ASML, the Dutch company that is the only supplier of the “extreme ultraviolet lithography” machines needed to make the most advanced semiconductor chips, reported Q3 profits that beat expectations and said it had customers interested in placing orders through 2030. The company also said it was unlikely to have enough capacity to meet the demand, and raised Q4 sales guidance. Sales were slightly below expectations, but the stock jumped 3% as traders concluded the demand for AI services remained strong.
European markets and U.S. futures were up this morning on that news, following a flat close for the S&P 500 yesterday.
It was a different story in Asia, where indexes largely sank after reports of extended fighting between Saudi Arabia and the Houthis drove up the price of oil.
- S&P 500 futures were up 0.21% this morning. The index closed flat on Tuesday.
- In Europe, the Stoxx 600 was up 0.48% in early trading, and the U.K.’s FTSE 100 was up 0.22% before lunch.
- Asia: South Korea’s KOSPI was down 0.44%. Japan’s Nikkei 225 was down 0.05%. India’s Nifty 50 was down 0.46%. China’s CSI 300 was down 1.36%.
- Brent crude was $106 per barrel.
- Bitcoin was at $83,330.
In bonds, France’s problem is America’s problem
A lot of eyes are on the French bond market right now as Paris struggles to deal with its national debt. Yesterday, we told you Macquarie was pondering whether there might be bank runs in France if the Élysée Palace can’t get things under control. And tomorrow ING will host a seminar whose title says it all: “Is France pushing the eurozone into a new sovereign debt crisis?”
But as this chart from Claudio Irigoyen and Antonio Gabriel at Bank of America shows, the French 10-year bond and the U.S. 10-year are basically on the same track.
They got there because they have the same problem: “When interest rates are low, governments have incentives to run bigger deficits financed with cheap debt, especially when the cost of financing is lower than the rate of growth of the economy,” they said in a note. “However, if that ‘cheap’ debt goes to finance a structural increase of the fiscal deficit, when interest rates increase, it is politically difficult to implement the necessary fiscal consolidation to put the house in order.”
Read the full digital edition of today’s Fortune 500 Digest here.
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