European stocks snapped two weeks of losses this week, as concern over a potential default by the US government faded and the nomination of US Federal Reserve Vice Chairwoman Janet Yellen to head the US central bank signaled the continuation of its stimulus.
Celesio AG surged 19 percent as McKesson Corp was said to be in talks to buy a majority stake in the drug wholesaler, while Persimmon PLC and Taylor Wimpey PLC led house builders higher as British property prices surged to an 11-year high and Goldman Sachs Groups Inc predicted further growth. Meanwhile, TGS Nopec Geophysical Co slumped 16 percent after reducing its sales forecast because of delays in getting permits for new surveys.
The STOXX Europe 600 Index added 0.6 percent to 311.61 this week after slipping 1.4 percent in the previous two weeks. The gauge has rallied 11 percent so far this year as the eurozone emerged from a recession and central banks maintained stimulus measures to support the global economy.
National benchmark indices advanced in 13 of the 18 western European markets this week. Germany’s DAX increased 1 percent to a record-high, while the UK’s FTSE 100 added 0.3 percent and France’s CAC 40 rose 1.2 percent.
The STOXX 600 lost 1.5 percent in the first three days of the week as a partial shutdown of the US government continued, but reversed losses as signs of a temporary resolution to the fiscal impasse emerged later in the week when Republicans in the US House of Representative proposed a short-term increase to the debt ceiling that would buy the government time until Nov. 22 to conclude a longer agreement.
Obama had earlier warned that the world’s biggest economy would slide into a recession if lawmakers failed to raise the ceiling.
Without congressional action, the US will exhaust its borrowing authority by Thursday next week, according to the US Department of the Treasury.
“Many investors believe that a solution to the US debt problem will be found, even if just a temporary one,” said Yves Maillot, who manages 18.5 billion euros (US$25 billion) as head of European equities at Natixis Asset Management in Paris.
Investors also turned their attention to corporate earnings as the shutdown delayed the release of some US economic data. Alcoa Inc, JPMorgan Chase & Co and Wells Fargo & Co all posted results that exceeded analysts’ estimates this week.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
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