Another day, another sell-off as Fed head Powell talks some more. He may or may not favor a central bank digital or crypto-currency.

The Nikkei index fell 1.15% today in Japan and the FTSE fell 0.8% in Britain, a harbinger of lower prices for the DJIA which duly fell 160 points at the opening. There are reasons for the drop.

Huge floods on the Ahr river south of Bonn, a wine-growing region, killed at least 4 people and 30 more are missing. A hospital in Leverkusen had to be evacuated. Other rivers in Belgium and the Netherlands also flooded. Global warming is not just a west coast US phenomenon.

Britain is suing 10 drug companies, happily not including any we own, for price-gauging. The National Health Service saw hydrocortisone prices rising as much as 1000% in 2018. Meanwhile, Johnson & Johnson is recalling sunscreen from the market because it is contaminated with carcinogens.

Photo by Adeolu Eletu on Unsplash

Two of my holdings had reports today. One was the US bank Truist TFC with a 3% profit beat boosting its share price. The other was Taiwan Semiconductor TSM whose beat did not play out normally. More on the news for paid subscribers follows:

Technology

*Taiwan Semiconductor, TSM fell 6.63% at the US opening today after it reported Q2 margins of 50%, vs estimates of 51% by the consensus and sales up 11% in Taiwan currency, but lower when converted into dollars, at $4.8 bn. It also chopped its forward estimates for the Sept. quarter margins to 49.5%. It expects net income for the rest of the year to again suffer from currency factors while sales increase by 14.6 to 14.8% in the next quarter.

CEO CC Wei told the world it is pondering building a fab plant in Japan, on which it is doing “due diligence.” This worries Taipei.

Another worry is that its largest client is Apple which purchased to 90 mn i-phones, 3% below forecasts. TSM's homeland chip testing facility, King Yuan, is out of operation because of a covid-19 outbreak, another negative. Taiwan is denied jabs by the PRC to prove Chinese intent to take over the island. TSM and another tech firm had to do a deal with a Hong Kong drug company to get jabs China would not deliver.

The issue no longer is corporate performance. It is China's crackdown on Taiwan's businesses, which even Asia Times' William Pesak now thinks is a “policy mistake”.

CFRA and Needham analysts rate TSM a buy, based on numbers but not political pressure. They estimated the price would top $143.75 and that profits would be $1.68. Ironically enough, weak Renminbi forecasts may wind up helping Taiwan Semi.

*After forecasting better earnings, the share price of Finnish Nokia rose yesterday. Today this reversed as NOK shareholders took profits, notably in the UK where NOK shares fell to euros 4.94/sh.

*The price of Microsoft cloud for small businesses with few employees will be $31/month, a huge expense in the view of this small business owner and MSFT shareholder.

*Tencent opened up on a note by Jonathan Weber in seekingalpha.com but our South African play on TCEHY, Naspers, did not follow because of riots and looting continuing over the arrest of Jacob Zuma but later gained 1.25% as controls were enforced. Prosus, PROSY of Holland rose 0.2%.

*Mercado Libre rose 0.63%. Coupang however fell 1%. MELI, CPNG.

Energy

Oil prices fell about 2% with a hint of oversupply after a deal was struck between Saudi Arabia and the United Arab Emirates, allowing the latter to boost output.

*Chinese car-maker. NIO opened up 3.3%.

*The price of oil falling hurt BP and Shell RDS-B but boosted others: Algonquin (AQN), Azure (AZRE), Canadian Solar (CSIQ), Plug Power (PLUG, up 3.56%), and EnergyFuel (UUUU) but not Earthstone Energy, down .38%. Later UUUU fell back to yesterday's close.

*Eon.SE, EONGY, gained 0.83% perhaps because of the floods taking down German electricity.

Gold

*The gold price fluctuated today, both up and down, but our mining share, Kirkland Lake Gold, KL, gained from a new estimate of its eps, 84.9 cents vs 82 cents.

*Cathie Wood of ARK says she likes Bitcoin for ESG holdings (despite the huge energy bill) and said that some Chinese companies are safe. I am waiting for her funds to crash, being a jealous female.

Pharma

*Danish Novo Nordisk, NVO, rose 0.6%.

*Thermo Electron, by largest US holding, gained 0.31%.

*Israeli BiolineRX jumped 0.82%, BLRX.

*Genfit gained 1.1%. GNFT.

*Zymeworks rose 2.03%, top of the heap. ZYME.

Essentials

*Alimentation Couche-Tard, ANCUF (ATD.B in Canada) gained over 4% on no news. It is expanding its retailing network in North America, Europe, and Asia, and raises its dividend in loonies every year.

*Despite the fall in lumber prices, Canadian fund Weyerhaeuser is up 0.85%. WY.

*Mexican Cemex rose 2% despite inflation risks south of the border, mainly because of statism. CX.