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Asian tech stocks generally fell on Friday after Apple raised prices. Investors are concerned that rising component costs will dampen demand for end devices and ultimately drag down memory chip prices, which have been supporting the AI investment boom. The market is reassessing whether soaring memory prices, driven by continued strong AI demand, will begin to suppress overall spending by increasing costs for electronics manufacturers and consumers. Apples price increase is one of the clearest signals yet that the industrys pricing power may be at the expense of future demand, prompting the market to reassess the valuation of AI-related semiconductor stocks. "The market is no longer viewing rising memory prices as a necessary positive factor for the entire AI deal," said Charu Chanana, chief investment strategist at Saxo Bank. "While this demonstrates that demand for AI infrastructure remains strong, it also drives up the cost of building and using AI. The risk is that the current strong memory chip cycle may slow down the entire AI deal in the future, and the market has already begun to price this in."According to IFR, a Reuters subsidiary, Zhejiang Laifu Harmonic Drive Co., Ltd. has set its Hong Kong IPO price at the high end of the range, aiming to raise HK$1.1 billion.The International Atomic Energy Agency (IAEA) stated that repairs to the transmission line are not expected to be completed in the short term, but are still underway.Russian Defense Ministry: Russia shot down 660 drones overnight.International Atomic Energy Agency Director General Grossi: Iran has the option to reduce the concentration of nuclear materials or transport them out of the country, but it must agree to do so.

S&P 500 (SPY) Dives To 3850 As FedEx Report Highlights Recession Risks

Alice Wang

Sep 19, 2022 15:13

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S&P 500 Continues to Face Serious Pressure Just before the weekend

Following a poor FedEx fiscal Q1 report, the S&P 500 index climbed around the 3850 mark. Analyst expectations were not met by the report. Additionally, on June 23, 2022, FedEx retracted their profitability prediction for the fiscal year 2023.


The macroeconomic instability in Asia and the service issues in Europe, according to FedEx, "had a notably negative effect on performance, resulting in a revenue shortfall in this area of roughly $500 million compared to company estimates."


The price of FedEx shares has dropped by 22% during today's trade. The shares of United Parcel Service is also seeing significant pressure.


The FedEx report increased concerns about a worldwide economic downturn. It is hardly unexpected that today's consumer cyclical equities are declining. International Paper Company and Packaging Corporation of America both had greater than 11% declines.


Other major losses in today's trade include Boeing, which is down 4%, and General Electric, which is down 5%.


In the meanwhile, Treasury rates continue to rise as traders remain uneasy before the Fed meeting. Higher rates are detrimental to the declining tech stocks. Meta was able to plummet below the $150 mark and is now testing annual lows around the $146 mark. Today's drop in Amazon stock is 3%.

Tests Support At 3950 for S&P 500

S&P 500 is now testing the next support level at 3850 after successfully settling below the support at 3885. The S&P 500 will go toward the next support level, which is at 3825, if this test is successful. S&P 500 will be pushed toward the support at 3800 if a move below 3825 occurs. S&P 500 will go toward the next support at 3780 if it drops below this level.


The prior support level at 3885 will act as the first resistance level for the S&P 500 on the upswing. The S&P 500 will go toward the resistance of 3900 if it is able to stabilize again above 3885. The S&P 500 will be pushed toward the next resistance level at 3920 if the resistance at 3900 can be successfully tested.

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