In today’s top stories, Chinese ecommerce leviathan Alibaba has seen its stock plunge over relocation rumours, while Korean chipmaker Samsung is taking recent losses in its stride. There are signs that healthcare might follow big tech into a post-pandemic contraction, with biotech company Amgen laying off some 1.2% of its staff. Elsewhere, the US-China trade war intensified as Washington blocked US firms from supplying Huawei, and it is looking like the most recent crypto winter might be over almost as soon as it began, with ETFs in the space seeing substantial boosts.
Investors turn cautious on Alibaba
The market value for Alibaba [BABA] has tumbled $28bn since Monday, following rumours the ecommerce giant may be moving its headquarters to Singapore. The stock had been rallying since the turn of the year on the back of hopes that China’s reopening will fuel a boom in consumer spending. “Some investors are getting cautious after such a sharp rally, and they are waiting for data on a fundamental recovery”, Banny Lam, head of research at CEB International, told Bloomberg.
Covid vaccine demand slump
Biotech company Amgen [AMGN] has announced it is to trim its US headcount by roughly 300 employees, or 1.2% of its total workforce, a sign that healthcare isn’t immune from the layoffs currently afflicting big tech, according to Reuters. Cooling demand for Covid-19 vaccines is expected to have weighed on Pfizer’s [PFE] Q4 earnings, reported yesterday. Bank of America, Wells Fargo and UBS have all downgraded the drugmaker since the start of 2023.
Samsung to increase capital expenditure
Soft consumer and enterprise demand caused Samsung Electronics’ [005930.KS] quarterly profit for its key semiconductor segment to sink by 97%. Nevertheless, the chipmaker remains unfazed, announcing it’ll increase capex in 2023. The Samsung Electronics share price closed down 3.6% amid investor concerns that the capex increase could drive supply and lower prices. Fellow Korean memory chipmaker SK Hynix [000660.KS] closed down 2.4% for the day. Samsung expects the smartphone market to shrink later this year.
US halts licences to supply Huawei
The US-China trade war intensified on Monday as Washington stopped approving licences for US firms to supply Huawei. There have long been fears that the controversial Chinese tech giant’s products might contain deliberate security flaws that could be exploited for espionage. Huawei’s US suppliers include Intel [INTC] and Qualcomm [QCOM]. “This will have [a] major impact on US supplier revenue for mostly commodity semiconductors,” Paul Triolo, a China tech expert at consultancy Albright Stonebridge, told the Financial Times.
Crypto winter shows signs of thawing
Cryptocurrencies have been on the rise in recent times, boosting funds with exposure to the blockchain industry. The Valkyrie Bitcoin Miners ETF [WGMI] is up 91.7% year-to-date through Tuesday, while the Ark Innovation ETF [ARKK] is up 23.3%. Elsewhere, the Premier League has announced a partnership with Sorare, an NFT-based fantasy football game, and a US bankruptcy court is permitting failed crypto lender BlockFi to auction off its mining equipment and assets.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.