US Open: Wall Street is trying to rebound. TSMC mixed Q2 report doesn't weigh on semiconductors

• Wall Street is opening slightly higher. US100, US500 and US30 are trading up between 0.1% and 0.3%
• American Express (AXP.US) results disappointed with lower revenue, but US consumers still strong
• Weaker-than-expected Taiwan Semiconductors (TSM.US) report with earnings compression and prospect of lower revenues - semiconductor sector without panic
• Oil price rebound favors oil companies, with Chevron (CVX.US) and Exxon Mobil (XOM.US) gaining

Wall Street opened marginally higher today but the further fate of the session remains in doubt. In the next two weeks, the capitalization of the companies that will report results will total nearly $25 trillion making the key days for the stock market likely ahead. The market expects the Fed to raise rates by 25 bps at its meeting on Tuesday, July 25, and maintain its hawkish track despite the recent positive CPI reading from the US. 

Bank of America's 'Bull & Bear' momentum indicator was at record levels since the beginning of the year driven by hedge fund positioning in US stocks, the Japanese yen and two-year bonds. At the same time, BofA pointed out, there was an outflow of $2.3 billion from the stock market and a $7.3 billion inflow into cash which could favor the US dollar and send a wrenching signal to the stock market, where risks are rising as valuations rise and the economic effects of rate hike cycles are unknown.

Stocks from the S&P500, table size reflects market capitalization. Among the largest companies, Amazon (AMZN.US), Tesla (TSLA.US), Nvidia (NVDA.US) and Meta Platforms (META.US) are losing the most today. Source: xStation5

The market is almost 100% certain of a 25bp Fed hike. However, Powell's overall message and the FOMC's determination to keep rates at higher levels, for longer, remains key. Source: CME 

Extrapolating the average rebound of the Nasdaq index after the downturns since 1985, there may be a bit more fuel for upside. Goldman Sachs analysts pointed to the positive aspect of the impending end of the blockade of corporate share buybacks, roughly from July 28. Source: Bloomberg

Contracts on the S&P 500 (US500) are moving in an uptrend, with key support level a the SMA10 4500 points and 4440 points, where we can see the SMA200 and the 23.6 Fibonacci retracement of the upward wave from the fall of 2022. Source: xStation5

News:

• Taiwan Semiconductors (TSM.US) shares are losing ground, with the semiconductor's giant estimating a 10% y/y decline in 2023 revenue, with Q2 net profits falling 23% y/y to $5.8 billion. The company pointed out that higher demand for AI chips is unable to offset its marked decline in all other business segments - the slowdown is weighing on the smartphone and PC markets. The company also conveyed that chip production in Arizona will not begin before 2025, however. According to the company's commentary, demand for AI chips may be volatile, with Nvidia (NVDA.US) losing nearly 1.7% today and slipping to $447;
• American Express (AXP.US) revenue missed expectations by nearly $500 million, though it came in at a record high in the company's history, with record earnings per share that slightly beat analysts' Refinitiv expectations. The company highlighted the strength of U.S. consumers and positive spending on entertainment and tourism.
• Sirius XM (SIRI.US) shares are losing nearly 15% after a frantic 'short squeeze' - analysts pointed out that there is no case to justify such a high valuation. According to Fintel data, the short was recently 33%
• Shares of Korea's POSCO (PKX.US) are up nearly 10%, thanks to higher demand for the raw materials needed to produce EV batteries and financial results that beat analysts' expectations. The company expects to generate $48 billion in revenue from its battery business by 2030, up from its current capitalization of around $35 billion.