Tag Archives: Asian markets

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

Sharp Volatility and Growing Concerns in Asian and U.S. Markets: Amid recent developments in U.S. trade policy,
global markets experienced heightened volatility following  President Donald Trump’s
announcement of a new tariff package—mainly targeting auto imports.
These actions have reignited investor fears over the global economic outlook,
inflation, and commodity prices, directly impacting performance across Asian and U.S. markets.

 

Contents

Decline in Asian Markets

Mixed Signals from the U.S.

Wall Street Retreats

Dollar and Bonds Hold Firm

More Volatility Ahead

Liquidity Hits Two-Year Low

Summary

 

 

 

 

Decline in Asian Markets

Equity indices in China, Hong Kong, and Japan posted steep losses on Thursday.
U.S. stock futures also fell during early Asian trading hours.
At the same time, both the Mexican peso and Canadian dollar weakened, reflecting growing investor caution.

Toyota Motor led the losses in Asian trading. At the same time, General Motors and Ford Motor
shares declined in post-market U.S. trading due to concerns over potential tariffs affecting the auto sector.

 

Mixed Signals from the U.S. Administration

Trump’s unexpected announcement of a 25% tariff on imported vehicles sent market shockwaves.
However, he later suggested that tariffs might be “very flexible.”
The uncertainty remains high, especially regarding China and
the potential sale of TikTok (owned by ByteDance) to a U.S. company.

According to Kyle Rodda, market analyst at Capital.com, these developments “shook market confidence once again”
and raised questions about the longevity of the current protectionist stance.

 

Wall Street Retreats, Led by the ‘Magnificent Seven’

In the U.S., significant indices declined sharply. The S&P 500 fell over 1%, led by the “Magnificent Seven” tech giants:
 Apple, Amazon, Nvidia, Alphabet, Meta, Microsoft,
and Tesla are all heading toward their worst quarterly performance since 2022.

Nvidia and Tesla shares dropped by more than 5.5%,
while Microsoft declined after reports that it was pulling out of new data center projects in the U.S. and Europe.
The Nasdaq 100 fell 1.8%, the Dow Jones Industrial Average dropped 0.3%,
the Bloomberg Magnificent Seven Index lost around 3%, and the Russell 2000 slid by 1%.

 

 

 

 

Dollar and Bonds Hold Firm

Despite the broader sell-off, the U.S. dollar rose by 0.3%,
while the yield on 10-year U.S. Treasury bonds climbed to 4.35%.
Oil held onto commodity gains after a significant drawdown in U.S. inventories,
and gold remained near its record highs.

 

Warnings of More Volatility Ahead

Daniel Skelly, Head of Wealth Management Research at Morgan Stanley,
warned that volatility is here to stay—especially with the upcoming tariff deadlines.
He added that these announcements may mark the beginning of new negotiations rather than the end of trade tensions.

At the same time, analysts at Barclays, led by Venu Krishna,

revised their 2025 target for the S&P 500 downward—from 6600 to 5900 points,
citing pressure from tariffs and weakening survey data.

From City Index and Forex.com, Matthew Weller said that trade policy uncertainty
has undermined risk sentiment and could lead to a short-term bounce in the dollar and risk assets.
However, he noted such gains may not last unless clarity emerges around U.S. trade strategies.

 

Liquidity at a Two-Year Low

According to Deutsche Bank data, liquidity in S&P 500 futures contracts
based on the most active contract—has dropped to its lowest level in two years.

Dan Wantrobski from Janney Montgomery Scott said 2025 could prove challenging
for investors due to persistent geopolitical uncertainty and shifting liquidity conditions.
He added that recent recovery attempts in the market have begun to look “somewhat erratic.”
and emphasized maintaining caution until solid confirmation that the market has reached a bottom.

 

Summary

Trump’s shifting stance on tariffs has reignited market fears globally,
dragging down major indices like the S&P 500 and Nasdaq 100
and shares of key companies such as Tesla, Nvidia, Microsoft, Toyota, Ford, and General Motors.

Meanwhile, investors found partial relief in a stronger U.S. dollar,
rising bond yields, and stability in gold and oil prices
the next steps in U.S. trade policy will be critical in shaping future market direction.

 

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

New Escalation by Trump Shakes Asian Markets: Tariff Pressure and Economic Concerns

New Escalation by Trump Shakes Asian Markets: Tariff Pressure and Economic Concerns:
The newly elected President, Donald Trump, has returned to the economic spotlight
by announcing plans to impose additional tariffs on China, Mexico, and Canada,
reviving memories of his controversial trade policies focused on the “America First” slogan.
These statements, which have unsettled global markets,

raise questions about the future of the global economy amidst a new escalation in trade wars.

 

Contents

Announcements and Immediate Impact

Economic Reactions

The U.S. Markets

The Effect on Commodities and Currencies

Renewed Optimism

Major Transformations Ahead

 

 

Announcements and Immediate Impact

Trump announced on his “Truth Social” platform plans to impose tariffs
of 10% on Chinese imports and 25% on goods from Mexico and Canada.
He justified these measures as necessary steps to curb illegal immigration and combat the flow of drugs across borders.

The financial markets responded quickly to these announcements:

Asian Stocks Drop: Indices in Japan, Australia, and South Korea declined significantly.

U.S. Dollar Rises: The Bloomberg Dollar Index rose by 0.7%.

Chinese Yuan Dropped by 0.4%, while the Mexican Peso and Canadian Dollar fell by more than 1%.

 

Economic Reactions

In response to these threats, market experts expressed concerns about the potential impact of these policies on global trade.
Kieran Calder, Head of Equity Research at “Union Bancaire Privée,” commented:
 “This strategy is not new to Trump, as his negotiation style relies on initial escalation to gain leverage later.”

 

The U.S. Markets: Between Optimism and Concerns

Despite the worries, U.S. stocks continued to perform positively.
The “S&P 500” rose by 0.3%, while the “Nasdaq 100” added 0.1%.
Analysts on Wall Street foresee further growth in the coming years,
with estimates pointing to the “S&P 500” reaching 6600 points by 2025.

 

 

 

 

The Effect on Commodities and Currencies

Commodity-Linked Currencies: The Australian Dollar fell by 1.1%,
and the New Zealand Dollar dropped by 0.8%, impacted by their strong ties to the Chinese economy.

Gold: Saw a slight increase after a 3.4% decline the previous day.

Oil: Prices dropped due to the stronger U.S. Dollar and concerns about the new trade threats.

 

Renewed Optimism for U.S. Stocks

After a period of skepticism about the strength of the stock market over the past two years,
Wall Street strategists have returned to optimistic forecasts, pointing to potential upward trends for the “S&P 500” by 2025.

Major financial institutions such as “Goldman Sachs,” “Morgan Stanley,
” and “BMO Capital Markets” Share a consensus on annual targets for the index near 6600 points.
This figure represents an estimated 11.7% increase compared to last Friday’s closing,
aligning with the historical annual average return of the index since 1928, with minor adjustments.

 

Major Transformations Ahead for the Global Economy

While these tariff threats have caused turbulence in Asian markets,
analysts believe this move reflects Trump’s stringent approach to dealing with trade partners.
The key question remains: how will these policies impact global trade relationships,
and will they lead to a new round of negotiations or
further escalations that could jeopardize the stability of the global economy?

 

New Escalation by Trump Shakes Asian Markets: Tariff Pressure and Economic Concerns

Decline in Asian Markets

Decline in Asian Markets: Impact of the Fall of American Tech Companies on Stocks, Currencies, and Bonds: Asian markets have significantly declined following
the drop in tech stocks on Wall Street.
This decline reflects the impact of various economic and political factors on stock, bond, and currency markets.

 

Content

Decline in Asian Stocks

Impact of Tech Companies

Expert Opinions

Stability of the Japanese Yen

Bank of Japan’s Expectations

U.S. Bond Market

U.S. Interest Rates

Performance of the Dollar and Other Currencies

Halt of the Tech Boom

 

 

 

Decline in Asian Stocks Following the Drop in American Tech Companies on Wall Street

The indices of Japan and South Korea fell by more than 2%.
Asian stocks began to decline as investors withdrew from betting on the AI frenzy that fueled this year’s bull market.
Stocks in Japan and South Korea fell by more than 2%, with chipmaker SK Hynix declining despite solid earnings.
The S&P 500 index fell by 2.3% in the United States, its worst performance since December 2022,
Ending its best continuous growth streak without dropping below 2% since the global financial crisis.

 

Impact of Tech Companies on Markets

The Nasdaq 100 index, dominated by tech stocks, fell by 3.7% due to the decline of the companies it includes.
Alphabet’s stock fell by 5% after it allocated more resources in its quest to outdo competitors in the AI field,
with higher spending than analysts expected.
Tesla’s stock fell by 12% following the loss of earnings and delay in the launch of its “Robotaxi” product, and Nvidia’s stock fell by 6.8%.

 

Expert Opinions

Peter Boockvar from The Boock Report said: “Investors have finally noticed the huge spending required by AI,
realizing that it requires much more spending at present, not as a revenue source.”

 

Stability of the Japanese Yen

The yen stabilized today, Thursday, after rising by more than 1% to its strongest level against the U.S. dollar since May,
reflecting a retreat in carry trade deals.
Charu Chanana, head of FX strategy at Saxo Capital Markets,
noted that this move is “likely to put pressure on yen short positions,
given that the current yen-funded trade has been a common strategy over the past few years.”

 

Bank of Japan’s Expectations

According to BlackRock, which has a pro-Japanese equities investment view,
the Bank of Japan is likely to keep interest rates low for a longer period, supporting stocks in the country.
The Bank of Japan meets later this month.

 

 

 

U.S. Bond Market

In the bond market, Treasury bonds rose today in Asian trading
after the curve steepened in the previous session due to bets that the Federal Reserve is nearing an interest rate cut.
Long-term Australian and New Zealand bond yields also rose.

 

U.S. Interest Rates

Former New York Federal Reserve President William Dudley called for a reduction in borrowing costs,
A move would be preferred for next week’s meeting.
For many analysts, such a step would be concerning as it suggests officials are rushing to avoid a recession.
Later today, investors in the U.S. will see more evidence of the economy’s health,
as seen by the release of U.S. GDP and initial jobless claims data.

 

Performance of the Dollar and Other Currencies

The dollar strength index remained almost unchanged today,
following similar stability yesterday.
The Canadian dollar declined from the previous day after the
Bank of Canada cut interest rates for the second consecutive meeting and hinted at more easing.

 

 

Halt of the Tech Boom

After leading stock gains for most of 2024, major tech companies hit a wall.
Traders shifted from significant companies to declining stocks in the market,
driven by bets on U.S. interest rate cuts and concerns that AI still needs to prove its worth.
Adam Crisafulli from Vital Knowledge said: “The problem with tech companies is not just that earnings are less than ideal,
but their stocks remain stuck due to the speed of portfolio reshuffling that began with the release of the June CPI.”

 

Decline in Asian Markets

Asian stocks rise ahead of the US inflation Rate

Asian stocks rise ahead of the US inflation Rate: Ahead of the U.S. inflation update and a Federal Reserve decision on interest rates and the possibility of reducing them next year, Asian stock futures rose.

 

Topics

A week full of economic events

Asian markets
US Consumer Price Index

Japanese yen rebound

 

 

A week full of economic events

Today, Tuesday, the consumer price index in the United States will be announced,
which is expected to give Wall Street a sense of whether the deflation is continuing.
This is one day before the Federal Reserve’s last scheduled decision for the current year,
with high expectations for officials to maintain interest rates and announce a summary of economic expectations.
Here, the question arises about the Fed’s intention to ease policy expectations after aggressive investor repricing.

Charo Chanana, market strategist at Saxo Markets, said,
“If the CPI and Fed data confirm no rise in interest rates, this week could be the best for Asian markets.”
“It may also be key as participants want to pressure monetary, fiscal, and industrial policies to achieve the 2024 growth target.”

 

Asian markets

With the opening of Asian markets, stocks witnessed a rise. In contrast, stock indices in Hong Kong achieved profits,
as investors followed the meeting of economic policymakers in China to learn about its results,
which may indicate the size of the expected stimulus next year. While US stock futures were flat.

The MSCI Asia-Pacific Index was flat for two days.
Technology stocks were the best performers after the gains achieved by
their American counterparts pushed the Philadelphia Semiconductor Index to its highest closing level since January 2022.

China’s 2023 Central Economic Work Conference is set to conclude its work today,
Tuesday, with the meeting expected to release its conclusions.about the importance of a more proactive role in fiscal policy,
and it also includes more early financing of financing
and strengthening implementation to improve the effectiveness of policies.

 

 

 

US Consumer Price Index

 

The US Consumer Price Index is expected to stabilize at 0% due to the decline in energy prices,
with the monthly core inflation rate at 0.3%, according to economists.
In a survey conducted by 22V Research,
it was found that about 46% of the survey participants believed that
the opening price index will not have an impact on the market reaction,
and 28% are betting on a “risk off” event, and only 26% see a “risk off” response.

“The sharp decline in short-term inflation expectations was due to the recent decline in energy prices,”
said Anna Wong and Stuart Paul of Bloomberg Economics.
“This allows the Fed to consider rate cuts as downside risks
to activity and upside inflation risks become more balanced.”

 

Japanese yen rebound

Meanwhile, the yen rebounded from its biggest decline in more than a month on Monday
due to a report from the Bank of Japan that they saw no need to rush to eliminate negative interest rates.
The sale of five-year Japanese government bonds was achieved at a higher price than expected,
Indicates significant demand as speculation subsides
the Bank of Japan’s possible exit from the negative interest rate regime.

Producer prices in Japan fell in November to their lowest level in three years,
underscoring the Bank of Japan’s view that inflationary pressures are moderating.

“USD/JPY pared much of its December 7 decline,
“Bearish positions are easing as traders reassess earlier optimistic forecasts that may have been exaggerated.”
said Jun Rong Yip, market analyst at IG Asia Pte.
“This comes as Bank of Japan officials continue to seek condemnation
on the requirement for wage growth to be confident of meeting ‘sustainable inflation’ as the policy focus.

Oil started the week with a new decline and Asian markets are trading in different directions

Oil started the week with a new decline and Asian markets are trading in different directions

Oil started the week with a new decline and Asian markets are trading in different directions :Uncertainty still hangs over global markets, including the oil market.

With recent data on U.S. inflation and other factors, investors are still rushing to invest in risky assets.

Evest follows market developments in the following report.

Topics:

Oil declines and loses most of last week gains

Multiple dynamics in Asia and Wall Street had a key role

Johnson & Johnson’s stocks and AMC are rising

Ali Baba and JD.com are rising because of the Singles’ Day Sales 

 

 

Oil declines and loses most of last week gains

Oil prices fell on Monday, while Brent crude fell below $82 per barrel.

Prices are under pressure by the dollar appreciation, worsening OPEC demand prospects and the potential for increased intervention by US authorities in the oil market,
according to Trading Economics.

Brent crude futures for January on the London Futures Exchange fell by $0.39 (0.47%), to $ 81.78 per barrel. 

On Friday, Brent price fell by $0.7 (0.8%) – to $82.17 per barrel.

By this time, December futures for West Texas Intermediate crude were cheaper in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.37 (0.46%), to $80.42 per barrel. 

During the previous session, the future fell by $0.8 (1%) to $80.79 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC), in its monthly oil market report,
did not change the outlook for oil demand growth in 2022 – at 4.2 million barrels per day,
but has diminished the prospects for demand growth for the current year by about 160 thousand barrels per day, to 5.7 million barrels per day, citing the impact of rising prices.

In the meantime, the American politicians continue to urge U.S. President Joe Biden and his administration to use oil reserves or suspend exports.

The appreciation of the US dollar, linked to higher inflation, has also led to lower oil prices.

The appreciation of the dollar results in a decrease in the purchasing power of market participants using other currencies.

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Multiple dynamics in Asia and Wall Street had a key role

Stock indices in the Asia-Pacific region show multi-directional dynamics on Monday. Japan’s Nikkei 225 is rising by 0.42%, while China’s CSI 300 is falling by 0.29%.

US S&P 500 futures are close to the previous day’s closing.

US stock indices rose on Friday.

Meanwhile, according to the results of the entire last week, the Dow Jones index lost 0.6%, the Standard & Poor’s fell by 0.3% and the Nasdaq index – 0.7%. 

Prior to that, the three indicators were completed “in the positive zone” for four weeks in a row.

Inflationary concerns and growth in government bond yields have a negative impact on investor morale.

However, there remains optimism about corporate profits despite continued supply chain turmoil.

The University of Michigan said on Friday that forecasts for this month’s inflation in the United States over the medium term (next year) rose to 4.9% from 4.8% in September.

 Meanwhile, the consumer confidence index that was calculated in November fell to the lowest level in the last 10 years – to 66.8 points from 71.7 points in the previous month. 

This came as a surprise to analysts who had predicted an average increase of 72.4 points.

US stock indices rose on Friday, while the Dow Jones industrial index exceeded 36 thousand points.

However, according to the results of the entire last week, it lost 0.6%, the Standard & Poor’s fell by 0.3% and the Nasdaq index 0.7%. 

Prior to that, the three indicators “in the positive zone” were completed for four weeks in a row, according to data from FactSet.

Inflationary concerns and growth in government bond yields have a negative impact on investor morale.

However, there remains optimism about corporate profits despite continued supply chain turmoil, according to MarketWatch.

According to some analysts, consumer confidence data were disappointing and potentially linked to inflationary forecasts.

However, she said that corporate profits were strong and third-quarter results were better than expected.

 

Johnson & Johnson’s stocks and AMC are rising

Johnson & Johnson has announced plans to split into two publicly traded companies.

The company will split the high-yield, risky pharmaceutical and medical device business into one company and the well-known,
and slow-growing consumer health care business into another. 

Based on this news, Johnson & Johnson stocks rose by 1.2% on Friday.

On the other hand, Adam Aron, CEO of AMC Entertainment, announced that the company has started selling movie tickets by accepting Bitcoin,
Ethereum, Litecoin, and Bitcoin Cash.

The cinema operator’s stocks rose by 1.4%.

Ali Baba and JD.com are rising because of the Singles’ Day Sales 

Despite the slow growth of consumer spending in the country due to the Covid-19 pandemic, Chinese shoppers spent $139.1 billion during Singles’ Day, breaking last year’s record.

China’s Ali Baba retailer index declined by 0.6 percent, while its rival JD.com rose by 2.1 percent.

From November 1 to 11, sales on the Ali Baba Group platforms totaled 540.3 billion yuan ($84.5 billion), breaking last year’s record.

Growth was 14%, 93% lower than last year.

JD.com earned 349.1 billion yuan ($54.6 billion) between October 31 and November 11.

It rose by 28%, while in 2020 growth was 32%.

On the other hand, Walt Disney’s stock fell 1.5% on Friday after falling more than 7% the previous day because of the investor disappointment over quarterly figures.

Book Holdings, which owns various travel services, fell by 1.1%.

The company announced the acquisition of Getaroom for approximately $1.2 billion, which provides hotel booking services to companies.