US Stocks Rise as TSMC Leads with 10% Surge

2024-10-18 | Daily Analysis , Daily Insight , FTSE China A50 Index , HK Stocks , Securities , US Stocks

US Stocks Rise as TSMC Leads with 10% Surge

On Thursday, US stocks closed mixed, with the Dow Jones hitting new intraday and closing record highs. September retail sales data slightly exceeded expectations, highlighting strong consumer spending that continues to support the economy, solidifying expectations for the Federal Reserve to cut rates by 25 basis points in November.

According to data released by the US Commerce Department on Thursday, retail sales in September, unadjusted for inflation, rose by 0.4% month-over-month, beating the market’s 0.3% expectation.

Along with a surprising drop in initial jobless claims last week, the data reinforced the view of a resilient US economy, further cementing expectations for a 25-basis-point rate cut from the Fed.

Josh Jamner, investment strategy analyst at ClearBridge Investments, noted that strong economic data has eased recession fears, leading investors to revise their outlook for economic and corporate earnings growth. Overall, this has allowed the market to rise, albeit more cautiously than previously expected.

Corporate earnings remain in the spotlight. TSMC (Taiwan Semiconductor Manufacturing Company) surged 9.8% on Thursday, hitting a record high after reporting a 54% jump in quarterly profits, beating expectations.

TSMC’s strong performance helped counterbalance the negative impact of ASML’s earlier guidance cut for 2025, driving up semiconductor stocks across the board. Nvidia followed TSMC’s lead, also reaching a new all-time high.

After the US market closed on Thursday, streaming giant Netflix also reported stellar earnings, lifting its stock by 5%. Netflix’s Q3 revenue and profits saw double-digit growth, surpassing expectations, with operating margins climbing sharply. Subscriber growth slowed less than expected, and the company’s Q4 revenue guidance was stronger than anticipated.

US Stocks

Fundamental Analysis: 

Large tech stocks were mixed, with Google down more than 1%, while Tesla edged lower. Intel, Apple, Microsoft, Amazon, and Meta all saw modest gains. Semiconductor, chip, and gold stocks mostly advanced, with TSMC surging nearly 10%, Harmony Gold up over 8%, Kinross Gold rising more than 5%, and Broadcom and Micron Technology both climbing over 2%.

Aerospace diagnostic equipment supplier Snap-on rallied about 10%, marking its best single-day performance since April 2020. Blackstone Group also jumped more than 6%, its best single-day gain since December 2023.

Most popular Chinese stocks fell, with the Nasdaq Golden Dragon China Index down 3.61%. FangDD dropped over 24%, KE Holdings fell more than 11%, Miniso and XPeng both slid 7%, while Nio dropped over 6%. Bilibili, Weibo, and Li Auto fell more than 5%, JD.com and Tencent Music both dropped over 4%, and iQIYI and GDS Holdings slid more than 3%. Meanwhile, U Power surged over 5%, while Youdao and Sohu gained more than 1%.

Technical Analysis: 

US Stocks Rise as TSMC Leads with 10% Surge
(S&P 500 Index, 1-day chart) 

Market Trends: 

  • Dow Jones rose 161.35 points, or 0.37%, to close at 43,239.05.
  • Nasdaq gained 6.53 points, or 0.04%, to close at 18,373.61.
  • S&P 500 fell 1.00 point, or 0.02%, to close at 5,841.47.

Hong Kong Stock Market

Fundamental Analysis: 

Hong Kong’s major indices all rose. Among tech stocks, Meituan climbed nearly 4%, Xiaomi gained over 3%, while JD.com and Alibaba fell more than 2%. Semiconductor stocks led the gains, with SMIC up over 5%.

Gold stocks also performed well, with Lingbao Gold up more than 4% and COMEX gold futures hitting new all-time highs. Against a backdrop of rising global economic uncertainty, gold’s appeal as a traditional safe-haven asset is growing stronger.

Mainland Chinese brokerage stocks surged, with China Merchants Securities soaring over 12%. The People’s Bank of China announced today that it had provided guidance to participants of the Securities, Fund, and Insurance Company Swap Facility (SFISF), clarifying business processes, operational elements, and the rights and obligations of both parties.

Reportedly, as of now, 20 securities and fund companies have been approved to participate in the swap facility, with the initial application amount exceeding 200 billion yuan.

US Stocks Rise as TSMC Leads with 10% Surge
(Hang Seng Index, 1-day chart) 

Technical Analysis: 

  • Hang Seng Index rose 0.75%, closing at 20,229.94 points.
  • Hang Seng Tech Index gained 1.03%, closing at 4,394.40 points.
  • Hang Seng China Enterprises Index climbed 0.90%, closing at 7,243.90 points.

FTSE China A50 Index

Fundamental Analysis: 

Mainland China’s three major indices all closed higher in the morning session. By midday, total market turnover reached 979.5 billion yuan, an increase of 61.7 billion yuan compared to the previous day. More than 3,800 individual stocks were up across the board.

Sectors showing the biggest gains included high-speed copper cable connections, semiconductors, and CPO (Co-Packaged Optics), while real estate and education sectors were in the red. Semiconductor stocks led the charge, with shares of Fulide, Jinghua Micro, and Shanghai Belling hitting their daily limit.

AI hardware stocks were also active, with high-speed copper cable connections driving the rally. Stocks like Kaiwang Technology hit the 20% daily limit, while Chuangyitong, Huafeng Technology, Yihua, Ruikeda, and Wolnuclear all gained over 5%.

The securities sector also saw gains, with Tianfeng Securities hitting the daily limit and Zhejiang Merchant Securities and Guohai Securities climbing over 5%. Meanwhile, the real estate sector continued to lag, with Yudev, Jintou Chengkai, and Wanliang Enterprises all dropping more than 5%.

Technical Analysis: 

US Stocks Rise as TSMC Leads with 10% Surge
(SSE Composite Index, 1-day chart) 

Market Trends: 

  • Shanghai Composite Index rose 0.67%, closing at 3,190.63 points.
  • Shenzhen Component Index gained 1.64%, closing at 10,054.43 points.
  • ChiNext Index surged 3.29%, closing at 2,100.37 points.

Risk Disclosure
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.  
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein. 

Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution. 

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