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Morning Brief| TSMC Surges Over 8% Boost Chip Stocks, Lucid Plummets 15% After Disappointing Result

AInvestThursday, Oct 17, 2024 8:09 am ET
3min read

Pre-market Movers

Ahead of Thurday's trading, the three major U.S. stock index futures are rise, with Dow futures rise 0.09%, S&P 500 futures rise 0.39% and Nasdaq 100 futures up 0.79% at press time.

**TSMC Surges Over 8% in Pre-Market Trading**

TSMC saw its stock rise over 8% in pre-market trading following better-than-expected third-quarter results. The company cited strong demand for artificial intelligence (AI) as a key driver of its impressive performance. U.S. chip stocks, including Nvidia and AMD, also experienced gains in pre-market trading.

Gevo surge around 40%

Gevo surge around 40% in premarket trading, after The U.S. Department of Energy on Wednesday announced a conditional $1.46 billion loan guarantee for the Gevo Net-Zero 1 plant at Lake Preston. 

**Lucid Group Plummets 17% in Pre-Market After Disappointing Q3 Forecast**  

Lucid Group's stock fell by 17% in pre-market trading after the company estimated a larger-than-expected operational loss for the third quarter. The projected loss ranges between $765 million and $790 million, exceeding analysts' expectations of a $752 million loss. Additionally, Lucid announced a public offering of over 262 million shares, further contributing to the stock's decline.

**Expedia Jumps 7.7% on Uber's Potential Bid**  

Expedia shares surged 7.7% after a Financial Times report revealed that Uber Technologies had explored a potential bid for the online travel company. According to the report, Uber approached advisers in recent months regarding the possible acquisition. However, the discussions are still in an early stage, and it is uncertain whether a deal will materialize. Despite the news, Uber shares dropped 2.6%.

Market Watcher

Market Rally in Jeopardy? Strategist Warns of Inflation, Populism, and a Potential 25% Drop

Barry Bannister, chief equity strategist at Stifel, expressed concerns about the sustainability of recent market gains, noting that true bull markets are typically driven by revolutionary technologies, which he argues generative AI is not. He believes inflationary pressures, combined with rising populism and increased government spending, could lead to significant market volatility. Bannister forecasts the S&P 500 may climb another 10% in the near term but predicts a sharp 25% drop by 2025-2026 due to rising inflation and a lack of corrective economic measures. He criticizes the Fed for talking up rate cuts, fueling speculative market behavior.

Pre-market Headlines

Yellen Warns on Using Tariffs to Wall Off US From World Economy

US Treasury Secretary Janet Yellen warned that sweeping, untargeted tariffs would hurt American households and businesses and preclude the US from advancing its economic and security interests. 

Yellen said that "sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive, we cannot even hope to advance our economic and security interests — such as opposing Russia's illegal invasion of Ukraine — if we go it alone." 

Turbulence in the Aviation Industry: Boeing in Trouble, Airbus Announces Layoffs 

The global aviation industry is going through a turbulent time. Boeing is grappling with frequent accidents and employee strikes, which have severely affected the company's operations. One might think this would benefit its competitor, Airbus. However, that's not the case. 

Airbus plans to cut up to 2,500 jobs in its defence and space division by mid-2026, according to a statement released on Wednesday. Analysts believe most of the job losses will be managed through retirements or voluntary departures.

Earlier this year, Airbus announced that supply chain issues had forced it to reduce the number of planes it expects to produce this year and next. The company now forecasts its adjusted earnings before interest and taxes to be around €5.5 billion for the year, down from an earlier estimate of €6.5 to €7 billion. 

World at A Glance

ECB to Step Up Pace With Back-to-Back Rate Cuts

Just five weeks after the last reduction, analysts polled by Bloomberg unanimously predict that the deposit rate will be decreased by another quarter-point on Thursday, to 3.25%. 

"The ECB's focus has shifted from too-high inflation to too-weak growth," said Paul Hollingsworth, chief economist for Europe at BNP Paribas. "From a risk-management perspective, it makes perfect sense to accelerate the pace of easing, even if high uncertainty still calls for some caution." 

China's $562 Billion Loan Push for Unfinished Homes Disappoints

China's pledge to nearly double the loan quota for unfinished residential projects to 4 trillion yuan ($562 billion) fell short of market expectations, causing property shares to retreat as investors looked for stronger policies. 

Musk's Business Empire Risks Being Targeted by EU for Potential Fines

European Union has warned X that it may calculate fines against the social-media platform by including revenue from Elon Musk's other businesses, including Space Exploration Technologies Corp. and Neuralink Corp., an approach that would significantly increase the potential penalties for violating content moderation rules. 

Today's Analyst Stock Ratings

Financial Calendar

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.