00:00Let's bring in our markets reporter, Anthony Stephens, on really how you're looking at things.
00:04I mean, obviously, Micron was a good sort of relief for a lot of us that are watching the chip
00:08rally.
00:09But can it spread beyond just the memory chips?
00:11Yeah, so the 85 percent odd margins that they're looking for into the fourth quarter, that is a shortage level
00:16margin.
00:17Right. So that's feeding into the broader chip ecosystem here.
00:21You're seeing Taiwan. All of the server plays are very strong.
00:24In Korea, obviously, memory is strong. That is pretty much one to one delta with Micron.
00:29So it's no surprise Hynix is trading really well. Samsung is trading really well.
00:33But for Hynix, what is very interesting is, you know, they went out and raised $29 billion and the stock's
00:37up 10 percent.
00:38That is so rare that it bears repeating. They raised $29 billion and the stock is up.
00:44And that is because they're using that money to fund an expansion at margins that are in this 70 to
00:5080 percent range.
00:51So it's an absolute spigot of cash flow. And that is feeding now into the Japanese sector.
00:56You're seeing the Japanese market being very strong. And that's because the Japanese have a huge chokehold on the cheap
01:02materials, cheap testing, cheap packaging parts of the semi-ecosystem.
01:06So if there is a shortage, these people have kind of order books that stretch into the years.
01:11So today we're seeing a kind of a data point from Micron and Qualcomm as they expand into data centers.
01:16There are data points that show that this is a multi-year structural bull market.
01:20And that's the reassurance markets have been looking for for weeks of this volatility.
01:24Yeah, I was talking to Shuli. We were joking in the makeup room about these margins of Micron 86 percent.
01:29They're bigger than even Hermes's margins.
01:31It's bigger than J.K. Rowling's margins.
01:34Yeah, let's talk about the dollar, though. It seems like it's about to break out in a big way here.
01:38How are we set up before the PCE date?
01:40I think so. PCE and Micron actually tie in together quite nicely, right?
01:44It's how much of this AI boom is going to come into U.S. economic growth and inflation that is
01:50aside from transitory shocks from commodities.
01:53And that has been Wash's entire narrative, right?
01:55I want to see inflation that is from growth, that is from wages, that is from construction, and not this
02:02transitory stuff from energy or food prices.
02:05And if you do see that coming through in PCE, and PCE has been trending higher, that can leg the
02:10dollar into a proper breakout of like a multi-year range.
02:13It's already jumping the gun in terms of like short dollar risk assets like Bitcoin, gold, silver.
02:20Those are a lot more vulnerable.
02:21Europe broke earlier, once 0.14, so there's a lot on docket today with the PCE.
02:29What about oil? We're seeing a continued slide.
02:34Well, oil is, you know, one of these dollar assets that will get hurt if the dollar continues to rally.
02:39But in this case, there's also the fundamental driver of the glut of Gulf oil coming on the market.
02:45And you're starting to see a lot of regional benchmarks in the oil market, in the Gulf, going to contango.
02:51Now, Brent has followed.
02:52And what is really going to be interesting is where the oil volatility also follows.
02:56The more oil volatility falls, the less relevant it becomes to risk assets.
03:00And we can slowly start to take oil off the table as a material mover and concentrate fully on the
03:06AI trade.
03:06So, that would be...
03:06So, that would be great.
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