TSMC's Strong Q3 Performance Boosts AI Chip Sector Amid Global Economic Shifts

TSMC steadies chip ship, ECB set to ease

A look at the day ahead in U.S. and global markets from Mike Dolan Tech-heavy stock markets are set to breathe a sigh of relief on Thursday as the world's largest chipmaker beat the street and eased gnawing doubts about semiconductor demand worldwide and jitters about the wider artificial intelligence theme. After a cloudy outlook from Europe's ASML earlier this week sideswiped chip stocks everywhere, Taiwan Semiconductor Manufacturing said on Thursday it expects sustained growth as it reported a forecast-beating 54% jump in profits and soaring demand for chips used in AI. TSMC, the dominant producer of advanced chips used in AI applications and whose customers include Apple and Nvidia, has become a bellwether for the AI story and its shares jumped 6% in Frankfurt after the earnings report. Nvidia shares were also up another 2% in out of hours trade. TSMC is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, although it has said most manufacturing will remain in Taiwan. With Wall Street index futures higher again ahead of Thursday's bell, the news from Taiwan may well lift both the S&P500 and Nasdaq back to record highs. Helped by a strong earnings season so far for the big U.S. investment banks, the wider market raced ahead on Wednesday. The small cap Russell 2000 clocked it best close in almost three years and Dow Jones blue chips set another record close after the index secured a foothold above the 43,000 mark. Streaming giant Netflix tops the diary later, with investors looking for signs its nascent ad revenue business is accelerating. That's important as it's set to report about 4 million new subscribers - its lowest addition in six quarters following a boom on its password-sharing crackdown. Netflix shares are up 44% for the year so far. With the European Central Bank set to deliver its third interest rate cut of the year later on Thursday - its first back-to-back cut in 13 years - the broader interest rate picture was supportive too. The euro fell to its lowest level since early August against a generally stronger dollar ahead of the ECB decision. European stocks pushed higher after a shaky week of disappointments from ASML and luxury goods maker LVMH, both hit by wobbling Chinese demand and a brewing trade war between Brussels and Beijing. China's markets underperformed once again and the offshore yuan touched its weakest level in almost two months as a lack of fresh stimulus from a closely-watched housing policy briefing left some investors disappointed. China will expand a "white list" of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan ($562 billion), Minister of Housing and Urban-Rural Development Ni Hong said. But analysts said the details just fleshed out previously announced support and some of the numbers underwhelmed. Property stocks traded in China and Hong Kong tumbled 7.9% and 6.7% respectively - reversing gains of the previous day. China reports third-quarter GDP numbers on Friday - and the annual growth rate over the three months is expected to have slowed to 4.5% from 4.7% the prior quarter. Back on Wall Street, Treasuries were steady, with the 10-year yield retaining a 4% handle ahead of a stream of retail, industrial and weekly jobless data for last month. With the labor market under the microscope at the Federal Reserve as it mulls its next interest rate move, distortions in jobless claims due to recent storms and strikes have made the number difficult to read. Still, another quarter-point Fed rate cut next month is almost fully priced in futures markets and there was encouraging news on the inflation front at home and abroad. U.S. import prices fell by the most in nine months in September amid decreases in the costs of energy products and food. And despite Middle East tensions, China-related global demand worries for next year have kept a lid on oil, leaving U.S. crude clinging on to $70 per barrel and down almost 20% on this time last year. In deals news, shares of travel booking website Expedia Group jumped 8% in after-hours trading after the Financial Times reported that ride-hailing giant Uber explored a possible bid for the company. Uber shares were down about 2%. Key developments that should provide more direction to U.S. markets later on Thursday: * European Central Bank policy decision and press conference with ECB President Christine Lagarde * US corporate earnings: Netflix, Snap-on, Intuitive Surgical, Blackstone, Travelers, Truist, M&T, Elevance Health, Marsh & McLennan, Huntington Bancshares, KeyCorp * US September retail sales, industrial output, weekly jobless claims, October Philadelphia Fed business survey, Oct NAHB housing index, August business/retail inventories, August TIC data on Treasury holdings * Federal Reserve Bank of Chicago President Austan Goolsbee * European Commission President Ursula von der Leyen and European Council President Charles Michel holds a press conference after European Union summit (mike.dolan@thomsonreuters.com; Editing by Christina Fincher)

AMERICAS TSMC steadies chip ship, ECB set to ease

A look at the day ahead in U.S. and global markets from Mike Dolan Tech-heavy stock markets are set to breathe a sigh of relief on Thursday as the world's largest chipmaker beat the street and eased gnawing doubts about semiconductor demand worldwide and jitters about the wider artificial intelligence theme. After a cloudy outlook from Europe's ASML (ASML.AS), opens new tab earlier this week sideswiped chip stocks everywhere, Taiwan Semiconductor Manufacturing (2330.TW), opens new tab said on Thursday it expects sustained growth as it reported a forecast-beating 54% jump in profits and soaring demand for chips used in AI. Advertisement · Scroll to continue TSMC, the dominant producer of advanced chips used in AI applications and whose customers include Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab, has become a bellwether for the AI story and its shares jumped 6% in Frankfurt after the earnings report. Nvidia shares were also up another 2% in out of hours trade. TSMC is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, although it has said most manufacturing will remain in Taiwan. Advertisement · Scroll to continue With Wall Street index futures , higher again ahead of Thursday's bell, the news from Taiwan may well lift both the S&P500 (.SPX), opens new tab and Nasdaq (.IXIC), opens new tab back to record highs. Helped by a strong earnings season so far for the big U.S. investment banks, the wider market raced ahead on Wednesday. The small cap Russell 2000 (.RUT), opens new tab clocked it best close in almost three years and Dow Jones blue chips (.DJI), opens new tab set another record close after the index secured a foothold above the 43,000 mark. Streaming giant Netflix(NFLX.O), opens new tab tops the diary later, with investors looking for signs its nascent ad revenue business is accelerating. That's important as it's set to report about 4 million new subscribers - its lowest addition in six quarters following a boom on its password-sharing crackdown. Netflix shares are up 44% for the year so far. With the European Central Bank set to deliver its third interest rate cut of the year later on Thursday - its first back-to-back cut in 13 years - the broader interest rate picture was supportive too. The euro fell to its lowest level since early August against a generally stronger dollar (.DXY), opens new tab ahead of the ECB decision. European stocks (.STOXXE), opens new tab pushed higher after a shaky week of disappointments from ASML and luxury goods maker LVMH (LVMH.PA), opens new tab, both hit by wobbling Chinese demand and a brewing trade war between Brussels and Beijing. China's markets (.CSI300), opens new tab underperformed once again and the offshore yuan touched its weakest level in almost two months as a lack of fresh stimulus from a closely-watched housing policy briefing left some investors disappointed. China will expand a "white list" of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan ($562 billion), Minister of Housing and Urban-Rural Development Ni Hong said. But analysts said the details just fleshed out previously announced support and some of the numbers underwhelmed. Property stocks traded in China (.CSI000952), opens new tab and Hong Kong (.HSMPI), opens new tab tumbled 7.9% and 6.7% respectively - reversing gains of the previous day. China reports third-quarter GDP numbers on Friday - and the annual growth rate over the three months is expected to have slowed to 4.5% from 4.7% the prior quarter. Back on Wall Street, Treasuries were steady, with the 10-year yield retaining a 4% handle ahead of a stream of retail, industrial and weekly jobless data for last month. With the labor market under the microscope at the Federal Reserve as it mulls its next interest rate move, distortions in jobless claims due to recent storms and strikes have made the number difficult to read. Still, another quarter-point Fed rate cut next month is almost fully priced in futures markets and there was encouraging news on the inflation front at home and abroad. U.S. import prices fell by the most in nine months in September amid decreases in the costs of energy products and food. And despite Middle East tensions, China-related global demand worries for next year have kept a lid on oil, leaving U.S. crude clinging on to $70 per barrel and down almost 20% on this time last year. In deals news, shares of travel booking website Expedia Group (EXPE.O), opens new tab jumped 8% in after-hours trading after the Financial Times reported that ride-hailing giant Uber (UBER.N), opens new tab explored a possible bid for the company. Uber shares were down about 2%. Key developments that should provide more direction to U.S. markets later on Thursday: * European Central Bank policy decision and press conference with ECB President Christine Lagarde * US corporate earnings: Netflix, Snap-on, Intuitive Surgical, Blackstone, Travelers, Truist, M&T, Elevance Health, Marsh & McLennan, Huntington Bancshares, KeyCorp * US September retail sales, industrial output, weekly jobless claims, October Philadelphia Fed business survey, Oct NAHB housing index, August business/retail inventories, August TIC data on Treasury holdings * Federal Reserve Bank of Chicago President Austan Goolsbee * European Commission President Ursula von der Leyen and European Council President Charles Michel holds a press conference after European Union summit * U.S. President Joe Biden visits Germany <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a> Editing by Christina Fincher Our Standards: The Thomson Reuters Trust Principles., opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Chipmaker TSMC's profits surge, retail sales ahead - what's moving markets By Investing.com

Investing.com -- S&P 500 futures and Nasdaq 100 futures contracts inched slightly higher on Thursday, with markets looking ahead to retail sales data and a slew of corporate earnings announcements. Taiwan Semiconductor Manufacturing Co's third-quarter profit tops expectations, as the world's largest contract chipmaker says demand for its artificial intelligence-linked products is "extremely robust". Elsewhere, Chinese stocks dip following a tepid reaction to a government briefing unveiling fresh support for the country's housing market. 1. Futures muted US stock futures were muted on Thursday as investors awaited new economic data and a raft of corporate returns. Shares in Morgan Stanley (NYSE:MS) surged by 6.5% to end at an all-time peak after the lender reported solid profits fueled by improved investment banking revenue. Larger regional banks climbed as well. Meanwhile, the Russell 2000 index and S&P Small Cap 600 both logged their highest finishing levels since 2021, in a sign that some investors may be rotating out of pricier tech names and into less expensive segments. 2. TSMC profit surges amid strong AI demand Taiwan Semiconductor Manufacturing Co (TW:2340) -- the world's biggest contract chipmaker -- posted a stronger-than-expected third-quarter profit on Thursday, as sustained demand from the artificial intelligence industry bolstered its top-line returns. The group also provided an upbeat outlook for the current quarter, partly citing improved capacity utilization. "We continue to observe extremely robust AI-related demand from our customers," CEO C.C. Wei added in a post-earnings webcast. TSMC clocked a net profit of T$325.26 billion ($10.1 billion) in the three months to September 30, it said in a press release. The figure was higher than a Reuters estimate of T$300.2 billion. Investors will have the chance to parse through fresh US retail sales data on Thursday that could provide more insight into the state of the economy as the Federal Reserve embarks on a potential cycle of interest rate cuts. US retail sales are tipped to have risen by 0.3% in September, accelerating from 0.1% in the prior month, according to economists' estimates of the Commerce Department data. In August, the month-on-month figure, which includes mostly goods and is not adjusted for inflation, unexpectedly ticked higher, while the July reading was also revised higher. Indications of resilience in consumer spending could bode well for the Fed's hopes of engineering a so-called "soft landing", in which a period of elevated inflation is quelled without sparking a broader downturn in activity. The central bank slashed rates by an outsized 50 basis points at its latest meeting last month and traders are betting policymakers could introduce further reductions at its final two gatherings of 2024. 4. Chinese stocks edge lower as property briefing underwhelms China's Shanghai Shenzhen CSI 300 and Shanghai Composite averages both slipped on Thursday after a briefing on more support for the country's ailing property market underwhelmed. China's housing ministry said it will roll out increased aid for the real estate market, including a bigger whitelist of property developers with easy access to government funding. It was the latest in a series of high-profile announcements from the Chinese government, which began in late September, as Beijing pushes to provide enough support for the economy to hit its annual growth target. 5. Meta cuts jobs at WhatsApp, Instagram - The Verge Facebook owner Meta Platforms Inc (NASDAQ:META) has begun laying off employees in several departments, most notably WhatsApp, Instagram, and Reality Labs, The Verge reported on Wednesday, while some employees also said they had been axed. The cuts appeared to be part of an internal reorganization of teams, and not a company-wide headcount reduction, the report said, after Meta eliminated over 20,000 roles in the past two years. Some Meta employees also posted on social media regarding the headcount reductions. The latest round of job cuts come after Meta cut some roles in its Reality Labs division earlier this year. That was preceded by cuts of over 10,000 roles in 2023 and about 11,000 roles in 2022, as the company dialed down its post-COVID growth prospects.