Chip Stocks Rallying After TSMC's Stellar Sales Outlook

Good morning, Its October 17th, and today we’ll cover the surge in chip stocks after TSMC’s stellar quarterly outlook, Blackstone’s impressive numbers, and a tech-based hiring platform whose shares are up more than 200% in premarket trade.

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Stocks rose on Wednesday, with the Dow closing at a record high for the second time this week, supported by strong corporate earnings. Financials led the way, with Morgan Stanley jumping 6.5% after beating third-quarter profit and revenue estimates.

Futures

Stock futures are rising slightly today as traders await key economic data. Dow futures are up 37 points (0.1%), while S&P 500 futures have gained 0.4% and Nasdaq 100 futures are up 0.7%.

Chip stocks are leading the premarket gains, with Taiwan Semiconductor up 8% after strong third-quarter results, followed by NVIDIA and AMD, both up more than 2%.

Investors are focused on upcoming jobless claims and retail sales data for further insights into the health of the labor market and consumer spending.

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What to Watch

A whole host of companies are due to release their earnings today, including Blackstone (NYSE: BX), Truist Financial Corporation (NYSE: TFC), KeyCorp (NYSE: KEY), and Huntington Bancshares Incorporated (NASDAQ: HBAN).

But the big one is Netflix (NASDAQ: NFLX), which will be disclosed after the market closes. Intuitive Surgical (NASDAQ: ISRG) and Crown Holdings (NYSE: CCK) will also report their results in the aftermarket session.

On the economic calendar, several key reports were released at 8:30 a.m. ET, including Initial Jobless Claims for October, U.S. Retail Sales, and Retail Sales Excluding Autos for September.

The Philadelphia Fed Manufacturing Index, Industrial Production, and Capacity Utilization for September will be published at 9:15 a.m. ET, followed by Business Inventories for August and the Home Builder Confidence Index for October at 10:00 a.m. ET.

Semiconductors

TSMC's Strong AI Sales Outlook Is Boosting US Chip Stocks

Chip stocks are surging during premarket trading today after Taiwan Semiconductor Manufacturing Co.'s (TSMC) impressive sales forecast, which fueled optimism about continued demand for AI-powered processors.

TSMC, the world’s largest contract chipmaker, raised its annual revenue expectations, citing that AI chip sales would contribute to a mid-teen percentage of its overall revenue for the year.

TSMC's U.S.-listed shares are climbing by 7% premarket, putting its market value on track to surpass $1 trillion.

AI chip leader NVIDIA and rival AMD are seeing gains of more than 2%, while Broadcom, Qualcomm, and Micron are also up by between 1.5% and 3%. Intel, which has been expanding its chip production capabilities to compete with TSMC, is edging higher as well.

TSMC's robust outlook provided relief for investors following recent concerns raised by equipment giant ASML's weaker forecasts, which had hinted at slower growth for chips outside the AI sector.

Banking

Blackstone Surpassing Profit Expectations Amid Record Fund Growth and Deal-Making

Blackstone reported stronger-than-expected earnings for the third quarter, with assets under management (AUM) reaching a record $1.1 trillion.

The alternative investment giant saw $41 billion in inflows during the quarter and committed $54 billion in capital, marking the highest level of deal activity in over two years.

The firm attributes this increase to a revival in deal-making as the U.S. Federal Reserve began easing interest rates, helping to lift previous economic pressures.

Private equity and infrastructure funds saw notable growth, appreciating by 6.2% and 5.5%, respectively, leading to Blackstone’s highest fund appreciation in three years. CEO Steve Schwarzman highlighted the "broad-based acceleration" across the firm’s operations.

The company posted distributable earnings of $1.3 billion, up 6% year-over-year, translating to $1.01 per share, exceeding analysts' expectations of $0.92. Major deals during the quarter included a $16 billion acquisition of Australia's AirTrunk and an $8.4 billion acquisition of U.S. software firm Smartsheet.

Blackstone’s stock reached a record high of $159.71 on October 16, with the firm’s market capitalization standing at $195 billion. It is currently up by more than 3% in premarket trading.

Healthcare

Elevance Health Stock Plunging After Lowered 2024 Earnings Forecast Amid Medicaid Issues

Elevance Health shares are falling by 12% in premarket trading.

The company slashed its earnings forecast for 2024, citing significant issues in its Medicaid business. Despite reporting third-quarter revenue of $44.7 billion, surpassing analysts' expectations of $43.5 billion, the focus shifted to the company's lowered outlook due to rising costs in Medicaid.

Elevance is reporting adjusted earnings of $8.37 per share for the quarter, falling short of Wall Street's estimate of $9.66.

The company highlighted an increase in its benefit expense ratio, which rose to 89.5%, reflecting higher-than-expected costs in covering benefits due to a mismatch between Medicaid rates and the medical needs of its members.

The company now forecasts 2024 adjusted earnings at approximately $33 per share, down from its previous expectation of at least $37.20.

CEO Gail Boudreaux expressed confidence in the long-term potential of the business but acknowledged the "unprecedented challenges" in Medicaid that have impacted short-term performance.

Despite these setbacks, Elevance shares had gained about 5% for the year before the recent drop.

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Nixxy Inc [NIXX] - Last Close: $175.72

Technology-based hiring platform Nixxy is soaring by more than 200% in premarket trading today.

The company announced a strong growth plan centered on acquiring traditional businesses and enhancing them with cutting-edge technology.

Nixxy's strategy involves buying profitable companies in industries that haven't fully embraced digital transformation and using artificial intelligence (AI) to make them more efficient.

They have an exclusive deal to use GoLogiq's AI platform, which helps small businesses streamline processes like inventory and order management.

Nixxy is currently negotiating multiple acquisitions and aims to reach a $1 billion valuation in three years.

Gevo Inc [GEVO] - Last Close: $2.25

Gevo's stock is rising more than 40% in premarket trading.

The company has secured a $1.46 billion loan commitment from the U.S. Department of Energy.

This funding will help build their Net-Zero 1 plant in South Dakota, which plans to produce 60 million gallons of sustainable aviation fuel each year.

The plant aims for a net-zero carbon footprint, using local materials to create eco-friendly fuel.

Gevo is continuing its momentum from yesterday when the stock gained 8%.

Alcoa Corp [AA] - Last Close: $42.07

Alcoa shares are up nearly 7% before the opening bell today.

The company exceeded earnings expectations for the third quarter in its quarterly results presentation yesterday.

Despite challenges, such as a 4% drop in alumina production due to the full curtailment of the Kwinana refinery and a 6% decline in aluminum shipments, the company reported higher-than-expected earnings per share (EPS) of $0.57, beating the consensus estimate of $0.28.

The surge in alumina prices and lower raw material costs helped boost adjusted EBITDA to $455 million from $325 million in the prior quarter.

These factors, along with a strong cash balance of $1.3 billion, have driven investor optimism.

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Everything Else

• Apple and BYD's partnership developed long-range EV battery tech now used in BYD's Blade system.

• Gold climbs to a record level, with traders eyeing a tight election and U.S. data.

• Yellen called Trump's proposed tariff hikes "deeply misguided," saying they would hurt American competitiveness.

• Czech interest rate cuts will proceed with caution, the central bank chief affirms.

• Sweden moves away from its budget surplus target to focus on balanced spending amid growing needs.

• India’s Infosys reported a Q2 net profit of Rs 6,506 crore, missing analyst estimates, but it raised its revenue guidance.

• Vietnam's central bank injected liquidity to boost economic recovery and credit growth.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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