Weekly Market Update - 17 October 2022

U-Turn Relief

The UK's financial drama continues as Chancellor of the Exchequer Kwasi Kwarteng flew back early from Washington and Prime Minister Liz Truss announced a press conference later Friday where she is expected to row back on her fiscal plan. That prospect, along with the bumper end to the BOE's buying program, has restored some degree of calm to UK markets, although the risk now is that the government disappoints again and sets up a messy open on Monday. Meanwhile, The Times’ Political Editor Steven Swinford tweeted that Kwarteng is “being sacked,” without citing where he got the information.

Source: Bloomberg

Chip Woes Grow

In the latest warning for the chipmaking industry, Taiwan Semiconductor Manufacturing Co. slashed its 2022 capital spending target by roughly 10% and Applied Materials Inc. cut its earnings forecast for the fourth quarter. Meanwhile, Intel Corp. is said to be preparing to fire thousands. Semiconductor companies are grappling with the Biden administration ‘s sweeping restrictions on doing business with China. The actions, which have incensed Beijing, threaten to disrupt a global economy already dealing with a potential global recession, soaring inflation and lingering supply snarls.

Source: Bloomberg

Ready For Takeoff

Qantas has surged back to profitability on booming travel demand after most pandemic-era curbs were dismantled, helping shore up Alan Joyce’s position as CEO. It ends a streak of five consecutive half-yearly losses. Elsewhere in the region, Thailand is betting on a rush of “revenge spending” travelers from Europe and the US to accelerate a recovery in its tourism industry, and Taiwan today lifts all its Covid entry restrictions.

Source: Bloomberg