Connect with us

Hi, what are you looking for?

Alive Business PlanAlive Business Plan

Investing

Morning Bid: Inflation cools, TSMC offers AI weather vane

By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets.

Markets across Asia should open on a firm footing on Thursday, supported by a rebound on Wall Street and softer Treasury yields the day before, and growing signs that global inflationary pressures are broadly easing.

Asia’s economic calendar on Thursday sees the release of the latest international trade data from Japan and Singapore, and Australian unemployment.

The main three U.S. indices all closed in the green on Wednesday with banks and small caps leading the rise. Big Tech, however, remains under pressure, which may intensify the spotlight even more on TSMC’s third quarter results on Thursday.

Taiwan Semiconductor Manufacturing Co, the main producer of advanced chips used in artificial intelligence applications, is expected to report a 40% leap in profit to T$298.2 billion ($9.27 billion) thanks to soaring demand.

The world’s largest contract chipmaker, whose customers include Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and ASML (AS:ASML), has benefited from the global surge towards AI. A miss or weak guidance, however, could trigger another wave of selling across Big Tech.

But assuming analysts’ estimates are met or even exceeded, the backdrop to Thursday’s session in Asia looks favorable, despite the dollar’s tick higher. The VIX index of U.S. stock market volatility dipped back below 20.0 on Wednesday and oil fell for a fourth day in a row.

Falling oil prices are often a warning of weak global economic activity and demand. A huge miss and surprising slump in Japanese machinery orders on Wednesday will only have strengthened those concerns.

But the disinflationary pull from oil’s weakness cannot be ignored, and if investors like one thing it’s lower interest rates. In that light, investors will have been encouraged by the price signals from around the world over the last 24 hours.

Inflation in New Zealand was slightly weaker than expected, inflation in Britain was much weaker than expected and sure to cement UK rate cut expectations, while the Bank of Thailand delivered a surprise rate cut.

With the European Central Bank widely expected to cut rates on Thursday by 25 basis points for a second meeting, to 3.25%, global financial conditions are loosening. Rates traders currently expect the Fed, ECB and Bank of England each to cut rates another 50 bps and the Bank of Canada to cut at least another 75 bps by the end of the year.

That’s a lot of easing, especially without a recession, at least in the US. Indeed, if there is a US recession coming, someone forgot to tell the corporate bond market, where spreads are now the tightest in nearly 20 years.

This is usually where the first hints of recession are seen as investors move to price the impending impact of rising unemployment, slowing growth and consumer weakness on companies’ debt loads.

Here are key developments that could provide more direction to markets on Thursday:

– Australia unemployment (September)

– Japan trade (September)

– Taiwan’s TSMC earnings (Q3)

This post appeared first on investing.com
Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    You May Also Like

    Latest News

    The Gateway Pundit, a far-right website, published a note from its editor on Saturday acknowledging that two election workers in Georgia did not engage...

    Latest News

    New majorities in Congress, particularly when the incoming party has a new leader, offer the rare chance for the institution to take a breath...

    Investing

    JAKARTA (Reuters) -Indonesia has asked Alphabet (NASDAQ:GOOGL)’s Google and Apple (NASDAQ:AAPL) to block Chinese fast fashion e-commerce firm Temu in their application stores in...

    Latest News

    Sister Stephanie Schmidt had a hunch about what her fellow nuns would discuss over dinner at their Erie, Pennsylvania, monastery on Wednesday night. The...



    Disclaimer: alivebusinessplan.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 alivebusinessplan.com