E TalkMarkets Tuesday Talk: New Year's Eve Euphoria?

Barring any last minute catastrophic events, US stock markets will end 2020 on high, green notes with many investors holding full hands. COVID-19 vaccines are in,Trump is on the way out and both 2021 and President-elect Biden will soon be with us. With those thoughts in mind and President Trump's signing of the stimulus bill on Sunday, Monday's post-Christmas holiday trading session ended higher with the S&P closing at 3,735, up 32 points, the Nasdaq closing at 12,899, up 95 points and the Dow closing at 30,404, up 204 points. On the year the S&P is up 530 points, the Nasdaq is up 4,012 points and the Dow is up 1,535 points, with 3 trading sessions to go. This morning, futures for all three indices are trading green.

Technology has been the major sector leading the markets out of their Q1 lows. Rishab Dugar in his article 3 Tech Stocks To Buy And Hold In 2021: Taiwan Semiconductor, Match Group, And Zendesk sets readers up for next year with three rising stars.

Dugar makes the following observations and then continues with detailed notes on his three 2021 picks. "The COVID-19 pandemic has revealed the extent to which society relies on technology and how it has become integrated with many, many aspects of our economies and lives. While coronavirus vaccine deployment in several countries led to a tech sell off earlier this month, the industry is poised to make a strong recovery we believe given the increasing dependence of people on technology for a plethora of reasons. Also, the renewed lockdown imposition across Europe and other countries has rekindled investor confidence in this industry."

Taiwan Semiconductor Manufacturing Company Limited (TSM)

TSM is engaged in the manufacturing and sale of integrated circuits and semiconductor products. It also provides computer-aided design (CAD) services. The company serves customers in computer, communications, consumer, and industrial and standard segments in North America, Europe, and Asia.

TSM’s revenues have increased 21.6% year-over-year in the third quarter ended September 30, 2020. Its operating Income has increased 39.1% from the year-ago value, while EPS rose 35.9% from the same period last year.

Analysts expect TSM’s revenues to rise 22.6% to $12.75 billion for the current quarter ending December 31, 2020. The company has an impressive earnings surprise history; it beat the Street EPS estimates in the trailing four quarters. The consensus EPS estimate of $0.93 for the current quarter represents a 27.4% improvement from the year-ago value. TSM has gained 83.5% over the past year.

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