Trade War: Investors in 'Watch-and-Wait' Mode

Key Concepts

• TSMC's (Taiwan Semiconductor Manufacturing Company) earnings and outlook as a bellwether for the semiconductor industry.
• ASML's (Advanced Semiconductor Materials Lithography) earnings report and its impact on market sentiment.
• Investor engagement and focus on macro headlines rather than fundamentals.
• Tesla's earnings report and its impact on retail investors.
• Intel's earnings report and the upcoming investor update on their foundry business.
• Semiconductor stock reactions to earnings reports and guidance.
• The influence of consumer demand (Apple, PCs) and AI on the semiconductor industry.
• "Watch and wait" mode of investors due to market uncertainty.

TSMC and ASML Earnings Reports

• TSMC's earnings report was positive and seen as a sign of confidence, especially considering tariff concerns. Their adders were modestly higher.
• TSMC's positive second-quarter guide prevented increased discussion and incoming calls, indicating a sense of relief.
• ASML's earnings report was disappointing, causing the stock to fall by 7%.
• TSMC's report indicated positive signs on both the consumer front (Apple, PCs) and the AI front.

Market Sentiment and Investor Behavior

• The market is currently in a "watch and wait" mode.
• Investors are hesitant to buy strength or add to positions until they see how stocks react to earnings reports.
• The lack of positive stock reactions to positive earnings reports from companies like TSMC is disheartening, raising concerns about how other semiconductor and tech companies will perform.
• Investors are highly engaged, reaching out to understand the perspectives of their peers in the investment community.
• Fundamentals are not driving market behavior as much as macro headlines and perceived positive or negative catalysts.
• Investors are not "anxious to go out and buy the dip" but have a short list of preferred or avoided names.
• The key question is what it will take to make the investment community incrementally more positive or negative.

Tesla and Intel Earnings Reports

• Tesla's earnings report primarily impacts retail investors.
• The bar is relatively low for Tesla, with focus on plans for new potential vehicles and their timing.
• Initial monthly reports have not shown great unit sales for Tesla.
• For Intel, the current quarter's numbers are expected to be fine, with a potential risk of downside next quarter.
• The focus for Intel is on the new CEO's strategy and the investor update on April 29th regarding their foundry business.
• The Intel foundry business investor update is expected to provide more details on their strategy and technology.

Conclusion

The semiconductor market is currently in a state of uncertainty, with investors closely monitoring earnings reports and macro headlines. TSMC's positive report provided some reassurance, while ASML's disappointment highlighted the fragility of market sentiment. Investors are hesitant to make significant moves until they see how stocks react to earnings reports and guidance, particularly from key players like Tesla and Intel. The upcoming Intel foundry business investor update is a crucial event that could provide more clarity on the company's strategy and technology.