Biden Administration moves to ban chip sales into China

02Sep

Biden Administration moves to ban chip sales into China

 

The Dow Jones Industrial Average and the S&P 500 ended the first day of September on a high note as traders looked forward to the jobs report tomorrow

The Dow cut its losses from earlier in the da jumping nearly 0.5 per cent, in the final minutes of trading. The S&P 500 rallied 0.3 per cent to 3,966.85, after trading lower for most of the day. Both snapped a four-day losing streak.

Meanwhile, the Nasdaq Composite fell about 0.3 per cent, to 11,785.13, to post its first five-day losing streak since February. It still came back from deeper losses earlier in the session.

The moves came as the 2-year US Treasury yield topped 3.5 per cent, the highest level since November 2007. That weighed on rate-sensitive growth stocks, making their future profits less attractive.

Overnight chipmaker Nvidia shares fell 7.7 per cent after the chipmaker said the US government is restricting some sales in China. The company said that US officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms' ability to carry out advanced work like image recognition and hamper Nvidia's business in China.

Other companies that make tool or design software have received similar letters in recent weeks informing them that the high-end technologies they export to China have been restricted.

The restrictions are part of a cold war between China and the United States for primacy in advanced technologies.  

To add to this, after years of growing their Chinese operations, US tech firms are starting to relocate production, with the moves small so far. Some of those moves include :

  • Apple moved some production of AirPods to Vietnam in 2020, where it also makes watches and iPads. More iPhone production will be done there as well.
  • Google will shift a portion of its latest Pixel phone manufacturing to Vietnam from China.
  • Microsoft’s Xbox and Amazon’s Fire TV devices, both of which used to be exclusively made in China, now ship from Vietnam and India

Over two decades, the tech industry has built up a low cost and formidable supply chain in China , but there is now a political push to diversify this supply chain. It looks like more and more capital is going to pull manufacturing out of China to find alternatives like Vietnam and India.

Across the sectors, markets were defensive as health care and utilities out performed while the oil price tumbled again on Thursday, as new Covid-19 lockdown measures in China added to worries that high inflation and interest rate hikes are denting fuel demand.Oil fell 3.3 per cent $86.61 per barrel.

Best performing industries included biotech, retail, media and real estate. Worst performers included industrial metals, precious metals, semi conductors and internet services.

Currencies

One Australian dollar has weakened by ½ cent compared to the US dollar yesterday, buying 67.91 US cents (Thu: 68.45 US cents), 58.82 Pence Sterling, 95.19 Yen and 68.27 Euro cents.

Commodities

Iron ore futures are pointing to a 2.9 per cent fall.

Gold prices fell below the key $1,700 level on Thursday for the first time since July, Gold lost $16.90 or almost 1 per cent to US$1709 an ounce.

Silver was down $0.22 or 1.2 per cent to US$17.67 an ounce.

Copper fell $ 11.20 or 3.2 per cent to US$340.65 a pound.

Oil fell $2.94 or 3.3 per cent to US$86.61 a barrel.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris fell 1.5 per cent, Frankfurt lost 1.6 per cent and London’s FTSE closed 1.9 per cent lower.

Asian markets closed mostly lower. Tokyo’s Nikkei lost 1.5 per cent, Hong Kong’s Hang Seng fell 1.8 and China’s Shanghai Composite closed 0.5 per cent lower.

Yesterday, the Australian sharemarket lost over 2 per cent to 6846.

Ex-dividends

There are 17 companies set to trade without the right to a dividend.

Ampol (ASX:ALD) is paying 120 cents fully franked
Eagers Automotive (ASX:APE) is paying 22 cents fully franked
Big River Industries (ASX:BRI) is paying 10 cents fully franked
Base Resources (ASX:BSE) is paying 3 cents unfranked
Bravura Solution (ASX:BVS) is paying 3.2 cents unfranked
Coles Group (ASX:COL) is paying 30 cents fully franked
Cyclopharm (ASX:CYC) is paying 0.5 cents unfranked
Helloworld Travel (ASX:HLO) is paying 10 cents fully franked
Infomedia (ASX:IFM) is paying 3 cents 14 per cent franked
Kelsian Group (ASX:KLS) is paying 9.5 cents fully franked
Lifestyle Communities (ASX:LIC) is paying 6 cents fully franked
Mineral Resources (ASX:MIN) is paying 100 cents fully franked
Prime Financial (ASX:PFG) is paying 0.6 cents fully franked
Pental (ASX:PTL) is paying 1.7 cents fully franked
SDI (ASX:SDI) is paying 1.75 cents fully franked
Symbio Holdings (ASX:SYM) is paying 4.7 cents fully franked
Terracom (ASX:TER) is paying 10 cents unfranked

Dividends payable

There are five companies set to pay eligible shareholders today.

Hotel Property Investments (ASX:HPI)
Korvest (ASX:KOV)
Microequities Asset Management Group (ASX:MAM)
National Storage REIT (ASX:NSR)
QV Equities (ASX:QVE)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network


Source: Finance News Network

Share this post

Related Posts

13Sep

Nasdaq falls as Apple unveils iPhone 15, crude oil hits highest level since Nov 22

13 Sep 2023 - The Nasdaq Composite fell Tuesday after Oracle shares plunged on disappointing results, whilst Apple unveiled the new iPhone model.

Read More
08Sep

Wall Street closes mixed on disappointing jobs data: Aus shares to open lower

09 Sep 2019 - Australian shares look set to open lower following an uneventful end to the week on Wall Street. US stocks closed little changed on Friday after the release of disappointing jobs data. Blue Sky Alternatives Access Fund (ASX:BAF) has announced that a binding agreement has been executed to sell all of the interests in the Atira student accommodation portfolio.

Read More
17Jul

Cedar Woods (ASX:CWP) forecasts 50%+ drop in profit: Aus shares gain 1.9% over the week

17 Jul 2020 - The Australian share market rose in early trade, slumped mid-session as the reintroduction of some pandemic restrictions weighed on the market, then jumped in the last half an hour of trade to close 0.4 per cent higher. Over the week, the market has gained 114 points or 1.9 per cent. Cedar Woods Properties (ASX:CWP) forecasts that its 2020 financial year net profit after tax is expected to be in the range of $20 to $21...

Read More
23Jul

Frydenberg reports $85.8 billion deficit: Aus shares 0.2% up at noon

23 Jul 2020 - The Australian share market opened lower this morning but is now trading 0.2 per cent up at noon. Treasurer Josh Frydenberg has confirmed an $85.8 billion deficit for the last financial year with that figure reflecting the $289 billion the Morrison Government has allocated to stimulus measures including JobKeeper.

Read More
13May

Red-hot inflation rise pressures Wall St to plunge: ASX to fall

13 May 2021 - The ASX is set to drop falling Wall St closing deep in the red as the annual inflation rate rose to its highest in 13 years. Citi rates Suncorp (ASX:SUN) as neutral while Morgan Stanley rates Virgin Money UK (ASX:VUK) as hold. The SPI futures are pointing to a 0.4% fall.

Read More
12Apr

Nasdaq falls as bond yields climb, ANZ, Whitehaven Coal, Uniti, Lynas, OZL on watch: ASX to fall

12 Apr 2022 - Global markets closed lower as investors mull on the impact of China's Covid-19 lockdown and inflation print coming in higher than expected on an already strained supply chain and its impact to stunt the growth of the economy. Deep dive on why climbing bond yields hurt tech shares.

Read More
13Nov

Bega (ASX:BGA) wins food fight: Aus shares close 0.2% lower

13 Nov 2020 - Over the week, the market has gained 215 points or 3.4 per cent. Energy gained over 14 per cent this week, boosted by the news of the Covid-19 vaccine. Today the High Court dismissed Kraft Heinz’s application for special leave to appeal the Federal Courts decision. Bega says that today’s proceedings confirm Bega Cheese’s right to use the current packaging of its smooth and crunchy peanut butter products.

Read More
27Feb

Capital expenditure falls 2.8% in the December quarter: ASX tracking 0.8% lower at noon

27 Feb 2020 - The ASX failed to maintain momentum this morning where it rose slightly in early trade, dipping to now track 0.8% lower at noon. Shares in the a2 Milk Company (ASX:A2M) rose after they released their pleasing half year figures. Link Administration (ASX:LNK) shares fell. The best-performing sector is Healthcare, while the worst performing sector is Energy. AP Eagers (ASX:APE) is to sell the AHG Refrigerated Logistics division to Anchorage Capital Partners for $100 million.

Read More
19Apr

Bumper bank earnings triggers bull run on Wall St: ASX to rise

19 Apr 2021 - The ASX is set to open higher this morning. Wall St extended their winning streak on Friday with all three indexes gaining more than 1.3% over the week. There are three companies set to make their debut.

Read More
24Jul

Dow notches tenth straight day of gains

24 Jul 2023 - Stocks were mixed Friday as traders assessed the latest corporate earnings results, and the Dow Jones Industrial Average stretched its winning streak to 10 sessions, a feat not seen for the index since August 2017.

Read More