Market Wrap – Intel Corp Announcement

Market sentiment remained fragile during the US session following yesterday’s drubbing in the major US averages. News about in Intel cutting its dividend also knocked market sentiment.

Intel Corp announced pre-markets that cut its dividend pay-out to its lowest in 16 years amid. The company is seen as a bellwether for the global economy.

Demand for Intel’s chips have slowed after two years of strong growth during the pandemic-led, sparked by remote work. The slowdown on the global economy is also hitting as inflation makes the consumer tighten their belts.

Chief Executive Pat Gelsinger said Intel would hold back on major investments to the tune of tens of billions of dollars on new manufacturing equipment and facilities as it grows its foundry business.

As the macro conditions continued to deteriorate in Q4 our free cash flow fell below our guard bands and in this environment we just came to the conclusion that the highest dividend payer shouldn’t also be the highest capital investor.

Oil prices failed to react to news that Russia is intending to cut crude exports from its western ports by around one quarter in March/April. This may be in reaction to a recent upping of rhetoric from the west.

Russia will voluntarily cut oil production by 500,000 barrels per day in March in response to sanctions. Strangely crude oil prices have yet to react to the news.

Crude oil is the most popular tradable instrument in the energy sector, offering exposure to global market conditions, geopolitical risk, and economy.