Hello everyone, welcome to “Financial Extraordinary Way”.
The US stock market has a “century-old curse”. Since 1928, no matter how good or bad the economic situation was in a given year, in September, the S&P 500 index has always dropped by an average of 1.2%. Regardless of how well the S&P 500 performed in other months, once September arrives, it is destined to fall! This pattern has been consistent from September 1928 to last September, nearly a hundred years, earning the nickname “September Curse” on Wall Street.
Today’s program title: Mainland China’s summer box office is bleak, famous directors hit the streets! US stocks unable to escape the “September Curse,” rate cuts imminent as everyone waits anxiously for surprises! The stock plunge seems inevitable, Intel may be removed from the Dow! Apple’s event is imminent, sparking the largest upgrade wave in history!
Despite the Fed’s imminent rate cut in September, Wall Street still harbors doubts about whether US stocks can achieve a soft landing in the remaining three months of this year.
Adam Turnquist, Chief Strategist at LPL Financial, pointed out: Since 1950, September has only seen an increase 43% of the time.
Experts also advise the public to keep at least 20% of their wealth in cash to prepare for a potential economic downturn. Honestly, the financial markets are eagerly waiting for some key data that could affect the Fed’s final decision.
In terms of specific situations, the US stock market performed well when the stock market closed last Friday, with the Dow Jones hitting a new high and the S&P 500 index rising for four consecutive months. Whether they can avoid the upcoming “September Curse,” we’ll have to wait and see.
Recently, news about Intel considering splitting its business has caught the industry’s attention. JPMorgan Chase pointed out that if Intel considers closing some factories, selling some assets, or even splitting some businesses, such moves would be good news for TSMC.
Not long ago, Intel explicitly stated that capital expenditures for fiscal year 2024 would be reduced from around $33 billion to $27 billion, with expenditures for 2025 remaining around $20 billion, adjusting expansion plans for some new factories. This reduction is quite substantial. JPMorgan Chase stated that should Intel decide to further reduce capital expenditures or shut down new chip factories, it would directly affect the production capacity of its external foundries. Given the ongoing global chip shortage, Intel’s actions would further tilt the market towards TSMC, especially since TSMC is actively expanding its business footprint.
In addition, analysts believe that Intel’s key artificial intelligence processor, Lunar Lake, in 2025 will likely rely heavily on TSMC’s technology. Given the drastic growth in chip demand in the artificial intelligence field, Intel may need to heavily rely on TSMC to maintain its competitiveness in the market.
JPMorgan Chase believes that with its strong technology and leading position in packaging technology, as well as its dominant position in areas such as artificial intelligence accelerators, TSMC is expected to continue maintaining its structural growth momentum.
Therefore, JPMorgan Chase’s stock rating for TSMC is “hold”, with a target price of NT$1200.
In the 1990s, two tech giants, Microsoft and Intel, were among the earliest to join the Dow Jones Industrial Average. At that time, the two companies were at the height of their power, becoming the most prominent leading companies of the dot-com era.
However, fast-forward thirty years, and now Intel’s glory has faded, being overtaken by new chip giants such as NVIDIA and AMD.
This year, Intel’s stock price has fallen by nearly 60%, making it the worst performer on the Dow Jones. Last month, Intel announced a suspension of dividends and laid off 15,000 employees during its earnings call. Many market analysts lament that this decision came too late.
Apple is set to unveil a series of new products at its fall event next week, with the highlight naturally being the iPhone 16.
Analysts believe that the launch of the new products will inevitably stimulate long-suppressed iPhone demand, speeding up the upgrade cycle.
Erik Woodring, market analyst at Morgan Stanley, pointed out that the new iPhone will focus on artificial intelligence, with pricing and battery life being key concerns for consumers.
Additionally, a new Apple Watch and AirPods are also expected to be released.
Reports indicate that the current upgrade cycle for iPhones is approximately four and a half years, so Woodring believes that in the next 3-12 months, demand for iPhone upgrades will peak. Coupled with Apple’s new artificial intelligence platform, Apple Intelligence, people are excited about the new generation of Apple phones and the application of artificial intelligence, which is expected to generate a wonderful response. This will likely increase people’s desire to purchase a new phone.
Therefore, analysts believe that this release will kickstart Apple’s largest-ever upgrade cycle in history.
Additionally, according to professional organizations’ estimates, approximately 300 million iPhones globally have not been upgraded in over four years, laying the foundation for a large-scale surge in new phone purchases.
Just as Apple fans eagerly await the upcoming Apple event where the brand new iPhone 16 will be revealed, news broke on Tuesday that starting in 2025, all iPhones sold in the market will be equipped with OLED (organic light-emitting diode) display screens, including the budget-friendly iPhone SE series, completely bidding farewell to the LCD era. This also means that Japan’s Sharp Corporation and Japan Display Inc. will be completely removed from Apple’s list of suppliers for phone screens.
In 2015, Sharp and Japan Display Inc. produced nearly 200 million LCD display screens for iPhones annually, but by last year, this number had dropped to about 20 million. In 2017, Apple first used OLED displays on the iPhone X released that year; since then, the screens of high-end iPhones have shifted to OLED, mainly supplied by South Korea’s Samsung Electronics and LG.
Research firm Omdia predicts that this year, the shipment volume of OLED screens for smartphones will exceed that of LCD screens for the first time.
In the past one or two years, the US real estate market has been in a state of stagnation, with high house prices and interest rates causing many people to postpone buying homes, temporarily shelving their American dream. However, with the imminent rate cut by the Federal Reserve this month, consumers are hopeful that the housing market will soon thaw out. However, the real dawn may still take some time to manifest.
Fed Chairman Powell: “It’s time to adjust policies.”
At the end of August, to the delight of the markets, Fed Chairman Powell finally made a clear statement. With September already here, the long-awaited rate cut is on the countdown. The US real estate market is showing signs of movement, with the 30-year fixed mortgage rate dropping to the lowest level in over a year.
As of the week ending August 29, the 30-year US mortgage rate has quietly dropped to 6.35%, a decrease of 0.1 percentage points from before, compared to a peak of 7.79% last year.
Data released by the US Census Bureau and the Department of Housing and Urban Development in late August showed that, after seasonal adjustments, sales of new single-family homes in July increased by 10.6% to 739,000 units, reaching a new high since May last year. So, is the housing market’s spring really on the horizon? In reality, many Americans are still facing tight housing affordability issues due to sustained high inflation.
Pennsylvania resident Danny Navarro: “I have a $400 student loan bill, a $545 property bill, and an average weekly food bill of $150.”
In addition, housing supply is also a problem. In July, the amount of new homes started in the US was at its lowest level in the past 16 months, with the number of building permits issued slightly declining.
Colorado Governor Jared Polis: “The average house price in the Denver metropolitan area is $600,000. Why? Because it’s a good place to live, but why are house prices so high? Because of government intervention, limiting the ability to build houses.”
US presidential candidates from both parties have proposed plans to increase housing supply, with Robin Hain claiming to build 3 million new homes, while Trump has proposed building more homes using federal land.
However, with the Fed rate cut driving down mortgage rates, many homeowners waiting to sell their homes may soon list their properties for sale, leading to an increase in the supply of homes.
Greg McBride, Chief Financial Analyst at Bankrate: “Homeowners are no longer in a hurry to switch from a 3% mortgage rate to 7%. But with the drop in mortgage rates, although we can’t expect them to drop back to 3%, homeowners may say, well, the mortgage rate has dropped low enough, let’s list this house for sale and then buy another one.”
However, the rate cut is still a double-edged sword, and homebuyers should not be too optimistic.
Greg McBride, Chief Financial Analyst at Bankrate: “A significant drop in mortgage rates can indeed increase the affordability of potential homebuyers, but if this leads to a surge in demand, it could push up housing prices. Homes don’t need to see a significant increase in prices to offset the benefits people get from lower mortgage rates.”
So what advice do experts have for you? Buyers, especially first-time buyers, must understand their financial situation before entering the market and should not make hasty decisions based on small changes in mortgage rates.
Greg McBride, Chief Financial Analyst at Bankrate: “It’s not just about making a down payment; you will also need to pay thousands of dollars in closing costs and moving fees…”
Indeed, purchasing a home is a significant investment and should be approached with caution. Additionally, when it comes to housing prices, California’s housing prices have always been among the highest in the US, especially in San Jose, in the southern part of the San Francisco Bay Area, where the median house prices have surpassed $1.5 million. However, in recent years, as wildfires in the state have become more frequent, the value of California’s properties is under pressure.
The Federal Reserve Bank of San Francisco reported last week (August 26) that many people prefer living in open areas surrounded by forests, but these areas are also prone to wildfires. Today, people are more concerned about the risk of wildfires outweighing other advantages, leading to a situation where property values here are falling while appreciating property values in other areas.
Currently in California, home prices in coastal areas of the central and northern regions as well as desert regions have increased more than homes in areas prone to wildfires in the Sierra Nevada Mountains and densely vegetated areas near Los Angeles.
A study by property analysis firm CoreLogic in 2023 indicated that from June 2021 to May 2023, the price of homes in areas prone to wildfires decreased by about 0.64%, while properties just one mile away from these areas increased in value by 5%, and properties further than 5 miles saw a 7.2% appreciation. These research findings show that homebuyers are still fairly sensitive to the impact of wildfires.
Government data also shows that since 2017, over 51,000 buildings and nearly 12.2 million acres of land have been destroyed by wildfires in California. If you happen to be considering purchasing property in California, this data might help you make better decisions.
Usually, over Labor Day weekend, box office numbers tend to be relatively low. However, this year’s long weekend holiday couldn’t overshadow the success of the Marvel movie, “Deadpool.”
Now let’s take a look at the box office rankings from the past weekend.
“It’s a mystery.”
After six weeks, the disaster thriller “Twister” made a comeback over Labor Day weekend, securing the fifth spot with earnings of $7.2 million.
The biographical film “Reagan,” starring Dennis Quaid, had a strong performance in its debut weekend, raking in $7.4 million and claiming the fourth spot. The film received a 98% audience approval rating on Rotten Tomatoes.
The drama film “Love, Stop Here,” based on a bestselling book, continues to hold strong in the top three at the box office for the third week, coming in third last weekend with $7.43 million in earnings.
Directed by Fede Alvarez, the sci-fi horror film “Alien: Deadly Ship” maintained its success from last week, ranking in second place with $9.3 million in revenue.
And once again, this past weekend’s box office champion remains Marvel’s new film “Deadpool vs. Wolverine.” This R-rated blockbuster, full of profanity and bloody violence, has dominated North American theaters for six weeks, becoming one of the most iconic movies of the summer. Over Labor Day weekend, it claimed the top spot with $15.2 million in revenue, surpassing $600 million in total revenue in North America and $1.25 billion worldwide.
China’s film market has hit rock bottom this summer. Rarely do any films shine momentarily before being engulfed by boredom.
Last summer, Ulan, who “dominated the gods,” faced a downturn with “Strangers Below,” only earning $1.2 billion, not even half of the film’s production cost. Chen Sicong’s collaboration with Liu Haoran, heavily marketed “Decryption,” failed to replicate the success of “The Vanished Her,” with box office returns only one-tenth of “Toy Grabber.” This led to criticisms of Chen’s creative fatigue. Hu Mei’s “Dream of the Red Chamber,” developed over 18 years, received poor reviews and dismal box office numbers.
Many well-known figures in the film industry, who used to be surrounded by flowers and praise, are now being mocked or even mobbed by others this year.
According to Lighthouse’s professional data, the 2024 summer box office totals only $11.643 billion, half of the $20.63 billion from the previous year. The highest-grossing film, “Toy Grabber,” reached $3.25 billion, failing to surpass the previous year’s “All-In.”
Director Ulan of “Strangers Below” exuded confidence in building a “unique world of superpowers for Chinese people.” Main actor Hu Xianxu took to variety shows and flaunted his abs on social media to hype the film. Ulan’s high expectations are not unfounded, as he excels in eastern mystical themes, with last year’s “Godslayer Part One” earning $24.8 billion and gaining a fan-following as a Chinese epic myth. Ahead of the premiere, expectations for “Strangers Below” reached 186,000 viewers on Maoyan’s professional version, giving it a strong initial advantage. However, the film ultimately only earned $12 billion, with a 5.9 rating on Douban, and poor box office and reception.
As August rolled in, films like Xie Tingfeng’s “Customs Frontline,” Jackie Chan’s “Legend,” and Marvel’s “Deadpool vs. Wolverine” failed to make a splash. Many theaters then pinned their hopes on Chen Sicong, the “man who can fight Shen Teng.”
Known for his directorial prowess as a product manager, Chen Sicong’s “Detective Chinatown” trilogy each raked in $820 million, $3.19 billion, and $4.12 billion, respectively. Last year, his suspense and social commentary film “The Vanished Her,” grossed $3.52 billion and claimed the runner-up spot in the 2023 summer blockbuster competition. This year, however, Chen disappointed fans with his new film “Decryption,” which only earned $330 million. Interestingly, on social media, more attention was paid to the leading actor Liu Haoran’s hairline than the movie itself.
Xu Zheng, known for his memorable performances in the “Lost in Thailand” comedy series and “Dying to Survive,” directed and starred in the new film “Contrarian Life.” The film drew criticism for showcasing a rich man playing a poor man for poor moviegoers to buy tickets to watch. Furthermore, using a food delivery rider’s miserable life to tell a story that conforms to China’s Communist Party ideology has sparked ridicule and criticism.
This year’s summer box office is arguably the worst and most unexpected in a decade for audiences. According to Maoyan’s professional version, only two of the 2024 summer films grossed over $1 billion, including “Toy Grabber” ($3.25 billion) and “Silenced” ($1.35 billion), as opposed to the five from the previous year. Therefore, why has Chinese cinema suddenly hit rock bottom in 2024?
The summer box office is a highly anticipated time of year for filmmakers who believe in auspicious timing. In 2015, “Monster Hunt” dominated that year’s summer box office with $2.4 billion in revenue. Subsequently, “Dying to Survive,” “Ne Zha,” and others emerged as dark horses from the summer box office. So why has China’s film market fallen into a rare low this year?
Every year, the number of film projects approved and films shot in China decides the future stockpile of the film market. According to statistics from China’s Film Bureau, in 2017, there was a record high of 3825 film projects approved, with the following two years maintaining levels close to 3000. These completed projects, which were to be released between 2020 and 2022, were stockpiled due to the pandemic and were finally released en masse in 2023.
For instance, “Godslayer Part One” started filming in 2018, wrapped production in 2020, but was not released until 2023. Additionally, works like “The Angry Sea” and “As Solid as Stone” are five years old. However, the unusually quiet year for new films.
In China’s deteriorating economic environment, many capital injections that were expected to flood into the film industry have quietly withdrawn, or companies have simply shut down due to an inability to operate, leading to insufficient film supply this year. Moreover, the stringent review system has limited the range of available film topics, constraining the production of movies that address real societal and human issues, causing a loss of audience interest. Films that truly captivate, inspire thought, or delve into social hot topics are what truly resonate and spark widespread discussion. However, it seems that under the Chinese Communist regime, such films have become rare.
According to the Think Tank’s data, there are 237 new films released in the first half of this year, only six less than the previous year, notably consisting mostly of medium to low-budget films, lacking big-name films to boost box office numbers. Among them, the few films that can stand out and hold the audience’s attention are few. Only four films earned over $1 billion in revenue in the first half of this year, the fewest in nearly six years. Various factors have contributed to this year’s summer box office hitting a rare low.
Many people believe that film marketing and promotion can create stars. However, this year, even the “marketing gods” have failed.
Many times, after watching teaser trailers and synopses on platforms such as Douyin, many viewers lose interest in watching the full movie. This situation is not uncommon. Recently, well-known film critic Tan Fei summed up the poor summer box office performance by mentioning that “extended viewing times” are why many people aren’t going to the movies, as viewers may lose interest after watching short video clips for just a few seconds or minutes.
Many experienced professionals in the film and television industry generally feel that marketing and promotion have become increasingly challenging. While film companies seek fresh and creative ideas, the actual marketing