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Article | 03 October 2023 | Investments
The cycle ends here?
Markets contemplated a milestone moment, as western central banks appeared to hit the ‘high for long’ pause in their hiking cycle. The US Federal Reserve (Fed) and the Bank of England left rates on hold, a week after the European Central Bank (ECB) raised rates, possibly for the last time this cycle. Data dependence remains the mantra, however, and central bankers will be keenly watching inflation and employment reports. Nonetheless, no sharp rate cuts are expected over the next year, with the trajectory predicted to resemble the plateau of Table Mountain, not the sharp peak of the Matterhorn.
The world’s biggest contract chipmaker, TSMC, sparked a tech-led market sell off. The Taiwanese tech giant was reported to have told key suppliers to delay delivery of
high-end chipmaking equipment. Elsewhere, the launch of Apple’s iPhone 15 was overshadowed by concerns over prospects in China, where the company is forecast to sell 50 million iPhones this year. Unconfirmed rumours suggested that government officials could be banned from using iPhones. And this as local rival Huawei launched a 5G enabled smartphone. Apple’s share price fell 6% over two days, knocking $200 billion off the company’s market value.
After a lean patch, the IPO (initial public offering) market sprang back to life. Three tech companies, Arm, a chip designer, Instacart, an online retailer, and Klaviyo, a marketing software company, were successfully listed. A limited amount of stock was on offer in each case and scarcity kept interest buoyant, if not quite at 2021 levels of exuberance. In Japan, the planned IPO of chip equipment maker Kokusai Electric, will be the biggest for five years. And it’s not only the tech sector. Birkenstock, whose sensible sandals featured in the movie Barbie, also plans to list on the US market.