Corporate (Mainly Tech) News Continues to Astound

Commentary

Most second-quarter earnings announcements are in the books, but most corporate news remains strong. Last Thursday, Taiwan Semiconductor (TSM) announced August sales up 53.3% compared to the same month a year ago. TSM is a major supplier to Apple, Microsoft, and Nvidia, so its record sales in August deliver a strong boost for many other technology stocks, as well as AI and data center-related stocks.

The other big stock news last week was the disclosure of an August 21st SEC filing showing that Nancy Pelosi’s husband bought up to $12 million of Bloom Energy (BE), including two big option bets, which sparked a big rally. Then on Tuesday, it was announced that Bloom Energy will be added to the S&P 500 on September 21st. For some odd reason, Nancy and Paul Pelosi are a pair of the world’s greatest investors.

Also, Apple’s product announcement on September 9th was a blockbuster, as I had expected. Apple’s first folding phone, the iPhone Duo, was officially announced and can be ordered about a month from now, on October 16^th, at a starting price of $1,999, but prices could soar up to $3,199 if you add more memory.

Here are the most important developments recently and what they mean:

– Kevin Hassett, the Director of the National Economic Council, said that he and President Trump do not think there is any need for a Fed key interest rate hike. I suspect that Treasury Secretary Scott Bessent, who wanted Kevin Warsh to be Fed Chairman, will run interference and explain to President Trump that if the Fed does not hike key interest rates, it could weaken the U.S. dollar, especially after the European Central Bank (ECB) raised key interest rates last week.

– Unless there is extraordinary news, like collapsing crude oil prices, I am fully expecting a key Fed interest rate hike. Market rates have risen globally due to higher energy prices, and after the ECB hike, more central banks are expected to follow and raise key interest rates. The big news is expected to be the FOMC statement that may signal whether or not the Fed is “one and done” or signal that more key interest rate hikes will be forthcoming. Under new Fed Chairman Warsh, the Fed may not provide good guidance, since Warsh wants Wall Street to take its cue from market rates.

– Speaking of crude oil, the Ukrainian attacks on Russian refineries, plus the Houthis attacks on Saudi Arabia oil facilities have caused the prices of diesel and jet fuel to soar. Saudi Arabia also closed its pipeline to the Red Sea due to Houthi drone attacks. The Houthis are occupying islands in the Red Sea and are expanding their ability to torment Saudi Arabia. Ironically, more crude oil is traveling through the Strait of Hormuz, so Iran’s attempted attacks on the U.S. Navy and oil tankers have been futile.

– Interestingly, The Wall Street Journal reported that Canadian Prime Minister Mark Carney is now seeking full membership in the European Union (EU) to resolve its trade spat with the U.S. This is clearly an act of desperation for Canada, and it would be interesting if the EU welcomes Prime Minister Carney’s overtures. Naturally, if the EU welcomes Canada to become an “associate member” of the EU, then Carney would adopt EU tariffs and ignore existing tariffs with the U.S. I am sure President Trump is furious that Carney is acting like a spoiled teenager moving out of the house and will put pressure on the EU to stay out of America’s spat with Canada.

– Alberta is in the midst of a secession movement to become an independent country, and Saskatchewan could follow. The EU’s Net Zero goal by 2050 is devastating to Alberta and Saskatchewan, since fossil fuels and chemical fertilizers would be banned under the EU’s strict climate goals. So, an implosion of Canada might ensue if Brussels imposes its strict EU rules on Canada. Naturally, President Trump would be happy to offer statehood to any Canadian provinces that want to secede.

– During President Trump’s visit to Ireland, just before the trophy ceremony at the Irish Open, he said that the U.S. plans to rescind tariffs on Irish whisky. According to the Irish Whiskey Association, the U.S. is the biggest export market for Irish whiskey and accounts for one-third of global sales. Interestingly, effective on September 29th, President Trump banned the imports of whiskey from Canada. Clearly, world leaders have to suck up to President Trump if they want to do business in the U.S.

– The AI doomsday selloff due to warnings that AI could kill humans is ridiculous. The order backlogs for the data centers will not stop, since these backlogs now extend well into 2032. President Trump dismissed AI safety concerns as a “hoax” that would give China the upper hand in developing AI technology. Over 200 Chinese bots have been planting false stories about AI and data centers to slow America’s AI momentum. These Chinese bots are also designed to interfere with the mid-term elections and might explain why President Trump is so passionate about squelching bogus AI rumors.

Overall, these fake AI and data center narratives should diminish after the mid-term elections, since they are being used to try to swing key congressional elections. The good news is there are no analyst or guidance cuts for the AI- and data center-related stocks I recommend. I did note that when some of the AI- and data center-related stocks were briefly hit this week, buying pressure rotated into cybersecurity stocks.