In April, the US Producer Price Index (PPI) saw its largest decline in five years, putting pressure on technology stocks, leading to mixed results in the US stock market; the Taiwan stock market closed at 21,730 points, as foreign investors have been net buyers for ten consecutive days.

Taiwan • Business • 05/16 02:58
In April, the US Producer Price Index (PPI) saw its largest decline in five years, putting pressure on technology stocks, leading to mixed results in the US stock market; the Taiwan stock market closed at 21,730 points, as foreign investors have been net buyers for ten consecutive days.

The U.S. Producer Price Index (PPI) fell by 0.5% in April, marking the largest monthly drop in five years, mainly due to a decrease in service prices, indicating a reduction in inflationary pressures. Following the release of this data, the U.S. stock market showed mixed performance, as the Dow Jones and S&P 500 rose, while the Nasdaq and Philadelphia Semiconductor Index fell. On the 15th, Taiwan's weighted index closed down by 52.62 points to 21,730.25, as foreign investors net bought for the tenth consecutive day, with a single-day net purchase of NT$7.534 billion, accumulating over NT$200 billion in net purchases over ten days.

Key Updates

05/17 14:27

Lisa Shalett, Chief Investment Officer at Morgan Stanley, warns: The rebound in U.S. stocks might be coming to an end, suggesting a shift from technology stocks to the financial and healthcare sectors.

Morgan Stanley Wealth Management's Chief Investment Officer, Xia Leite, warns that the rebound in U.S. stocks is unlikely to be sustained. She advises investors to realize profits from tech stocks and shift towards industries such as finance, energy, and healthcare, which benefit from regulatory easing. She points out that there is a structural shift in the AI sector, with corporate revenues and free cash flows below expectations, constraining the market's upward potential. Xia Leite's view aligns with changes in market fund flows, indicating an increasing preference among investors for defensive and value-oriented assets.

05/16 22:55

U.S.-China Tariff Deal and Trump's Visit to the Middle East Boosts the Market: Tech Stocks Lead the Gains, All Three Major U.S. Stock Indices Rise

On May 16, 2025, the US stock market closed higher across the board due to a 90-day tariff suspension agreement reached between US-China and a $200 billion trade agreement as a result of President Trump's visit to the Middle East. The Dow Jones Industrial Average rose by 331 points, the S&P 500 Index closed in the green for the fifth consecutive day, and the Nasdaq Composite rose by nearly 100 points. Tech stocks led the rally, with Tesla and Nvidia stocks rising 17% and 16% respectively this week. However, the US consumer confidence index dropped to its second-lowest level on record, and inflation expectations hit their highest level since 1981, contributing to market uncertainty.

05/16 21:54

U.S. stocks have rebounded strongly this week: Outstanding corporate earnings, relief from U.S.-China tariffs, and diminished inflationary pressure

In the second week of May 2025, the U.S. stock market rebounded strongly, with the S&P 500 index rising nearly 5% for the week. Driving factors included corporate earnings exceeding expectations, a temporary pause in the US-China tariff war, inflation data indicating reduced pressures, and market expectations of a shift in Federal Reserve policies. However, the technology and semiconductor sectors performed weakly, reflecting the market's conflicting views on the AI boom versus the real economy.

05/16 18:26

S&P 500 Index Rises for Five Straight Days: Eased US-China Trade Tensions and Corporate Mergers and Acquisitions Lift Market Sentiment

On May 16, 2025, the S&P 500 index of the U.S. stock market rose for the fifth consecutive trading day, with a total weekly gain of 4.5%. The rally was driven by a reduction in U.S.-China trade tensions, the merger between Charter and Cox, a depreciating dollar, moderate inflation figures, and expectations of a potential rate cut by the Federal Reserve. Investors moved funds back into riskier assets, and market sentiment warmed.

05/16 09:54

U.S. stocks have risen for four straight days: Market sentiment has improved, but the Federal Reserve warns about the risks of supply shocks.

U.S. stocks continued to rise this week, with the S&P 500 index closing higher for four consecutive days. The Dow Jones index rose over 270 points on May 15, due to the easing of U.S.-China tariffs and improving economic data, which boosted market confidence. Federal Reserve Chairman Powell warned that supply shocks could become more frequent and persistent, highlighting that the market still faces risks. Issues such as supply chain bottlenecks, policy uncertainty, and weak consumer spending remain, urging investors to remain vigilant.

05/16 02:58

In April, the US Producer Price Index (PPI) saw its largest decline in five years, putting pressure on technology stocks, leading to mixed results in the US stock market; the Taiwan stock market closed at 21,730 points, as foreign investors have been net buyers for ten consecutive days.

The U.S. Producer Price Index (PPI) fell by 0.5% in April, marking the largest monthly drop in five years, mainly due to a decrease in service prices, indicating a reduction in inflationary pressures. Following the release of this data, the U.S. stock market showed mixed performance, as the Dow Jones and S&P 500 rose, while the Nasdaq and Philadelphia Semiconductor Index fell. On the 15th, Taiwan's weighted index closed down by 52.62 points to 21,730.25, as foreign investors net bought for the tenth consecutive day, with a single-day net purchase of NT$7.534 billion, accumulating over NT$200 billion in net purchases over ten days.

05/16 02:58

U.S. stock futures fluctuate in early morning trading: Dow drops slightly by 17 points, Nasdaq and S&P both retreat.

On May 16, 2025 (local time in Taipei), in early trading, U.S. stock futures were volatile. The Dow Jones Industrial Average futures stood at 42,368 points, down 17 points or 0.04%; the S&P 500 futures were at 5,925.25 points, down 8 points or 0.13%; and the Nasdaq 100 futures were at 21,361.75 points, down 38.5 points or 0.18%. This was in contrast to the rise seen at 08:31, when futures for the three major indices saw a slight uptick. After a mixed performance in the previous trading day, investor sentiment was cautious.

05/16 01:24

JPMorgan CEO Jamie Dimon, in Paris, warns about recession risks, and the uncertainty surrounding US-China trade negotiations is impacting US stock performance.

On May 15, 2025, JPMorgan Chase's CEO, Jamie Dimon, warned at the Global Markets Conference in Paris that despite the easing of US-China tariff tensions, global economic uncertainties and recession risks still exist. Progress in the US-China trade negotiations has been limited, and market sentiment is cautious. On that day, the performance of US stocks was mixed, with the Dow Jones Industrial Average rising 271 points, the S&P 500 closing higher for the fourth consecutive day, while the Nasdaq and the Philadelphia Semiconductor Index experienced slight declines.

05/15 22:55

US stocks are mixed: Employment data is steady, IMF cuts global growth forecast; US-South Korea forex talks lead to Korean won fluctuations

On May 16, 2025, the major indices of the U.S. stock market had mixed performances, with the Dow Jones Industrial Average rising by 0.65% and the S&P 500 Index by 0.41%, while the Nasdaq Index fell by 0.18%. The U.S. non-farm employment report for April showed an increase of 177,000 jobs, with the unemployment rate remaining at 4.2%. The IMF downgraded the 2025 global economic growth forecast to 2.8%, citing U.S. tariff policies as the reason. The U.S.-South Korea foreign exchange policy talks led to fluctuations in the Korean won, and the appreciation of the New Taiwan dollar attracted attention, though the Taiwan-U.S. tariff negotiations did not address exchange rate issues.

05/15 21:23

U.S. stock market closed with mixed results: Cisco's stock rose as its financial forecast was revised upward, while UnitedHealth's stock plunged due to a judicial investigation.

On May 15, 2025, the U.S. stock market closed with mixed performance. The Dow Jones Industrial Average rose over 270 points due to Cisco's upward revision of its full-year forecast, while the S&P 500 Index increased for the fourth consecutive day. The Nasdaq Index edged down due to declines in tech stocks such as Amazon and Meta. Cisco's stock price jumped more than 5% on strong AI demand, while UnitedHealth tumbled 11% after reports of a criminal investigation by the U.S. Department of Justice, hitting a five-year low, making it the market's focal point.

US April PPI Falls 0.5%, Largest Monthly Drop in Five Years

Data released by the US Bureau of Labor Statistics on May 15 shows that the PPI in April decreased by 0.5% month-on-month, far below the market's expected increase of 0.2%, marking the largest monthly drop since 2019. The core PPI (excluding food and energy) also fell by 0.4%, the largest drop since 2015. The decline in PPI was mainly influenced by falling service prices, particularly a 6.9% drop in portfolio management fees, a 3.1% decrease in hotel accommodation prices, and a 1.5% decline in airline fares.

According to the US Department of Labor, the final demand service prices fell by 0.7%, the largest drop since the category began being tracked in 2009. Most of these service items fall under the core personal consumption expenditures (PCE) inflation indicator, which the Federal Reserve closely monitors, indicating that inflationary pressures continue to ease.

Tech Stocks Weaken, US Major Indices Mixed

Affected by the PPI data, US stock markets were mixed on the 15th. The Dow Jones Industrial Average rose by 271.69 points, closing at 42,322.75 points, an increase of 0.65%. The S&P 500 Index rose by 0.41%, closing at 5,916.93 points. In contrast, tech stocks performed weakly, with the Nasdaq Index falling by 34.49 points to close at 19,112.32 points, a decrease of 0.18%. The Philadelphia Semiconductor Index dropped by 28.28 points, closing at 4,932.45 points, a decline of 0.57%.

Among tech stocks, AMD fell by 2.32%, closing at $114.99; NVIDIA slightly decreased by 0.38%, closing at $134.83; TSMC ADR fell by 0.28%, closing at $194.22, still at an 18.1% premium compared to the Taipei trading price.

US Treasury yields fell simultaneously, with 2-year and 10-year Treasury yields each dropping by 10 basis points to 3.95% and 4.43%, respectively. Market focus on the Federal Reserve's future policy direction continues to grow.

Taiwan Stocks Close Down 52 Points, Foreign Investors Net Buyers for 10 Consecutive Days

The Taipei stock market opened lower and fluctuated on the 15th, ultimately closing down 52.62 points at 21,730.25 points, a decrease of 0.24%, with a trading volume of NT$340.835 billion. The index reached a high of 21,821.01 points and a low of 21,674.32 points during the session. Among the eight major categories, food and financial stocks rose by 0.66% and 0.59%, respectively, while most other categories closed down, with textiles and paper stocks experiencing larger declines of 1.84% and 1.68%, respectively.

The three major institutional investors collectively bought a net NT$8.905 billion, with foreign investors buying a net NT$7.534 billion, marking the tenth consecutive trading day of net buying, with a cumulative ten-day net buying amount of NT$200.8 billion. Investment trusts and proprietary traders (self-trading) bought a net NT$1.88 billion and NT$0.8 billion, respectively, while proprietary traders (hedging) sold a net NT$0.47 billion.

In the futures market, the net long positions of the three major institutional investors in Taiwan index futures decreased by 684 contracts to 2,521 contracts, while foreign investors' net short positions increased by 925 contracts to 37,208 contracts. In terms of options open interest, the largest open interest for monthly call options was at 22,800 points, and for monthly put options was at 20,600 points. The put/call ratio decreased from 1.18 to 1.17, and the VIX index fell by 1.01 to 24.75, indicating a slight decrease in market volatility expectations.

Foreign Investors' Top Net Buy and Sell Stocks

In terms of individual stocks, the top five net buys by foreign investors on the 15th were UMC (2303), Evergreen (2603), Winbond (2344), Yang Ming (2609), and China Steel (2002), with net buy volumes ranging from 16,000 to 41,000 units. The top five net sells included Innolux (3481), AUO (2409), Acer (2353), MediaTek (2454), and Walsin (1605), with net sell volumes exceeding 30,000 units.

References

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