Stocks, News, Data and Earnings

The world’s most important semiconductor companies, Dutch company ASML and Taiwan’s TSMC, lifted share prices on Thursday after Nvidia’s earnings impressed investors.

Nvidia reported revenue and earnings that beat market expectations on Wednesday. But its sales forecast for the second quarter was about $11 billion — 50% higher than Wall Street’s estimate — sending the U.S. company’s shares up more than 24% in after-hours trading.

Carl Weinberg, Chief Economist at High Frequency Economics, discusses the US debt ceiling talks and Fitch’s decision to put the default rating of the US’s AAA long-term foreign currency issuer on negative watch.

New figures show that net migration to the UK will rise to 606,000 in 2022.

It comes despite repeated promises from the ruling Conservative Party to reduce the number, and party members divided over whether to increase immigration to fill labor shortages.

The government said this week it would tighten rules on student visas, reduce the number of students allowed to bring dependents to the UK and limit the conversion of student visas to work visas.

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– Jenny Reid

UK borrowing costs are close to levels not seen since the bond market crisis triggered by former prime minister Liz Truss’ 2022 mini-budget.

UK consumer price inflation fell less than expected in April, figures showed on Wednesday. The annual consumer price index fell to 8.7% in April from 10.1% in March, beating consensus estimates and the Bank of England’s forecast of 8.4%.

This prompted hawkish market challenges on Bank of England interest rates.

UK government bond yields continued to rise early Thursday. The yield on the UK’s 2-year gilt rose to 4.42%, while the 10-year yield almost rose to 4.28%.

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European stocks extended the previous session’s sharpest losses early Thursday, with the Stoxx 600 index down 0.13%.

While technology was up 1.65%, other sectors were mixed with some gains. Media and retail stocks were down around 1.2%.

Germany’s DAX fell 0.4% after data showed the country entered a technical recession in the first quarter. The UK’s FTSE 100 and France’s CAC 40 lost 0.5% and 0.6% respectively.

The German economy entered a technical recession in the first quarter of this year as households tightened spending.

After Europe’s largest economy recorded a contraction of 0.5% in the last quarter of 2022, data from the German statistics office showed a downward revision of zero to -0.3% in GDP for the period.

Read the full story here.

– Sylvia Amaro

Britain’s energy regulator Ofgem announced that household gas and electricity bills will be cut by £2,074 ($2,562) annually for the three months from July 1, due to lower wholesale prices.

The limit was previously £3,280, although the government stepped in to ensure the average household could pay no more than £2,500.

Consumer prices fell for the first time since the energy crisis began in late 2021, although they were nearly double the October 2021 average. The regulator last year reduced its ceiling revision period from six to three months in light of market volatility.

UK inflation figures on Wednesday showed a moderation in price rises. However, headline and key figures beat expectations and inflation in areas such as food is near record levels, putting pressure on the Bank of England to keep raising interest rates.

– Jenny Reid

Morgan Stanley has identified two memory chip stocks with significant potential for growth as China bans chips made by Micron, a major US-based memory chipmaker.

The bank predicts a boom in the memory chip market and says the impact of artificial intelligence on memory chips has been underestimated.

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– Ganesh Rao

Some corners of the market may have been overbought this year, but investors still have long-term opportunities, according to financial research firm Redburn.

“Which stocks have the potential to double in two to three years? Redburn analysts have selected 12 companies where changes in the competitive or financial environment or management practices could translate into greater value for shareholders,” the firm wrote in a May 23 report.

Here are four of them.

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– Weissen Don

European markets are expected to open higher on Thursday.

UK’s FTSE 100 index is expected to rise 14 points to 7,626, Germany’s DAX is expected to rise 13 points to 15,837, France’s CAC is expected to rise 4 points to 7,253 and Italy’s FTSE MIB is expected to rise 17 points to 26,579.

Proceeds come from Tate & Lyle, Manchester Utd, Johnson Matthey, United Utilities and Pets at Home. Data releases include a detailed breakdown of Germany’s first-quarter GDP.

– Holly Elliott

Fed minutes showed “uncertainty” from participants about whether to raise rates for the 11th time at the June meeting.

According to the minutes, the central bank now seemed to have two camps. A panel of “few” members ruled that progress in reducing inflation had been “unacceptably slow” and that further hikes would be needed. Another, supported by “many” FOMC members, saw economic growth slowing, including “no need for further policy confirmation after this meeting.”

The minutes do not identify individual members or quantify “some” or “many” with specific numbers. However, in Fed parlance, “some” is considered to mean more than “many”.

Bottom line, the minutes showed the central bank is closely watching incoming data to decide whether to raise rates again on June 14.

– Jeff Cox, John Melloy

Correction: In Fed parlance, “some” is assumed to mean more than “many”. An earlier version misstated the difference.