Jobless Claims Drop, TSMC Boosts Chips

Chart of TSMC record Q1 profit and falling U.S. jobless claims lifting semiconductor stocks and U.S. benchmarks

Key Points

01U.S. initial jobless claims fell below forecasts, bolstering a soft-landing narrative and supporting risk assets.
02TSMC reported record Q1 profit, raised full-year revenue guidance and signalled higher capex, which supported chip and equipment sentiment.
03U.S. industrial production unexpectedly fell 0.5% m/m in March, which pressured industrial cyclicals and tempered the growth outlook.
04Samsung's court filing to block alleged unlawful strikes heightened near-term supply risk at its Pyeongtaek memory complex and raised volatility concerns.

Global Market Summary

U.S. benchmarks rose: S&P 500 (SPX) climbed 0.26%, the Nasdaq Composite (^IXIC) gained 0.36% and the Dow (DJIA) added 0.24% as weekly initial jobless claims unexpectedly fell and TSMC's strong results supported semiconductor sentiment. European markets were mixed with Germany's DAX (DAX) up 0.36% and the FTSE (UKX) up 0.29% while France's CAC (FRA40) slipped 0.14%; China's benchmark 000001.SS was unchanged (0.0%).

Top Movers

Leading sectors: Energy (XLE +1.47%), Communication Services (XLC +1.25%) and Technology (VGT +1.01%). Weakness: Healthcare (XLV -0.79%), Consumer Discretionary (XLY -0.47%) and Industrials (XLI -0.50%). Notable movers: Gainers — AXTI +29.95%, XNDU +29.75%, NN +26.64%; Losers — IESC -8.66%, SCHW -7.63%, MAIN -7.56%.

Macro highlights

U.S. initial jobless claims fell to 207,000 for the week ended April 11, below the 215,000 Reuters forecast, bolstering a soft-landing narrative and supporting risk assets. U.S. industrial production unexpectedly declined 0.5% m/m in March, a downside surprise that pressured industrial cyclicals and tempered the growth outlook.

News that moved markets

Samsung asked a South Korean court to block alleged unlawful union strike actions, heightening near-term supply risk at its Pyeongtaek memory complex and increasing volatility concerns for semiconductor suppliers. TSMC reported record Q1 profit, raised full-year revenue guidance and signalled higher capex, which supported chip and equipment sentiment but produced mixed intraday stock reactions. Circle's CEO flagged the prospect of a yuan-backed stablecoin within three to five years, and Madison Air Solutions' strong NYSE debut (MAIR) drew notable IPO interest. PGI completed the acquisition of Legacy Brands and a broad IP portfolio. Announced transactions included International Paper's planned acquisition of North Pacific Paper Company.

Upcoming session watchlist

01Japan Inflation Rate YoY (Mar) — forecast 1.5% vs 1.3% prior, Apr 17, 11:30 PM | Gauges headline consumer inflation momentum and price pressures across Japan's economy.
02Japan Core Inflation Rate YoY (Mar) — forecast 2.0% vs 1.6% prior, Apr 17, 11:30 PM | Measures underlying inflation pressures in Japan and informs the broader inflation trend.
03Euro Area Balance of Trade (Feb) — consensus €11.1B vs €-1.9B prior, Apr 17, 09:00 AM | Indicates trade flows and external demand within the euro area economy.
04Italy Balance of Trade (Feb) — consensus €3.83B vs €1.089B prior, Apr 17, 08:00 AM | Signals export competitiveness and import demand within Italy's economy.
05US Fed Waller Speech — Apr 17, 06:00 PM | Fed remarks may shape expectations for monetary policy and interest rates.

Key Takeaways

01U.S. equity benchmarks rose modestly as jobless claims fell and chip sentiment improved.
02Technology, Communication Services and Energy led sector gains while Healthcare, Consumer Discretionary and Industrials lagged.
03Industrial cyclicals were pressured after the surprise drop in U.S. industrial production.
04Notable individual moves included large winners AXTI, XNDU and NN, and declines in IESC, SCHW and MAIN.

References