‘Taiwan quake to hit chip output, full impact not yet known’ - Versace
‘Taiwan’s biggest earthquake since 1999 will hit some chip output,’ says Tematica CIO, Chris Versace, ‘but how badly or how long remains to be seen.’
Versace also talks to IGTV financial analyst Angeline Ong about Intel and this Friday’s NFP.
(Partial Video Transcript)
How has the Taiwan earthquake affected the chip sector?
Angeline Ong: Hello and welcome to IG’s “Trading the markets”. I'm Angeline Ong and today we're joined by Chris Versace, the CIO at Tematica, to talk about an unfortunate event that's happened out of Taiwan. How is all this affecting not just the people but obviously the chip sector as well?
Chris Versace: It's a great question, Angeline. And you know, this is the worst earthquake that Taiwan has had in 25 some years. You know, we've heard reports that Taiwan Semiconductor, the largest chip foundry in the world, has idled its facilities. Of course, it's dealing with the impact of the earthquake. We're going to have to see and assess the total impact in terms of this production. How many days is it shut down? Is it shut down more than days? And the wind up here is that this is going to have an impact on March quarter guidance when companies ranging from Apple to NVIDIA to QUALCOMM report their first quarter results.
And I've been, let's just say, concerned about expectations for S&P 500 earnings for 2024. They were up a consensus view up about 10.5%. And as we look at how the March quarter shaped up, it's really the guidance for the second quarter that is going to help reaffirm arm or not that ten and a half percent expectation for the S&P 500. And with the market trading at PE multiples that it's at, we really need to see even stronger EPS growth from that basket to drive the market higher on a sustainable basis. If we don't get it, we could see some of the froth that we've been hearing about in a overbought investor sentiment, exuberant market come back.
(Watch the video for the full interview)
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