European stocks fell for the first week in seven as earnings from GlaxoSmithKline PLC to Akzo Nobel NV disappointed investors, sparking concern the worst of the profits slump may not be over.
ICAP PLC sank 11 percent as the world’s largest broker of trades between banks lost 85 percent of its business in the most active part of the mortgage-bond market in six weeks. Drugmaker GlaxoSmithKline lost 3.1 percent as earnings missed analysts’ estimates. Akzo Nobel fell 5.6 percent as the world’s biggest maker of paints posted a first-quarter loss on sliding demand.
“There is still a lot of bad news to come out from the economy,” said Lothar Mentel, London-based chief investment officer at Octopus Investments Ltd, which manages the equivalent of about US$1.1 billion.
Investors should be “prepared for a bumpy ride until the end of the year,” he said in a Bloomberg Television interview.
The Dow Jones STOXX 600 Index slid 0.6 percent to 195.82, ending the longest streak of weekly gains on the measure since 2006. The gauge has rallied 24 percent since March 9 as investors speculated US Treasury Secretary Timothy Geithner’s plan to finance the purchase of as much as US$1 trillion in illiquid assets from banks will help to pull the global economy out of the economic slump.
The UK economy shrank more than economists forecast in the first quarter, marking the biggest contraction since the rise of then-British prime minister Margaret Thatcher in 1979 as manufacturing and business services posted record declines.
Earnings at 55 of the companies in the STOXX 600 that have reported earnings so far since April 7 declined by an average of 25 percent, according to data compiled by Bloomberg.
Credit Suisse Group AG and Debenhams PLC were among companies that gave investors positive surprises when they reported first-quarter results this week.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is