Good morning. Here’s what happened overnight and what you need to know today.
1.
Chip shot: Chip stocks pulled the Nasdaq and S&P 500 lower overnight even after Taiwan Semiconductor Manufacturing posted a 77% jump in quarterly profit, as traders seemed focused on its higher capex guidance. The Nasdaq lost 1.47%, the S&P 500 fell 0.51% and the Dow slipped 0.20%, with the semiconductor index down 4.3%. TSMC’s US-listed shares fell more than 2% as investors focused on its lifted capital expenditure guidance of USD60 billion to USD64 billion, up from USD52 billion to USD56 billion. Memory names SanDisk, Western Digital, Seagate and Intel all fell. Alphabet sank more than 4% after Bloomberg reported its Gemini 3.5 Pro model is months behind schedule. “It comes strictly down to the weight of the chips in the S&P 500,” said Paul Nolte of Murphy & Sylvest. “Three or four years ago, it was 8%, and now it’s over 20%. If you look at the rest of the market, it’s doing fine.” Eight of 11 S&P 500 sectors rose. Earlier, Korea’s Kospi fell 6.4%, slipping into a bear market after the Bank of Korea raised interest rates for the first time since January 2023. (Reuters)(Bloomberg)(WSJ)
2.
Fear factor: Macquarie is facing staff unrest in its high-profile investment banking division after a group of employees wrote to the board to complain about what they described as unacceptable conduct by senior managers, the AFR reported. Two letters sent to chairman Glenn Stevens alleged six senior Macquarie Capital managers had engaged in conduct “incompatible with Macquarie’s values”, including breaching company and travel policies, disrespecting employees and manipulating information, budgets and internal asset valuations. The letters, seen by the paper, were signed “Macquarie Capital employees” without names. The employees reportedly wrote that their decision to remain anonymous was “indicative of the climate of fear and the ineffectiveness of existing internal reporting mechanisms”. Some of the most serious allegations concerned the infrastructure and energy capital unit, where former and current employees allege staff were encouraged to produce financial forecasts many internally believed were too optimistic. Macquarie declined to comment to the paper on the specific allegations, but said the material allegations were not substantiated. The unrest comes ahead of Macquarie’s AGM on 23 July. (AFR)
