A look at the day ahead in European and global markets from Tom Westbrook While U.S.-Iran talks have stalled, and next to no oil is making its way through the Strait of Hormuz, stock markets'
AI Supply Chain Booms Drive Global Markets as Hormuz Oil Flows Stall
Market Overview and Key Drivers
A look at the day ahead in European and global markets from Tom Westbrook
Impact of U.S.-Iran Tensions on Oil Flows
While U.S.-Iran talks have stalled, and next to no oil is making its way through the Strait of Hormuz, stock markets' attention has swung back to the unabated boom in AI.
AI Supply Chain Rally in Asian Markets
Artificial intelligence supply chain stocks rallied markets in Japan, South Korea and Taiwan to record highs on Monday on a wave of buying unleashed by Intel's unexpectedly strong revenue forecast.
Central Bank Policies and Market Sentiment
With G10 central banks seen leaving rates where they are this week and the uneasy ceasefire holding in the Middle East, the focus is on the linchpin of AI gains -- the hyperscalers' spending plans when they report earnings later this week.
Chipmaker Earnings and Stock Performance
Asia's chipmakers reported record-breaking earnings last week, with quarterly profit up fivefold at SK Hynix and Samsung projecting an eightfold jump to an operating profit of nearly $38 billion for the three months from January to March.
TSMC and Regional Market Valuations
TSMC, which also posted a record first-quarter profit, has logged eight straight quarters of double-digit growth. Share prices can hardly keep up with the rivers of gold, but they are surging too, with Hynix stock near doubling this year and the market value of South Korean and Taiwanese stocks eclipsing those of Germany, according to the World Federation of Exchanges.
Developments in Iran and Market Response
On the Iran front, an Axios report that Iran had proposed conditions for reopening the Hormuz and separating nuclear negotiations for another time, buoyed markets on Monday.
Upcoming Economic Data and Earnings
German consumer sentiment for May is due on Monday and investors may start to adjust some of the aggressive short-term rates positions betting on imminent hikes leading into European and British central bank meetings.
Key Developments to Watch
- U.S.-Iran peace talks
- Economics: German consumer sentiment for May
- Earnings: Deutsche Boerse, Verizon, Domino's Pizza
(Editing by Kate Mayberry)
