Cree suffers losses. Target talks about declining attractiveness of online commerce. Cisco May Have Fun with Financiers at Tech Companies. Toyota falls prey to lack. Bank of America predicts bad, but it is not exactly.
Disclaimer: when we talk about that, that something has grown up, we mean a comparison with the same quarter a year ago. Since all issuers from the United States of America, then all indicators in dollars. Sources were used in the development of the material, hard-to-reach for users from Russia. Putting our hopes on, Do you understand, what to do.
Reports
Semiconductor manufacturer Cree (Nasdaq: CREE) said about a thirty-five percent increase in revenue. However, losses, unfortunately, also grew - almost in 3,5 Times, to 145.2 million. Approximately half of them are caused by rising costs of industrial expansion. The result turned out to be worse than the expectations of specialists, and stocks plummeted.. Cree characteristics can be considered a warning to all semiconductor manufacturers: logistics costs and rising prices for the necessary components have a very negative impact on the margins of this business, even in terms of increasing purchasing power for semiconductors.
Target retail chain (NYSE: TGT) said about the growth in revenue for 9,5 % and income for 7,4 %. A more exciting moment in reporting is the change in the dynamics of online sales growth, in which the company invests a lot of money. Online sales of Target grew by only ten percent, and for the corresponding time period a year ago they tripled. The company said about the growth in attendance of physical stores.
This is not a unique case.. Prior to this, another Walmart retail chain said about an increase in customer traffic in its own outlets.. All this is generally well superimposed on quarterly reporting. Amazon, posted a few weeks ago: e-commerce giant's report notes a slowdown in online consumer activity. Because of this news, Amazon is now even planning to open several large stores., and offline, but in physical reality.
This news is important for investors for a number of reasons.. Firstly, it suddenly turned out, that physical retail is surprisingly resilient, what we already wrote about. This, undoubtedly, good news for stores without major online breakthroughs - like Macy's - and not so good news for brick-and-mortar retailers, which invested a lot of money in the development of online channels, because how the moment moves away, when the money invested will start to fight back.
Based on this thesis, one can also assume, that this slowdown in online sales could lead to lower levels of investment in this area. And with unpleasant consequences for the reporting of solution providers for warehouses and goods accounting. Finally, slowdown in online sales in general makes the online trading sector less attractive for investors. In such conditions, loss-making startups like Farfetch are unlikely to be able to count on an offer to buy at the current price..
Secondly, this news could mean lower demand for warehouses, which could lead to slower revenue growth for logistics REITs like Prologis.
Cisco IT Goods and Services Provider (NASDAQ: CSCO) increased revenue by 8% and profit on 14%. This was mainly due to operating results., but also helped by the absence of major restructuring spending last quarter. Results support the hypothesis, expressed in the idea by Cognizant: enterprises are increasing investments in the renewal of fixed assets, largely due to the IT infrastructure. So, the indicators of the Cisco report can be considered a positive indicator for all companies., providing maintenance services for IT facilities.
"The car flies like an arrow ..."
Major automaker Toyota recently announced plans to cut auto production in September by as much as 40% due to lack of semiconductors. Previously, Volkswagen announced cuts, General Motors and Ford Motor - but Toyota has always stood apart, since after complications, caused by the 2011 earthquake, the company began stockpiling semiconductors and other components. That fact, that even Toyota's stocks have come to an end and at the same time there is nothing to replenish them, testifies to, that the shortage of semiconductors could last up to 2022. And even, quite possible, longer - after all, the construction of plants and their output to design capacity require a lot of time. In this regard, some intermediate conclusions can be drawn..
The shortage of cars in the US may be delayed, what could threaten consumers with price increases as for old, as well as new cars. Under normal circumstances, this would be good news for car dealers., but now I'm not so sure. In the idea for Sonos we talked, that consumers in the US are already starting to get angry at the insane prices of many long life products, especially for cars. So a new round of price increases could lead to a sharp drop in the availability of cars for many buyers - and a strong drop in sales.. Big question, Will car dealers be able to compensate for the outflow of buyers with high prices.
Decrease in the number of orders. The second important point: auto parts suppliers should brace for lower orders. However, it's not accurate yet. The fact, that the current crisis in the automotive industry is caused largely by, that effective managers for many years only solved problems as they came - and ordered exactly that many chips, how much was needed to produce several batches of goods. The coronavirus crisis has led to the disruption of supply chains and the lack of components in many manufacturing plants. Maybe, The tragic experience of the past four months - with auto production shutdowns due to lack of parts - will force many managers to rethink their strategy and lead them to think that, what is better to buy components for future use.
If that's the case, then, maybe, there will be no significant drop in orders from spare parts suppliers. But this is a hypothesis, check the correctness of which we have yet to in the next reporting period.
The last days have come. It seems
Bank of America survey, only 27% U.S. fund managers expect economic growth to continue over the next 12 months is much less, than in March of this year - 91%. At the same time, the share of those, who expects the economic situation in the world to worsen, has increased since March 21 to 28%. And this is the highest level since March 2020, when did it start you know what.
There are enough reasons for this deterioration: declining consumer confidence scores, history of the fall of Kabul and, finally, dissemination of new, more dangerous strains of coronavirus. Basically, this could be considered a reason for correction, but on closer inspection it's not so bad.
Exodus from Afghanistan, essentially, problem only for the image of the American army. The deterioration in consumer confidence is driven almost entirely by higher house and car prices. For both categories of goods, the price increase is caused by a shortage of supply in the market with an increase in demand., And, basically, As supply increases, the situation will improve.. As for the new strains of coronavirus, then here, certainly, there are many unknowns - and that's just the likelihood of a new quarantine remains very visible. But the media, seems to be, not yet decided, how dangerous is this in the context of universal vaccination, - so, maybe, after that, how the number of vaccinated will reach a certain threshold, the problem will subside.
According to the same survey, Many Managers Expect Massive Government Investment in U.S. Infrastructure. Bank of America experts regard this item as a positive signal, but, in my opinion, this is where the main problem lies. US military setbacks, rising prices for certain categories of goods and even coronavirus are all news. For example, during coronavirus lockdown 2020 market, as you remember, рос. But the infrastructure spending of the US government to many investors, seem to be, are seen as a key condition for further market growth.
Seems to be, investors are very hopeful for the adoption of Biden's infrastructure plan, and if that doesn't happen, then, probably, in their opinion, preconditions for market growth will disappear. And of course, it will be a self-fulfilling prophecy: such disappointment can lead to a major sell-off on the stock exchange. Hope, that I am wrong and the possible lack of progress in negotiations on infrastructure spending will not affect the exchange. However, it should be taken into account.
