Themes on the move: Semiconductor comeback
Senior Quantitative Analyst, Saxo Bank
Summary: Semiconductor stocks had a strong week last week after having been under pressure this year, and the rally was boosted by positive guidance reported by some of the major semiconductor manufacturers. The semiconductor theme is ranking on top this week in our thematic screener, which monitors themes breaking out of their usual patterns. We zoom in on the theme below.
In this new weekly publication series we monitor trends in a pool of more than 40 equity themes. Every week we focus on one themes which have moved the most in the previous week relative to its usual trading pattern, and we provide an unbiased sample of companies within the theme.
The confidence in semiconductor stocks have been declining this year as the ongoing cost-of-living crisis have been hurting the industry. Additionally the US CHIPS Act is constraining the exports of semiconductor equipment to Chinese companies. However, semiconductor stocks presented a strong comeback last week in the rallying stock market. The chipmaker Lam Research posted a beat-and-raise quarter, and ASML reported sales guidance which beats estimates as well as stating that the impact from US curbs would be ‘fairly limited’.
The list below illustrates 10 companies from different areas of the theme, and the list is intended as inspiration only:
How the list was created: Each theme consists of a number of companies from ETFs and indices within the given theme. The list above is created by sampling 10 different companies from the theme, making sure that the companies have a low mutual correlation within the theme, such that they span a broad part of the overall theme. Note that this is based on historical performance which is not an indicator for future returns. The list is for inspirational purpose only and should not be considered as trade recommendations in any way.
Price evolution of a thematic ETF on semiconductors, over 6 months and 5 years, respectively:
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.