QCOM wants to create competition in the AI chip market. Hong Kong index hits five-month high

By JustMarkets

At Wednesday’s close, the Dow Jones Industrial Average (US30) was down 0.11%, while the S&P 500 Index (US500) was up 0.02%. The NASDAQ Technology Index (US100) closed positive 0.10%. The US stock indices traded mixed, with the S&P 500 (US500) and NASDAQ (US100) hitting weekly highs. Strengthening technology stocks provided support for the overall market. However, the broader market’s gains were limited as rising bond yields pressured equities. On the positive side, shares of Tesla (TSLA) rose more than 12% despite weaker-than-expected first-quarter earnings per share after the company said it would accelerate the launch of less expensive models as early as this year. Also on Wednesday, semiconductor stocks rose after Texas Instruments (TXM) reported better-than-expected first-quarter earnings and projected second-quarter profit above consensus.

On Wednesday, chip developer Qualcomm (QCOM) announced its latest chips designed to run Windows software on laptops. Qualcomm is thus entering the AI race and potentially competing with software developers such as Intel (INTC) and AMD (AMD). It introduced the Arm (ARM)-based Snapdragon X Plus chip for Windows laptops, having previously announced the more powerful Snapdragon X Elite chips for Windows. These chips will be available in mid-2024 and are designed to consider the latest lineup of chips from rival Intel’s Core Ultra and Apple’s (AAPL) M3.

Meta (META) achieved record first-quarter sales, showing strong growth in its advertising business thanks to new advances in artificial intelligence. The company announced a substantial increase in revenue to $36.5 billion, up 27% year-over-year, setting a new record for the January through March period and beating analysts’ expectations. However, the company provided a softer revenue outlook for the second quarter, forecasting between $36.5 billion and $39 billion, averaging 18% growth for the year – below analysts’ average forecast of $38.3 billion. This conservative outlook caused Meta’s shares to fall by — 11% in extended trading, reflecting investor concerns about the company’s ability to grow at the pace it has previously.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) fell 0.27%, France’s CAC 40 (FR40) closed down 0.17%, Spain’s IBEX 35 (ES35) lost 0.43%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

WTI crude oil futures faced downward pressure on Thursday as investors weighed the potential impact of a delayed US rate cut on the demand outlook. Traders were wary of the prospect of the Fed taking longer to raise rates amid a string of solid inflation and employment data. Markets now await Thursday’s US GDP data and the PCE Price Index report, which the Fed prefers to release on Friday, to determine the future outlook. However, official data showed that US crude inventories fell by 6.37 million barrels last week, contradicting expectations of a 1.6 million barrel increase. Meanwhile, supply concerns eased as tensions in the Middle East continued to reduce, and Iran and Israel signaled no further military action against each other.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose 2.42%, China’s FTSE China A50 (CHA50) gained 0.35% for the day, Hong Kong’s Hang Seng (HK50) added 2.21%, and Australia’s ASX 200 (AU200) closed at its opening price. The Hang Seng Index (HK50) hit its highest level in nearly five months as positive outlooks for Chinese and Hong Kong equities from central investment banks, including Goldman Sachs and UBS, continued to lift sentiment.

Malaysia’s annual inflation rate unexpectedly reached 1.8% in March 2024, unchanged for the second consecutive month but below market forecasts of 2%. The latest result remained at the highest level since October 2023.

The Japanese yen breached 155 per dollar on Thursday, falling to new 34-year lows as the Bank of Japan begins its two-day monetary policy meeting. The BoJ is expected to leave rates unchanged after exiting negative rates in March. Still, traders will watch for any hawkish signals as the yen weakens, breaking through a psychologically crucial level market previously thought would prompt Tokyo to act.

S&P 500 (US500) 5,071.63 +1.08 (+0.02%)

Dow Jones (US30) 38,460.92 −42.77 (−0.11%)

DAX (DE40) 18,088.70 −48.95 (−0.27%)

FTSE 100 (UK100) 8,040.38 −4.43 (−0.055%)

USD Index 105.83 +0.15 (+0.14%)

• – Eurozone GfK German Consumer Climate (m/m) at 09:00 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.