Intel shares slide as company warns of deeper Q3 losses, potential foundry exit, and major job cuts

South Africa

On Friday the JSE All Share index lost 1.05% to close the session at 98,918.9 points, while the Top 40 index shed 1.04% to finish the session at 91,303.4. South Africa’s National Treasury began soliciting at least $500 million of foreign-currency financing for its 2025/26 budget following the resolution of political gridlock. The bid emphasised diversification—encouraging ESG-linked instruments—amid concerns about a 4.8 % deficit and gross debt nearing 77 % of GDP. Meanwhile, Q1 GDP edged up just 0.1 % quarter-on-quarter, with mining down 4 % and manufacturing contracting. Agricultural growth of 15 % was a bright spot, though it wasn't enough to offset broader stagnation. Investors remain focused on funding costs, sovereign risk spreads, and potential Reserve Bank rate signals ahead.

Europe

Europe’s markets traded cautiously as EU–U.S. trade talks neared a critical August 1 deadline. Investors welcomed progress on a likely deal limiting tariffs to 15 %, with further reductions possible for steel and aluminium. Market sentiment was buoyed by easing export worry, though Brussels’ adjustment spells remain uncertain. Meanwhile, the IMF warned that the UK faces significant risks to fiscal stability and growth under current constraints, even as retail sales rose 0.9 % in June. NatWest delivered stronger-than-expected Q2 profits, unveiling a £750m share buyback. Executive pay controversy at Nationwide offered a governance spotlight.

United States

U.S. markets ended flat after earnings from major corporates—such as Intel, Tesla, IBM, UnitedHealth and American Airlines—failed to meet market expectations. Alphabet posted modest upside, but sector-wide tech softness weighed heavily. Economic data delivered mixed signals: jobless claims fell, PMI composite rose to 54.6, yet durable goods orders declined. The dollar steadied as Fed and BOJ meetings loom, with no rate changes expected but forward guidance key. Trump’s criticism of Fed chair Powell went largely ignored. Attention now pivots to July’s non‑farm payrolls and PCE inflation prints for Fed direction.

Asia

Asian equities were mixed: mainland China lifted benchmark indices after stronger-than-expected Q2 macro data, supporting hopes for further stimulus despite property-sector drag. Conversely, Japan’s Nikkei fell nearly 0.9%, weighed by technical profit-taking and caution ahead of BOJ guidance. Hong Kong’s Hang Seng dipped around 1.1%. South Korea's KOSPI and Singapore were steadier. Weakening export demand across the region and sensitivity to the U.S. dollar rebound dampened risk sentiment. Trade reprieve hopes with the U.S. kept positioning cautious yet opportunistic, particularly in cyclical and technology-linked assets.

Currencies

The U.S. dollar clawed back ground on Friday, supported by resilient data and muted expectations for imminent Fed rate cuts. EUR/USD hovered near recent lows as ECB policymakers set a high bar for September easing. GBP/USD declined modestly amid soft UK PMIs and IMF warnings over fiscal headroom. USD/JPY climbed above 147 with the yen under pressure ahead of BOJ deliberations. The rand held firm at approximately R17.9–18.0/USD, buoyed by commodity-linked inflows and emerging-market risk appetite. Other EM currencies, including the rupee, remained pressured by capital outflows and weaker trade sentiment.

Commodities

Oil prices ticked higher on renewed optimism over U.S.–EU trade détente and the prospect of extending the U.S.–China truce ahead of a critical August deadline; Brent and WTI rose modestly. Gold declined roughly 0.2 % as risk sentiment improved and the dollar steadied, reducing safe‑haven demand. Copper and other base metals remained subdued, pressured by tariff uncertainty through green‑tech import channels. Agricultural and soft commodities were stable, though cocoa sentiment softened following supply-region political developments. Portfolio flows into metals are increasingly sensitive to trade policy clarity and central bank guidance.

Cashbuild Limited (CSB) -2.25%

Cashbuild reported a 4% year-on-year revenue increase for Q4 FY2025 on a comparable 52-week basis, with 3% growth from existing stores and a 1% contribution from 14 new outlets. Transactions rose 6% in the same period, while selling price inflation was contained at 1.7% year-on-year to June. However, due to a non-comparable prior period, revenue declined 5% against a 14-week Q4 in FY2024, with transactions down 3%. For the full year, revenue rose 5% and transactions increased 4%. The group added 8 stores and closed 12 during the year, ending with 318 trading stores after 26 refurbishments. This update is unaudited.

Merafe Resources Limited (MRF) -9.77%

Merafe reported a 28% year-on-year decline in attributable ferrochrome production to 112kt for H1 2025, reflecting extended smelter suspensions due to weak market conditions. In a trading statement, the company guided for a sharp drop in earnings, with EPS expected between 6.4c and 12.2c (down 58–78%) and HEPS between 9.8c and 15.4c (down 45–65%) versus the prior period. The earnings decline is driven by lower sales volumes, softer ferrochrome prices, a stronger rand-dollar exchange rate, and additional impairments. Cash and equivalents fell to R1.14 bn (from R1.8 bn at December), including R378 m ring-fenced for environmental liabilities.

AVI Limited (AVI) -0.44%

AVI expects to report headline earnings per share of between 721.5 and 735.2 cents for the year ended 30 June 2025, up 5–7% year-on-year, and earnings per share of 723.5 to 737.1 cents, up 6–8%, supported by margin resilience and disciplined cost control. Group operating profit rose 7.8% despite a subdued consumer environment and volume softness across categories. Entyce and Snackworks delivered solid profit growth, while I&J improved on fishing performance, though abalone profitability remained under pressure. Indigo and Footwear/Apparel underperformed amid intense competition and weak demand. Capital gains were boosted by the disposal of I&J’s Umsobomvu joint venture.

Phillips 66 (PSX) +0.52%

Phillips 66 reported stronger-than-expected Q2 2025 results, with adjusted earnings per share of $2.38, driven by a 12% year-on-year increase in refining margins and reduced turnaround costs. Crude capacity utilisation reached 98%, the highest since 2018, while refining segment profits rose around 30%. Midstream earnings saw a slight decline. The improved performance follows ongoing pressure from activist investor Elliott, which recently secured board representation and is pushing for operational streamlining and strategic asset sales. Management emphasised capital discipline and value creation, with the stock gaining modestly following the release.

Intel Corporation (INTC) -8.53%

Intel shares fell sharply after the company flagged deeper Q3 losses and suggested it may scale back or exit its foundry ambitions if external demand remains insufficient. Management noted that up to $100 billion in assets may be at risk, and plans to restrict its advanced 18A process to internal use for now. The firm also disclosed further workforce cuts, aiming to reduce headcount by 22% by year-end. Several expansion projects in the U.S. and Europe have been paused. Investors reacted negatively to the strategic pivot, raising doubts about the viability of Intel’s turnaround efforts.

Deckers Outdoor Corporation (DECK) +11.35%

Deckers Outdoor delivered a strong Q1 2026, with revenue rising 17% year-on-year to $964.5 million, well ahead of expectations. Growth was led by standout performance in both Hoka and UGG, which posted sales increases of 20% and 19%, respectively. Earnings beat forecasts, and management issued upbeat Q2 guidance, reflecting continued momentum and confidence in brand strength, particularly in international markets. Despite previous concerns over macro conditions and trade exposure, the company remains focused on margin protection and demand-led expansion. Shares jumped more than 10%, outperforming broader indices on the day.

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