To The Moon

On Mon, 13 Jan 2025, US stocks continued to perform poorly, even though most media termed it as “mixed”.

Tech stocks continued to tumble, dragging Nasdaq (the tech index) along with it.

While, Treasury yields continued to move higher, with the benchmark 10-year note yield touching a 14-month high of 4.805% and last up 1.6 basis points to 4.79%, amid doubts about the Fed's next move on interest rates.

By the time market closed for the day: (see above)

• DJIA: +0.86% (+358.67 to )4,2297.12.

• S&P 500: +0.16% (+9.18 to 5,836.22). Bounced off a 2-month low and eked out a slight gain.

• Nasdaq: -0.38% (-73.53 to 19,088.10).

Sectors’ Performances:

• Overall there were 2 decliner sectors, namely Technology (XLK) and Utilities (XLU). (see above)

• Remaining 9 sectors were “green” where the 3 best sectors were - Materials (XLB), Energy (XLE) and Healthcare (XLV).

So, big tech stocks, including the Magnificent Seven, were lower on Monday (except $Tesla Motors(TSLA)$) despite paring early losses. (see below)

Mag 7 - Quick summary.

• Chip giant $NVIDIA(NVDA)$ fell by -1.97% (or -$2.68 to $133.23).

• Despite Nvidia announcement of deals with big names in healthcare sector like Mayo Clinic, IQVIA Holdings (IQV), and Illumina (ILMN) .

• This happened at the same time the Biden administration proposed twelve new rules to limit & restrict export of advanced AI chips to some countries. (see below)

• In a blog posted on Monday, Nvidia said these rules were 'misguided'.

• Fellow chipmakers and AI darlings like Super Micro Computer (SMCI), Micron (MU), and Constellation Energy (CEG) also fell in the process.

• $Meta Platforms, Inc.(META)$, $Alphabet(GOOG)$, Microsoft(MST)$ and Amazon Inc(AMZN)$ also gave up ground to the sum of -1.22% (-$7.53 to $608.33), -0.46% (-$0.88 to $192.29), -0.42% (-$1.76 to $417.19) and -0.22% (-$0.48 to $$218.46) respectively.

• Tesla (TSLA) bucked the trend, closing +2.17% higher after spending most of the day in the red.

• Apple (AAPL) stock fell by -1.02% (-$2.45 to $234.40), after a report from Counterpoint Research said iPhone sales fell in Q4 2024, shrinking the tech giant's share of the global smartphone market.

Foundry Stock - TSM$.

$Taiwan Semiconductor Manufacturing(TSM)$ was one of the tech stocks hit ‘hard’ hit on Monday too.

It fell by -3.36% (or -$7.01), closing at $201.36 per share. (see below)

Based on YTD performances, TSMC stock gained +80% in 2024 alone.

For 2025, TSM is upped +2.1% YTD before corrections in the past week, amid a broader decline in chip stocks.

Taiwan Semiconductor Manufacturing Co. (TSM) shares will likely remain in the spotlight ahead of the contract chipmaker’s Q4 earnings report out on Thu, 16 Jan 2024, before the opening bell.

Investors polled are expecting artificial intelligence (AI)-driven demand to fuel results.

Recap.

• Earnings per share (EPS) for Q3 2024 came in at $1.95 vs analysts’ consensus of $1.79.

• Revenue for Q3 2024 was $23.5 billion vs $23.32 billion expected, beating expectations.

Q4 Earnings Forecast.

Above is Wall Street’s expectations of TSM Q4 2024 earnings:

• Earnings per share (EPS) is expected to be $2.20 per share.

• Analysts expect the Taiwanese chip giant to post a quarterly profit of $11.4 billion.

• This estimate comes on the heels of surging demand for advanced silicon used in AI infrastructure.

• Reuters reported investors will likely have high expectations after the company reported a +34% jump in 2024 sales.

Any Things Else ?

The chipmaker’s (a) Outlook and (b) capital expenditure (CAPEX) will come under close scrutiny as the company continues to spend billions on new factories amid the potential for export curbs and tariffs under the outgoing Biden administration and incoming Trump administration.

While things look rosy now, there will be new considerations, as TSM’s new silicon plants in the US begins production.

There will be new operating costs incurred that may erode its profitability as US labour costs are definitely more hefty. Going forward, even closer scrutiny will be the order for the day ?

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• Do you think TSM chip maker’s future will be even brighter, with the new Trump administration ? Remember the ex President declared that Taiwan should pay the US for “protection” fees ?

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