Next week, the second quarter balance sheet period will begin with the balance sheets to be announced by the world’s largest chip manufacturer TSMC and US banking giants.
1. CHIP EXCITEMENT
Taiwan’s TSMC, the world’s largest chip manufacturer, will announce its second quarter results next Thursday.
The fact that the shares of South Korean chip manufacturer SK Hynix made $26 billion in sales on their first day of trading in the USA showed that there is still interest in the shares of the semiconductor company, which is rapidly rising with the support of investments in artificial intelligence.
The balance sheet of TSMC, one of the most important suppliers of leading technology companies such as Nvidia, Apple, AMD and Broadcom and Asia’s most valuable publicly traded company, is expected to provide a clear picture of the demand for investment in artificial intelligence.
Investors will closely monitor the company’s end-2026 annual revenue growth expectations and whether there is an upward revision to its capital investment plans.
While the company said last month that it was having difficulty keeping up with the demands for artificial intelligence investment and did not want to be the one slowing down the chip supply chain, it pointed out that it wanted to raise its prices.
2. BALANCE SHEET PERIOD IN THE USA
As the second quarter balance sheet period begins next week in the USA, the balance sheets to be announced by Wall Street’s largest banks will show whether the strong trend in corporate profits continues.
Five of the six largest banks in the USA, including JPMorgan Chase and Goldman Sachs, will announce their balance sheets next Tuesday. Morgan Stanley will announce its balance sheet on Wednesday.
As the volatility in the markets increases transaction volumes, banks’ income from trading activities is expected to be strong.
After bank balance sheets, investors will follow the balance sheets announced by large companies such as Netflix, BlackRock and Johnson & Johnson.
Market expectations regarding the balance sheets are high. According to LSEG IBES data, second quarter profits of S&P 500 companies are expected to increase by 23.4 percent compared to the same period last year. These predictions were influenced by the fact that the first quarter results were stronger than the markets predicted.
3. WAITING FOR THE STRAIT OF HORmuz
Trump’s announcement that the temporary peace agreement reached with Iran has ended, increased the volatility in the markets again. Oil prices briefly rose above $80 per barrel, reigniting concerns that inflation pressures could strengthen again.
There has been an increase in oil shipments through the Strait of Hormuz in recent days. Although this situation is considered as a development that will limit the rise in prices, it is still unclear whether this trend will be permanent in an environment where mutual tension between the USA and Iran continues.
Most investors believe that the price of oil is currently low. The increasing demand for call options, which indicates that prices will rise by the end of July, also reflects this.
According to LSEG data, among the most preferred transactions by investors were options based on the expectation that the barrel price of Brent oil will rise to the range of 86 to 91 dollars at the end of July.
On the other hand, although the markets are focused on the bullish scenario, they maintain their cautious stance. Investors’ biggest positions are still in options, which give them the right to sell Brent oil at $69 or $70 a barrel. This shows that uncertainty regarding the direction of prices continues.
4. PULSE MEASUREMENT IN PRICES
Economic data to be announced next week will provide clues about the course of inflation in the USA.
Next week, June US CPI data will be published closely on Tuesday and PPI data on Wednesday. Also, US retail sales data will be released on Thursday.
Minutes of the Fed’s June meeting showed that the central bank, under new Fed Chairman Kevin Warsh, is still uneasy about inflation.
Warsh will answer questions about monetary policy for the first time in the US Congress on Tuesday.
5. CHINA AGENDA
Economic data to be announced next week in China will show the effects of the artificial intelligence-induced rise and the war between the USA and Iran on the world’s second largest economy.
As China tries to shift economic growth from the real estate sector, which has been in crisis for a long time, to the still stagnant domestic consumption, foreign trade has been one of the rare positive areas in this process.
Export data to be announced next Tuesday is expected to indicate an 18 percent increase on an annual basis in June. This rate remains slightly below the 19.4 percent growth recorded in May, led by demand for chips and other technology products.
However, it is thought that the real big test for the Chinese economy will be the second quarter gross domestic product (GDP) data to be announced on Wednesday. Economic growth is expected to decrease to 4.5 percent compared to the same period last year.
The Chinese economy grew by 5 percent in the first quarter of the year, exceeding economists’ expectations and reaching the upper limit of Beijing’s growth target. But most of this period was before the start of the war between the United States and Iran, which shook energy markets.
