President Trump's China trip has concluded, with the multi-day summit producing comments from both sides that pointed to warming bilateral relations. As Trump returns aboard Air Force One on Friday morning, traders are shifting focus to overnight turmoil in South Korea, where labor action risks rattled Samsung shares and other memory stocks, and dragged the country's benchmark KOSPI index lower.
Samsung’s strike is set to formally begin on May 21. Because the company’s semiconductor fabs are already highly automated, the impact on production is expected to be limited. However, there will likely be noticeable disruptions to packaging and logistics, R&D and design, as well…https://t.co/l2ibgeXEIL
"There was pronounced pressure in Asia, with the KOSPI down 6.1%, led by heavy selling in Samsung and SK Hynix. Headlines around a potential 18-day union strike at Samsung further exacerbated weakness across tech," UBS analyst Zeynep Akkok wrote in a short note to clients.
First time in weeks that Samsung and KOSPI had a down week:
Akkok explained that the selling in South Korean tech and memory stocks spread to Europe: "This is feeding directly into Europe, where technology stocks are down 2.7%, and UBS's semiconductors basket is off 4.2%."
One of the most aggressive AI melt-ups globally just hit its first real air pocket. Spot-up, vol-up works great…until everybody suddenly realizes they are naked to the downside.https://t.co/YqHKAjyZEP
Everything you need to know about the labor action theat against Samsung (courtsey of Bloomberg):
Samsung's largest labor unionthreatened an 18-day walkout beginning May 21after government-mediated wage negotiations collapsed on May 13.
The union demands that Samsung scrap existing bonus caps and allocate 15% of operating profits to bonuses, while both sides remain sharply divided over AI-related earnings bonuses.
Samsung CEO Jun Young-hyun and executives met with union leadership on Friday, with Samsung offering unconditional talks and urging swift dialogue.
Source: ZeroHedge News
