Weekend Update #80
Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
Everyone is waitin' on the bell
A couple seconds, we'll be raisin' hell.
The sun is shinin' down, school is finally out
Nothin' matters, so we might as well
Everybody's bakin' in the sun
Come and party, do it while we're young
Move your body, when you hear the drum
So put your hands up
It's gonna be a bitchin' summer
We'll be livin' fast, kickin' ass together
Like high school lovebirds
Gonna have a blast make it last forever
I'll pick you up at the liquor store
Hurry up, we can fit one more
It's now or never
It's gonna gonna be, be a bitchin' summer
Bitchin' summer
Avril Lavigne, eponymous album (2012). Songwriters: Avril Ramona Lavigne, Matt Squire, David Hodges, Jacob Kasher Hindlin and Chad Robert Kroeger.
—JUNE 24, 2022—
DOBBS, STATE HEALTH OFFICER OF THE MISSISSIPPI DEPARTMENT OF HEALTH, ET AL. v. JACKSON WOMEN’S HEALTH ORGANIZATION ET AL.
OVERVIEW
We believe that the semiconductor supply chain has entered a period of relief as demand settles in certain end-markets. Our position is based on an analysis of the aggregate inventories of the 30 constituents of the SOXX, Semiconductor ETF. Lower levels of demand may allow these companies to regain control of their product cycles and provide added conviction for analysts and investors. Stronger inventory conditions will also stabilize margins, as products are cycled out on predictable schedules and inventories avoid going obsolete.
We speculate that the most recent COVID-19 lockdowns in Shanghai, China had the added impact of supply straining the manufacturing process, given that the country is a major producer of analog components necessary to build complete semiconductor kits. With major Chinese ports and cities coming back live, it is likely that the semiconductor value chain will experience additional stabilization, decreasing lead time and pricing volatility.
That being said, we are still skeptical about the level of demand for certain semiconductor end-markets, namely consumer electronics and client computing end-markets. We fear that this may increase uncertainty over sales levels during ‘23 and ‘24. Overall, we are long-term bullish on the datacenter, industrial & AIoT, as well as the automotive semiconductor end-markets.
Our analysis is based on the 30 constituents of the SOXX ETF. It includes most of the largest, publicly traded semiconductor companies on U.S. exchanges.
About the index:
iShares Semiconductor ETF is an exchange-traded fund incorporated in the USA. The ETF’s objective seeks investment results that correspond to the performance of the ICE Semiconductor Index which is composed of U.S.-listed equities in the semiconductor sector.
INVENTORY ANALYSIS - 1Q22
Inventory Position
Chicago Fed National Activity Index
The Chicago Fed National Activity Index (CFNAI) fell from 0.40 in April to 0.01 in May.
Production-related indicators contributed –0.01 to the CFNIA in May, down from +0.29 in April
Manufacturing industrial production decreased 0.1% in May after increasing 0.8% in April
The contribution of sales, orders and inventories category to the CFNAI moved up to +0.05 in may from –0.07 in the previous month
Employment-related indicators contributed +0.08 to the CFNAI in May, up slightly from +0.07 in April
The unemployment rate was unchanged at 3.6% in may
The contribution of the personal consumption and housing category to the CFNAI decreased to –0.11 in May from +0.10 in April
A reading below zero indicates below-trend-growth in the national economy and a sign of easing pressures on future inflation
University of Michigan Consumer Sentiment:
Final Results From the June 2022 Survey
Source: Surveys of Consumer Attitudes — University of Michigan
The final June reading of 50.0 confirmed the early-June decline in consumer sentiment, settling 0.2 index points below the preliminary reading and 14.4% below May for the lowest reading on record. Consumers across income, age, education, geographic region, political affiliation, stockholding, and homeownership status all posted large declines.
About 79% of consumers expected bad times in the year ahead for business conditions — the highest since 2009. Inflation continued to be of paramount concern to consumers; 47% of consumers blamed inflation for eroding their living standards, just one point shy of the all-time high reached during the Great Recession.
Since the preliminary June reading, the Federal Reserve raised interest rates by 75 basis points, exceeding the 50 basis point hike that had been previously telegraphed.
Opening Statement by Senator Sherrod Brown (D-OH)
The Banking, Housing, and Urban Affairs Committee will come to order.
Today’s hearing is in hybrid format. Our witness is in-person, but members have the option to appear either in-person or virtually.
Today we’ve seen the fastest job growth in decades, faster growth than China, and the lowest unemployment levels in 50 years. But when Americans see the price of gas and groceries going up, week after week, available jobs and long-awaited wage gains don’t mean as much and don’t go as far. American families have been through enough the past two years. But for most people, it’s not just the past two years that have been tough.
Our economy hasn’t worked for most Americans for far too long. Whether it’s war or disease or financial crisis or the march of globalization, workers and their families always bear the biggest burden – whether it’s in the form of higher prices or lost jobs or low wages or all of the above. That’s not inevitable. The economy isn’t physics. The ghost of Adam Smith would not recognize America today. There is no invisible hand of the market. When prices go up, it’s because someone made a choice to raise them. In corporate boardrooms, when supply chains slow down or input costs go up or resources become scarce, executives make decisions: Do we cut back on bonuses, do we rethink our stock buyback plan for this quarter, do we forgo executive raises this year, do we post quarterly profits that are still higher than last year – but maybe not quite as high as analysts thought they could be? Or do we raise consumer prices, and foist all the negative consequences of world events onto the people who can least afford them?
We know what most corporations do. They make the same choice they’ve always made, no matter the economic conditions of the moment. Most of these executives probably aren’t bad people. They’re just doing their jobs, they tell us. It’s the Wall Street system. These executives have to post profit increases for their shareholders, quarter after quarter – the consequences for everyone else be damned. It’s why for decades, Wall Street has rewarded the companies that squeeze their workers the hardest – companies that cut wages and retirement benefits, and then cut corners on worker safety and on consumer protection – just to make their stock prices go up. It’s why too many companies failed to invest in their workers or their products. It’s why companies moved manufacturing overseas, and then neglected the supply chains that have been crippled during the pandemic. It’s why big corporations like Amazon and Starbucks bust unions. It’s why oil and gas companies would rather charge higher prices than increase supply to meet demand. We aren’t witnessing traditional inflation– we’re watching Russia and OPEC drive up prices and American energy companies engage in war-time profiteering.
PBCAR0191: New Cohort vs. ASH Cohort Results
Precision BioSciences & Novartis In Vivo Gene Editing Collaboration Presentation
On June 21, 2022, Precision BioSciences announced they had entered into a partnership with Novartis to develop an in vivo gene editing program for the treatment of hemoglobinopathies, including sickle cell disease and β-thalassemia.
Precision will generate an ARCUS nuclease for an undisclosed “safe harbor” target to be delivered to hematopoietic stem cells (HSCs). After development of the ARCUS enzyme, Novartis will take over all subsequent development and commercialization of the therapy.
Under the deal, Precision received an upfront payment from Novartis of $75 million — $50 million in cash and $25 million in equity (12.4 million shares). Precision will also be eligible to receive up to $1.4 billion in milestone payments and royalties on the sales of an approved product. Importantly, these collaboration revenues extend the company’s cash runway to 2024.
The partnership will enable Precision to gain experience in a 4th tissue target location — now with in vivo programs spanning the liver, muscle, central nervous system, and hematopoietic stem cells — and Precision will seek the opportunity to validate ARCUS as the premier gene editing platform with a complex edit they believe cannot be matched by any other gene editing technology.
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TANIA CANDIANI: FOR THE ANIMALS
Curated by Miranda Lash, MCA Denver Ellen Bruss Senior Curator
On view from Friday, June 3 to Friday, August 26
Tania Candiani: For the Animals explores the interrelationships between human, animal, and non-biological sounds, and the rich and fragile nature of the acoustic fabric around us. This solo exhibition at MCA Denver presents artist Tania Candiani's mesmerizing three-channel video For the Animals, 2020, as well as sculpture, prints, and video related to this project.
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