Interestingly, despite the IPO excitement surrounding SK Hynix, shares fell 10% on Tuesday after announcing a 19-fold earnings increase. This was the third straight quarter of record earnings for Samsung. So essentially, South Korea is the tail that is wagging the dog as far as memory stocks are concerned. In my opinion, all the memory stocks, led by (MU), are great near-term buys.
The other interesting development this week is that (SPCX) is being added to the , but its weight will be restricted due to the fact that the IPO only sold 5% of its outstanding shares. As SpaceX unlocks stocks for insiders, the number of shares outstanding will rise, and its weight in the NASDAQ 100 should naturally increase. However, in the meantime, SpaceX’s percentage in the NASDAQ 100 is being restricted due to its relatively thin float.
The Institute of Supply Management () announced this week that its non-manufacturing service index came in at 54 in June, down from 54.5 in May. Since any reading over 50 signals an expansion, the service sector remains very healthy. The big news in the ISM service sector report is that the prices component declined to 67.7 in June, down from 71.3 in May, which is indicative of moderating prices and that service inflation is apparently cooling. Also positive is that the backlog of orders component rose to 54.9 in June, up from 51.3 in May. Fully 14 of the 18 service industries that ISM surveyed reported expanding in June.
In the wake of America’s 250th birthday party, I certainly hope that investors pinch themselves and realize that we are truly in a wonderful time. While both Europe and the U.S. suffered from heat domes, at least in America our regulators are not opposing the installation of air conditioning, like the mayor of Paris. Furthermore, most of Europe’s electricity is too expensive to encourage data centers, but Poland is an exception.
So, while much of Europe flounders when it gets hot, at least in America we are blessed with substantially cheaper electricity and continue to outpace the world for economic growth. In fact, many European World Cup fans have marveled at American prosperity and realized that the U.S. is truly a special, entrepreneurial oasis where literally anyone can succeed.
