Taiwan Semiconductor Earnings Fuel AI Party

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Jan. 16.

State of Play

Stocks advanced yesterday, putting in a broad-based rally after the CPI came in a little below forecasts. As we eye our board of indicators for signs of direction at 0700, things are tilted to risk-on:

• Stock index futures are mixed. Tech is moving higher after Taiwan Semiconductor Manufacturing (TSM 0.00%↑) earnings, with the Nasdaq up 0.5% but other US indexes aren’t budging from the break-even point;

• Cryptos are joining the tech party, with Bitcoin up 2.5% to trade north of $99,000 again;

• Commodities are mixed, with WTI crude oil down 1% to trade below $78/barrel but copper up 0.7%. Gold and silver continue to move higher;

• Bonds aren’t doing anything. The 10-year yields 4.67%.

Today’s Known Events

Some earnings to kick things off:

• Taiwan Semiconductor crushed estimates overnight and the stock is up 5% in the pre-market, taking Nvidia (NVDA 0.00%↑) and other AI stocks with it.

(TSM Earnings bolster bull case for AI, by author via Grok AI)