To The Moon

We saw semiconductor stocks such as $Intel(INTC)$ and AMD (AMD) experienced significant losses, nearing 5%, following reports that China has mandated telecom companies to replace foreign chips with domestic ones by 2027.

With this mandate, Intel and $Advanced Micro Devices(AMD)$ would face substantial challenges, these 2 companies has China as their market. With Intel Q1 results coming up on 25 April and AMD would release their results on 01 May, we would need to be aware of the impact of this new development in their 2024 outlook.

$NVIDIA Corp(NVDA)$ also saw a 3% decline, continuing its downward trend since last month's GTC event. But seeing from the performance, investors are still into buying sentiment for Nvidia.

Last Week Major Indices Dragged Down By Disappointing Bank Guidance

All 3 major indices, including the Nasdaq Composite, S&P 500, and the Dow Jones Industrial Average, all fell by more than 1%. This is due to disappointing guidance from JPMorgan, with concerns over potential conflict in the Middle East.

On Saturday (13 April 2024), we saw Iran launch the major strike on Israel, though no major casualties or damages, but this could signal for further escalation if there is less restraints from both parties. We are see investors seeking refuge in bonds and the dollar, this has contribute to the significant market downturn.

The heightened geopolitical tensions and concerns over global economic growth has caused the stock market to wrap up the week with significant declines across major indexes The Dow Jones Industrial Average fell by 1.2%, the S&P 500 dropped 1.5%, the Nasdaq Composite decreased by 1.6%, and the Russell 2000 saw a 1.9% reduction.

Oil Prices Set To Rise After Weekend Attack By Iran On Israel

When there is reports on Friday (12 April) suggesting a potential attack by Iran on Israel ahead of the weekend has investors fearing and lead to a sell-off in the markets. We already saw a rise in oil prices (WTI) on 12 April 2024 to $85.47 per barrel, a 0.53% increase. This is because there are concerns that oil supply might be disrupted.

I went to pump petrol in Sunday (14 April) and the pump price has went up, so go for full tank before suffering further oil price increase.

Investors Sought Safety In Treasuries

With the geopolitical unrest, investors sought for safer asset, this has helped treasuries to gain. Though overall, we still see treasuries experienced overall declines for the week.

This is due to the market participants adjustment for their expectations for rate cuts, with the 2-year note yield falling nine basis points to 4.91% today, despite a 15 basis point increase over the week. The 10-year note yield decreased by eight basis points today to 4.53%, climbing 12 basis points over the week.

China’s Reported Decline In Exports and Imports

Market concerns were also fueled by China's reported decline in exports by 7.5% year-over-year and imports by 1.9% year-over-year for March, raising alarms over global economic health.

Broader Market's losses Came From Semiconductor Sector

The broader market's losses was contributed largely by the semiconductor sector after China announced the directive for Chinese telecom companies to replace U.S.-made processors with alternatives by 2027. This led the PHLX Semiconductor Index (SOX) to tumble by 3.3%.

S&P 500 Sectors Experienced Declines

All 11 sectors of the S&P 500 experienced declines, ranging from 0.7% in utilities to 1.8% in materials. After JPMorgan Chase CEO expressed caution in his macroeconomic outlook and maintained the bank's net interest income guidance for 2024, we saw the stock decline by 6.5%. Citigroup (C, Financial) and Wells Fargo (WFC, Financial) also saw declines following their earnings releases.

Friday (12 April 2024) Economic Data Summary

Friday’s economic data revealed slight increases in March Import Prices and Export Prices, alongside the University of Michigan's preliminary April consumer sentiment index dropped to 77.9 from last month's 79.4 that was the highest since mid-2021,

We also saw inflation expectations have risen, aligning with recent CPI data and Federal Reserve officials' comments on being patient before implementing rate cuts.

What To Focus In Coming Week

I would be trading on the energy and oil related stocks, as well as treasuries yield there might be some spillover from the middle east conflict, this would raise more concerns over the oil shortage and also there are stocks in the affected regions gaining benefits.

$Energy Select Sector SPDR Fund(XLE)$ might see a gain as a result of the rise in oil price, oil and gas prices soared in 2022 after Russia's invasion of Ukraine caused economies around the world to boycott Russian resources, but we saw it retreated as supply has normalized before the Iran and Israel conflict over the weekend.

We could see XLE soared as oil and gas might soar as a result of the conflict when economics around the world might sanction Iran resources.

With investors adjusting to safer assets, with geopolitical conflicts, this might cement their approach to go into treasuries, and I foresee the treasury bond yield to go up.

iShares U.S. Treasury Bond ETF

Summary

We should be seeing some more selloff when market open on Monday, and the economic calendar for Monday includes March Retail Sales and the April NAHB Housing Market Index, these data should provide further insights into consumer behavior and the housing market’s health.

I will be looking to put my money into safer assets to prepare to take advantage of any market reversal

Appreciate if you could share your thoughts in the comment section whether you think market would continue to experience selloff and investors would adopt a more cautious approach?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.