A look at the day ahead in U.S. and global markets from Mike

Dolan

Tech-heavy stock markets are set to breathe a sigh of relief on

Thursday as the world's largest chipmaker beat the street and

eased gnawing doubts about semiconductor demand worldwide and

jitters about the wider artificial intelligence theme.

After a cloudy outlook from Europe's ASML earlier

this week sideswiped chip stocks everywhere, Taiwan

Semiconductor Manufacturing ( TSM ) said on Thursday it

expects sustained growth as it reported a forecast-beating 54%

jump in profits and soaring demand for chips used in AI.

TSMC, the dominant producer of advanced chips used in AI

applications and whose customers include Apple ( AAPL ) and

Nvidia ( NVDA ), has become a bellwether for the AI story and

its shares jumped 6% in Frankfurt after the earnings report.

Nvidia ( NVDA ) shares were also up another 2% in out of hours trade.

TSMC is spending billions of dollars building new factories

overseas, including $65 billion on three plants in the U.S.

state of Arizona, although it has said most manufacturing will

remain in Taiwan.

With Wall Street index futures higher again

ahead of Thursday's bell, the news from Taiwan may well lift

both the S&P500 and Nasdaq back to record highs.

Helped by a strong earnings season so far for the big U.S.

investment banks, the wider market raced ahead on Wednesday. The

small cap Russell 2000 clocked it best close in almost

three years and Dow Jones blue chips set another record

close after the index secured a foothold above the 43,000 mark.

Streaming giant Netflix ( NFLX ) tops the diary later, with

investors looking for signs its nascent ad revenue business is

accelerating. That's important as it's set to report about 4

million new subscribers - its lowest addition in six quarters

following a boom on its password-sharing crackdown.

Netflix ( NFLX ) shares are up 44% for the year so far.

With the European Central Bank set to deliver its third

interest rate cut of the year later on Thursday - its first

back-to-back cut in 13 years - the broader interest rate picture

was supportive too.

The euro fell to its lowest level since early August

against a generally stronger dollar ahead of the ECB

decision.

European stocks pushed higher after a shaky week

of disappointments from ASML and luxury goods maker

LVMH, both hit by wobbling Chinese demand and a

brewing trade war between Brussels and Beijing.

China's markets underperformed once again and the

offshore yuan touched its weakest level in almost two

months as a lack of fresh stimulus from a closely-watched

housing policy briefing left some investors disappointed.

China will expand a "white list" of housing projects

eligible for financing and increase bank lending for such

developments to 4 trillion yuan ($562 billion), Minister of

Housing and Urban-Rural Development Ni Hong said.

But analysts said the details just fleshed out previously

announced support and some of the numbers underwhelmed.

Property stocks traded in China and Hong Kong

tumbled 7.9% and 6.7% respectively - reversing gains of

the previous day.

China reports third-quarter GDP numbers on Friday - and the

annual growth rate over the three months is expected to have

slowed to 4.5% from 4.7% the prior quarter.

Back on Wall Street, Treasuries were steady, with the

10-year yield retaining a 4% handle ahead of a

stream of retail, industrial and weekly jobless data for last

month.

With the labor market under the microscope at the Federal

Reserve as it mulls its next interest rate move, distortions in

jobless claims due to recent storms and strikes have made the

number difficult to read.

Still, another quarter-point Fed rate cut next month is

almost fully priced in futures markets and there was encouraging

news on the inflation front at home and abroad.

U.S. import prices fell by the most in nine months in

September amid decreases in the costs of energy products and

food.

And despite Middle East tensions, China-related global

demand worries for next year have kept a lid on oil, leaving

U.S. crude clinging on to $70 per barrel and down almost

20% on this time last year.

In deals news, shares of travel booking website Expedia

Group ( EXPE ) jumped 8% in after-hours trading after the

Financial Times reported that ride-hailing giant Uber ( UBER )

explored a possible bid for the company. Uber ( UBER ) shares were down

about 2%.

Key developments that should provide more direction to U.S.

markets later on Thursday:

* European Central Bank policy decision and press conference

with ECB President Christine Lagarde

* US corporate earnings: Netflix ( NFLX ), Snap-on, Intuitive Surgical,

Blackstone, Travelers, Truist, M&T, Elevance Health, Marsh &

McLennan, Huntington Bancshares, KeyCorp

* US September retail sales, industrial output, weekly jobless

claims, October Philadelphia Fed business survey, Oct NAHB

housing index, August business/retail inventories, August TIC

data on Treasury holdings

* Federal Reserve Bank of Chicago President Austan Goolsbee

* European Commission President Ursula von der Leyen and

European Council President Charles Michel holds a press

conference after European Union summit

* U.S. President Joe Biden visits Germany

([email protected]

Editing by Christina Fincher)