Big picture themes?  On Wednesday Bubble Stocks and Payments companies rose the most out of the Equity Basket we track globally, but these sectors remain very bearish still are down 49% and 28% respectively so far this year. At S&P500 sector level on Wednesday, Computer Electronics and AgTech rose the most.

Nvida (NVDA) the largest chip maker in the world (by market size) reported better than expected results and rose 5.1% in normal hours trading, but its shares fell 6.9% after hours when the market began to price in their weakening guidance. Revenue rose 46% to $8.29 billion (that’s a record and beat the $8.1b expected).

The reason the stock is down after hours is because its Q2 revenue is expected to fall to about $7.9 to $8.2 billion, and diluted earnings per shares is predicted to fall from $0.76 Q1 FY22 to $0.64 Q1 FY23. This reiterates why we advocate for backing companies with growing earnings. These tech stocks, the down-and-outs and big tech firm, will have their day in the sun again, but not soon. Maybe consider letting the QT dust settle, before considering buying ‘the dip’

Asia Pacific’s stocks are having a mixed day after Fed minutes fail to add anything new. Taking a bid from the higher close in the overnight markets, APAC markets opened in the green today. Australia’s ASX200, opened higher but fell into the red, and is trading down 0.4%. However, the market still seems to be in a very short uptrend from the May 12 low, supported by commodity stocks rebounding.

Takeover talk beefed up the tech sector 1.4% after co-creator of Siri, Appen (APX) rose 28% upon receiving a takeover offer. Codan (CDA) Metal detection and tech company is also doing well, but more the major theme is that tech stocks are being led high as M&A talks are heating up, given Aussie tech is down 40%, with some names like Tyro (TYR) down 75% from their highs. Singapore’s STI index (ES3) was up about 0.8% led by 6% gains in Jardine Matheson. Japan’s Nikkei (NI225.I) lost 0.1% as Fast Retailing and SoftBank shares jumped higher but Tokyo electron remains under pressure following the dismal guidance from Nvidia (NVDA) amid the supply issues.

What to consider?

Investors need to be comfortable feeling uncomfortable, as we haven’t seen the bottom in the market yet. So what’s next? We’ve already seen liquidity dry up (mass selling in stocks, fund managers are seeing large outflows) PLUS idle trading accounts are collecting dust. And Quantitative tightening (QT) has not even started yet. It starts in June.

Semiconductor stocks weighed down by the poor tech sentiment. While supply pressures, China lockdowns and rising input costs have weighed on semiconductor firms this year, the general sentiment has also been fragile due to PC demand peaking. Adding to the mix, general rotation out of the tech sector in the current market downturn also means some pressure on semiconductor stocks. Japan’s Tokyo Electron is down 11% YTD while Lasertec has lost over 50% and TSMC is down 18% since the start of the year.

Negotiations on avoiding delisting of Chinese companies in US. exchanges is continuing to stall. Despite repeated optimism from the Chinese authorities, Y.J, Fischer, director of the U.S. SEC’s international-affairs office says that significant issues remain and Chinese companies may face delisting as soon as in March 2023 if the China Competitiveness Bill, which incorporates bills to shorten the audit paper compliance deadline by a year, got legislated by the Congress later in the year.