Markets are focusing on Friday’s US employment report. Softer job creation would reduce the likelihood of another Fed increase and could support bonds, REITs, utilities and growth stocks.
However, a very weak report would shift the concern from inflation toward recession and earnings risk. The preferable outcome is moderate employment growth accompanied by easing wage pressure.
Earnings
The earnings season remains strong overall, but markets are punishing companies whose results do not exceed very high expectations.
* AMD: data-centre revenue more than doubled to US$6.72 billion, but its shares fell because investors wanted a larger AI payoff.
* SpaceX: reported record revenue, but its shares fell sharply because of concerns over heavy AI capital expenditure, cash burn and whether Starlink can continue funding the investments.
* Disney and Booking Holdings: rose after stronger operating results, indicating that consumer travel demand remains comparatively resilient.
The message is clear: strong growth is no longer sufficient when valuations already price in near-perfect execution.
AI and semiconductors
The structural AI thesis remains intact, but today’s decline confirms that chip stocks are entering a more volatile and selective phase.
The most defensible beneficiaries remain:
1. high-bandwidth memory,
2. advanced semiconductor manufacturing,
3. networking and optical interconnects,
4. cooling and power management,
5. transformers and switchgear,
6. electricity generation and grid connections.
Chinese semiconductor-equipment competition is also emerging as a longer-term issue. Samsung and SK Hynix are reportedly considering equipment from China’s AMEC, potentially increasing competitive pressure on established US equipment suppliers.
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- dropppie·08-06 14:12I trimmed some AI chip names already, cooling and power still look cleaner here. HBM and tools still good, but AMEC pressure is real no?LikeReport
- AmandaViolet·08-06 14:12120k to 150k payrolls with cooler wages is the sweet spot. Anything sub 100k and recession fear probably hits REITs and growth too, no?LikeReport