European stocks advanced for a second week after better-than-forecast earnings outweighed disappointing economic data and political uncertainty in France and the Netherlands.
The STOXX Europe 600 Index advanced 0.5 percent to 259.12 this week, extending last week’s 1.7 percent rally. The measure has still lost 4.9 percent since its 2012 high last month amid renewed concerns that the eurozone is yet to contain its sovereign-debt crisis.
“Equity investors are relying on supportive earnings and valuation considerations to offset top-down challenges that have intensified,” Ian Williams, a London-based strategist at Peel Hunt, wrote in a note to clients. “The euro-zone’s economic weaknesses are prompting a political backlash, the US recovery is losing pace and the UK is back in recession.”
NATIONAL INDICES
National benchmark indices rose in 12 of the 18 Western European markets. The UK’s FTSE 100 Index gained 0.1 percent, Germany’s DAX added 0.8 percent and France’s CAC 40 climbed 2.4 percent. Spain’s IBEX 35 Index advanced 1.5 percent even as Standard & Poor’s cut its credit rating for the country for the second time this year.
The STOXX 600 sank to a three-month low on Monday after reports showed manufacturing contracted in the eurozone and China, while French President Nicolas Sarkozy became the first incumbent since 1958 not to win the opening round of the nation’s election. Dutch Prime Minister Mark Rutte also offered to resign after struggling to clinch an austerity deal.
DOUBLE-DIP RECESSION
Reports this week also showed that the UK slipped into its first double-dip recession since the 1970s, while an index of executive and consumer sentiment in the eurozone fell to 92.8 from a revised 94.5 last month. In the US, the economy expanded less than forecast in the first quarter, while more Americans than estimated filed for jobless claims last week.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
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OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to