- Haven Demand Returns as US-China Uncertainty Weighs, Pelosi Set to Land in Taiwan.
- European Semiconductor Stocks Fall.
What is Earnings Season & What to Look for in Earnings Reports[1]
DAX 40: Retreats as Geopolitical Concerns Stir Haven Demand
The DAX[2]retreated in European trade as weak global factory data fanned slowdown fears, while uncertainty reigns as U.S. House of Representatives Speaker Nancy Pelosi was set to visit Taiwan. These developments come as manufacturing PMI data[3] from the United States[4], Europe and Asia, released over the last couple of days, showed a slowdown in factory activities in July, adding to recession fears.Moody's Investors Service flagged an increased risk of stagflation in European Union countries. Losses have however been limited as quarterly corporate earnings continue to provide support.
U.S. House of Representatives Speaker Nancy Pelosi was set to visit Taiwan on Tuesday, three sources said, as the United States said it wouldn't be intimidated by Chinese threats to never "sit idly by" if she made the trip to the self-ruled island claimed by Beijing. Such a move would raise tensions between the world’s two economic superpowers, with Chinese foreign ministry spokesman Zhao Lijian stating on Monday that it would lead to “very serious developments and consequences”. Fear around the potential visit is reflected in European semiconductor stocks, which fell between 0.6 and 3.6% in early trade. Most of the global chip production occurs in Asia, thus any escalation or increase in uncertainty regarding the geopolitics in the region could lead to chip shortages or steep price increases.
The other fear in this regard rests on the Taiwan Strait, which is the primary route for ships passing from China, Japan, South Korea and Taiwan to points west, carrying goods from Asian factory hubs
