📉Renewed fears in the market🧸

The market has a lot to digest on Thursday. China’s economy received a new blow as the country began the lockdown of its fourth largest city to combat the flares of new Covid cases. It certainly hit on risk on sentiments when the Fed is also taming inflation. 

China’s latest action has a profound effect. After all, in the past decade, it represents a more significant proportion of global growth than the combination of the US, Europe and Japan. Its economy has always been the pillar of support when other regions are in a downturn. In this instance, its economy is also wobbling given the harsh lockdown while less inclined to usher in the massive stimulus. 

There is a silver lining, though. A major lockdown can push back China’s economic recovery and potential reduce oil demand which helps to alleviate the rise in oil price that feeds inflation hike. 

💣The chips just got roasted⏳

It’s wartime. Nvidia and AMD stocks took a hit, given that the US government had informed them of a new licensing requirement that is taking effect immediately. This affected Nvidia’s A100, and it soon to be released H100 products to countries like China.

The company is actively engaging its China’s client to plan their future purchases and explore other products if possible. 

Essentially, the A100 chips are used in data centres to help power AI, and data analytics works. AMD face collateral damages on sentiments even as the company does not see a significant effect on its business. 

Again, Pika World will look at possible entry points, though mildly, as we see significant risks in the equity market. 

📪What’s on the menu today?🧰

At 8.30 pm, we will welcome the most anticipated piece for the week, the Nonfarm payroll. We expect it to cool to 300K from a high of 528K in the prior period. The unemployment rate should maintain at 3.5%. 

It is significant as market participants are betting that a weaker showing in job reports may still encourage the Fed to be less aggressive in its rate hike.

Comparing factory orders, growth on a monthly basis will be released at 10 pm, and a growth of 0.2% is expected, a moderation from 2.0%.