Generally strong earnings delivered solid gains of more than 2 percent for US markets in a holiday-shortened week, helped by the absence of bad news from Europe.
US investors focused on relatively positive domestic economic data and fourth quarter earnings reports, to mark the best weekly gains of the year so far.
“It’s been a strong week, pretty much based on the fact there wasn’t any bad news out of Europe,” said Mace Blicksilver of Marblehead Asset Management.
“The individual earning reports, by and large, were great reports, although Google was weaker. But still, IBM is much more representative of the economy than Google is.”
The Dow Jones Industrial Index of blue chips jumped a third straight day on Friday on the back of strong earnings from Microsoft, Intel and IBM, to drive the gain for the four-day week to 2.4 percent.
The S&P 500 added 2.0 percent while the NASDAQ, despite being pulled down on Friday by Google’s disappointing quarterly results, racked up a 2.8 percent jump for the week.
“US markets were more interested in domestic developments, particularly positive employment and manufacturing data and generally upbeat earnings results from S&P 500 companies — major banks notwithstanding,” said Paul Edelstein at IHS Global Insight.
“Double-dip recession fears are shrinking in the rear-view mirror as it becomes increasingly evident that the US recovery will endure, if not necessarily flourish.”
For the coming week attention will be split between the eurozone and a bucket-load of domestic US events, including the US Federal Reserve’s policy meeting, US President Barack Obama’s State of the Union address on Tuesday and GDP figures.
The president’s annual address to the US Congress is expected to touch heavily on the economy, which has been a key issue in this year’s US election campaign.
On Tuesday and Wednesday the Federal Reserve’s Federal Open Market Committee will likely consider more stimulus for the US economy, via bond purchases.
On Friday the government will release its first estimate of fourth-quarter growth.
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