1.
$NVIDIA(NVDA)$ is going to make AI supercomputers in the US in partnership with TSMC.
$Taiwan Semiconductor Manufacturing(TSM)$ will make chips in its fab in Arizona and $NVIDIA(NVDA)$ will put them in a supercompuer.
Sounds super bullish right?
Meanwhile, $Taiwan Semiconductor Manufacturing(TSM)$ is trading at 14 times forward earnings.
That’s all I’m gonna say.
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2.
This chart clearly explains why outsourcing manufacturing and running a trade deficit is not per se bad.
America outsourced basic manufacturing and created higher value service jobs instead.
If the share of low paying manufacturing jobs in economy remained flat, American’s would have much lower GDP per capita.
I don’t understand why would anybody want to reverse this…
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3.
China has all the cards it needs to wreak havoc on the US economy:
Bond holdings, and entrenched supply chains.
1) China is the second largest foreign holder of US debt with over $750 billion in Treasury bonds. If it sells just around 10%, bond yields will spike around 0.3%.
2) Supply chains are entrenched in China, especially in electronics. Current tariff rate can alone raise inflation to around 5% according to Boston Fed.
How come people still think they don’t have any cards?
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