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ASML reported a blowout quarter Wednesday, the same morning the June wholesale inflation report came in softer than expected. The combination lands well for equity bulls.
The case for a sustained move, though, requires both readings to mean something durable, and that case is not yet made. Two signals in the same morning ASML's blowout result is the more specific of the two.
The Dutch semiconductor equipment company makes the lithography machines that chipmakers need to build advanced processors, and its order book reads as a forward indicator for where chip production capacity is heading.
A beat at this stage carries more weight than it would mid-cycle, because the market has been watching demand signals from equipment makers for confirmation that investment in semiconductor capacity is holding up.
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