cyclical

If companies add too much capacity, they then have to deal with oversupply when demand slows or falls quickly due to macroeconomic trends or the cyclical nature of the industry.

The tailwinds that buoyed growth in the prior quarter were stock trading and exports, which may not be sustainable, as China’s markets tend to be cyclical and escalating trade tensions will eventually bite, they said.

But the company’s outlook “reflects a more normal seasonal decline as the cyclical upswing seems to be on pause for the analog group,” according to Jefferies analyst Blayne Curtis, referring to analog semiconductors.

“That’s a cyclical upgrade that can put a stop to the massive rise in gold prices, at least for a little while”, he writes.

Investors have been questioning whether volatility in the industry is cyclical or structural, after hits from inflation, regulatory pressure, restrictions on bars and restaurants following the pandemic, Jefferies analysts said in a note.