Market Rundown: US-China Trade War, Government Shutdown, and TSMC's AI Chip Surge

Global Market Jitters

• 🌎 Despite strong earnings from big banks, the market remains nervous due to US-China trade tensions.
• ⚡ Top US officials are urging China not to implement announced export controls on rare earths, viewing them as a "global supply chain power grab."
• 🤝 There is still hope for a resolution, with President Trump expected to meet Xi Jinping at the end of the month.

TSMC Fuels AI Rally

• 칩 TSMC's profit surged 39.1% in the third quarter, significantly exceeding forecasts.
• 🚀 The world's largest producer of advanced AI chips anticipates another 24% leap in profit this quarter, driven by the AI boom.
• 📈 TSMC's stock has seen a 38% increase year-to-date due to high demand for AI chips.

US Government Shutdown Costs

• 💰 The ongoing US government shutdown is costing the economy an estimated $15 billion per week.
• ⚖️ A judge temporarily blocked the administration from laying off federal employees, but termination letters have still been issued to at least 4,000 staff.
• 🚫 The end of the shutdown appears to be nowhere in sight.

French Bond Market Stability

• 📊 The spread between French and German bonds has been falling this week, indicating decreased market perception of risk in French debt.
• ✅ Prime Minister Sebastian Lau is expected to pass a budget after securing support from the Socialist Party by suspending a rise in the pension age.
• ⚠️ Goldman Sachs estimates that ditching the pension age rise entirely could increase France's debt to 130% of GDP in 10 years.