTD). Notably, Twitter (TWTR) is only showing modest losses after reporting better-than-feared results this morning.

It's not difficult to find weak spots within SNAP's quarterly results, but here are some of the most concerning items.

  • Revenue growth continues to slow appreciably, coming in at just 13% for Q2, compared to 38% last quarter, 42% in 4Q21, and 57% in 3Q21. Worse yet, average revenue per user declined by 4.5% yr/yr.
    • Although SNAP passed on providing specific revenue guidance for Q3, it did disclose that revenue for the quarter is about flat so far on an yr/yr basis.
  • Similarly, daily average user (DAU) growth is trending lower, providing further evidence that SNAP is losing market share to competitors -- most notably including TikTok. After increasing by 23% in 3Q21 and by 20% in 4Q21, DAUs grew by only 18% in 1Q22 and 2Q22.
  • SNAP is burning through an increasing amount of cash as its top-line growth fizzles out. Free cash flow was ($147) mln for the quarter compared to ($116) mln in Q1. To stop the bleeding, the company stated, "We also intend to recalibrate our investment levels to build a path to free cash flow break-even or better, even with reduced rates of revenue growth..."
    • This recalibration will include a substantially reduced rate of hiring and a review of internal processes to drive better productivity in the business.
SNAP is taking hits on multiple fronts, but the most damaging blow may be coming from macroeconomic shocks. In the company's shareholder letter, SNAP highlighted the impact of persistently high inflation, rising interest rates, and geopolitical risks tied to the war in Ukraine as key impediments. SNAP acknowledged that advertising spending is one of the first line items that companies cut back on when cost structures come under pressure. Even in industries where growth is still strong, SNAP is seeing a reduction in marketing spending and lower bids per action due to rising costs of doing business.

Additionally, Apple's (AAPL) iOS privacy changes have had a profound and lasting effect on the value of direct-response ads. Advertisers are finding it more difficult to measure the returns and effectiveness of their ads since many users can't be as easily tracked across apps and sites.

SNAP does have a plan to reignite its growth, principally through new products like Spotlight, Snapchat+, and new augmented reality (AR) experiences through Lenses. However, SNAP's bread-and-butter business is still advertising and that won't change in the near-term. Therefore, the road ahead looks rough for SNAP, but it's important to remember that companies can flip the switch back on for advertising spending just as quickly as they switched it off.




Boston Beer Co struggles with softening demand for Truly Hard Seltzer, driving weak Q2 results (SAM)
Updated: 22-Jul-22 11:04 ET


The softening of Truly Hard Seltzer demand continues to deflate Boston Beer Co (SAM), acting as the culprit behind its double-digit Q2 earnings miss and considerably reduced FY22 guidance. SAM's big bet on hard seltzer demand was grossly overestimated during the summer of 2021, leading to lackluster 2Q21 earnings results and driving a ~25% dive in share price. Since that blunder, SAM has struggled, delivering inconsistent quarterly EPS and revenue upside.

However, despite the rough patches in Q2, SAM finally returned to profitability in a meaningful way after two straight quarters of negative earnings while also topping sales estimates. Furthermore, excluding Truly, SAM is seeing strength in its other "Beyond Beer" brands. Although the stock price is struggling to remain in positive territory today, these silver linings are encouraging.

  • What happened? SAM's hard seltzer segment experienced a 17% decline in volume and a 13% tumble in dollars in off-premise channels in the quarter, worse than the company previously expected. Meanwhile, SAM was lapping challenging comparisons in depletions and shipment growth of +24% and +27%, respectively, from the year-ago period. This partially contributed to the weak 7% and 1% drop yr/yr in depletions and shipments, respectively, in Q2.
    • However, Truly Hard Seltzer was the root of the lackluster depletion growth. When excluding Truly's decline, depletions grew 14% in Q2.
    • Ongoing supply chain hiccups were at the core of the disappointing shipment growth.
  • SAM attributes Truly's blemishes to two major factors.
    • For one, the market is too crowded. This has been a driver behind frustrating Truly sales since last summer. We do not expect this to let up soon, especially as more alternative traditional beers, such as SAM's Twisted Tea and Angry Orchard brands, hit the marketplace.
    • The second factor is tied to inflationary pressures. SAM is noticing a volume shift from hard seltzers to premium light beers, which tend to carry lower pricing. Anheuser-Busch InBev (BUD) brought attention to the strength of premium beer with its upbeat Q1 results, commenting that ongoing premiumization partly drove sales growth in the quarter.
  • Disappointing Q2 results turned into discouraging FY22 guidance. SAM slashed its adjusted earnings outlook to $6.00-11.00 from $11.00-16.00. Likewise, depletions and shipments are projected to fall between 2% and 8%, a significant step backward from an increase of +4-10%. Gross margins, which took a 260 bp hit yr/yr in Q2, were also lowered for FY22. SAM expects margins of 43-45%, down from its prior 45-48% forecast due to lower volume and ongoing supply chain issues.
Overall, SAM endured another challenging quarter, brought on by ongoing softness for its Truly Hard Seltzer brand. However, the company may be finally turning a corner. Twisted Tea expanded its number one position in the Flavored Malt Beverage (FMB) category in Q2 by five share points. Meanwhile, Angry Orchard continued to command the top spot in hard cider in measured off-premise channels.

Although FY22 is shaping up to be less than ideal for SAM, its other brands, as well as an expected launch of Hard Mountain Dew, a product of its PepsiCo (PEP) partnership, position the company for success over the long run.






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To: Return to Sender who wrote (88714)7/22/2022 8:54:20 PM
From: FJB
3 Recommendations   of 89347
 
Week In Review: Manufacturing, Test

Samsung’s $200B Texas fabs plan; game-changing new semiconductor; Skywater’s $1.8B Indiana fab; Siemens to buy Zona; PDF teams with SAP; CHIPS Act progress


JULY 22ND, 2022 - BY: KAREN HEYMAN



Ramping capacity

Samsung is considering building as many as 11 fabs in central Texas, investing an estimated $200 billion and creating as many as 10,000 jobs. The plans came to light when the company filed paperwork for tax breaks. Samsung already has broken ground on a new $17 billion fab in Taylor, Texas. The remaining nine fabs, including two in nearby Austin, would be built over the next couple decades. Tax breaks could amount to $4.8 billion. The fabs would start operating in 2034, with the last two slated to open in 2042.


SkyWater announced plans to build an advanced $1.8 billion fab, in partnership with the state of Indiana and Purdue University, if the CHIPS Act passes. “This endeavor to bolster our chip fabrication facilities will rely on funding from the CHIPS Act. Federal investment will enable SkyWater to more quickly expand our efforts to address the need for strategic reshoring of semiconductor manufacturing,” said Thomas Sonderman, SkyWater’s president and CEO. “Through our alliance with the Indiana Economic Development Corporation and Purdue Research Foundation, we have a unique opportunity to increase domestic production, shore up our supply chains, and lay the groundwork for manufacturing technologies that will support growing demand for microelectronics.”

Meanwhile, the CHIPS Act is making progress. The U.S. Senate voted to begin debating the bill. However, an amendment for millions in additional spending was included, which could lead to more of the back-and-forth that has held up passage for more than a year. Once again applying pressure, U.S. Commerce Secretary Gina Raimondo warned of a “a deep and immediate recession” if the U.S. should ever lose access to Taiwanese suppliers.

Palomar Technologies is expanding its Innovation Center in Singapore to meet growing demand in Southeast Asia for process development and specialty OSATs. “Strong demand from our regional Asia Pacific customer base has driven us to expand the footprint of our Singapore Innovation Center for the second time in five years,” said Rich Hueners, Palomar’s managing director. “This expanded area will serve to host plasma cleaning, dry boxes, and customer-specific test equipment, while the original lab area will continue to host the die attach, wire bond and vacuum reflow equipment.”

Materials Research
New research is claiming cubic boron arsenide could be a “game-changing” semiconductor with a “very high mobility for both electrons and holes,” according to this MIT article. “Imagine what boron arsenides can achieve, with 10 times higher thermal conductivity and much higher mobility than silicon,” said lead author Jungwoo Shin. Find the technical paper here.


Legal
After four years, Apple agreed to a $50 million settlement of the class action lawsuit brought by customers who bought MacBook Airs with “butterfly” keyboards. In the end, that will work out to $50 to $395 per customer repair. In court documents, Apple stated: ““The proposed settlement to resolve this case is not an admission of guilt or wrongdoing of any kind by Apple.”

IQE accused Tower Semiconductor of “ misappropriation of its intellectual property.” In February, Intel agreed to acquire Tower Semiconductor for $5.4 billion.

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To: Return to Sender who wrote (87497)7/24/2022 3:11:57 PM
From: Return to Sender
2 Recommendations   of 89347
 
The U.S. wants to spend $52 billion to become a chips powerhouse. Experts say that hundreds of billions—and decades—is needed to crack its reliance on Asia

finance.yahoo.com

The threat of China looms so large that it has united Washington into advancing discussions on funding an unprecedented package of subsidies for the U.S. semiconductor sector.

On Tuesday, the Senate voted 64-34 to advance debate on the CHIPS Act, a bill that earmarks $52 billion in incentives for chipmakers to build plants in the U.S.—viewed by many in Washington as critical to shoring up American supply chains and the U.S.'s ability to counter China in the global tech arms race. Tuesday’s procedural vote prepares the Senate and House of Representatives for a vote on the legislation by the end of next week.

The CHIPS Act is "about national security, [which] we can't put a price on," U.S. Commerce Secretary Gina Raimondo told PBS on Tuesday. “We need to make more of these [chips] on our shores [to] protect our people,” Raimondo said. CHIPS advocates say the funding will lessen America’s reliance on Asian chip suppliers—a crucial vulnerability that China could exploit—and rebuild its once-powerful chips manufacturing sector.

There’s one catch, though. The tens of billions in subsidies to build chip plants on U.S. soil is unlikely to reduce its dependence on Asia, especially in the short-run, let alone transform it into a semiconductor manufacturing powerhouse. The U.S. likely needs hundreds of billions more in funding, and decades, to secure its chips supply and catch-up with Asian chipmakers in any meaningful way, some experts say, prompting the question of whether onshoring chip manufacturing is the best way to achieve its goals.

Chips powerhouseThe COVID-19 pandemic laid bare the need for countries to secure their supply chains. The pandemic run on semiconductor chips—which are used in everything from phones, computers, cars and kitchen appliances to military equipment—delayed goods shipments, inflated prices, and led to billions in losses alone for companies like Apple, and over $200 billion in losses for the global automotive industry.

The pandemic-led chips shortage exposed the U.S.'s own supply chain vulnerabilities. "The reason we're really in this mess is because for a long time, we haven't invested. We took our eye off the ball," Raimondo told CNN.

The CHIPS Act allocates $39 billion for chipmakers to build plants, known as fabrication facilities (fabs), on U.S. soil. It offers another $11.2 billion for semiconductor research and development.

Yet the tens of billions on the line isn't nearly enough to shift global production dynamics, experts say. The U.S. "isn't the most attractive place for chipmakers, period—otherwise companies would've moved their production a long time ago," rather than wait for the subsidies to kick in, says Shay Luo, principal at consultancy Kearney. The high costs of labor and production limits American manufacturing, she says. Asian nations like Taiwan, China, and South Korea, lead the world's chip production because it's 25% to 40% cheaper to make chips in those countries. The U.S.'s semiconductor manufacturing share has plunged to 12% from 40% three decades ago.

The CHIPS Act’s one-off package, to be divvied up into piecemeal allocations—private firms and public institutions can apply for federal grants of up to $3 billion to build or expand plants—is insufficient to incentivize chipmakers to shift their supply chains in a major way, Rakesh Kumar, professor in electrical and computer engineering at the University of Illinois at Urbana-Champaign told Fortune. Constant state subsidies of at least hundreds of billions is likely required to onshore chip production on a mass scale, he says. He points to Taiwan's TSMC, the world's biggest chips manufacturer, that plans to invest $100 billion over the next three years to maintain its global dominance. The U.S., meanwhile, has fallen behind Asian chipmakers like TSMC and Samsung in advanced chip technology. Intel and other chipmakers heavily rely on TSMC for 5-nanometer chips—the world’s most efficient and most advanced—as the Taiwanese firm accounts for 92% of the globe’s supply, according to Capital Economics. It’d have to "spend much more, with no guarantee of success, just to get even in terms of technology," Kumar says. Intel has said it’s building new fab plants across Europe, Israel, and the U.S. at a cost of $44 billion to try to catch up.



"This is what makes me nervous. Once you're on this path, you have to commit billions... every year to have even a small chance at succeeding, which the [public] may not have the appetite for,” Kumar says.

Robert Reich, a former U.S. Secretary of Labor, a current professor of public policy at the University of California at Berkeley, and author of Saving Capitalism: For the Many, Not the Few and The Common Good, argues that the CHIPS funding is akin to "extortion"—an act that'll subsidize already-rich chipmakers like Intel, with little assurance that they'll actually boost the U.S.'s chip supply. Chip companies are loyal to their shareholders, and will "sell their chips to the highest bidders around the world, regardless of where the chips are produced," he told Fortune.

Chipmakers like Intel, Micron, and GlobalWafers have warned lawmakers that they’ll move their fabs to other countries if the CHIPS Act doesn’t pass. Intel recently delayed the groundbreaking ceremony of its $20 billion new Ohio plant because Congress hasn’t yet passed the bill. Intel CEO Pat Gelsinger cautioned that without the CHIPS funding, the company “would end up investing a lot more in Europe as a result.” This February, $7.3 billion of the EU’s $46 billion European Chip Act was directed at subsidizing Intel’s new fab in Germany.

Yet even an uptick in production on U.S. soil won’t make the country less dependent on Asia, Ling Chen, assistant professor of political economy at John Hopkins University School of Advanced International Studies (SAIS), told Fortune. The U.S.’s lack of manufacturing capacity means it’s pressuring Asian chipmakers to set-up their plants in the U.S., she says. The tens of thousands of jobs that could be created in the next decade from CHIPS will also be dependent on foreign nations since the U.S. doesn’t have the skilled labor to fill these positions. If the U.S. builds 20 new plants and creates 70,000 to 90,000 new jobs, it needs to increase its current workforce by 50% to fill the roles, according to an estimate from Eightfold.AI. One Georgetown University analysis calls for establishing skilled work visa programs for thousands of Taiwanese and South Korean workers to come to the U.S. Simply "supplying capital for setting up plants isn't enough” for the U.S. to become less dependent on Asian economies, Chen says. A better approach might see the U.S. strengthening its allies’ manufacturing, while investing in advanced chip technology at home to ensure future market dominance, Kumar says.

SecurityStill, others argue that Congress must pass the CHIPS Act—or risk widening the already-large gap between the U.S.’s chipmaking abilities and Asian economies, which would make it even more vulnerable to foreign dependence and Chinese coercion. “If we fail to reorient our supply chains, it will continue to [pose] a serious risk to U.S. security,” Dan Katz, co-founder of investment management firm Amberwave Partners and former senior adviser at the U.S. Department of the Treasury.

Building fabs in the U.S. doesn’t make sense cost-wise, Luo says. The funding is “more about a service-level play than a cost-play,” meaning that foundries like Intel will be able to shorten their supply chains and obtain critical components and chips closer to home, thereby reducing the U.S.’s vulnerability to disruptions, she notes.

The U.S. has more reason to pass the CHIPS Act than to reject it, Paul Hong, professor of operations management and Asian studies at The University of Toledo, told Fortune. Without the CHIPS funding, Asian chipmakers could postpone, or cancel their plans to build plants in the U.S., while America will continue to struggle with semiconductor shortages along with the rest of the world, keeping prices high, he says. Even if the bulk of the CHIPS subsidies is passed to Taiwanese and South Korean firms, the fact that their plants will be built and operated in the U.S. and hire mostly American workers means that they’re creating a vital supply chain artery that helps other U.S. suppliers develop and expand, Hong says.

Ultimately if the U.S. subsidizes chipmakers, the government should demand that companies prioritize U.S.-based customers that "use the chips in products that are made in the U.S., by American workers," Reich says. Congress must demand that companies “produce the highest value-added chipmaking in the U.S.—[from] design, to design engineering and high-precision manufacturing, so [that] Americans [also] gain that technological expertise," Reich says.

The CHIPS Act is “not perfect, nor is it ideal,” Hong says. But the U.S. needs to advance decisions that’ll help it secure its supply chain in strategic areas, and mitigating chip shortages is one of the highest priorities at this time, he says.

This story was originally featured on Fortune.com

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To: Return to Sender who wrote (87497)7/24/2022 5:48:37 PM
From: Return to Sender
2 Recommendations   of 89347
 
Big week of earnings for components of the SOX. NXPI on Monday after the close.

Earnings Whisper ®
$3.45
2nd Quarter June 2022
Consensus: $3.39
Revenue: $3.27 Bil

NXP Semiconductors N.V. is a global semiconductor company. The Company designs and manufactures High Performance Mixed Signal semiconductor solutions to meet the requirements of systems and sub-systems in its target markets. High Performance Mixed Signal solutions are an optimized mix of analog and digital functionality integrated into a system or sub-system. The Company's expertise is in RF, analog, power management, interface, security and digital processing products. NXP's solutions are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. The Company claims to provide its customers improved power efficiency, functional performance, miniaturization, quality, durability and adaptability in their electronic systems and application solutions. NXP is based in Eindhoven, the Netherlands, with research and development activities in Asia, Europe and the United States, and manufacturing facilities in Asia and Europe.


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