Democrats Take House and Senate, Moving Markets
The US midterm election results are out, with Democrats scoring a sweeping victory, winning both the House and Senate. Trump said he lost because his name was not on the ballot. Financial News Media Chairman Hsieh Chin-ho analyzes that US bond yields continue to soar, prices are surging, public cost-of-living pressure is growing, and the election outcome showed early signs. Capital markets have fallen relentlessly since October, already pricing in a possible Trump defeat and expectations that Republicans would lose both the House and Senate.
Weak Philadelphia Semiconductor Index and AI Capex Pressure
US stocks post a celebration rally, but the Philadelphia Semiconductor Index performs weakly, with TSMC ADR closing down 2.24%, failing to reclaim 400 dollars. Another market focus is the massive AI arms race, with the four major CSPs spending 7450億 dollars in capital expenditure this year, creating heavy free cash flow outflows, including Amazon with negative 423.6億 dollars in free cash flow over the past 12 months, frightening the market and raising concerns about when massive AI spending can turn into profits.
Double Blow From Data Centers and Earnings
Hsieh Chin-ho notes the market worries that Democrat-controlled states will resist data center and power system construction, and worries even more that Texas could flip. In this Republican loss of Senate and gubernatorial races, Musk bears the brunt first. Trump has long been a major promoter of AI construction, and now lame-duck, whether it affects future AI development must be reassessed. Earnings shocks are also a source of selling pressure. Besides Google and Amazon, the market shocker this time is Intel, whose shares plunged 28.58% on earnings day, with large Taiwanese enterprises such as Taiwan Mobile-scale enterprises like Delta Electronics and Yageo also affected, including Yageo falling to 417 yuan, below the low since falling from 1220 yuan in July.
Global Market Comparison Shows Taiwan Stocks Strongest
In addition, Changxin Technology's 4F square technology shocks memory stocks, with South Korea's Samsung and SK Hynix just recovering from double-leverage selling pressure before being hit again, while China's Hua Hong, SMIC, and GigaDevice also tumble together. Compared with global markets, Indonesia stocks perform worst this year, South Korea stocks are nearly halved, China's Shenzhen stocks fall more than 30%, Shanghai and Hong Kong fall about 20%, and China's securities regulator has suspended new share IPOs to rescue the market. Hsieh Chin-ho says Taiwan stocks gain the most this year, and this drop of 8113 points, down 16.24%, is already the world's strongest-performing market. Next, the world will adjust, consolidate, and find new direction, and Taiwan stocks' challenge to the 50,000 mark may have to wait until next year.