Taiwan Dollar's Stunning Rally Spells Trouble for Tech, Insurers
A surging Taiwan dollar is aggravating concerns about the competitiveness and earnings prospects of local firms that form the backbone of global tech supply chains.
The currency's recent sharpest rally against the greenback in nearly four decades has further eroded the relevance of an upbeat results season that preceded Donald Trump's punishing tariffs. Of the 205 Taiwanese companies that had reported first-quarter earnings, more than half of them beat estimates, according to a Goldman Sachs Group Inc. note last week.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
18 minutes ago
- Forbes
Fusion Energy May Be The Key To World Hegemony
What would it take for the United States to lose its hegemony to a rising power like China? Right now, America appears to be ahead economically and militarily. However, there is a stark difference between America's national strategy (insofar as one exists) and China's. The US under President Trump calls for regression. It seeks to restore a manufacturing economy that peaked in the 1950s—like an elderly man trying to restore hair where it hasn't grown for decades. It is doubling down on domestic oil, gas and coal. Through tariffs, disparagement of NATO and aggression towards allies like Canada and Denmark, the administration has alienated partners that long supported a US-led world order. China, meanwhile, has a tremendous lead in developing the economy of the future. It has a near monopoly on rare earth minerals, which are needed for electronics, renewable energy systems, defense technologies and more. China leads in solar, wind and batteries, the energy systems growing at the fastest rate. It is ahead in electric vehicles, industrial robotics and drones as well. It probably has achieved parity in artificial intelligence and may surpass the US soon. If China were to take Taiwan, it would control the global market for advanced chip manufacturing. In the background, but probably most importantly, China may be on track to commercialize fusion energy before the US or its disgruntled allies. Unlike the US, China has no domestic energy industry with vocal lobbyists (and purchasable politicians) to slow progress. It is funding fusion as a national strategy while private fusion companies in the West are at the mercy of investors that, for the most part, chase low risk and quick returns. Fusion promises cheap, plentiful, baseload energy without carbon emissions. AI, data centers and industrial robotics powered by fusion would produce goods and services at much lower costs than value chains dependent on fossil-fired electricity. Militaries built on swarms of small, cheap, electronic drones and robots—powered by small, distributed fusion facilities deep underground, safe from attack—would have an edge over competitors using large, expensive, petroleum-powered vehicles with vulnerable supply chains. I cannot overstate the ramifications of China developing fusion first. As an analogy, imagine if Japan and Germany had uncovered vast reserves of oil at home in the 1920s. American and Soviet oil gave the Allies a strategic advantage over the Axis powers. Had the situation been reversed, World War II could have ended differently. While private fusion companies in the West have raised about $8 billion total, China is investing at least $1.5 annually into fusion projects—double what the US government spends. Japanese and German investments in fusion don't even come close. Canada, for the record, has no fusion funding strategy. Moreover, the government of British Columbia, home of industry leader General Fusion, seems not to understand the value of this crown asset.* On all fronts nuclear, China is leaping ahead. In April, its scientists added fresh fuel to an operational thorium molten salt reactor—a first. The thorium reserves found in Inner Mongolia, an autonomous region of China, could theoretically meet Chinese energy demand for thousands of years. The kicker: this reactor design originated in the US. As project lead Xu Hongjie put it, 'The US left its research publicly available, waiting for the right successor. We were that successor." Moreover, in January, China's Experimental Advanced Superconducting Tokamak (EAST) sustained a fusion reaction for 1,066 seconds, setting a new record. Its Burning Plasma Experimental Superconducting Tokamak (BEST) fusion reactor could come online by 2027 and is expected to produce five times the amount of energy it consumes. When BEST announces this milestone, Western fusion companies may be announcing that they've run out of funding. To China, fusion is not a startup project—it's a matter of national interest and security. Its scientists are patenting more fusion-related technologies than any other single country and graduating more doctorates in fusion-related fields. And because China is the top refiner and exporter of the critical minerals needed in fusion reactors (e.g., for magnets), no external force is going to slow their progress. In the meantime, China has a cheap gas station next door—Russia—supplying all the fossil fuels China could need in exchange for support in its war with Ukraine. That support includes critical minerals needed by Russian arms manufacturers. Is fusion energy, along with other Chinese-dominated technologies, enough to end US hegemony? In 1988, historian Paul Kennedy published The Rise and Fall of the Great Powers, a book that tried to explain the relative success (and failure) of powerful states. According to Kennedy, their rise and fall '…shows a very significant correlation over the longer term between productive and revenue-raising capacities on the one hand and military strength on the other.' Essentially, states must balance economic prosperity with strategy. Technological breakthroughs are vital to both. Innovation creates wealth, which enables the state to invest in defense and win wars. While underinvestment in defense leaves the state vulnerable to other powers, overextension and overspending on defense can run an economy into the ground, leaving it unable to sustain a strong military. Now, picture a great power—China—with a military to rival the US and fusion reactors that provide virtually unlimited energy. Imagine the clout China would have in establishing ports, military bases and consumer markets around the world if it could license that fusion technology. A China that exceeds the US in energy, industry, intelligence, mobility and defense is positioned to usurp it. Of course, China could bungle its advantage. Authoritarian regimes have a habit of mismanaging internal dissent, falsifying reality and making preventable mistakes. The rise of China is inevitable, but the self-inflicted decline of the US and its allies isn't. Rather, it's a choice reflecting how societies invest their resources and envision their future. *Disclosure: The author is an investor in General Fusion and sits on its board of directors.
Yahoo
26 minutes ago
- Yahoo
European ETFs Set to Gain as ECB Cuts Rate Again
The European Central Bank (ECB), as widely expected, again cut its interest rate by 25 bps to 2% in a move to shore up a weakening economy. The move marks the eighth consecutive quarter-point cut in the past year. The ECB also signaled it is nearing the end of its rate-cutting cycle as inflation decision underscores growing concern over the eurozone's sluggish recovery in the face of global headwinds, most notably, the destabilizing effects of ongoing U.S. trade policies under President Donald Trump. The ECB's dovish stance will push European stocks and ETFs higher. With rates at their lowest in years and inflation subdued, European bonds, especially corporate debt, may gain renewed investor interest. A weaker euro will likely boost multinational earnings denominated in stronger foreign such, we have highlighted five European ETFs that stand to benefit from the ECB's decision. These are Vanguard FTSE Europe ETF VGK, iShares MSCI Eurozone ETF EZU, iShares Core MSCI Europe ETF IEUR, SPDR EURO STOXX 50 ETF FEZ and JPMorgan BetaBuilders Europe ETF BBEU. These funds could be excellent buys for investors seeking to reap benefits from the current measures. Economic growth has slowed across the eurozone, especially in France, Germany and Italy, and the outlook for next year is weak, according to forecasts by the European Union (EU). Eurozone inflation fell to 1.9% in May, slipping below the ECB's 2% target for the first time in nine months. Additionally, Trump's protectionist trade agenda has led to rate cuts by the ECB. The White House's imposition of fresh tariffs on European industrial goods and autos, along with retaliation from EU partners, has curtailed exports and dampened business investment. The eurozone's export-driven model, especially in manufacturing-heavy Germany, has proven vulnerable. A further escalation in global trade tensions could further hit euro area growth by dampening exports and dragging down investment and consumption (read: 6 Factors to Play Europe ETFs Now).The ECB's latest rate cut brings borrowing costs in the eurozone to less than half the level in the United States and the United Kingdom, where the Federal Reserve and Bank of England have held rates at 4.25%–4.5% and 4.25%, respectively. "While the uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term, rising government investment in defense and infrastructure will increasingly support growth over the medium term," the ECB said. Vanguard FTSE Europe ETF (VGK)Vanguard FTSE Europe ETF offers exposure to companies located in the major markets of Europe by tracking the FTSE Developed Europe All Cap Index. It holds a broad basket of 1241 stocks with key holdings in financials, industrials, health care, and consumer discretionary sectors. Vanguard FTSE Europe ETF has AUM of $25.5 billion and trades in an average daily volume of 4 million shares. It charges 6 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk MSCI Eurozone ETF (EZU)iShares MSCI Eurozone ETF provides exposure to developed market countries using the euro for currency and follows the MSCI EMU index. The fund holds about 223 securities in its basket with financials, industrials, information technology and consumer discretionary taking a double-digit allocation each. From a country look, France and Germany take the biggest share in the basket with 31.3% and 29.3%, respectively. iShares MSCI Eurozone ETF is one of the most popular ETFs in the broader European space, with AUM of $7.9 billion and an average daily volume of 2 million shares. It charges investors 51 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Europe ETF (EZU) Hits New 52-Week High). iShares Core MSCI Europe ETF (IEUR)iShares Core MSCI Europe ETF tracks the MSCI Europe Investable Market Index, holding a broad basket of 1019 European companies. It has key holdings in financials, industrials, and health care sectors with double-digit exposure each. The United Kingdom is the top country accounting for 22.8%, followed by France (15.6%), Germany (14.9%), and Switzerland (14%). iShares Core MSCI Europe ETF has AUM of $6.7 billion and trades in an average daily volume of 1 million shares. It charges 9 bps in annual fees and has a Zacks ETF Rank # EURO STOXX 50 ETF (FEZ)SPDR EURO STOXX 50 ETF follows the EURO STOXX 50 Index, which measures the performance of some of the largest companies across the components of the 20 EURO STOXX Supersector Indexes. The fund appears rich with AUM of $4.6 billion and average daily volume of around 1.4 million shares. It charges 29 bps in annual fees and holds 50 securities in its basket with key holdings in financials, industrials, information technology and consumer discretionary sectors. In terms of country allocation, France and Germany lead with 36.9% and 29.1% share, respectively, followed by the Netherlands (23.3%), Spain (8.7%) and Italy (8.4%). SPDR EURO STOXX 50 ETF has a Zacks ETF Rank # BetaBuilders Europe ETF (BBEU)JPMorgan BetaBuilders Europe ETF provides investors exposure to developed European equity markets by tracking the Morningstar Developed Europe Target Market Exposure Index. It holds 396 stocks in its basket with key holdings in financials, industrials and consumer discretionary sectors. Here again, the United Kingdom is the top country accounting for 22.3% share, followed by France, Germany, and Switzerland with 14% share each. JPMorgan BetaBuilders Europe ETF has amassed $4.6 billion in its asset base and charges 9 bps in fees from investors. It trades in a heavy volume of nearly 330,000 shares a day on average and has a Zacks ETF Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR EURO STOXX 50 ETF (FEZ): ETF Research Reports iShares MSCI Eurozone ETF (EZU): ETF Research Reports Vanguard FTSE Europe ETF (VGK): ETF Research Reports iShares Core MSCI Europe ETF (IEUR): ETF Research Reports JPMorgan BetaBuilders Europe ETF (BBEU): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Wall Street Journal
26 minutes ago
- Wall Street Journal
Lululemon Shares Tumble on Warning That Tariffs Will Hurt Profit
Tariffs are shrinking Lululemon's LULU -19.90%decrease; red down pointing triangle profit. Lululemon Athletica shares plummeted by more than 20% Friday, after the company said tariffs and consumer malaise would hurt its earnings this year.
