TheChek News Flow

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SDAX:

Max intra-year drawdown, S&P 500:

1974 Ford: ≈ -37%
1978 Carter: ≈ -14%
1982 Reagan: ≈ -17%
1986 Reagan: ≈ -9%
1990 Bush: ≈ -20%
1994 Clinton: ≈ -9%
1998 Clinton: ≈ -19%
2002 Bush: ≈ -34%
2006 Bush: ≈ -8%
2010 Obama: ≈ -16%
2014 Obama: ≈ -7%
2018 Trump: ≈ -20%
2022 Biden: ≈ -25%

2026 Warsh: ???

Thirteen mid-term years. Every one had a pullback — but so does almost every calendar year; the average intra-year drop in any year is about -14%. The real signal is depth: mid-term years average roughly -18%, and nine of these thirteen deepened into a true correction of -10% or worse. That's the edge — not that a dip happens, but that it tends to run harder and cluster in the third and fourth quarters.

There's a second cycle in play. A new Fed chair, Kevin Warsh, sworn in late May and about eight weeks into the job. Markets tend to test a new chair early — they price a probability distribution, not a person, and probe until he reveals himself. It's a softer tendency than the mid-term pattern, not an iron law (there have been roughly ten chairs since the 1930s, and "an early wobble" is common for almost any starting date). But the sharpest example is the one that rhymes with now.

2018 : Powell takes the chair, Volmageddon hits within days, and after "a long way from neutral" the S&P falls ~20% into Christmas Eve. Then Powell blinked. 2019 returned over 30%. New chair, mid-term year, autumn washout, capitulation low, melt-up. That's the template worth watching

Even fear has a calendar. The VIX tends to trough in early summer and crest in September–October, and in mid-term years the crest runs higher. It sat around 15 in early July, right at the seasonal low. Last week it spiked above 18 intraday. The market has started paying attention. It hasn't yet paid the full toll.

And the shock absorbers look thin: retail cash allocations near the lows last seen in 1998, 2000, 2018 and 2021; put/call skew unusually low, meaning little hedging; heavy IPO supply draining liquidity. (Positioning reads are worth watching but move fast — treat them as color, not confirmation.)

Here's the flip side, and it's the more reliable half of the pattern. The stretch after the mid-term low is historically one of the strongest in the entire four-year cycle — the six months from November through April have averaged roughly +14%, and the market has gone on to make new highs in the large majority of cases. Bull markets rarely die of a drawdown; they die of exhaustion. The mid-term correction tends to be maintenance, not the end.

The playbook isn't heroic. Hold your quality. Keep dry powder with a shopping list attached — decided at VIX 18, executed at VIX 28. Buy fear in tranches.

None of this is a schedule. It's a pattern with a sample size in the low teens: elevated odds of an autumn air-pocket and a strong rebound behind it, not a guarantee. The tripwires that would break it: the Fed staying hawkish into a slowdown, credit spreads blowing out, earnings rolling over, or the VIX term structure inverting and staying inverted.

Greed is obvious. Fear is the edge — but so is honest math.

Chief executive of subsidiary Alexion says rare disease medicine is a largely untapped area

The field of rare disease medicine remains a largely untapped area open for pharmaceutical and biotech companies to develop new treatments for thousands of diseases that lack approved therapies, the head of one of the world’s largest rare disease drugmakers has said.

Marc Dunoyer, chief executive of Alexion, the US-based rare disease subsidiary of AstraZeneca, said patients living with about “95 per cent” of the “10,000 identified, specific rare diseases” do not have medicines available to them.

“[The] rare disease world is an immense field of new opportunities,” said Dunoyer, who has led Alexion since it was acquired by AstraZeneca for $39bn in 2021.

“There are about 500 rare diseases covered by modern medicines. But about 95 per cent of them are not covered . . . [S]cience these days is making enormous leaps and progress in different avenues that five, 10 years ago were not available to us,” he told the FT in an interview.

Rare diseases are illnesses, disorders or conditions that affect a small number of people, usually about one in 2,000 individuals or fewer in the general population, according to the World Health Organization.

Alexion has become a pivotal component of AstraZeneca since its acquisition by the UK’s largest pharmaceutical group. Rare disease medicine sales accounted for 16 per cent of AstraZeneca’s $58.7bn revenue last year, making it one of the company’s biggest divisions.

The field is also regarded as a growth area as AstraZeneca sets its sights on a revenue target of $80bn by 2030 and launching 20 new medicines by the same year. AstraZeneca is halfway through meeting this new drugs pledge, and two of its new offerings are rare disease medicines.

Dunoyer, who was previously AstraZeneca’s finance chief before taking the top job at Alexion, said the Boston-headquartered division has leveraged its parent company’s global reach to expand to 80 countries from the 20 it was present in during its time as an independent company.

Alexion has announced a set of positive clinical trial data in recent weeks, including that of efzimfotase alfa, a drug to treat children with hypophosphatasia (HPP), a condition that affects bone development.

Rare disease medicine sales can be contentious given how expensive treatments can be. But Dunoyer said pricing was not necessarily the biggest concern for Alexion, although he admitted it “takes time” to agree pricing with healthcare systems.

“It takes time because these are expensive medicines for very small number of patients usually . . . it takes time for the various pricing regulators to agree and accept this financial burden,” he said, but added that many do understand the merits and savings in terms of healthcare costs and managing the burden of diseases for individuals.

Beijing’s export controls cut off a route for Russian flows, adding to pressures after disruption to Qatari production

Europe is facing an even tighter squeeze on helium supplies as China cuts off exports of the industrial gas that is vital for manufacturing microchips and the functioning of medical devices including MRI scanners.

Beijing earlier this month announced export controls on the natural gas byproduct, which has been in scarcer supply since the conflict in the Middle East cut off exports from the Gulf.

While China is not itself a major producer of helium, Russian supplies of the gas had been flowing through the country to Europe, according to analysts.

Russia accounts for almost 10 per cent of global helium production, while Qatar was responsible for a third of the world’s supplies before the outbreak of the Iran war.

Beijing acted last week since it imports most of the helium used by its industry and hospitals.

“China isn’t a source; it’s a conduit”, meaning the halt “pinches a re-export valve Europe had been leaning on”, said Seokjoon Kwon, a professor at Sungkyunkwan University in Seoul. The ban, which was announced as the fragile ceasefire between the US and Iran came under pressure, was an indicator that China was preparing for “renewed scarcity”, he added. 

The price of the gas being bought for immediate delivery has roughly doubled since the start of the conflict, while prices in long-term contracts have also been rising, analysts said. That has come as major producing facilities, including QatarEnergy’s Ras Laffan complex, the world’s largest liquefied natural gas facility, have been forced to halt production.

The EU banned direct imports of Russian helium in 2024. But some gas has been flowing to Europe via China, experts said. 

Chinese re-exports to Europe have been rising over the past 18 months, and remained elevated even after the outbreak of the Iran war, according to estimates by consultancy AKAP Energy.

Although the helium market is opaque, AKAP estimated that China was still re-exporting about 16 per cent of its helium imports, on average, between March and May this year, after the war started. 

Russia itself imposed export restrictions on helium in April, but not an outright ban. The Chinese ban came soon after a Ukrainian attack in June on the Orenburg gas processing and helium plant in western Russia, near the border with Kazakhstan.

Cliff Cain, commercial manager at London-listed Pulsar Helium, said the market situation had worsened over the past several months, with shortages affecting users such as aerospace and welding companies. Pulsar was “getting a lot of queries” and speaking to public and private sector buyers, including those in the US and Japan, he said. 

With pre-Iran war inventories of the gas running low, “the coming weeks will reveal whether diversification away from Qatari supply happened quickly enough to avoid production impacts”, said Nick Lawson, executive chair of Ocean Wall, a merchant bank.

Sabina Ciofu, international policy and strategy lead at trade association techUK, said its members had been sourcing supplies from alternative channels, but that “prolonged constraints could have wider implications across global technology supply chains”.

Ajit Manocha, president of industry body SEMI, said: “The market has clearly tightened, and semiconductor companies are managing higher prices, tighter allocations and more complex sourcing.”

The semiconductor supply chain may be more able to absorb cost increases than sectors such as healthcare, analysts said. Available supplies are being prioritised for strategic sectors, including certain technology, healthcare and government contracts, with others such as consumer electronics likely to lose out, they said.

US users may be more cushioned, since the country produces substantial volumes of helium domestically. Premier Inc, which sources helium supplies on behalf of hospitals in the US, said medical-grade helium remains prioritised and “members are not reporting disruptions affecting MRI operations or mixed-gas products”.

TAIPEI, July 20 (Reuters) - TSMC (2330.TW), opens new tab is seeing strong, multi-year demand for its AI chips as it invests a further $100 billion to expand its Arizona facilities, ​but it needs to address several challenges, such as a shortage of construction workers there, a top executive said.

Speaking after blockbuster second-quarter results on Thursday, ‌Chief Financial Officer Wendell Huang said the company is "very happy" with progress in Arizona, which is why it decided to ramp up investment to $265 billion.

"We will continue to invest," he said in an interview, adding that the company was very grateful for U.S. government support.

"We continue to see customers' strong demand — multi-year structural demand."

The world's main producer of advanced AI chips and a major Nvidia (NVDA.O), opens new tab ​supplier, TSMC's aggressive capital spending and soaring profit margins have made it a barometer of demand in the global semiconductor industry.

The pledge to expand in ​Arizona is a win for U.S. President Donald Trump, who has pushed for more chipmaking at home.

Trump has repeatedly accused Taiwan of ⁠stealing American semiconductor business. He has said that by the time he leaves office, the U.S. will have 50% of the world's semiconductor manufacturing capacity.

ARIZONA FABS

TSMC's first ​Arizona fabrication plant — or fab — is operational and achieving yields "as good as" the flagship fab in Taiwan, Huang said.

The second fab will shortly begin moving in equipment, while construction ​of a third fab is under way and preparatory work has started on a fourth fab and the site's first advanced packaging facility, Huang said.

In total, current and planned projects will bring TSMC's Arizona footprint to 12 fabrication and advanced packaging facilities plus an R&D centre. He did not provide a timeline for the latest investment.

However, "there are physical constraints — the number of construction workers available, the ​infrastructures available," Huang said. "We'll work closely with the government to solve these issues."

At the same time, TSMC continues to invest at home, where it is building 13 leading-edge ​and advanced packaging fabs over the next several years.

"Land is a scarce resource in Taiwan," Huang said. "Therefore, whenever there are available lands, we will use them for the most leading-edge technologies."

"When ‌you ramp ⁠the most leading-edge technologies, you need very close collaboration between the R&D and operation functions," he added. "It has to be in Taiwan. And after it stabilizes, then we can consider transferring overseas."

BOND ISSUANCE

Asked if the company would consider raising money by selling new shares in the U.S., Huang said it would "not rule out issuing new bonds" if market conditions are favourable.

Despite its aggressive expansion plans, TSMC faces headwinds from geopolitical tensions between Washington and Beijing, with the U.S. seeking to control advanced chip exports to China.

Reuters reported ​last year that TSMC could face a ​penalty of $1 billion or more to ⁠settle a U.S. export control investigation over a chip it made that ended up inside a Huawei AI processor.

Huang referred questions about the status of the case and any potential penalty to the U.S. government, but said TSMC's internal export control system was ​constantly being reviewed.

"I have to say there is (only) so much we can do in terms of complying with all the ​rules and regulations, but ⁠when the customers sell to customers, they sell to customers," he said.

"At some point in time, you lose the visibility. That's the reality."

Investors worries about the sustainability of the AI boom amid massive infrastructure spending has re-emerged recently.

TSMC's Taipei-listed shares fell 7.3% on Friday despite the company's record results. Even so, its shares remain up nearly 50% this year.

While TSMC ⁠has long ​been by far the market leader in making the world's most advanced chips, competitors are seeking to ​narrow the gap, including Samsung Electronics (005930.KS), opens new tab, which has benefited from a recovery in the memory chip market, and Intel (INTC.O), opens new tab, which enjoys backing by the U.S. government.

Huang said the company remains confident in its business model.

"We ​do not intend to leave anything on the table," he said. "Our competitors are good, but we are even better."

Nvidia’s chief Jensen Huang spent two days — July 15 and 16 — in Tokyo, courting Japan’s industrial and chip-supply elite, weeks after a keynote in Taiwan, and months after a visit to South Korea. He left with deals spanning Japan’s entire tech ecosystem: a national AI factory, partnerships with the country’s leading robotics companies, and agreements with the chip-material suppliers powering Nvidia’s next generation of AI chips. His message was clear. Nvidia is targeting Japan’s factory floor, and many of the country’s biggest manufacturers are joining in. AI’s next chapter, Huang said, belongs to factory floors, robots, and machines, and he wants Japan to build it.

Thirty years ago, a $5 million Sega investment helped keep a near-bankrupt Nvidia afloat; today, Nvidia and Japan’s industrial giants need each other again — this time to build the physical-AI era, starting with these three projects:

Noetra — Japan’s sovereign-AI play. The country doesn’t want to run its factories and robots on American or Chinese AI. So, the government pulled together roughly 44 domestic firms, with SoftBank, Sony, NEC and Honda at the core, to build its own AI for robots, vehicles and factory floors. Tokyo is committing up to 1 trillion yen ($6.2 billion) over five years, a bet on homegrown “physical AI”, foundation models built to run machines. Japan wants to own the software brain. The hardware to build it, though, still comes from Nvidia. The U.S chip giant is building “a Vera Rubin AI factory”, a massive data center packed with its next-generation chips, expected to launch in 2028, with 13,750 Vera CPUs and 27,500 Rubin GPUs, delivering 140 megawatts. Noetra will oversee the effort, with plans to build the data center. Noetra’s plan runs in three stages: a reasoning model heavy on Japanese-language skills starting in fiscal 2026; an omni-modal version handling text, images, video, and audio by 2028; and “Real-world Native AI” built to run robots by 2030, released to outside Noetra developers in phases.

The robotics coalition — Japan’s industrial giants line up behind Cosmos. Nvidia is targeting Japan’s factory floor, and many of the country’s top robotics and manufacturing players are signing on. Fanuc, Yaskawa, Kawasaki Heavy, Fujitsu, Hitachi, NEC, Sony, SoftBank, Kubota and robotics group AIRoA say they plan to build on Nvidia’s Cosmos models, an open-model effort Nvidia started in May with a handful of global AI labs. In Tokyo, Nvidia gave them a reason to commit, unveiling Cosmos 3 Edge, a version of the model that runs on its Jetson Thor chips inside the machines themselves. Some are already testing a shared control system; others, like Honda R&D and Omron, are building on the tools now. “The next frontier of AI is in the physical world, and this is a once-in-a-generation opportunity for Japan,” Huang said in the company’s statement. “Japan invented modern manufacturing. Now, it has the opportunity to reinvent it for the age of intelligent industries.”

Toyota — cars and physical AI. Toyota uses Nvidia chips across much of its stack. It committed its next-generation vehicles to Nvidia’s Drive platform at CES in January 2025; the newer work extends Nvidia into its manufacturing, where simulations are used to design production lines, into the software that runs its vehicles, and into systems that read road traffic. Toyota’s cars will run advanced driver assistance, which steers and brakes but still requires a driver, a more conservative approach than Waymo and Tesla, which are developing systems that rely less on a human driver.

Huang’s visit put physical AI at the center of Japan’s industrial strategy, and Tokyo is spending to back it. Facing a shrinking workforce, Japan wants 10 million AI-equipped robots across 18 sectors by 2040, backed by $65 billion in public and private physical-AI investment.

The longer game is bigger. Japan’s AI Robotics Strategy, released in March, aims to capture more than 30% of the global AI robotics market by 2040, a market Tokyo values at roughly ¥20 trillion, or about $133 billion. METI is funding a domestic foundation model to run the machines, and Noetra’s Nvidia-powered factory is where models of that scale, into the trillions of parameters, would be trained. The wager is that Japan’s factory-floor data and manufacturing base can do for physical AI

Underneath the industrial case is a sovereign one. As the U.S. and China pull ahead in large-scale AI, Tokyo wants its own data, its own compute, and less dependence on infrastructure it doesn’t control. Huang appeared on July 16 alongside trade minister Ryosei Akazawa at the government’s physical-AI launch, with Prime Minister Sanae Takaichi joining by video. The Takaichi administration has made AI and semiconductors the centerpiece of a growth plan chasing ¥370 trillion ($2.3 trillion) in public and private investment by 2040. Noetra’s factory — which Nvidia bills as “the world’s first national AI infrastructure” — is the clearest bet yet. Japan’s push for independence, at least for now, rests on American chips.ndence runs on American silicon.

In two days, Huang sat across from nearly every name that matters in Japanese tech — the CEOs of Toyota, Fanuc, Yaskawa, Fujitsu and Kawasaki over lunch, and dozens of supply-chain chiefs over skewers and whisky in a Kanda izakaya.

It’s the same playbook he ran weeks earlier — a homecoming keynote in Taiwan, fried chicken, and a 50,000-GPU deal in Seoul last fall. This time, it was Tokyo’s turn, with the robots, the supply chain, and the chips underneath.