The Week Ahead (29 Jun – 3 Jul): Semiconductor Pricing, Euro Inflation, UK House Prices, Nike, Currys

US indices were on track for a rise last week until a heavy tech retreat took over. While semiconductors briefly pushed markets upwards, an abrupt reversal hit mega-caps like Apple and Microsoft. Cost inflation and macro worries have started to take their toll.

• Microsoft announced a massive $150 price hike for Xbox consoles globally. While meant to offset skyrocketing hardware costs, it spooked tech investors by signalling that inflation in the tech supply chain is far from dead.
• Apple announced overnight price hikes on Thursday for Mac and iPad models as a direct response to a massive global shortage of DRAM and NAND flash storage. Because cloud-computing hyperscalers are buying up every bit of memory capacity to build out massive AI data centres, traditional consumer electronics memory has been heavily squeezed. Apple CEO Tim Cook said, "This is a hundred-year flood. I've never seen anything like it in any area in over 40 years."
• Benefitting from the unprecedented demand for chips, Micron enjoyed a massive boost after reporting blowout earnings fueled by unrelenting corporate demand for AI data centre build-out.

In less tech-focused markets, such as the UK, there was renewed optimism that inflation may be waning and that this would be reflected in a better outlook for equities.

Tensions eased slightly around key global shipping corridors, such as the Strait of Hormuz, benefiting broader market sentiment, with oil and gold prices taking a tumble in response:

[Source: Trading Economics]

Lower inflation expectations have also fed into the UK 5-yr rate dropping away from recent highs and benefiting mortgage pricing and debt markets:

[Source: Trading Economics]

Here's what we can look forward to next week:

Economic Calendar

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