Week Ahead: Will TSMC rejoin the trillion-dollar club?

• US listed TSMC shares ↑ almost 80% YTD
  

• Less than 4% away from all-time high created in July
  

• Forward guidance for Q4 in focus
  

• FXTM’s TWN index could see fresh volatility

• Technical levels for TSMC – $192.65, $183.00 and $177.00
  

Another slew of key data releases and corporate earnings could rock markets in the week ahead:

Saturday, 12th October

• CN50: China’s Ministry of Finance holds briefing

Sunday, 13th October

• CN50: China PPI, CPI

Monday, 14th October

• CN50: China trade
• US500: Fed Governor Christopher Waller speech

Tuesday, 15th October

• CAD: Canada CPI, existing home sales
• EU50: Eurozone industrial production, Germany ZEW survey
• JP225: Japan industrial production
• UK100: UK jobless claims, unemployment
• US500: Goldman Sachs, Bank of America, Citigroup earnings

Wednesday, 16th October

• NZD: New Zealand CPI
• ZAR: South Africa retail sales
• UK100: UK CPI
• NETH25: ASML earnings
• US500: Morgan Stanley earnings

Thursday, 17th October

• AU200: Australia unemployment
• EU50: Eurozone CPI, ECB rate decision
• JP225: Japan tertiary index, trade
• SG20: Singapore trade
• NAS100: US retail sales, jobless claims, industrial production, Netflix earnings
• TWN: Taiwan Semiconductor Manufacturing Company (TSMC) earnings

Friday, 18th October  

• CN50: China GDP, retail sales, industrial production, home prices
• JP225: Japan CPI
• UK100: UK retail sales

The spotlight shines on the world’s largest contract chipmaker with a market cap of almost $1 trillion.

US-listed shares of Taiwan Semiconductor Manufacturing Company (TSMC) are up almost 80% year-to-date, logging only one negative month in 2024.

Note: TSMC shares can be traded on the Taiwan Stock Exchange (TWSE) and New York Stock Exchange (NYSE).

Back in July, TSMC shares hit an all-time high at $192.65 after strong Q2 revenues – giving the company a trillion-dollar valuation momentarily before stocks later tumbled.

Still, prices have rebounded since August with a recent report revealing that TSMC’s September sales jumped 39.6% year-on-year.

This welcome development along with a positive earnings release could push the company’s stock higher.

• When will earnings be published?

TSMC reports its third-quarter earnings on Thursday 17th October before US markets open.

• Market expectations

The chipmaker is expected to post earnings of $1.78 per share with Q3 revenues seen rising to $23.28 billion from $17.28 in the prior year.

• What to watch out for

Back in July, TSMC forecasted third quarter revenue in a range of between $22.4 billion to $23.2 billion.

But the chipmaker has already beaten these forecasts with consolidated sales in Q3 (July – September) hitting $23.6 billion, thanks to AI demand from major clients like Nvidia and Apple.

So much focus will be on the company’s earnings and forward guidance for Q4 which could serve as a key gauge for AI demand.

• What does this mean for FXTM’s TWN index.

FXTM’s TWN index tracks the underlying FTSE Taiwan RIC Capped Index.

And TSMC makes up just under 20% of the index weighting, meaning that the upcoming earnings could result in heightened volatility.

The index is up almost 3% this month, bringing year-to-date gains to roughly 22%. Prices have been trending higher in recent weeks with the all-time high 7% away at 2046.8.

Key levels of interest can be found at 1930 and 1825.

• Technical picture

TSMC shares are trending higher on the weekly charts with prices trading above the 21, 50 and 100-week SMA. However, the Relative Strength Index (RSI) is near 70 – signaling that prices may be overbought.

On the daily charts, the trend is bullish with prices are trading less than 4% away from its all-time high created in July at $192.65.

• A decline below $183.00 may see prices test the 21-day SMA at $177.0 and $170.0.

• Should $183.0 prove to be reliable support, this may open a path back to the all-time high at $192.65 and beyond.