Markets Breathe a Sigh of Relief
Tech-heavy stock markets are poised to rebound today, thanks to a forecast-beating earnings report from Taiwan Semiconductor Manufacturing (TSMC), the world’s largest chipmaker. This news eases concerns about semiconductor demand and the wider artificial intelligence theme.
Chipmaker’s Soaring Profits Boost AI Hopes
TSMC reported a 54% jump in profits, driven by soaring demand for chips used in AI applications. As a bellwether for the AI story, TSMC’s shares surged 6% in Frankfurt, while Nvidia shares gained 2% in out-of-hours trading. This upbeat news could lift the S&P 500 and Nasdaq back to record highs.
Wall Street Index Futures Rise Ahead of Thursday’s Bell
Helped by a strong earnings season for major US investment banks, the wider market rallied on Wednesday. The small-cap Russell 2000 clocked its best close in almost three years, while the Dow Jones blue chips set another record close above the 43,000 mark.
Netflix Earnings in Focus
Later today, streaming giant Netflix will report its earnings, with investors looking for signs of acceleration in its nascent ad revenue business. This is crucial, as Netflix is expected to report its lowest subscriber additions in six quarters, following a boom on its password-sharing crackdown. Netflix shares have already surged 44% this year.
European Central Bank Set to Cut Interest Rates
The European Central Bank is expected to deliver its third interest rate cut of the year, its first back-to-back cut in 13 years. This supportive interest rate environment has pushed European stocks higher, despite a shaky week of disappointments from ASML and luxury goods maker LVMH.
China’s Markets Underperform
China’s markets underperformed once again, with the offshore yuan touching its weakest level in almost two months. A lack of fresh stimulus from a closely-watched housing policy briefing left investors disappointed. Property stocks traded in China and Hong Kong tumbled 7.9% and 6.7%, respectively.
Key Developments to Watch
Today’s key developments include the European Central Bank policy decision, US corporate earnings, September retail sales, industrial output, weekly jobless claims, and the October Philadelphia Fed business survey. The Federal Reserve Bank of Chicago President Austan Goolsbee and European Commission President Ursula von der Leyen will also hold press conferences.
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