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After the worst day since early September, the market continued to absorb news about the elections and the epidemic. US stocks opened in a narrow range on Tuesday (27). The major indices rose and fell mixed. The Dow Jones industrial average fell 20 points or 0.1%. The Stark Index was up 0.1%, the S&P 500 Index was up 0.05%, and rates were up 0.3%.
After approving Amy Coney Barrett as a judge of the Federal Supreme Court on Monday (26), until November 9 after the general election, senators will be able to temporarily leave to participate in the campaign, which means that the rescue negotiations long-standing are temporarily. This came to an end and also thwarted expectations for a stimulus package before the elections.
Recently, the number of confirmed cases in the United States and some European countries has continued to rise, along with the stagnation of US stimulus measures, causing people to worry about the unstable pace of economic recovery. The main Wall Street index fell to a low of almost 4 weeks on Monday (26).
According to data from John Hopkins University, there were more than 62,000 newly diagnosed cases in the United States on Monday the 26th. The total number of confirmed cases reached 8.67 million and cumulative deaths exceeded 225,000.
In terms of economic data, durable goods orders from the United States increased for 5 consecutive months in September, with a monthly growth rate of 1.9%, higher than market expectations, mainly driven by transportation equipment.
At 9 p.m. on Tuesday (27) Taipei time:
- The Dow Jones index fell 20.61 points or -0.07%, temporarily reporting 27,664.77 points
- Nasdaq rose 14.72 points, or 0.13%, to 11,373.66 temporarily
- The S&P 500 Index rose 1.77 points or 0.05%, temporarily to 3,402.74
- Rates and a half rose 7.15 points 0.31%, temporarily reported 2315.60 points
- TSMC ADR rises 0.08% to $ 86.80 per share
- Yield on 10-year US Treasuries fell to 0.784%
- New York light crude oil rose 0.41% to $ 38.72 a barrel
- Brent crude rose 0.37% to $ 40.61 a barrel
- Gold rose 0.03% to $ 1,906.20 an ounce
- The dollar index fell 0.21% to 92.845 points
Focus actions:
Xilinx (XLNX-US) was up 11.42% in early trading to $ 127.63.
Advanced Micro Devices (AMD) announced on Tuesday (27) that it will acquire Xilinx in a transaction with a total value of $ 35 billion, with the transaction expected to be completed by the end of next year.
Under the acquisition agreement, Xilinx shareholders will receive approximately 1.7 AMD common shares per common share, which means that Xilinx’s purchase price per share has reached $ 143, a premium of 24.8% over the share. closing price of October 26. After the merger, AMD Share capital will represent 74% and Xilinx shareholders 26%.
Merck (MRK-US) rose 0.53% in early trading to $ 79.26.
Key facts from the third quarter financial report:
- Revenue: $ 12.6 billion, an annual increase of 1%
- (Non-GAAP) Net Income: $ 4.43 billion, an annual increase of 14%
- (Non-GAAP) Net earnings per share: US $ 1.74, an annual increase of 15%, higher than the US $ 1.44 expected by Refinitiv
- (Non-GAAP) Gross profit margin: 74.8%, higher than 75.9% in the same period last year
Financial forecast for the entire year 2020:
- Revise the full-year revenue range up to $ 47.6 billion to $ 48.6 billion, including 1.5% of the negative impact of the exchange rate.
- Earnings per share (EPS) under lower GAAP range from $ 4.55 to $ 4.65
- Increase the range of non-GAAP EPS to US $ 5.91-6.01, including 2.5% of the negative impact of the exchange rate.
Development Heavy Industry (CAT-US) fell 1.9% to US $ 160.10 in early trading.
Q3 Key facts based on GAAP financial report:
- Revenues: US $ 9.9 billion, a 23% year-on-year decrease, higher than the US $ 9.798 billion expected by Refinitiv
- Net earnings per share: US $ 1.22, a year-on-year decrease of 54%, higher than the US $ 1.16 expected by Refinitiv
- Operating profit: $ 985 million, an annual decrease of 51%
- Operating profit margin: 10%, compared to 15.8% in the same period last year
Daily key economic data:
- The initial monthly growth rate of durable goods orders in the United States in September reported 1.9%, 1.0% expected and 0.5% expected
- The monthly growth rate of the FHFA home price index in the United States in August reported 1.5%, which is expected to be 0.7%. The previous value was revised up from 1.0% to 1.1%.
- At 10:00 PM Taipei time, consumer confidence will be announced at the October US Consultative Conference, which is expected to be 101.9 and the above value is 101.8
- The Richmond Fed Manufacturing Index will be announced at 10:00 p.m. Taipei time, it is expected to be 18.0, and the previous value is 21.0
Wall Street Analysis:
Charlie Ripley, senior investment strategist at Allianz Investment Management, said the stock market will continue to decline this week due to the inability to achieve a comprehensive stimulus package.
Allianz believes that as Election Day approaches, the possibility of coming up with a stimulus plan dissipates by the day. Coupled with the uncertainty surrounding the epidemic and the election results, putting pressure on investors, market fluctuations are expected to continue.
Seema Shah, chief strategist at Principal Global Investors, said the company is paying attention to the number of confirmed cases of the new crown and how countries are responding to the epidemic. He also said that the government halted the economic restart and resorted to lockdown measures. This measure scared the market.
In response to the US epidemic, Shah believes the outside world is concerned that the US will soon follow in Europe’s footsteps. If lockdown measures are implemented in the US, it will seriously damage market confidence.
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