US stock markets climbed steadily, if unspectacularly, this week, nearing three-year highs despite worry over rising oil prices and Europe’s slow boil debt crisis.
“Stocks were in a bear market from October 2007 until March 2009,” said Beth Ann Bovino of Standard & Poor’s (S&P). “They have now recovered much of those losses.”
The holiday-shortened week saw the Dow Jones Industrial Average hover above the symbolic threshold of 13,000 points, helping add to confidence about the growing economy and falling unemployment.
At the end of the week, the Dow was up 0.3 percent at 12,982.95 points. The NASDAQ rose 0.4 percent and the S&P 500 rose 0.3 percent.
“A stronger job market is helping the US weather headwinds from both home and abroad,” said economists at Nomura, a Japanese bank.
One of those headwinds is higher oil prices, which have been rising on tensions in Iran.
While prices have been on the rise for some time, there was renewed focus this week as US politicians talked extensively about what can be done to stem the rise in this election year.
“Oil prices are on the rise again and concerns are growing about their impact on the recovery,” IHS Global Insight economists Paul Edelstein said.
“The situation is reminiscent of early-2011, when Brent oil prices reached US$126 a barrel, creating a growth pocket in the middle of the year,” he said.
“If oil prices stay persistently high or continue to rise, growth forecasts will likely be revised downward, but it would take a much bigger spike in prices to sink the US economy back into recession,” he said.
Higher oil prices spelled a boon for the oil majors. ExxonMobil was up 2 percent for the week, and Chevron was up 2.3 percent
Airlines got the raw end of that trade. US Airways plunged 21 percent, United Continental 13 percent and Delta 12 percent for the week.
In other sectors Wal-Mart saw steep declines, down 5.9 percent following disappointing quarterly earnings. Hewlett-Packard suffered a nearly 10 percent drop after reporting a 44 percent profit fall in its fiscal first quarter.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to