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Direxion Daily Semiconductor 3x Bear ETF (SOXS)

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  • Nov. 11, 2014, 2:52 AM
    • The U.S. and China have reached an agreement to drop tariffs on a wide range of tech products, expanding upon their previous Information Technology Agreement at a time of strained relations.
    • Eliminating tariffs on sales of roughly $1T, the deal would liberalize trade in more than 250 categories ranging from semiconductors to medical devices.
    • The agreement has yet to be signed off by other countries involved in the talks, and will be discussed in Geneva by members of the WTO in December.
    • ETFs: XLK, VGT, KWEB, SOXL, FDN, TECL, USD, SMH, TDIV, IYZ, IYW, ROM, VOX, SOXX, CQQQ, XSD, QQQC, SOXS, PBS, TECS, FTEC, RYT, IGV, IGM, QTEC, FXL, PSI, PSCT, SSG, IGN, MTK, PXQ, REW, XTL, XSW, PSJ, PTF, FCOM, LTL, TLL
    | 4 Comments
  • Oct. 31, 2014, 11:31 AM
    • Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
    • Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
    • On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
    • Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
    • Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
    • Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 17 Comments
  • Oct. 26, 2014, 9:44 AM
    | 14 Comments
  • Oct. 10, 2014, 1:42 PM
    • Following Microchip's warning and related prediction of a chip industry correction, Goldman's James Covello thinks there's 15%-20% downside in industry names.
    • Covello, who lowered his industry view to Cautious in August: "The last time Microchip negatively preannounced was October 15, 2012 (3% sales miss). Between October 1 and December 31, Street 2013 sales estimates for the Semi group were revised down 6% on average."
    • He adds several datapoints suggest the industry has been overheating. Among them: Semi revenue growth has outpaced end-market growth, and supply chain inventory dollars rose 3% more than their 3-year average in Q2.
    • "Nobody will be spared," predicts Hedgeye's Craig Berger. Benchmark's Gary Mobley observes 5 of the 6 chip stocks to have made Q3 pre-announcements have thus done so to the downside.
    • Worth noting: Mobile chipmaker Silicon Motion (SIMO -8.9%) is the one chipmaker to have positively pre-announced. It might not be a coincidence that Microchip has relatively low mobile exposure.
    • Observing U.S. macro data remains positive even as China and Europe soften, Longbow's JoAnne Feeney remains bullish long-term on select names. However, she has cut her short-term rating on Linear (LLTC -3.8%) to Sell, and removed IDT (IDTI -7.1%) from her trading long list.
    • In addition to the names previously mentioned, the following chip stocks are seeing steep losses: AMD -5.1%. FCS -13.6%. NXPI -11.2%. CODE -11%. LSCC -9.6%. SIMG -8.1%. IPHI -7.7%. ISIL -9.5%. CY -6.9%. RMBS -7.1%. QUIK -5.7%. SQNS -5.1%. IMOS -6.5%.
    • Foundries and contract manufacturers are also selling off: TSM -3.9%. UMC -2%. SMI -2.4%. SANM -11.7%. FLEX -6.8%. JBL -4%.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 44 Comments
  • Oct. 9, 2014, 4:37 PM
    • Microchip (NASDAQ:MCHP) expects FQ2 revenue of $546.2M, below prior guidance of $560M-$575.9M and a $567.9M consensus.
    • CEO Steve Sanghi: "The month of September is usually a strong month for our revenue after the summer holiday period. This time, the September sales did not materialize to our expectations. The revenue miss was led by China where the September quarter is traditionally the strongest."
    • Sanghi also highlights Microchip's status as a bellwether for the chip industry, due to its 80K+ customers and recognition of distributor revenue based on sell-through to customers rather than distributor sell-in. "We believe that another industry correction has begun and that this correction will be seen more broadly across the industry in the near future."
    • MCHP -8.1% AH.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 8 Comments
  • Aug. 18, 2014, 9:24 AM
    • Following a strong 2014 rally fueled by healthy industry growth and hopes for more consolidation, Goldman has lowered its rating for the semi industry to Cautious from Neutral.
    • The firm thinks industry shipment growth will slow down, and sees risk to Q4 estimates. InvenSense (NYSE:INVN) has been cut to Neutral, NXP (NASDAQ:NXPI) to Sell, and Maxim (NASDAQ:MXIM) to Buy from Conviction Buy.
    • Benchmark aired cautious remarks about the sector last month, noting supply chain inventories have been rising and Taiwanese electronics growth (seen as a proxy for chip demand) has been slowing down.
    • Regarding InvenSense, analyst Mark Delaney notes shares have hit Goldman's $25 target and have soundly outperformed the S&P 500 since being added to Goldman's Americas Buy list near the end of 2011. He adds a key near-term catalyst (share gains at Apple) has played out.
    • INVN -2.4%. NXPI -3.3%.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 4 Comments
  • Jul. 23, 2014, 12:25 PM
    • Among the year's best tech performers, chip stocks are selling off (SOXX -1.8%) on an up day for the Nasdaq following weak numbers from FPGA giant Xilinx (XLNX -14.5%).
    • Xilinx missed FQ1 revenue estimates by over $18M, and also guided for FQ2 revenue to be well below consensus. The company blamed the FQ1 shortfall on soft defense and wireless sales. BMO and BofA/Merrill have downgraded Xilinx; the former thinks Xilinx's 28nm share might be peaking.
    • Xilinx stated on its CC (transcript) the wireless weakness was mostly due to soft 28nm chip sales to Chinese 4G base station vendors; Chinese 4G rollouts have long been viewed as a catalyst for both Xilinx and Altera (ALTR -4.7%). Aerospace/defense sales were hurt by program timing issues.
    • Meanwhile, switch/router vendor Juniper offered light Q3 guidance to go with a Q2 beat. The company noted on its CC (transcript) "market dynamics" for U.S. carriers, including M&A activity, are affecting project rollouts.
    • Also: Analog/mixed-signal IC vendor Linear (LLTC -4.1%) is selling off in spite of beating FQ4 estimates and guiding in-line (8%-11% Y/Y FQ1 rev. growth vs. 9.1% consensus).
    • Notable decliners: FSL -5.3%. IDTI -6.4%. EZCH -3.3%. PMCS -4.3%. LSCC -6.8%. CAVM -4.7%. SMTC -4.1%. ATML -3.2%. TQNT -3.1%. RFMD -2.9%. IRF -2.9%.
    • Qualcomm, NXP, TriQuint, and Cirrus Logic report after the bell.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 2 Comments
  • Jul. 10, 2014, 7:09 PM
    • Gartner now expects global semiconductor sales 6.7% Y/Y in 2014 to $336B; the firm previously forecast 5.4% growth.
    • DRAM sales, boosted by strong pricing, are expected to grow 18.8%. But Gartner adds many other industry segments, including ASICs, FPGAs, analog chips, and non-optical sensors, are also doing well. As one would expect, mobile hardware demand is fueling much of the growth.
    • Trade group SEMI recently estimated global chip equipment sales would rise 20.8% this year to $38.4B, and 10.8% in 2015 to $42.6B. Investments in cutting-edge manufacturing technologies (3D transistors, 3D NAND flash, 14nm) is driving much of the growth.
    • Is a lot of the good news priced in? The Philadelphia Semi Index (SOXX) has easily outperformed the Nasdaq this year, thanks to optimism about improving growth and industry consolidation. Benchmark observed today inventories have been rising for much of the semi supply chain.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • Jul. 7, 2014, 3:56 AM
    • The U.S. has warned China that treaties and other global negotiations could be in danger if negotiations fail regarding their high-tech product international trade agreement. The agreement includes an annual $2T in trade, and eliminates tariffs and other trade barriers on IT products.
    • China has recently excluded approximately 60 new product categories, including medical devices and next-generation silicon chips, from the trade agreement. American authorities are looking to use this week’s annual U.S.-China Strategic and Economic Dialogue to update the 1996 Information Technology Agreement.
    • U.S. officials warn that if an agreement is not reached, increased opposition will be taken in Congress toward other trade deals with China.
    • ETFs: XLK, VGT, FDN, SOXL, KWEB, TECL, USD, SMH, PNQI, IYZ, TDIV, IYW, ROM, VOX, CQQQ, SOXX, QQQC, XSD, SOXS, PBS, TECS, FTEC, IGV, RYT, IGM, QTEC, PSCT, FXL, IGN, PSI, MTK, SSG, REW, PXQ, XSW, XTL, PSJ, PTF, FCOM, LTL, TLL
    | 1 Comment
  • Jun. 9, 2014, 10:36 AM
    • A slew of chip stocks are rallying following Analog Devices' (ADI +5.9%) $2B deal to acquire RFIC vendor Hittite Microwave.
    • The purchase is part of an M&A wave that has hit the semiconductor industry over the last 12 months, as chipmakers try to gain scale, cut opex, and grow their cross-selling opportunities by consolidating. Other deals: RF Micro/TriQuint, Avago/LSI, Microchip/ISSC.
    • ADI, which shares many telecom equipment, defense/aerospace, and automotive clients with Hittite, predicts Hittite's RF, microwave, and millimeter wave ICs will complement its RF and signal-conversion (ADC/DAC) products.
    • Several RF and analog/mixed signal chipmakers are higher, but they're not the only gainers: RFMD +1.8%. TQNT +1.8%. PSMI +2.5%. LLTC +1.6%. MSCC +2.1%. IDTI +3.8%. ATML +3.4%. IRF +1.4%. SIGM +3.9%. AMCC +3.8%.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • May 22, 2014, 9:28 AM
    • Microchip (MCHP) is paying NT$143/share ($4.74/share) in cash to acquire all outstanding ISSC shares on Taiwan's GreTai Securities Market. The deal has an equity value of $328.5M, and an enterprise value (excludes net cash) of $294.3M. It's expected to close later in 2014.
    • ISSC had 2013 revenue of $69.2M, and an op. margin of 18.9% The company's Bluetooth ICs for headsets, PC peripherals, car stereos, speakers, and game controllers, among other products.
    • Microchip, which sells microcontrollers and other products into many of ISSC's markets, expects the deal to be immediately accretive. The company no doubt hopes to tap a growing market for embedded/wearable Bluetooth-enabled devices.
    • Is a semi consolidation wave underway? The deal is the latest in a string of industry mergers/acquisitions that includes Avago/LSI and RF Micro/TriQuint. RBC recently cited the industry's transition into "a more mature era" as a reason for becoming bullish on it.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • May 19, 2014, 10:26 AM
    • In a bullish call on chip stocks, RBC's Doug Freedman has upgraded Nvidia (NVDA +2.9%), Broadcom (BRCM +1.8%), Micron (MU +3.3%), Texas Instruments (TXN +1.3%), and Altera (ALTR +1.8%) to Outperform.
    • Freedman sees the industry's free cash flow profile improving as it transitions "into a more mature era," and companies embrace more "shareholder-friendly capital-allocation strategies."
    • Nvidia, TI, and Altera have already announced major cash-return efforts in recent years. TI has promised to return all of its FCF to shareholders, save for funds needed to pay down debt.
    • Micron (just digested Elpida) and Broadcom have been more cautious, though the latter did hike its dividend in January.
    • Freedman downgraded Micron on Jan. 3, when shares were at $21.66. He was bullish during the company's big 2012/2013 rally.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 1 Comment
  • Apr. 16, 2014, 1:47 PM
    • Though the Nasdaq is up 0.7%, many chip stocks are heading in the opposite direction (SOXX -0.6%) after Intel provided mixed Q1 top-line numbers for its business units - server chip sales were healthy, mobile sales were weak, and PC sales were in between - ASML lowered its 1H14 sales outlook and provided cautious 2H remarks (has dinged many chip equipment stocks), and Linear offered somewhat soft March quarter guidance.
    • Notable decliners: CRUS -3.3%. ENTR -3.3%. QUIK -2.4%CAVM -2%. PSMI -3.6%. ADI -2.3%. TXN -1.4%. MXIM -1.5%. FCS -1.5%. The last four companies all compete against Linear.
    • Himax (HIMX -1.5%) is off after Chardan Capital lowered its PT to $9 from $12; the firm downgraded Himax in January. Shares tumbled on Monday, then ticked higher on Tuesday following a Q1 pre-announcement.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • Apr. 15, 2014, 1:49 PM
    • While broader equity markets are only seeing modest declines, tech stocks aren't so lucky. The Nasdaq-100 (QQQ -0.8%) had its lowest print since October this morning before recovering slightly.
    • Chinese tech stocks (KWEB -4.3%), including 2013 solar high-flyers (TAN -4.2%), are especially hard-hit following a Shanghai selloff triggered by PBOC withdrawals. Other Internet (PNQI -2.3%) and social media (SOCL -2%) stocks aren't faring much better.
    • Will earnings season come to the rescue? Intel and Yahoo report after the bell today, and Google and IBM after the bell tomorrow.
    • Tech ETFs: XLK, VGT, FDN, ROBO, SOXL, SKYY, TECL, USD, SMH, IPK, IYW, ROM, TDIV, SOXS, SOXX, KWT, TECS, XSD, IXN, IGV, FTEC, RYT, IGM, PXN, QTEC, PSCT, FXL, IGN, PSI, SSG, MTK, REW, PXQ, XSW, FONE, PSJ, AAIT, PTF, CQQQ, QQQC
    • Update: Tech stocks rallied in the final hours of trading. The Nasdaq closed up 0.3%.
    | 1 Comment
  • Feb. 26, 2014, 11:24 AM
    • Chip stocks are outperforming (SOXX +1.1%) after Avago (AVGO +5.1%) posted an FQ1 beat and strong margin numbers (albeit while guiding light, as many expected), and STMicroelectronics (STM +3.9%) exec Paul Grimme states his company's European sales are stabilizing, with Germany leading the way.
    • Notable winners: AMBA +5.4%. AMCC +5.2%. CRUS +3.3%. SWKS +3%. QUIK +4.1%. INVN +2.7%. RFMD +3.5%. TQNT +3%. SIMO +2.7%. CAVM +3.6%. Nearly all of the aforementioned names have strong mobile and/or telecom equipment exposure.
    • RBC has hiked its Avago PT to $66 from $64, and says the chipmaker remains its "top play on China and global LTE deployments." With LSI in tow, the firm thinks FY15 (ends Oct. '15) EPS will top $5.
    • Morgan Stanley ($68 PT) is confident Avago can raise LSI's op. margin to 30% from 17% over the next few years, much as the company has doubled its own op. margin to 30% post-LBO.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • Jan. 14, 2014, 5:42 PM
    • PC industry names outperformed amid a broader tech rally, aided by a JPMorgan Intel (INTC +4%) note that argued PC demand is stabilizing, and tablet cannibalization diminishing. A number of chip stocks also rallied strongly (SOXX +2.1%).
    • Also: Major hard drive suspension assembly maker Hutchinson has reported above-consensus Dec. quarter sales, while citing strong demand for 2.5" notebook drive assemblies. Seagate and Western Digital both rallied.
    • JPMorgan's Christopher Danely, who upgraded Intel to Overweight, has raised his 2014 estimates soundly above consensus ahead of the chip giant's Thursday Q4 report. Danely notes Intel, Microsoft, H-P, and others have said PC demand is improving, and that Taiwan's big-4 notebook contract manufacturers collectively grew their shipments 7% Q/Q in Q4. Q1 shipments are expected to drop in-line with seasonality.
    • He also points out tablet shipment growth is decelerating, and forecasts shipments will only rise 25% in 2014 (down from 53% in 2013).
    • Danely's optimism contrasts with another bearish Intel note from Bernstein's Stacy Rasgon, who estimates five mobile CPU sales are needed to make up for one PC CPU sale, and doubts Intel's foundry business will move the needle.
    • PC industry gainers: MSFT +2.3%. HPQ +2.6%. AMD +4.1%. NVDA +3.1%.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Previous: Goldman on Intel's Q4, Gartner/IDC's Q4 PC estimates, Intel's light 2014 guidance
    | 14 Comments
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SOXS Description
The Direxion Daily Semiconductor Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the PHLX Semiconductor Sector Index ("Semiconductor Index"). There is no guarantee the fund will meet its stated investment objective.
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Sector: Technology
Country: United States
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