While the sharp shakeout in semiconductor stocks continues, Taiwan’s TSMC may just steady the chips as the world’s largest contract chipmaker reported another blowout quarter with a forecast-beating 77% surge in profits.
The bar is high, however, as Europe’s ASML found out on Wednesday when it posted a similar beat and still saw its stock end the day in the red. South Korea’s high-flyers also tumbled again, as the central bank there lifted interest rates to steady the won and as regulators cracked down on new listings of leveraged funds on single stocks that have helped to fuel volatile trading.
IPO fever cooled too as SpaceX’s stock retreated back below its offer price for the first time since the blockbuster listing last month.
Stock sector rotation, however, saw the S&P 500 eke out another small gain on Wednesday, and the mood was better in bond markets as another June inflation readout - this time the U.S. Producer Prices Index - came in much softer than expected, helping to remove speculation of a Fed rate hike this month from futures pricing.
Still, the reheated Iran war in July may mean that inflation relief is fleeting as world oil prices are back well above $80 per barrel. What’s more, the Fed’s favored core PCE inflation gauge is still tracking annual rates of over 3% for June and July.
Elsewhere, sterling was buoyant, hitting its highest in over a year against the euro on Wednesday amid reports that the relatively conservative Labour Party Home Secretary Shabana Mahmood was the favourite to be the new UK finance minister.
With that, onto today's column.
