Five charts of the week's financial events: energy shock, chip winners, Fed relief and more
Every Friday, Open Interest distills the previous five days' financial data into five charts that highlight the trends, surprises, and overlooked moves.
1. THIN BUFFERS RON BOUSSO, 'ROI Energy Columnist': The renewed U.S.-Iranian blockades of Strait of Hormuz has sharply reduced?oil exports and gas from the Middle East, adding to the pressure on global energy markets that were forced to adapt quickly earlier this year. But unlike the beginning of the war, in late February, the global oil reserves have been heavily depleted. This has left the world with a much thinner buffer to absorb a new supply shock.
2. HYPERSCALERS IN, CHIPS OUT
JAMIE McGEEVER, ROI Markets columnist: Hyperscalers’ trillion-dollar capex spree has drained the once-abundant funds, which are being channeled primarily to semiconductor firms that provide?the chips needed for the AI buildout.
The "generational shift" is reflected in the markets. For example, the S&P 500 Software and Services Index is down by?17% for the year. Meanwhile, the Philadelphia Semiconductor Index has risen over 65%. This index had a tough week and is down nearly 17% in the last month. The long-term trend here is what matters.
3. CHINA SURPRISE
MIKE DOLAN is a columnist for ROI Finance & Markets. China's exports were boosted in June by orders for?chips that will fuel the AI boom around the world and automobile shipments which surpassed 1 million for the very first time. ?The stronger-than-expected trade performance keeps China on ?track to post a surplus above $1 trillion for a second straight year. China's second quarter GDP, at 4.3%, was the lowest in three years. Concerns about the housing market and domestic consumption continue to weigh heavily on the economy.
4. SOFT LANDING ANNA SZYMANSKI is the Editor-in-Charge of ROI. U.S. Consumer inflation slowed in June more than anticipated as energy prices retreated. Core prices, which exclude?food and?energy posted their first month decline in over six years. Core CPI fell 0.02% from one month to the next, which in some reports was rounded up to zero. This was due to a drop in auto insurance, and declines in healthcare, communications and hotel prices. The report may have quenched market speculation that the Federal Reserve would raise rates this month, but a rate hike is still expected for later in the year. This inflation respite could be short-lived, as energy prices may rise again if U.S. vs. Iran strikes escalate.
5. TAKING STOCKS RON BOUSSO ROI Energy Columnist: China’s response to the?shock of the energy supply - sharply reducing crude imports, limiting exports of refined gasoline and drawing from domestic inventories - marked the culmination a decade-long campaign to lessen its heavy dependence 'on overseas energy sources. This could be a sign that China's role is changing. It is no longer just the largest energy importer, but an independent, opaque power that could reshape world energy markets in years to come. Opinions are the sole responsibility of their authors. These opinions do not represent the views of News. News is committed to the Trust Principles and to a free, independent, and impartial news service.
(source: Reuters)
