By Jeffrey Jones of Gallup

Joe Biden’s job approval rating is 40%, a step down from the 44% measured in August but still above his term-low 38% from July. In all other months in 2022, his approval rating has been in the 40% to 42% range.

The Oct. 3-20 survey finds 56% of Americans disapproving of Biden’s performance, unchanged from September and midway between his highest (59% in July) and lowest (53% in August) disapproval scores this year.

Biden’s approval ratings continue to be starkly different by political party, with 85% of Democrats and 4% of Republicans approving. The 81-point gap in party ratings matches the average for Biden’s presidency to date, and is the same level of polarization measured in Donald Trump’s job approval ratings, on average.

Thirty-nine percent of political independents approve of the job Biden is doing, which is slightly above the 36% average approval rating among independents from January to September.

Biden Seventh-Quarter Approval Average Fairly Typical

Biden averaged a 42% job approval rating during his seventh quarter in office, which spanned July 20 through Oct. 19. That average is similar to what most other elected presidents dating back to Jimmy Carter received during their seventh quarters in office. The major exceptions were George H.W. Bush and George W. Bush, who had significantly higher ratings tied to the U.S. response to Iraq’s invasion of Kuwait and the 9/11 terrorist attacks, respectively.

Carter, Ronald Reagan, Bill Clinton and Trump all averaged 41% or 42% approval during their seventh quarter, while Barack Obama’s 45% average during that time was slightly higher.

Biden’s seventh quarter was notable for the ongoing high inflation and elevated gas prices the country was experiencing. Gas prices have come down from their mid-June high but remain above where they were a year ago. A bright spot for the economy is the continued strong job market, with the unemployment rate matching its lowest point since 1969.

Additionally during his seventh quarter, Biden achieved key campaign goals with passage of the Inflation Reduction Act, which addresses climate change, prescription drug costs and deficit reduction. Biden also announced a plan, now on hold pending litigation, to forgive student loan debt for many U.S. adults holding such loans.

Bottom Line

Americans’ evaluations of the job Biden is doing as president continue to be more negative than positive, as they have for over a year now. Given the relationship between low job approval ratings and midterm election outcomes, Biden’s unpopularity is likely to be a drag on his fellow Democrats’ chances in this fall’s voting.

It’s been a terrible morning for the tech giants which reported yesterday, GOOGL, MSFT, TXN, all of which either missed or guided much weaker than expected. The results is this:

• *ALPHABET FALLS 8% AT THE OPEN AFTER 3Q RESULTS DISAPPOINT
• *MICROSOFT SINKS IN BIGGEST INTRADAY DROP SINCE MARCH 2020
• *TEXAS INSTRUMENTS SLIDES 6.1% AT THE OPEN, MOST SINCE FEB. 3

Below we compile some of the most notable hot takes following the dismal earnings which started off the tech portion of earnings season on a decidedly wrong foot.

First Microsoft:

Microsoft shares tumbled after the software company reported its weakest quarterly sales growth in five years and gave a lackluster forecast for sales growth in its Azure cloud-computing services business. Analysts noted that Azure growth is expected to moderate, “elevating near-term concerns.” That echoed disappointing results from other industry giants, leading US tech stocks to tumble.

Here’s what analysts are saying

Piper Sandler (overweight, PT cut to $265 from $275)

• FX headwinds and deteriorating macro conditions pressure outlook
• Azure growth is expected to moderate, “elevating near-term concerns on competitive pricing and workload optimization efforts that could curb consumption patterns heading into a recession”

Jefferies (buy, PT cuts to $270 from $275)

• Azure miss was due to a moderation in consumption across customer base and geographies
• The personal computer markets deteriorated further in September

RBC Capital Markets (outperform, PT cut to $310 from $380)

• Microsoft’s commercial outlook was mixed with Office 365 looking encouragingly resilient and Azure’s disappointing outlook

Morgan Stanley (buy, cuts PT to $307 from $325)

• While investors were expecting some cyclical weakness, they might be surprised by the magnitude

Barclays (overweight, cuts PT to $296 from $310)

• Results from Microsoft’s More Personal Computing and Productivity businesses “should calm investors,” though “not all was perfect, as Azure growth of 42% YoY in constant currency was slightly below consensus at 42.6% and gross margins came in slightly below”

Bloomberg Intelligence

• “Microsoft’s sales growth of 16% in constant currency gives us confidence that tech spending is stable amid economic uncertainty”

* * *

Alphabet

Alphabet shares are also tumbling after the Google parent reported third-quarter revenue that was weaker than expected, reinforcing concerns about a slowdown in the ad market. Analysts also singled out a strong US dollar as a headwind.

Here’s what analysts are saying

Raymond James (outperform, PT to $120 from $143)

• The soft results reflect difficult year-over-year comparisons and an “increasingly challenging macro environment”
• “We are optimistic that margins can improve by later 2023”

Citi (buy, PT $120)

• “The macro environment is likely to continue impacting the broader online advertising environment,” although “Alphabet remains one of the best positioned companies across the Internet sector”

Baird (outperform)

• Most of the softness came from YouTube and Network, due to the sluggish performance in app installs, macro impact on video ads and some cannibalization from Shorts

Goldman Sachs (buy)

• YouTube results were much weaker and “likely reflective of a mix of brand ad dollar volatility, revenue headwinds created by consumption mix to Shorts and one last quarter of tougher comps from direct response revenue growth last year”

Bloomberg Intelligence

• “Alphabet’s weakness, particularly in its high- margin Google Network segment, shows the company isn’t immune to ad pricing”

Jefferies (buy, PT $130)

• Ad revenue was weaker than expected, “likely due to FX and macro,” while Google Cloud was strong

Truist Securities (buy, PT $136)

• “The top and bottom lines missed Street expectations,” with revenue pressured by a currency headwind
• The miss “overshadows sustained momentum” in the US

* * *

Finally, Texas Instruments

Texas Instruments shares are down 6.1% on Wednesday, after the chipmaker’s fourth-quarter outlook signaled that the semiconductor industry’s slump is spreading beyond PCs and smartphones to the once-healthy industrial segment. KeyBanc analysts note that while chip softness broadens, the auto segment continues to hold up

Here’s what analysts are saying

KeyBanc Capital Markets (overweight, PT cut to $210 from $220)

• Lowering guidance to be consistent with expectations as “a broader inventory correction” is commencing
• Expect headwinds to persist over the next several quarters

Morgan Stanley (underweight, PT cut to $152 from $160)

• TI remains more cautious than its analog peers
• “The company’s sober outlook will be something of a negative outlier – but a broad-based inventory correction will eventually impact everyone”

Citi (neutral, PT cut to $155 from $165)

• “TXN reported increasing cancellations as the downturn takes hold”

Truist Securities (hold, PT $172)

• The outlook “represents a 12% sequential decline and is about 7% below both typical seasonality and consensus expectations”

Mizuho Securities

• The outlook “is not a total shock” and “looks a bit worse on surface than reality,” writes Jordan Klein, a managing director and tech analyst
• Given the stock’s year-to-date outperformance relative to chips, some investors may be looking to sell or short the stock

* * *

After the dismal earnings, all the three stocks were trading sharply lower, and dragging down their peer group, which early this morning was set to shed nearly $300 billion in market cap as the combined weight of just the three companies above amounts to more than 19% of the Nasdaq 100.

Despite the devastation unleashed by these three companies, there was a silver lining.

As Goldman’s Prime Brokerage notes, a possible bright spot is that institutional exposure in FAAMG has been reduced significantly and might soften some of the blow from these prints. Positioning data from the GS Prime book suggest a cautious stance on the mega caps (FAAMG) by hedge funds: indeed, the first chart below shows that the aggregate FAAMG long/short ratio on the Prime book now stands at ~6.3, a multi-year low. For perspective, the same metric was at ~18 in March and at 9.2 in mid-July.

Another note: FAAMG collectively now make up ~11% of the overall US Single Stock Net exposure on the Prime book, also a multi-year low. The same metric was at ~14% in March and at ~12% in mid-July.

There was both good and bad news in Boeing’s latest Q3 earnings report. First the good news: after many years and many more quarters of relentless negative cash flow following its countless 737 and Dreamliner fiascoes, Boeing appears to have finally turned the corner, and in Q3 the company reported nearly $3 billion in FCF, almost 3x more than consensus estimates. This was only the second time Boeing has generated positive cash since Chief Executive Officer Dave Calhoun took the top job in early 2020.

The sold cash performance overshadowed more bad news from the Arlington-based company’s defense division, which racked up $2.8 billion in losses due to cost overruns on its KC-46 aerial tanker, Air Force One and other military contracts. This resulted
in Boeing reporting a whopping adjusted loss of $6.18 a share in the period, a huge miss to analyst expectations of slightly positive earnings, marking the company’s fifth consecutive earnings miss.

Revenue of $16 billion also fell short of the $17.7 billion expected by Wall Street.

Here is a summary of the company’s Q3 results:

• Adjusted free cash flow $2.91 billion, estimate $1.02 billion
• EPS loss -$6.18 vs. loss/shr 60c y/y; Exp. +0.07
• Revenue $15.96 billion, estimate $17.74 billion
  • Commercial Airplanes revenue $6.26 billion, +40% y/y, estimate $6.95 billion
  • Defense, Space & Security revenue $5.31 billion, -20% y/y, estimate $6.57 billion
  • Global Services revenue $4.43 billion, +5% y/y, estimate $4.53 billion
  • Boeing Capital revenue $52 million, estimate $62.9 million
• Operating cash flow $3.19 billion vs. negative $262 million y/y, estimate $1.38 billion
  • Commercial airplanes oper loss $643 million, -7.2% y/y, estimate loss $195.6 million
  • Defense, space & security oper loss $2.80 billion vs. profit $436 million y/y, estimate profit $352.7 million
  • Global services oper earnings $733 million, +14% y/y, estimate $691.2 million
  • Boeing Capital operating earnings $23 million, estimate $21.9 million
• Backlog $381 billion

The uneven results underscored Boeing’s slow progress in overcoming supplier strains and the financial toll from two 737 Max crashes. Still, with cash unexpectedly surging by rising jet deliveries, stronger receipts and a tax benefit, the company sparked investors’ hope that it’s finally emerging from one of the worst crises in its history.

After several quarters of relentless declines, Boeing’s quarter-end cash finally rose, pushing higher by almost $3 billion from $11.4BN to $14.3BN at Sept 30, while debt was unchanged. The airplan manufacturer said in presentation slides that it has “sufficient liquidity” and expects to generate positive FCF for the rest of 2022. 

As Bloomberg reports, in an early-morning message to employees, CEO Calhoun touted the progress toward Boeing’s goal of achieving positive free cash flow this year and blamed the defense unit’s latest losses on “higher estimated manufacturing and supply-chain costs, as well as technical challenges” on a handful of military programs with fixed-price contracts.

“Turnarounds take time — and we have more work to do — but I am confident in our team and the actions we’re taking for the future,” Calhoun said.

Having mostly passed the hurricane from the 737-MAX fiasco, Boeing has been hammered with a series of cost overruns: the company had already recorded $1.5 billion in cost overruns on fixed-price defense contracts during the first half of this year as it dealt with shortages of workers with security clearance and other supplier stresses. Calhoun declared in April that the company would no longer bid near its estimated costs as it did last decade to secure high-profile contracts, from a military trainer to the Air Force One replacements now facing ballooning expenses.

Boeing is working to mitigate risks on the programs, Calhoun said. He touted other work underway to stabilize Boeing’s factories, like hiring 10,000 employees, expanding digital tools to track inventory, creating teams of experts to address industrywide shortages and ramping up its own parts-fabrication capacity to help offset supplier shortfalls.

After first dumping in kneejerk response to the bad news, then spiking on the good news, BA shares were little changed as of 9:00 a.m. before the start of regular trading. Boeing had declined 27% this year through Tuesday’s close.

Authored by Paul Joseph Watson via Summit News,

Tens of millions of US citizens were given a “COVID-19 decree violation” score as a result of a data harvesting program conducted during the first lockdown by voter analytics firm PredictWise.

“These Covid-19 decree violation scores were calculated by analyzing nearly two billion global positioning system (GPS) pings to get “real-time, ultra-granular locations patterns.” People who were “on the go more often than their neighbors” were given a high Covid-19 decree violation score while those who mostly or always stayed at home were given a low Covid-19 decree violation score,” writes Reclaim the Net’s Tom Parker.

The data collected was then used by PredictWise to help Democrats target over 350,000 “COVID concerned” Republicans with campaign ads relating to virus prevention measures.

“PredictWise understood that there were potential pockets of voters to target with Covid-19 messaging and turned high-dimensional data covering over 100 million Americans into measures of adherence to Covid-19 restrictions during deep lockdown,” the company states in its white paper.

This information was used to help identify 40,000 “persuasion targets” for Senate candidate Mark Kelly, who was subsequently elected.

As we highlighted throughout the COVID lockdowns, chilling components of the surveillance grid were weaponized against ordinary people.

At one point, a senior government minister in Australia refused to rule out citizens being forced to wear electronic ankle bracelets, even if they were fully vaccinated, to make sure they were complying with home quarantine orders.

Conservative MP Jeremy Hunt, who was recently promoted to become Chancellor of the Exchequer, called for the government to use GPS tracking technology to ensure Brits were complying with COVID quarantine measures.

“Daily contact with those asked to self-isolate – using GPS tracking to monitor compliance if necessary as happens in Taiwan and Poland,” said Hunt.

Police in the UK also used surveillance drones to monitor and threaten people who dared to go out into remote countryside to walk their dogs.

In Australia, tracking drones were deployed to catch people who didn’t wear masks outside and to keep track of cars that traveled further than 5km from home.

*  *  *

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Update(8:48ET): Russia has hailed the ‘success’ of Wednesday scheduled annual nuclear drills, after President Vladimir Putin oversaw the exercises from a command and control room.

RIA news agency quoted the Kremlin as saying, “Under the leadership of the Supreme Commander-in Chief of the Armed Forces Vladimir Putin, a training session was held with ground, sea and air strategic deterrence forces, during which practical launches of ballistic and cruise missiles took place.”

The defense ministry also published brief footage of some of the drills in action…

⚡️Tu-95MS from today’s nuclear exercises. pic.twitter.com/fZkHn7Jsux

— War Monitor (@WarMonitors) October 26, 2022

The Kremlin additionally said that “all missiles hit their targets in the drills,” and that the exercise was undertaken to “prepare for possible enemy nuclear attack against Russia,” according to TASS.

Russia launches Soyuz rocket pic.twitter.com/plTWsFizI8

— Russian Market (@runews) October 26, 2022

* * *

With NATO’s “Steadfast Noon” annual nuclear drills already ongoing in the North Sea region, and led by B-52 bombers from the United States, Russia has formally notified Washington it is kicking off nuclear exercises of its own. 

Two US officials cited in a Tuesday CBS report say the notification from Moscow specified that the annual exercises are to include “launches of nuclear capable missiles starting Wednesday.”

The timing of the two sides holding “annual” nuclear exercises couldn’t be worse, with the Ukraine war now hitting the eight-month mark – and tit-for-tat false flag accusations currently being hurled between the warring parties.

Russia says Ukraine forces are preparing to unleash a “dirty bomb” which will be blamed on Kremlin forces, while Kiev has alleged the Russians are preparing a “terrorist act” using spent nuclear fuel from the occupied Zaporizhzhia nuclear power plant. 

According to more on the announced Russian exercises via the new CBS reporting: 

The annual exercise has been described by U.S. officials as “routine” around this time of year but nevertheless will take place against heightened Russian rhetoric about using nuclear weapons in Ukraine. 

The Russian “Grom,” or Thunder nuclear exercise, typically involves large-scale maneuvers of strategic nuclear forces, including live missile launches, a senior military official said earlier this month. Officials have expected the annual exercise for several weeks but only recently received notification from Russia.  

NATO Secretary General Jens Stoltenberg has meanwhile said the Western military alliance will closely “monitor” the Grom drills, saying it “will remain vigilant not least in light of the veiled nuclear threats and the dangerous nuclear rhetoric we have seen from the Russian side.”

The administration’s position is now:
1. There will be no diplomatic track.
2. Military aid will be virtually unlimited and go on forever.
3. Only Zelensky can decide when and how the war ends.
4. Even though (according to Biden) the war could escalate into Armageddon.

— David Sacks (@DavidSacks) October 25, 2022

Also deeply alarming is the fact that negotiations seem a distant possibility at this point. The US position is that Ukraine must achieve “victory” – and that ceasefire dialogue with Russia is a decision for President Zelensky alone. 

Russia’s military and the Pentagon just within the last days reaffirmed that they are keeping “open lines of communication” – precisely so that inadvertent escalation can be avoided.

Just hours after the offshore yuan hit a new record low amid chatter of wealthy Chinese capital exodus, and questions about whether the PBOC is ‘allowing’ the communist nation’s currency to devalue, Beijing appeared to step in and spark the biggest rise in the currency on record…

After weeks of fixing the onshore yuan far stronger than the offshore yuan (to no effect), having barely adjusted the fix during the Party Congress, last night saw the fix slightly stronger (for the first time this week) and then offshore yuan leg dramatically higher, almost up to the fix…

Desk chatter suggested Chinese state-owned banks were actively selling dollars – no doubt under orders from party HQ – triggering stop-losses and sparking the biggest single-day gain in the offshore yuan in history…

It’s certainly not the first time we have seen the very visible hand of Beijing in the currency markets, but traders are not piling on to the trade for now…

“The PBOC is experienced in managing onshore-offshore spot basis and spot-fixing gap, by always choosing the right timing,” said Ju Wang, head of Greater China FX & Rates Strategy at BNP Paribas.

The offshore yuan had traded below the lower end of the PBOC’s peg band, likely another reason for Beijing’s sudden entrance…

Finally, not to be left out, Yen is rallying on speculation of yet another round of intervention…

Given our comments last night on the broken JGB market, they may just have to keep intervening.

Idiocy? Yes. But once you are in the endgame of MMT and helicopter money, that’s all you have left.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Everyone caught by surprise that the infinite road actually has an end will face a bewildering transition.

The End of the “Growth” Road is upon us, though the consensus continues to hold fast to the endearing fantasy of infinite expansion of consumption.

This fantasy has been supported for decades by the financial expansion of debt, which enabled more spending which pushed consumption, earnings, taxes, etc. higher.

All the financial games are fun but “growth” boils down to an expansion of material consumption: more copper mined and turned into wire which is turned into new wind turbines, housing, vehicles, appliances, etc.

There are three problems with the infinite expansion of consumption “growth” paradigm.

1. Everyone in developed economies already has everything. The “solution” is planned obsolescence and the obsessive worship of marketing, which seeks to manipulate “consumers” into buying stuff of marginal utility that they don’t actually need with credit. This is sold as “fashion.”

The reality is many consumer goods are of far lower quality than previous generations of products and services. Some of this can be attributed to lower quality control and the relentless pressure of globalization to lower costs, but it’s also a systemic expansion of planned obsolescence: product cycles, low-quality components, designs intended to be unrepairable, etc. have all been optimized for the LandFill Economy where products that once lasted for decades are now dumped in the landfill after a few years of service. (As for recycling all the broken stuff–that’s another endearing fantasy.)

Bright Panels, Dark Secrets: The Problem of Solar Waste: Generating photovoltaic electricity takes more than sweetness and sunshine.

The purchase of “fashionable” replacements and marketing gimmicks are the only real driver of “growth” in developed economies. Life is not being enhanced with better quality or utility; it’s supposedly being enhanced by “new” stuff, the only benefit of which is that’s it’s “new.” The claimed benefits are marginal.

2. Those who could actually use more stuff don’t have any money. China’s unprecedented development enabled 500 million people who previously didn’t have the earnings or credit to buy vehicles, high-rise flats, etc. gained the income and credit to buy all the middle class goodies. This immense expansion of the global middle class boosted the global economy for 30 years.

But the rest of the developing world has a harder time duplicating the staggering flood of capital into China that funded its transition into “the workshop of the world.” Global corporations might be able to sell snacks and soda and cheap mobile phones to developing economies, but vehicles and high-rise flats–those require expansions of earnings, capital flows and credit that cannot be generated by financial magic.

3. The easy-to-get materials needed to build another billion vehicles, high-rise flats, etc. have been extracted. While the faithful await new technological miracles that will keep the “growth” system expanding forever, those tasked with actually building the new techno-wonders are looking at real-world limits and costs. Read these two twitter threads for a taste of reality:

COPPER redux: I live near one of the largest copper mines on earth (Kennecott Utah Copper – KUC). I helped manage a smaller copper mine for 8 years. Observation: Wind/Solar/Battery Proponents and ESG bean-counters are completely out of touch with copper mining and production.

Is “Renewable Energy” Renewable? Part 1: PV & Polysilicon

The logic of “growth” is to consume more materials, not less. Consider the premier consumer product globally, the automobile. We’re constantly told the value of advancements in safety and comfort are the drivers of higher vehicle prices, but the reality is the advances that mattered occurred in the 1970s. Since then, vehicles have become much larger and heavier, consuming more resources for marginal gains.

My 1977 Honda Accord (built 45 years ago) was a considerably different vehicle from the 1962 Dodge Dart my Mom drove. It had far better fuel efficiency, far more power per cubic inch of engine displacement, and was far safer and more comfortable. The same can be said for the modest-sized 4-cylinder Toyota pickups we drove for work.

The modern versions of this car and truck are far larger, heavier and consume far more resources than previous models. If we scrape away the marketing mind-tricks we would conclude the 45-year old vehicles were far more environmentally sound than the bloated modern versions, and the supposed advances (rear cameras, bluetooth sound systems, etc.) are either marginal or annoyances.

I looked through a Toyota Prius manual a few years ago. The majority of the thick book addressed the convoluted, complex sound system. Issues such as why the starter battery went dead if the car wasn’t used constantly were unaddressed.

Electric vehicles and hybrids use far more of the planet’s resources than simple ICE (internal combustion engines) vehicles, and they don’t last as long as their heavy, costly batteries must be replaced long before the basic ICE vehicle reaches the end of its useful life. Only an inconsequential percentage of lithium-ion batteries are recycled, and regardless of rah-rah marketing claims to the contrary, this isn’t going to change.

The environmentally sound approach would be to make vehicles that were radically lighter, less powerful, more efficient and slower, vehicles that would get the equivalent of 200 miles per gallon of fuel (or electrical charge) and last 20 years without major overhauls, battery replacements, etc.

But the logic of marketing and debt expansion demands bigger, heavier, more complex, and more costly everything, and the replacement of everything sooner rather than later. Only if we consume and squander more real-world resources can we continue running the marketing / planned obsolescence / expanding debt machine toward the goal of infinite “growth.”

Marketing and debt are not substitutes for real-world limits. A great many people are enamored of techno-promises of limitless energy, etc., but they don’t look at the vast material consumption needed to build and maintain techno-wonders such as fusion reactors (incomprehensibly complex), nuclear reactors (huge, complex plants that take years to build) or the mining operations needed to dig up and process all the copper, uranium, bauxite, etc. that all these techno-wonders require in the real world.

We’ve reached the end of the “growth” road in which the expansion of marketing and debt magically increase the materials we can consume. Debt and marketing have their own limits, and our reliance on them has generated second-order effects few understand.

The road ends, and the trail beyond is narrow, rough and unmarked. Those who are deaf to marketing and debt and attuned to self-reliance will do just fine. Everyone caught by surprise that the infinite road actually has an end will face a bewildering transition.

*  *  *

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South Korean chipmaker SK Hynix Inc. provided a worsening outlook for the already slumping semiconductor market in its latest quarterly report, dashing all hopes for a quick rebound. 

Hynix said it would slash capital expenditures by more than 50% from the current year due to an oversupply of memory chips. It reported that 2022 spending would be between $7 billion and $14 billion, meaning 2023 investments would be dramatically lower. 

The move by Hynix is similar to the memory chip industry’s cuts made during the 2008-09 financial crisis. It may provide the understanding that the global economy is set for a vicious downturn next year. 

“SK Hynix diagnosed that the semiconductor memory industry is facing an unprecedented deterioration in market conditions,” the company wrote in an earnings release, adding that “shipments of PCs and smartphone manufacturers, which are major buyers of memory chips, have decreased.” 

Hynix warned about the steep decline in DRAM and NAND storage prices, falling by at least 20% last quarter. It will cut production gradually and expects elevated memory supply for the remainder of this year. 

The South Korean chipmaker is one of the largest players in the memory space, trailing only Samsung Electronics Co. 

Last month, Korea Economic Daily warned Samsung “lowered its semiconductor sales forecast for the second half of the year by more than 30%.” The newspaper attributed declining semiconductors demand “as the economy froze due to central bank rate hikes caused by global inflation.” 

The paper warned: “As the semiconductor industry has entered a full-fledged ice age, there are many forecasts in the industry that the recession will continue until the first half of next year when semiconductor inventories are eliminated.” 

Hebe Chen, an analyst at IG Markets Ltd., wrote Hynix’s massive capital expenditure cut is a “bold statement demonstrating their determination to confront the escalated uncertainties.”

“This CAPEX cut is a strong action that the market has been waiting for,” Greg Roh, head of technology research at HMC Investment & Securities, said after the earnings report. The move by the company could clear the memory glut by the second half of next year. 

Global chip demand has rapidly slowed in recent quarters due to a plunge in shipments of PCs and smartphones as consumers and companies pull back on spending. 

“I would say the current downturn is very severe for everyone involved in an unprecedented manner,” Noh Jong-won, the company’s chief marketing officer, said in an earnings call.

Besides Hynix, Texas Instruments Inc. also offered more gloom for the industry. It warned about a chip slowdown for personal devices and in the industrial-equipment market. 

Other chip companies such as Taiwan Semiconductor Manufacturing Co., Intel Corp., and Nvidia Corp. have all warned about sliding demand this year. 

The Philadelphia Stock Exchange Semiconductor Index has slid more than 40% since peaking in late 2021. 

Hynix also warned that the Biden administration’s chip restrictions on China could force closures of at least one major plant — though it said that would be in an “extreme situation.” 

We recently pointed out that prices of graphics processing units have also plunged in recent months. Perhaps, this fall could be a great time to build out a gaming trading computer for a fraction of the price compared to where prices were earlier this year. 

Authored by Irina Slav via OilPrice.com,

“The world is in the middle of the first truly global energy crisis,” the executive director of the International Energy Agency, Fatih Birol, said today in Singapore.

IEA projections show global oil consumption growing by 1.7 million barrels a day in 2023. Russian crude will be needed to bridge the gap between demand and supply, Birol said.

As Reuters reports, a U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it.

“I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand,” Birol said.

The official went on to warn that natural gas and LNG markets would tighten further in 2023, with only 20 million tons of new liquefaction capacity scheduled to come online in that year, Reuters reported.

Speaking at the Singapore International Energy Week, the head of the IEA also said that while supply remains tight, demand for gas will continue to be strong, especially in Europe and possibly in China.

Birol’s warning comes amid expectations that this winter will not be the toughest for Europe.

Next winter is believed to be potentially much worse because, during the first half of this year, the EU could stock up on Russian pipeline gas, which is unlikely to come back next year, leaving the EU with a supply gap that other suppliers would be hard-pressed to fill.

Meanwhile, as many as 60 LNG tankers have turned into floating storage off European coasts as there is not enough regasification capacity on the continent to unload the cargo.

This, CNBC reports, is delaying some of the tankers’ return to the Gulf Coast to reload, and pushes gas inventories higher, Andrew Lipow from Lipow Oil Associates told the network.

“The wave of LNG tankers has overwhelmed the ability of the European regasification facilities to unload the cargoes in a timely manner,” Lipow said.

The shortage of LNG import capacity is aggravating Europe’s gas supply crisis but there is no quick solution to this problem except floating regasification units that Germany, for one, is seeking to deploy by the end of the year.

Price is also challenging, with LNG a lot costlier than the pipeline gas Europe was used to. Earlier this month, French president Emmanuel Macron slammed the U.S. for setting double standards in this respect, pointing to how gas cost much less on the U.S. market than on the international LNG market.