Key Inflation Data and Market Impacts: Fed, Apple, SK Hynix

The focus this Friday is on the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index.

The PCE data will likely test market expectations that the U.S. central bank may cut interest rates in September. The June PCE price index is anticipated to have increased by 0.1% month-over-month, with an annual rate of 2.5%, which is close to the Fed's 2% target.

Additionally, economists at JPMorgan expect the core PCE inflation report for June to show a 0.2% month-over-month rise in prices, leaving the year-over-year increase unchanged at 2.6%. The recent decline in the consumer price index for the first time in four years has strengthened market expectations that the Fed is ready to cut interest rates. However, it is unlikely that this will happen in next week's meeting.

Apple Suffers Drop in Chinese Sales

Apple (NASDAQ: AAPL) is facing increasing competition in China, its third-largest market, leading to a significant drop in its position among smartphone vendors. According to data from market research firm Canalys, Apple’s smartphone shipments in China decreased by 6.7% in the second quarter of 2024, with total shipments falling to 9.7 million units from 10.4 million units in the same quarter last year.

This decline follows a 25% year-on-year drop in shipments in the first quarter, reducing the number to 10 million units. Chinese consumers are increasingly favoring local brands that aggressively incorporate generative AI into their products. Consequently, Apple's market share in China fell from 16% to 14%, and its ranking dropped from third to sixth place.

Vivo emerged as the top vendor with a 19% share, followed by Oppo, Honor, and Huawei, with 16%, 15%, and 15% respectively.

SK Hynix to Invest $6.8 Billion in New Semiconductor Plant

Memory giant SK Hynix announced on Friday its plans to invest 9.4 trillion Korean won ($6.8 billion) to construct a new semiconductor manufacturing plant in South Korea. The plant will be located in the Yongin Semiconductor Cluster, an emerging hub where the South Korean government is developing a massive complex for chip operations.

SK Hynix has been capitalizing on the AI boom and its partnership with Nvidia (NASDAQ:NVDA). This week, the company reported its second-quarter profit, the highest level in six years, highlighting its strong performance in the semiconductor market.