US stock futures held steady on Thursday morning, with traders pausing as they awaited fresh economic data and a wave of corporate earnings reports.
The Dow Jones Industrial Average hit its third record close in four sessions on Wednesday, while the S&P 500 and Nasdaq Composite also posted gains. Morgan Stanley (MS) led the charge, surging by 6.5% to an all-time high following strong earnings fueled by a boost in investment banking revenue. Meanwhile, the Russell 2000 and S&P Small Cap 600 both reached their highest levels since 2021, hinting at a potential rotation by investors from expensive tech stocks into more affordable small-cap names.
Taiwan Semiconductor Sees Profit Surge Amid AI Boom
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, reported a strong third-quarter profit on Thursday, driven by continued demand from the booming artificial intelligence (AI) sector. TSMC posted a net profit of T$325.26 billion ($10.1 billion), surpassing expectations and delivering an optimistic outlook for the current quarter.
In a post-earnings call, CEO C.C. Wei highlighted “extremely robust” AI-related demand from customers, underscoring the ongoing strength of the sector. This positive report from TSMC comes just days after ASML provided a more cautious outlook, citing slow chip demand in non-AI industries.
Retail Sales Data on the Horizon
All eyes will be on the latest US retail sales data set to release on Thursday. Analysts are expecting a 0.3% rise for September, up from August’s 0.1%. Strong retail sales could signal resilience in consumer spending, potentially bolstering the Federal Reserve’s hopes of achieving a “soft landing,” where inflation cools without triggering a major economic slowdown.
Following the Fed’s recent 50-basis point rate cut, traders are looking to see if further rate cuts will be on the table at the Fed’s remaining 2024 meetings, as they navigate a complex economic environment.
China’s Market Slips on Underwhelming Property Support
China’s major stock indices, including the Shanghai Composite and CSI 300, fell on Thursday following a disappointing announcement from the government regarding support for the struggling real estate sector. While the housing ministry pledged more aid for the property market, including an expanded list of property developers eligible for government funding, the measures failed to meet investor expectations.
This marked the latest in a series of policy moves aimed at stabilizing China’s economy, which has struggled in recent months to meet its growth targets.
Meta Platforms Announces Job Cuts in Key Divisions
In tech news, Meta Platforms (META) has initiated another round of layoffs, this time affecting departments across WhatsApp, Instagram, and Reality Labs. The cuts appear to be part of an internal reorganization rather than a broad workforce reduction. This follows Meta’s recent pattern of trimming down its workforce—over 20,000 roles have been eliminated in the past two years as the company refines its strategy post-pandemic.
Meta’s move to cut jobs in key divisions suggests a continued shift in focus, as the tech giant works to adjust to changing market conditions and growth expectations.
At OptionsPlayers, we stress the importance of paying attention to broader market trends and adjusting your trading strategy accordingly. Whether it’s recognizing shifts in sector rotation or understanding the impact of macroeconomic data, staying informed is key. See OP chat later for today’s upgrades & downgrades plus any chat plays or plans.
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