Wall Street shifts its focus back to the economy after US congressional elections that produced some surprises, but were largely welcomed by investors.
The past week produced moderate gains for the main stock indexes with the market unfazed by the sweep of Congress in Tuesday's vote by opposition Democrats, who will now control both chambers.
Some analysts said the move could be good for Wall Street by keeping government spending in check, and that the subsequent removal of US Defense Secretary Donald Rumsfeld might help lead to a new course in Iraq.
In the week to Friday, the Dow Jones Industrial Average blue-chip index advanced 1.02 percent to 12,108.43.
The broad-market Standard & Poor's 500 gained 1.22 percent to 1,380.90, while the tech-heavy NASDAQ rallied 2.53 percent to 1,380.90.
"The muted response to the Democrats' unexpected sweep of both congressional houses was impressive," Lynn Reaser at Banc of America Investment Advisors said.
"Although some industries could face `headline risk,' as various proposals and bills are debated, the new Democratic leadership will not be able to claim every prize it desires. Democrats lack the 60 votes necessary to block a Republican filibuster in the Senate and the two-thirds vote required to overturn a presidential veto," she said.
Mace Blicksilver, an analyst at Marblehead Asset Management, said Rumsfeld's ouster at the Pentagon may be a positive.
"The market thinks that maybe it will lead to a resolution sooner in Iraq, which [could] help support consumer confidence," Blicksilver said.
Marc Pado, market strategist at Cantor Fitzgerald, said the split power in Washington suggests no major economic policy changes from either party.
"Economically, it's not going to make a big difference," he said.
Pado said Wall Street is now watching closely to see if the US economy, which struggled at a 1.6 percent growth pace in the third quarter, will manage a so-called "soft landing" without slipping into recession.
"Where the market stands, the psychology is we had discounted a soft landing," he said.
He said the prevailing wisdom is that "we will have this very nice smooth soft landing and then the economy will pick up a little bit later."
Pado said this is "the likely scenario, but it never goes that smoothly; so what I'm saying is `Watch out for the bumps.'"
The analyst said that although stocks have held firm, "the bond market is indicating you're in for a hard landing."
Pado said a key indicator of the health of the US economy will be retail sales for the crucial holiday season.
"We're going to be watching the holiday season like a football game," he said.
Other analysts said they are cautious following the election results.
Ed McKelvey at Goldman Sachs said the market is pricing in an "immaculate" housing correction -- one that does not induce recession -- which may be too optimistic.
"It is quite conceivable to us that the contraction in housing activity could ultimately drag the US economy into recession," he said in a note to clients.
Although he said that "is not our forecast," he said it is "a downside risk."
Andrew Busch at BMO Nesbitt Burns said the split power in Washington would be good for bonds by keeping deficit spending in check, mixed for the stock market and "bad for the US dollar."
But he added that too much posturing by Democrats could be damaging.
It is "hard to be positive for the markets if there are subpoenas, investigations, and acrimony between the legislative and executive branches of government," Busch said.
Bond prices firmed over the week. The yield on the 10-year Treasury bond eased to 4.586 percent from 4.715 percent a week earlier, and that on the 30-year bond dropped to 4.692 percent against 4.811 percent. Bond yields and prices move in opposite directions.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the