Wall Street will move into low gear this week ahead of the Christmas holiday, but traders will keep a close eye on a trickle of US data and Europe’s struggle to contain its debt troubles.
Last week saw stocks close slightly higher amid an encouraging sharp drop in weekly jobless claims and a robust rise in housing construction and manufacturing.
Sentiment was further lifted after the US Congress late on Thursday approved the extension of a sweeping tax cuts and jobless benefits deal that analysts expect to boost the country’s economic growth next year.
US President Barack Obama signed the bill into law shortly after markets closed on Friday.
“In what was a very busy week for economic indicators, the theme was generally better-than-expected readings on the economy, which is consistent with our outlook for steadily improving growth in the next couple of years,” analysts at Wells Fargo Advisors said in a note.
In the week to Friday, the Dow Jones Industrial Average rose 0.72 percent to 11,491.91, after reaching its highest level since September 2008 on Thursday.
The broader S&P 500 index added 0.28 percent to 1,243.91 points, while the technology-rich NASDAQ composite index rose 0.21 percent to 2,642.97 points.
Though traditionally considered a period of profit-making, analysts expect stocks to move modestly up in the week ahead — cut short by Christmas day on Friday — as many traders have already cashed in profits in recent weeks amid growing optimism.
“Historically, we see a nice move for the market into the end of the year buoyed by sentiment that the season brings, but this year it wouldn’t surprise me if it continues to be muted until December 31,” analyst David Levy of Texas-based Kenjol Capital Management said.
Several key economic indicators are to be released in the week ahead, led by the third estimate of US third-quarter GDP, which -analysts expect to be revised slightly higher to 2.6 percent.
Other data includes existing home sales, personal spending and manufacturing data, which are all forecast to notch up in keeping with recent data that has pointed to a slow but steady economic recovery.
“There is plenty of economic data to come out, some companies will report their earnings, but generally speaking the last two weeks of the year are pretty slow,” Miller Tabak chief economic strategist Dan Greenhaus said.
The main source of concern to global markets will remain Europe’s efforts to deal with the major threat of member states going broke under massive debts, following Ireland and Greece.
Over the past week alone, Moody’s downgraded Ireland’s rating and threatened to slash that of Spain and Greece, once again, due to their high debt levels.
“The one wild card [on Wall Street] could be something happening in Europe,” Levy said.
“In the last several days we’ve seen downgrades of various countries’ sovereign debt, and so far the US market has chosen to largely ignore the news out of Europe and instead favoring better economic news and stronger corporate outlook in the US,” he told reporters.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price
NOT A PANACEA: Offering 5G services would not solve the problem of declining telecom incomes, chairman Sheih Chi-mau said, expecting a flat 5G telecom revenue Chunghwa Telecom Co (中華電信) yesterday became the nation’s first telecom to debut its 5G services, offering tiered tariffs that include a threshold of NT$599 and flat rates, as it aims to switch half of its subscribers to the 5G network within three years. Subscribers would have unlimited data transmission for monthly fees starting at NT$1,399 — the same flat rate as when the company launched its 4G service in 2014 — and they can subscribe to the highest-rate plan for NT$2,699 per month for faster data transmission speeds and larger bandwidth, the company said. Data transmission speeds would be within the range
STAYING AHEAD: TSMC expects its sales this year to grow 14 to 19 percent and could spend up to US$3.52 billion on research and development, leaving its rivals far behind Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) reported that the US last year approved 99 percent of its patent applications, which placed the tech giant among the top patent holders in the US. In its Corporate Social Responsibility Report, TSMC said it last year secured about 3,600 patents worldwide, including more than 2,300 in the US. As of the end of last year, TSMC owned more than 39,000 patents, the report said. The company last year filed almost 6,500 patent applications worldwide and ranked among the top 10 patent applicants in the US. In Taiwan, it was the largest patent applicant for the fourth