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🚀Earning Season, Here we Come🚀

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🧨Taper is expected to be faster🧨

As we recap for the week, the stock market retraced sharply on Monday and Tuesday. However, Wednesday saw a firmer need despite the FOMC minutes indicating a possible faster rate of tapering.

While tapering is expected to occur, the consensus was for a start in December and probably finished by mid-2022. Nonetheless, the FOMC minutes had suggested a faster timeline. It means possible tapering by mid-November. Yet, the market seems to hold well.

Indeed, the faster pace does not shape the general picture since the Fed is already determined to do so. Pika World continues to favour some financials to better hedge on a higher interest rate environment.

🎉Bank of America: Pika World’s Favourite🎉

Readers of Pika World would have known the counter since we had been trading it for a long time, especially during the year’s first half. The latest earnings results were robust as the bank released some of its reserves and charged more advisory fees.

Profits hit $7.7 billion while ahead of the forecast of $6.1 billion. There is improvement in organic growth, and net interest margin had increased by $1 billion given strong deposit growth and investing in the excess liquidity held by the bank.

Notably, Pika World likes the strong advisory and wealth management business which hit near-record levels. In addition, its global wealth business brought in a healthy sum of $1.2 billion. Therefore, we continue to favour its business outlook, notwithstanding changes in the macro-environment.

🎙TSMC: Tight Supplies Remains🎙

Even as the company registered a 14% jump in net profit, it expects a tight capacity situation in 2022 as worldwide shortages of semiconductors see little relief.

Indeed, chips shortages have stiffened economic recovery and impacted global consumer brands such as Apple, where its chips are used in 5G-enabled smartphones. Apple contributes about one-fourth of TSMC’s revenue, and its ability to ramp up production will be in focus.

We continue to monitor the earning season.