Q4 is looking to pick up right where Q3 left off with futures indicating a strong start to the week, month, and final quarter of 2018. Obviously, the big catalyst this morning is the announced trade deal the US has reached with Canada to join the US-Mexico trade agreement.
Another area where Q4 is picking up right where Q3 left off is in analyst sentiment towards the semis. There’s been a number of downgrades of semiconductor stocks this morning with Morgan Stanley downgrading Intel (INTC), Baird cutting AMD, and both Mizuho and Deutsche Bank cutting Lam Research (LRCX).
The negative sentiment towards the semis is really nothing new at this point. Intel, for example, is down 17% from its highs. Short interest levels also show that negative bets towards the semis have been building for some time.
As the most recent data (through mid-September) illustrates, the average short interest as a percentage of float for stocks in the semiconductor group is at the highest levels since October 2014.
