By The Financial District
May 23, 20231 min
Taiwan Semiconductor Manufacturing's (TSMC) stock was a particular standout in trading recently as shares of the leading semiconductor foundry were surging, Billy Dubertsein reported for The Motley Fool.
Photo Insert: TSMC had muted performance to start the week amid news that Warren Buffett's Berkshire Hathaway had completely sold out of the stock last quarter.
The company, known as TSMC, actually had muted performance to start the week amid news that Warren Buffett's Berkshire Hathaway had completely sold out of the stock last quarter, as reported in a filing.
So perhaps TSMC is playing catch-up to the surging semiconductor sector today. The semiconductor sector is cyclical, with violent booms and busts.
However, the sector is really a "growth cyclical" market, as semiconductors continue to make their way into more and more applications over time. Therefore, macroeconomic events have the ability to propel chip stocks higher or lower than the overall market.
Traders appeared to bet that debt-ceiling talks would bear fruit by the end of this week, which many think is the cutoff to get the debt ceiling passed through both houses of Congress before the US violates the debt ceiling.
House Majority Leader Kevin McCarthy, who had previously been quite downbeat on the state of the talks, noted the negotiators had found a process to get to a deal by the end of the week. It's no surprise that stocks largely took off on the news, as traders hoped a potential debt-ceiling recession would be avoided.
Semiconductors would especially suffer in a recession triggered by a default, so it's no surprise those stocks are bouncing higher.