The first total solar eclipse to pass over the U.S. since 2017 is happening Monday; U.S. Treasury Secretary Janet Yellen says future talks with China will focus on a Beijing policy shift; Nvidia (NVDA) chip supplier Taiwan Semiconductor Manufacturing Co. (TSM) is awarded up to $6.6 billion in direct funding and a potential $5 billion in loans for factories in Arizona under the CHIPS Act; shares of Boeing (BA) and Southwest Airlines (LUV) are falling in premarket trading after one of the low-cost carrier’s Boeing 737s lost an engine cover during takeoff in Denver on Sunday; JPMorgan Chase (JPM) CEO Jamie Dimon warns the U.S. might face an interest-rate spike; and Kimberly-Clark (KMB) is selling its personal protective equipment (PPE) business to Australia’s Ansell for $640 million in cash. U.S. stock futures are little changed after shares surged Friday following blowout jobs numbers. Here’s what investors need to know today.
1. Yellen Says US Will ‘Underscore’ China Policy Shift in Talks
U.S. Treasury Secretary Janet Yellen said Monday that future discussions between the U.S. and China will focus on Beijing shifting its industrial and economic policies. “We intend to underscore the need for a shift in policy during these talks—building on the over two hours I spent on this topic with the Vice Premier (Liu He) last week,” she said in the last of her four-day trip to China. She kicked off her trip with a speech saying that concerns are growing over the global economic fallout from China’s excess manufacturing capacity and criticized the country’s government for the “unfair” treatment of American and other foreign companies.
2. Nvidia Supplier TSMC Gets $6.6B in CHIPS Act Funds, $5B in Loans
Taiwan Semiconductor Manufacturing Company’s (TSM) American depositary receipts (ADRs) were 1.5% higher in premarket trading, after the world’s largest contract chip maker said Washington had granted it up to $6.6 billion in direct funding and a potential $5 billion in loans under the CHIPS Act to build cutting-edge chips and set up a third fabrication plant in Arizona. TSMC said the three facilities will employ about 6,000 direct high-tech, high-wage jobs. Intel (INTC) recently was awarded up to $8.5 billion and an additional $11 billion in loans from the CHIPS Act, which is aimed at expanding manufacturing of key industries like chipmaking amid growing geopolitical tensions with China. TSMC supplies many “fabless” firms and chip designers, including Apple (AAPL), Nvidia (NVDA), and Qualcomm (QCOM) with semiconductors to use in their products.
3. Boeing, Southwest Airlines Shares Fall in Latest 737 Mishap
Shares of Boeing (BA) and Southwest Airlines (LUV) were both moving lower in premarket trading, after the Federal Aviation Administration (FAA) said that one of the low-cost carrier’s Boeing 737s on Sunday lost an engine cover during takeoff, which then struck a wing flap. The incident, in Denver International Airport, forced the 737-800 jet to return to the gate, with customers safely transferred onto a replacement aircraft to complete their journey to Houston’s William P. Hobby Airport. This is the latest in a slate of safety incidents the low-cost carrier has faced in recent weeks, while this is the latest in a long line of problems for Boeing ever since a door plug on an Alaska Airlines Boeing 737 Max 9 plane blew out in midair in January. The FAA has barred Boeing from expanding production of its 737 Max jets, including the Max 9 model involved in a mid-flight failure. Boeing shares were down 1.1% while Southwest slipped 0.5%.
4. JPMorgan CEO Dimon Sees Low Chance of ‘Soft Landing,’
JPMorgan Chase (JPM) Chief Executive Officer (CEO) Jamie Dimon said he sees the chance of a “soft landing” as slimmer than expected by stock markets and also interest rates rising to more than 8% as inflation persists amid record-high deficit spending and geopolitical issues. “Markets seem to be pricing in at a 70% to 80% chance of a soft landing—modest growth along with declining inflation and interest rates,” Dimon wrote in his annual letter to shareholders released Monday. “I believe the odds are a lot lower than that.” He noted that the bank is prepared for a very broad range of interest rates, “from 2% to 8% or even more.” He added that artificial intelligence (AI) will have an “extraordinary” impact on society. The impact will be “possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet.”
5. Kimberly-Clark Sells PPE Business to Australia’s Ansell for $640M
Consumer products giant Kimberly-Clark (KMB) is selling its personal protective equipment business to Ansell for $640 million in cash, the Australian company said Monday. Ansell said it would acquire from Kimberly-Clark a business that designs, markets, and sells gloves, eyewear, and other apparel under the Kimtech and KleenGuard brands. Kimtech products are targeted at the scientific market, while KleenGuard is sold to industrial users. U.S. domestic mask producers, who had bulked up production over recent years in response to gummed supply chains and COVID-related demand, are reportedly now left with plants sitting idle, unfinished or operating below capacity while U.S. hospitals pivot back toward foreign firms for PPE. Shares of Kimberly-Clark, the maker of Kleenex tissues and Huggies diapers, were little changed in premarket trading.
