US stocks jumped to fresh records this week as the US Federal Reserve’s promise of continued low interest rates offset turmoil in Iraq that lifted oil prices.
The tech-heavy NASDAQ Composite Index advanced 57.39 points (1.33 percent) to close on 4,368.04, while the Dow Jones Industrial Average jumped 171.34 (1.02 percent) to 16,947.08 and the S&P 500 shot up 26.71 (1.38 percent) to 1,962.87.
Both the Dow and the S&P stood at records at week’s end.
Equities were in positive territory most of the week, but the strongest gains came on Wednesday after Fed Chair Janet Yellen downplayed higher inflation numbers and signaled that benchmark interest rates would remain low through next year.
“What’s driving the market now is central bankers,” Cornerstone Wealth Management chief investment officer Alan Skrainka said, adding that he thinks Yellen was too dovish. “I really feel the Federal Reserve should be a little less accommodative and send a message that they’re not going to be caught behind the curve when it ultimately becomes time to raise rates.”
While Skrainka still believes the US economy is strengthening, he said the country’s stock market at this point is “fully valued,” warning that a correction could come in the short term in the even of another surprise negative event such as the sudden eruption of fighting in Iraq.
Wunderlich Securities chief market strategist Art Hogan gave a more bullish outlook on stocks and praised the Fed’s tone, but agreed that Iraq remains a wild card.
“I think the market has grown tolerant of the near-term story, but it wouldn’t take much of an escalation of violence and/or a movement closer to a disruption of energy or oil to change that narrative,” Hogan said. “So it’s very tenuous still.”
Besides easy liquidity from the Fed and generally improving economic data, US stocks have benefited from a steady stream of corporate deals his year.
Major deals during the week included US medical device maker Medtronic Inc’s plan to buy its Irish-based competitor Covidien Ltd for US$42.9 billion, and US telecom operator Level 3 Communications Inc’s takeover of TW Telecom Inc in a deal worth US$7.3 billion.
On Friday, General Electric Co’s proposal to buy the energy assets of French industrial heavyweight Alstom SA for US$16.8 billion received a key boost when the French government endorsed the deal over a competing offer from Germany’s Siemens AG and Japan’s Mitsubishi Heavy Industries Ltd.
As part of the deal, France plans to take a dominant 20 percent stake in Alstom by buying two-thirds of the shares owned by French group Bouygues SA.
Ireland’s Shire PLC on Friday rejected a US$46 billion informal bid from US giant AbbVie Inc, saying the proposal “fundamentally undervalued” the company and criticizing AbbVie’s plan to relocate its headquarters in Britain for tax purposes.
Next week’s calendar includes releases on durable goods orders for last month, the US Conference Board’s Consumer Confidence Index and several important housing indicators, including new home sales, existing home sales and the Case-Shiller Home Price Index.
The agenda also includes earnings reports from agricultural giant Monsanto Co and Dow component Nike Inc.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day