| The friction between the US and China has technology at its very core. Uncle Sam is worried that China is using Silicon Valleyâs tech to beef up its military capability. And Americaâs ever-tightening restrictions on tech exports to China are beginning to show up in Nvidiaâs stock price. The firmâs AI-powering chips have long been gobbled up by China, which represents at least 20% of the firmâs data center revenues. And that leaves Nvidia, then, as potential collateral damage in this global spat. You never want to read too much into bank earnings. Thatâs because while they might be a good pulse check on the current state of the economy, theyâre rarely helpful for anyone wanting to take a view of whatâs up ahead. (More on that later). That said, itâs always good to hear that things in the economy are generally OK. And thatâs basically what JPMorgan said in its latest results. Itâs seeing little sign of any deterioration when it comes to credit conditions and the firmâs consumer lending business is still humming. Mind you, JPMorgan is kind of a different beast. And the more inside-Wall-Street-type firms like Goldman Sachs â the ones that make their money on huge corporate lending and merger and acquisition deals â havenât had it so good. So when Goldman reported its results, it brought the mood down a notch. It was a quieter week across the pond on the earnings front, but Dutch market darling ASML did get its moment to shine. Now, the semiconductor industry has been pretty flat recently. Ever since the Covid-era boom, chipmakers and their suppliers like ASML have been nursing a bit of a hangover. And unfortunately, ASMLâs third-quarter new orders shrank 40% from the previous quarter. That suggests the sales drought is going to continue, at least for now. But if youâre long-term-oriented, you might just want to look past all that. After all, ASML says it expects the whole industry to turn in 2025, and that could be when AI demand goes supersonic. Chinaâs economic story has had more twists and turns than a bowl of chow mein noodles. And honestly, no one knows whatâs up next. But right now the country is not scoring too badly against its initial economic targets. China is looking for 5% growth for 2023, and for the third quarter, the country churned out 4.9%. Thatâs pretty close. Perhaps more telling is the fact that the third quarter was 1.3% higher than the second, suggesting that the worldâs second-biggest economy might finally be building some growth momentum. |
