【Eng】2024/7/22 - CSOP Regional Market Morning Report

- US major stock indices closed higher on Monday, building on Friday's rally as increasing expectations of a second Donald Trump presidency in the wake of a failed assassination attempt raised hopes of a looser regulatory environment.

- The growing probability that the U.S. Federal Reserve will begin cutting its key interest rate as soon as September also helped feed risk appetite.

- Tech shares slumped Wednesday as investors shed the behemoths that fueled Wall Street’s monster stock rally this year. The Nasdaq Composite index tumbled 2.8%, logging its worst day since December 2022. The S&P 500 lost 1.4%.

- Shares of tech heavyweight Nvidia (NVDA) slumped 6.6% and rival chipmaker Advanced Micro Devices (AMD) shares dropped by 10.2%.

- The selloff comes after a Tuesday report from Bloomberg that the Biden administration is mulling plans to impose more sanctions on Chinese tech firms and to heighten semiconductor trade restrictions between the US and China.

- Foreign holdings of U.S. Treasuries rose to a record high in May, exceeding the previous record in March, data from the Treasury Department showed on Thursday.

- Holdings of U.S. Treasuries rose to $8.129 trillion in May from a revised $8.04 trillion in April. Japan's stash of Treasuries shrank to $1.128 trillion from $1.15 trillion in April. Japan remains the largest foreign holder of U.S. Treasury securities. China, which is No. 2, saw its holdings fall to $768 billion from $771 billion in April.

- On Sunday, China released the full text of the decision on deepening reforms passed by the 20th Third Plenary Session, clearly outlining measures for economic system reforms and high-quality development.

- The decision proposes to formulate a law to promote the private economy, move the collection of consumption tax to a later stage and steadily delegate it to local governments, reform the financing methods of real estate development and the pre-sale system of commercial housing, improve the real estate tax system, and accelerate the reform and transformation of local financing platforms.

- Japan’s exports grew for a seventh consecutive month in June, supporting the view that in the second quarter the economy will recover from its contraction at the start of the year. Exports gained 5.4% from a year ago, led by chip-making gear and non-ferrous metals, the Finance Ministry reported Thursday.

- Cathie Wood said that Tesla entry into the more profitable Robotaxi autonomous taxi platform will be the catalyst for a 10x increase in the stock price.

- She believes that the global autonomous taxi ecosystem will be an $8 trillion to $10 trillion revenue opportunity, with platform providers such as Tesla accounting for half of the total.

- ASML's second-quarter orders are expected to reach close to US$5.4 billion, higher than consensus estimates, Mihuzo analyst Kevin Wang said.

- Analysts said ASML may upgrade guidance, as major contract suppliers of cutting-edge chips including Taiwan Semiconductor Manufacturing Co (TSMC), which makes chips for Nvidia and Apple - report earnings on Thursday and might forecast an increase in equipment purchases.

- Taiwan Semiconductor Manufacturing Co. achieved significant growth again in the second quarter of 2024. TSMC’s financial report released on July 18 showed that Q2 revenue was NT$673.51 billion (approximately US$20.82 billion), a year-on-year increase of 40.1% and a month-on-month increase of 13.6%. The year-on-year growth rate was higher than the average analyst’s expectation of 35.5%.

- Net profit was NT$247.845 billion, a year-on-year increase of 36.3% and a month-on-month increase of 9.9%, higher than the average analyst estimate of NT$235 billion.