Wall Street enters a typically quiet pre-holidays week following a tumultuous week that ended with strong gains despite grave concerns about the eurozone and mixed US economic data.
Fears that Europe’s sovereign debt could further weigh on the sluggish global recovery are likely to dominate next week’s trade.
“All eyes are on the eurozone now. That situation has the ability to push US investors significantly in one direction or another,” Miller Tabak chief economic strategist Dan Greenhaus said.
In the week to Friday, the Dow Jones Industrial Average rose 2.62 percent to 11,382.09.
The broader S&P 500 index added 2.97 percent to 1,224.71 points, while the technology-rich NASDAQ composite index rose 2.24 percent to 2,591.46 points, its highest point in nearly three years.
The trading week opened with global markets nose-diving after Ireland adopted a massive international bailout plan, sparking deep concerns that other debt-burdened eurozone states, mainly Spain and Portugal, would also require aid.
The Wall Street gloom turned into cheer on Wednesday and again on Thursday as encouraging employment data and retail sales boosted hopes that the US economic recovery was well underway.
On Friday, dismal US Department of Labor data showing a tiny rise in hiring, with the unemployment rate rising 0.2 percentage points to 9.8 percent, dented some of the confidence, but failed to pull down stocks.
“A disappointing November jobs report portrayed the US labor market as barely advancing, but we are skeptical that the picture is accurate,” analysts Aaron Smith and Ryan Sweet of Moody’s Analytics said.
Another source of optimism were overall very strong results from retailers and department stores following the Thanksgiving weekend, which unofficially starts off the holiday shopping season.
“The retailer [shares] are up 33 percent over the past three months. That’s a tremendous move and it shows the consumer is really there,” Cantor Fitzgerald analyst Marc Pado said.
Next week is historically marked by light trading as investors take a step back ahead of the Christmas holiday. And with few major economic indicators set, apart from October trade figures on Friday, stocks are likely to move cautiously.
“In the second week of December the market tends to pull back, partly because you come off the Thanksgiving weekend with a lot of important data, then you get a breather before the mad push in the third week of December for those final purchases,” Pado said.
The US dollar was set to remain a key player in the market, as its rise against the euro earlier this week in the wake of the eurozone’s woes weakened many US manufacturers, for whom a weak dollar means more business for their exports.
“If the European situation can calm down, then dollar weakness will reassert itself until the end of the year and you are likely to see the stock markets continue to trade upwards,” Greenhaus said.
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to