Yazar: Geoffrey Smith
Investing.com – Dollar and US bond yields fell after President Joe Biden announced his plan to increase corporate taxes and spending large infrastructure. Manufacturing in Europe is enjoying the global recovery, while the US ‘weekly jobless claim will be shared. While Microsoft (NASDAQ 🙂 receives an order of $ 22 billion from the US military, Taiwan Semiconductor Manufacturing (TSM) will spend $ 100 billion to solve the chip scarcity in the world. OPEC will meet with Russia and others to discuss the May production policy.
Here’s what you need to know in financial markets on Thursday, April 1.
1. Dollar and bond yields fell after Biden pointed to tax increases to fund spending plans
US dollar and US Treasury yields fell after President Joe Biden said he wanted to raise corporate income tax to 28% in the medium term to support financing $ 2.25 trillion infrastructure spending plans.
Biden’s tax plans also include increasing the tax rate on foreign earnings from 10% to 21%. This is a situation that will disproportionately affect some of the largest US companies like Apple (NASDAQ 🙂 and Facebook (NASDAQ :).
The plans will face opposition from Senate Republicans, but could prevent potentially expensive disputes with Europe, which has prepared ‘digital services taxes’ for Internet companies after the Trump administration effectively abandoned an international project working on a new framework for taxing multinational corporations.
2.US unemployment claims to be published, European manufacturing output at full speed
Following the jump in private sector recruitment seen in Wednesday’s ADP report, the weekly jobless claims report will also shed light on the recovery situation of the labor market as states and cities lift restrictions on workplaces and social gatherings.
Analysts expect initial applications to have fallen to 680,000 last week. It was 684,000, which is the post-pandemic low in the previous week.
The final job survey of the Institute for Supply Management (ISM) for March will also be published. The eurozone manufacturing PMI reading was revised from 62.4 points to 62.5 points, while the UK manufacturing PMI reading was revised to 58.9 points – the highest in the decade. However, after France extends the general quarantine for another month, the service reading may not be that bright. , and has seen the high of all time.
3. Stock markets will open high, technology is in popularity again
US markets will start the new quarter positively. While long-term interest rates subsided, the technology sector became popular again.
It rose by 16 points, up 0.3% and 0.9%.
Among the stocks that may be in the spotlight is Microsoft (NASDAQ 🙂 from the US military, which has secured a $ 22 billion, 10-year deal for augmented reality headset based on HoloLens technology.
In addition, Discovery (NASDAQ 🙂 and Google division, whose B-class shares rose 82% in one of the aftershocks of the Archegos fire sale on Wednesday, and Alphabet (NASDAQ :), which informed their employees that they want to return to the office this month, will also attract attention. Cruise ship operator Carnival (NYSE 🙂 will share its earnings.
4. TSMC will spend $ 100 billion to increase its capacity
Taiwan Semiconductor Manufacturing Co. (TSMC) said it is considering spending $ 100 billion in the next three years to increase chip manufacturing capacity. This is the most dramatic response ever to the global semiconductor shortage that has been squeezing manufacturers around the world this year.
The company had already planned to spend $ 28 billion this year on capacity building to meet the steady increase in demand as 5G technology is spreading and life becomes more and more automated. This increase, combined with the effects of the epidemic that increases the demand for high-tech products of all kinds, forces automobile manufacturers and others to start production.
TSMC also said it will suspend price cuts on silicon wafers for one year from 2022. While its shares rose 2.8% ahead of the market, the share prices of its suppliers such as the Netherlands-based ASML jumped in Asian and European trade.
Semiconductor shares were also bolstered by the strong gains and guidance of Micron Technology (NASDAQ :).
5. OPEC + set sail towards manufacturing agreement
The day after OPEC meets to coordinate its position, the world’s largest producers will meet again to decide on May production levels.
According to the Reuters report, two options will be discussed at the meeting: one to maintain production at current levels and the other to increase by 500,000 barrels per day. Russia and Kazakhstan, which are not OPEC members, are understood to support the second option, while Saudi Arabia and other OPEC members will prefer the first.
The meeting will start at 16:00.
While it was $ 60.39, up 2.1%, it rose 1.9% to $ 63.90.
Baker Hughes, on the other hand, will be sharing a day early due to the Easter holidays.