Chip Rebound, Amazon Results Bolster Stock Rally | Bloomberg Brief 07/31/26
Speakers
Mark
— Reporter, Bloomberg
Ven Ram
— Markets Live Reporter/Strategist, Bloomberg
Winnie Hsu
— Bloomberg Reporter (Asia Markets)
Jane Foley
— Rabobank Head of FX Strategy
Chloe Meley
— Reporter, Bloomberg
Summary
Global markets rally as tech earnings diverge: Amazon surges on AWS reacceleration, while Apple drops on supply chain warnings. South Korea's KOSPI rebounds a record 18% on AI chip demand, though analysts caution the rally is fragile. The yen weakens after BOJ holds rates and intervention fails, while hedge fund blowup highlights leverage risks, not a broken AI thesis. Oil majors preview amid geopolitical supply concerns.
- Amazon up sharply premarket as AWS cloud growth accelerates to 37%, reinforcing AI investment narrative
- Apple slumps on disappointing guidance; Tim Cook calls component shortages a '100 year flood'
- South Korea's KOSPI index soars 18% in a day, led by Samsung and SK Hynix surging 35%
- Ven Ram warns KOSPI rally is positional, market casino-like, with more compression ahead
- BOJ holds rates; yen intervention attempts fail as Ven Ram argues no action will sustain a stronger yen
- Citadel buys assets from Situational Awareness fund; blowup driven by leverage, not a break in AI theme
- Europe pushes for tech champions via revised merger guidelines, aiming to close gap with U.S. giants
- Oil prices volatile ahead of Exxon and Chevron earnings; Middle East outages cloud outlook
Ideas
Apple supply crunch hits sales forecast.
Apple is facing severe component shortages, with Tim Cook likening the memory cost crunch to a '100 year flood', leading to disappointing sales guidance and a significant drop in shares.
AWS growth accelerating, AI opportunity huge.
Amazon's cloud business AWS reaccelerated to 37% growth, exceeding expectations, and CEO Andy Jassy compares AI buildout to the original AWS build, suggesting a massive growth engine. Investors are buying this narrative.
Yen weakness persists despite intervention.
The Bank of Japan squandered an opportunity to raise rates, currency interventions have failed to sustainably strengthen the yen, and no matter what they do, it won't help the yen.
