US Equities

TSMC reported third-quarter revenue of US$46.72 billion, up 50.9% on the year, and net income up 68.7%, with a 66.4% gross margin. It guided fourth-quarter revenue to US$52.3-54.3 billion with a 65-67% gross margin, citing a steep 2nm ramp.

Why it matters here: TSMC's U.S.-listed shares are a top holding in the semiconductor fund, and a steep 2nm ramp signals sustained orders from the U.S. chip designers held alongside it, supporting earnings expectations across the chip supply chain.

Counterpoint: The Philadelphia semiconductor index fell for eight straight sessions through Friday despite the results, which suggests the market is pricing funding risk at AI customers rather than doubting current demand.

AP reported that stronger-than-expected profits helped lift U.S. stocks on 15 October: Bank of New York Mellon rose 3.2%, Marsh & McLennan 4.6% and Kimberly-Clark 4.7% after results or guidance above expectations, and the Dow gained 1.1% to 52,177.69. Reuters reported analysts expect third-quarter earnings growth above 30%, driven by AI-related megacaps, with Tesla, Meta and Procter & Gamble reporting next week.

Why it matters here: Beats from a custody bank and an insurance broker support the financial sector, and solid profits outside technology broaden support for blue-chip stocks while AI leadership wobbles.

Counterpoint: The Dow gave back ground on Friday, closing at 52,002.41 from 52,177.69, and with growth above 30% already expected, the megacap reports that dominate the season face a high bar.

Speaking in Bangkok on 16 October, Fed Chair Kevin Warsh said he does not prejudge meetings and would not signal moves for the rest of the year. CNBC reported traders pricing a 72.3% and later more than 80% chance of a hold at the 27-28 October meeting, while Reuters reported about a 90% chance of a December hike; S&P 500 and Nasdaq futures edged higher after he spoke.

Why it matters here: A likely October pause removes one near-term rise in discount rates, giving the large-cap benchmark brief relief from rate pressure.

Counterpoint: The S&P 500 still fell 1.09% to 7,659.44 on Friday as the AI selloff and oil dominated, and a December hike remains about 90% priced, so the policy relief was overwhelmed within the same session.

The Census Bureau reported on 15 October that retail and food services sales rose 0.8% in September to $745.0 billion and 6.3% from a year earlier, with August's gain revised up to 1.3% from 1.1%. The figures are not adjusted for prices, which rose 0.6% in September on gasoline.

Why it matters here: Consumer-discretionary revenue tracks retail spending directly, and the equal-weight index carries more domestic consumer and cyclical exposure than the cap-weighted benchmark, so two strong months of spending support both into earnings season.

Counterpoint: The gain is nominal and largely gasoline-driven: with consumer prices up 0.6% and gasoline up 9.1% in September, real spending outside fuel was weak, and firm demand also feeds expectations of a December hike.

CXMT said on 10 October it had achieved key advances in 4F2 DRAM cell technology and plans a next-generation DDR5 server module by the end of 2026, Kyunghyang Shinmun reported. Reuters linked the week's tech selloff partly to concerns about Chinese competition; TechInsights says Chinese makers remain more than two generations behind in server DRAM.

Why it matters here: The semiconductor fund holds Micron and memory-equipment suppliers whose margins depend on memory pricing, so competition fears compress multiples for that part of the chip complex.

Counterpoint: CXMT sells mostly outside the U.S., export controls limit its access to advanced tools, and AI demand keeps memory supply tight, so near-term earnings for U.S. memory makers are little affected.

Brent settled at $109.86 and WTI at $101.41 on 16 October as Gulf attacks intensified, and the U.S. average diesel pump price rose to $6.32 a gallon from $6.27. Reuters cited the jump in oil among the reasons Wall Street fell on Friday, and weekend strikes on Saudi territory extended the escalation.

Why it matters here: Higher fuel costs erode discretionary spending power and squeeze transport and retail margins, while domestic small caps are more exposed to fuel costs and to the higher rates that energy inflation sustains.

Counterpoint: The U.S. is a net energy exporter and energy stocks cushion the broad indexes, and retail sales rose 0.8% in September despite high gasoline prices, so consumers have so far absorbed the shock.

The Philadelphia semiconductor index fell 3.83% on 16 October for an eighth straight decline, the Nasdaq lost 2.14% to 26,140.03 and the S&P 500 1.09% to 7,659.44. CoreWeave fell 11.91%; Reuters said its bonds sold off during the week, pushing yields above 15%, amid concern that debt-funded AI infrastructure companies may not turn profitable in time to repay borrowing as rates rise.

Why it matters here: The technology index and the large-cap benchmark are concentrated in AI-linked megacaps that carried most of the year's gains, so funding stress at debt-heavy AI builders challenges the earnings narrative behind index leadership and lowers multiples for the most crowded names.

Counterpoint: Analysts still expect third-quarter earnings growth above 30% led by AI megacaps, TSMC has just beaten and raised, and the blue-chip and equal-weight indexes held up better, so the damage looks concentrated rather than systemic.

The Bureau of Labor Statistics reported on 14 October that consumer prices rose 0.6% in September after 0.4% in August, lifting annual inflation to 3.7% from 3.4% against an expected 3.6%. Gasoline jumped 9.1%, and core prices rose 0.3% on the month and 2.6% on the year, up from 2.4%. Reuters cited the inflation reports as one driver of Friday's selloff.

Why it matters here: Accelerating inflation raises the odds of further tightening, which lifts discount rates for long-duration growth stocks and tightens financing for small caps that carry more floating-rate debt.

Counterpoint: The monthly figure matched forecasts and core held at 0.3% on the month, and the Dow gained 1.1% the day after the release as earnings beat, showing profit growth can absorb a modest inflation surprise.

The Bureau of Labor Statistics reported on 15 October that final-demand producer prices rose 1.3% in September after 0.5% in August, the largest monthly advance since March 2022, and 6.3% over 12 months against an expected 5.5%. Energy goods rose 10.8%, and prices less foods, energy and trade rose 0.5% on the month and 5.0% on the year.

Why it matters here: Rising input costs squeeze margins for large-cap companies without pricing power and reinforce hike expectations, a double pressure on earnings and valuation multiples across the benchmark and its growth leaders.

Counterpoint: Trade-services margins rose in the report, meaning retailers and wholesalers passed costs through, and stocks rose on the day of the release, with the Dow up 1.1% to 52,177.69.