Geopolitics Remain, But US Market Shines: Focus on Tech & Financials for Growth

The reporting season in US just began and the market is off to a good start. The Information Technology and Financial sectors performed well, up 1.28% and 1.20% respectively at the time of writing. Snippets of reported numbers includes:

TSMC - Net revenue and income beat expectations with an increase of 16.5% and 8.9% respectively and the company anticipates a “healthy” growth year.

Texas Instruments  gave a bullish revenue forecast for the current quarter implying that a slump in demand for industrial and automotive components may be easing.

Ohio-based Vertiv, a provider of critical infrastructure and cooling services for data centers, reported 60% organic order growth YoY with a book-to-bill  ratio of 1.5x.

Alphabet soared as it announced plans to buy back $70 billion in shares and declared its first ever cash dividend while Microsoft rose on 3rd Q revenue that topped estimates after the firm showed progress on AI.

Our take is that with Jerome Powell’s recent remark on the lack of progress on the inflation front created a buying opportunity into the AI sector. Geopolitical worries will continue to created uncertainty and hence the need to focus on resilient fundamentals and growth outlook.