Europe locked in at a one-year high; Chip stocks recovered

19:40

Michael Berry, famous for his successful bet against the housing market before the 2008 crisis, is increasing his bets against AI and chip stocks. Today Berry revealed a new short position against Micron Technology alongside existing positions against companies such as Nvidia, Applied Materials and the SOXX hedge fund. His main claim is that the sharp rally in the chip market, driven by the wave of investments in AI infrastructure, has reached extreme pricing levels that could lead to a significant correction of about 30%.

Berry disclosed the bearish bet in a post on Substack, noting that he opened a short position on the stock at a price of $1,051.87 per share.

“Yesterday I shorted one stock, even though it had already gone down nicely, because I think I have a relatively good understanding of how this story will end. In addition, I increased positions in five others,” Berry wrote in a post he published yesterday.

His rationale is the cyclical nature of the chip industry. According to him, Micron represents this dynamic very well: periods of strong demand and high profitability repeatedly alternate with periods of excess supply, falling prices and sharp damage to profits. He points to dozens of decline cycles of over 30% throughout the company’s history, and claims that the long-term returns are not impressive relative to the risk.

The debate surrounding the chips is complex, but Berry highlights the company’s financial metrics such as low return on capital and high volatility in cash flow, which he says indicate a business that is not as stable as the market is currently pricing it.

The central aspect of his critique is around the AI ​​narrative. Berry claims that the market is pricing in almost infinite growth in demand for advanced chips, especially HBM type memory, to the point where the supply is “pre-sold” for years to come. According to him, such a situation creates a dynamic of FOMO, where investors buy shares out of fear of missing the rally and not necessarily out of a rational valuation.

Berry calls this “greater fool dynamics”, a dynamic in which the price continues to rise as long as there is a buyer willing to pay more, even if the company’s data does not support it.

Micron stock has jumped more than 240% since the start of 2026, but in the past week it has retreated by about 10%.

Berry explained why he preferred a short position to buying put options – “they seem relatively expensive”, but noted that he may increase his bearish position if the volatility in the market calms down, that is, if the price of the options falls and he can enter at a more favorable price.

18:30

In Europe, trading is now closed. After the trading started with gains, later the trend moderated and the indices moved to trade in a mixed trend but rose towards the closing. The pan-European Stoxx 600 index rose by 0.7% to a 52-week high and even completed a weekly increase of about 2% – the fourth consecutive week of increases. At the same time, the dollar weakened to a two-week low and gold continued to strengthen.

In Europe, technology stocks and utilities stand out for the better, leading the STOXX 600 index towards a second record high in a row.

Following the recovery of chip stocks in South Korea (SK Hynix shares by almost 11%, while Samsung Electronics climbed by 8.2%), chip stocks in Europe also went up. stock ASML The Dutch company, a chip equipment manufacturer, rose 2.1%, as did the competitor ASM . In Germany it got stronger Infineon Technologies by 0.9%, while STMicroelectronics added 0.6%.

In European stock markets – Frankfurt rose by 0.8%, Paris by 0.4% and London by 0.2%.

17:27

Oil prices are trading relatively stable, with the market preparing for an oversupply in the short term. Brent crude rose 0.3% to $72 a barrel, while WTI oil contracts for August delivery traded almost unchanged at $68.8 a barrel.

According to Sojin Kim, an analyst at MUFG, the recovery of oil exports from the Gulf countries, along with the increase in the volume of Iranian oil stored in tankers off the coast of Iran, continue to increase the supply in the near term. However, she notes that the risks to the oil supply have not yet disappeared. Fundamental disputes still remain between the US and Iran, including the issue of future control of the Strait of Hormuz – a strategic shipping lane through which a significant part of the world’s oil supply passes.

16:52

Chip stocks in Europe are recovering today, following the gains recorded earlier in Asia.

The sharp declines in chip stocks began on Wednesday, after the chairman of the Federal Reserve, Kevin Warsh, said that those who expect the central bank to agree to inflation higher than the 2% target are “expected to be disappointed”. His words strengthened the fear that high interest rates will remain for a long time, and led to the continuation of the wave of realizations also on Thursday.

15:49

The US dollar weakened against most major currencies, after investors reduced expectations that the Federal Reserve will continue with a tight monetary policy, following the publication of the weak employment report for June in the US on Thursday.

The dollar index (DXY), which measures the performance of the American currency against a basket of six major currencies, fell by about 0.13% to a level of about 100.70 points. This completed a decrease of about 0.6% compared to last week’s closing level, which stood at 101.37 points.

The weakening of the dollar reflects a change in investors’ expectations: the weak employment data reduced estimates that the Fed would leave interest rates high for a long time, and even strengthened the chance of interest rate cuts in the coming months. Such expectations tend to weigh on the dollar, because they reduce the yield advantage of dollar-denominated assets relative to other currencies.

15:45

Gold prices are rising today, and the precious metal is on track to record its first positive week in five weeks, after a prolonged period of pressure.

The price of gold for immediate delivery (Spot) increases by 1.4% and trades around $4,182 per ounce, on the way to a weekly increase of about 2.3% – the first weekly increase since the end of May. Gold futures in the US for delivery in the coming month are also up by about 1.5%.

Gold has been on a downward trend since the beginning of the year, against the background of fears of accelerating inflation, the strengthening of the dollar and the hardening of the central banks’ position following the war between the US and Iran – factors that hurt demand for the metal, which is considered a safe haven asset.

In the second quarter, gold posted its worst quarterly performance in 13 years, and is still trading about 22% below the historic high of more than $5,300 an ounce, set in January.

The recovery this week came after the US employment report released on Thursday indicated an addition of only 57,000 jobs in June – less than the updated addition of 129,000 in May, and also below analysts’ forecasts of 115,000. The data reinforced estimates that the US labor market is slowing, which may increase expectations for interest rate cuts – a scenario that tends to support gold prices.

15:20

Trading in the stock markets in the world is conducted in a mixed trend.

In Europe, the trade opened with gains, but later the trend moderated and the indices started to trade in a mixed trend. The pan-European Stoxx 600 index traded almost unchanged in the morning hours in London, but is still on track to complete a weekly increase of about 2% – the fourth consecutive week of gains. At the same time, the dollar weakened to a two-week low and gold continued to strengthen.

In Europe, technology stocks and utilities stand out for the better, leading the STOXX 600 index towards a second record high in a row.

In European stock markets – Frankfurt is up by 0.4%, Paris is unchanged and London is slightly down.

Nasdaq 100 futures rose 1.1% in trading that took place while the US Independence Day holiday kept markets closed. In South Korea, the shares of memory giants SK Hynix and Samsung Electronics recovered, and helped lead to an increase of about 2% in the Asian indices.

Friday’s gains reflect another turn in a period of volatile trading, as investors try to assess whether the strong rally recorded in the second quarter, led by artificial intelligence stocks, has gone too far. After the stock recovery following two days of sharp declines in the chipmakers, the market’s eyes are now on the upcoming report season, which will provide an indication of whether the massive investments in artificial intelligence infrastructure are beginning to translate into actual profits.

The price of gold is now up 1.6%, putting the metal on track for its first weekly gain in five weeks, after coming under sustained pressure this year. As of now, gold is trading at a level of about $4,194 per ounce. Gold prices have fallen this year, and the quarter that ended in June was its worst in 13 years. It is still trading at a discount of about 22% from the all-time high of over $5,300 recorded in January.

There will be no trading on Wall Street today due to the American Independence Day celebrations.

Yesterday there was another rotation on Wall Street – money that went between chip stocks and technology stocks (SOXX and-XLK (to other sectors such as the health sector)XLV ) and consumption (XLP ). The rotation is also reflected in the S&P 500 index with an equal weight that rises (RSP ), the S&P 500 fell 0.2%. The Nasdaq fell about 1.5% but the Dow rose 0.9% to a new high.

Two things affected the market: First, the employment report that was published yesterday. According to the report, the American economy added only 57,000 jobs in June, far below expectations of 113,000. The unemployment rate was 4.2%, slightly better than the 4.3% forecast. After the chairman of the Federal Reserve, Kevin Warsh, called on investors to focus on the economic data to assess the interest rate path, and not rely on hints from the central bank.

After a mixed series of data published this week, the weakness in the labor market is expected to strengthen estimates that the Fed will reduce interest rates later this year, as it indicates a moderation in economic activity and reduces the need for a restrictive monetary policy.

The second reason is reports that increase the fears among investors about a future change in the demand map in the chip industry.

stock dark Zinka jumped after it was announced that it was looking into purchasing some of its memory chips from Chinese manufacturer CXMT, which is generating an opposite market reaction.

Shares of manufacturers of memory chips are seen as candidates for damage in the event that Apple transfers some of the demand to other suppliers. Micron For example, it enjoys significant exposure to the mobile and personal computer market, so any fear of a “leak” from a major customer like Apple immediately affects the stock.

Another reason for concern is the report according to which the artificial intelligence company Anthropic is in talks with Samsung, with the aim of making it the manufacturing partner of a dedicated artificial intelligence chip that the company is developing.

According to the report, the program is still at an early stage, and Anthropic has not yet finalized the decisions regarding the technical specifications of the chip. However, the very possibility of the company developing its own chip was seen in the market as a sign that major AI companies continue to strive to reduce dependence on existing chip suppliers and develop customized solutions.

Meanwhile, the Roundhill Memory ETF fund (DRAM ), which tracks companies in the field of memory chips, ended the week with a decrease of almost 15%. This is the fund’s worst week. The fund, which was launched at the beginning of the second quarter just as the rally in the memory shares began, almost tripled in value between the beginning of April and the end of June, so the recent declines also reflect the realization of profits after the sharp increases.

Tesla fell even though it reported deliveries of 480,126 vehicles worldwide in the second quarter, this figure also significantly beat analysts’ forecasts, which averaged only about 396,000 deliveries.

Harel Finance cites two main reasons: one is a classic “buy on hearsay, sell on knowledge”: the stock jumped more than 8% just three days ago. Investors took advantage of the excellent delivery data to “lock in” profits and exercise positions. The second reason is probably a dramatic jump in capital expenditures, of course also the fact that Michael Berry (“Big Short”) opened a short position on the heavy stock.

At the same time, the report season for the second quarter has begun. The reports of the fashion and clothing company Levi Strauss (owner of the Levi’s brand), the food and beverage company PepsiCo and the airline company Delta Airlines are expected to be published next week.