Commercial Optimism Pushes Global Stock Indices Higher
Stock indices in Asian and European markets rose during Wednesday’s trading session,
supported by investor optimism about the potential breakthrough in trade negotiations between the United States and China,
in addition to market anticipation of tomorrow’s European Central Bank meeting.
Indices closed higher for the first time in four sessions, with the Nikkei 225 rising 0.8% to close at 37,747 points,
supported by gains in technology stocks. The Topix index also climbed 0.5% to 2,785 points.
In the bond market, the yield on 10-year government bonds rose to 1.501%, while the dollar stabilized against the yen at 143.97.
China
Gains in technology and rare earth metals companies supported the rise in stock indices.
The Shenzhen Composite closed up 0.9% at 1,999 points, while the Shanghai Composite gained 0.4% to reach 3,376 points.
The CSI 300 index also rose by approximately 0.45% to close at 3,868 points.
These movements came amid market anticipation of a potential call this week between Presidents Trump and Xi Jinping to revive trade talks.
Europe
Stocks rose amid declining government bond yields in Germany, Italy, and the United Kingdom,
ahead of the European Central Bank meeting, which is expected to result in a 25-basis-point interest rate cut. The Stoxx Europe 600 index increased by 0.2% to 549 points,
while Germany’s DAX added 0.55% to close at 24,220 points.
France’s CAC 40 rose by 0.25% to 7,781 points,
and the UK’s FTSE 100 remained steady at 8,786 points.
Airbus shares gained 2.8% following news that Chinese airlines are planning large purchase orders from the company next month,
signaling a potential rebound in the aviation sector.
Commercial Optimism Pushes Global Stock Indices Higher
U.S. Assets and Asian Stocks Rise After Trump Tariff Freeze: U.S. assets rebounded Thursday after
The U.S. Court of International Trade ruled that President Donald Trump’s reciprocal tariffs were unlawful and suspended.
Strong earnings from Nvidia further boosted investor sentiment.
Futures on the S&P 500 and Nasdaq 100 rose by 1.7% and 2.1%, respectively,
following the court ruling, which the Trump administration announced it would appeal.
Asian stocks also rose by 0.2%, with a 1.2% gain in Japanese shares.
Simultaneously, the U.S. dollar index climbed to its highest level in over a week,
the 10-year Treasury yield rose by two basis points, and the yen fell by 0.8% against the dollar.
In after-hours trading in New York, Nvidia shares jumped nearly 5%
After the company issued strong revenue guidance, boosting investor sentiment.
Court Ruling Offers Temporary Relief
The ruling gave investors a temporary breather after a wave of intense selling
triggered by Trump’s April 2 announcement of record-high tariffs to restructure the global trade system.
The move, along with Trump’s tax cut plans,
raised widespread concerns about the impact of a trade war on global growth.
Billy Leung, Chief Investment Strategist at Global X ETFs in Australia, said:
“The ruling is viewed more as a morale booster than a structural shift.”
It “removed a tactical risk ahead of the critical July deadline,
Though positioning data and sentiment indicators still reflect investor caution.”
Eyes Turn to the Supreme Court
Three judges from the U.S. Court of International Trade in Manhattan
ruled in favor of Democrat-led states and a group of small businesses,
arguing that Trump had misused emergency powers to justify specific tariffs.
The U.S. Supreme Court could hear the case, which could issue a final decision
ruling with far-reaching implications for trillions of dollars in global trade.
The ruling suspends most of Trump’s tariffs, including reciprocal tariffs imposed
on China and fentanyl-related tariffs on China, Canada, and Mexico.
However, it does not affect tariffs imposed under other authorities,
such as Section 232 and Section 301, which cover steel, aluminum, and automobiles.
Tim Waterer, Chief Analyst at KCM Trade in Sydney, commented:
“Any disruption to Trump’s tariff agenda is typically a positive sign for markets.”
“Risk assets like stocks are expected to respond to this development.”
Dollar Regains Some Momentum
The dollar rose by up to 0.4% during Thursday’s Asian trading.
It had dropped more than 7% from its February peak due to the trade war’s effect on investor confidence.
Mingzi Wu, a currency trader at StoneX Financial in Singapore, said:
“The dollar was heavily sold due to tariffs,
So even a slight improvement in the trade outlook justifies this rebound.”
Nvidia Lifts Markets, HP Drops
Nvidia CEO Jensen Huang reassured investors regarding the slowdown in China,
affirming that the AI-powered computing market is still set for “tremendous growth”,
backed by strong sales forecasts.
By contrast, shares of HP Inc. fell nearly 8% in extended trading after earnings forecasts missed expectations.
The company also lowered its annual guidance,
citing a weaker economy and continued U.S. tariffs on Chinese goods.
Tesla’s Robotaxi Launch and Chip Design Restrictions
Reports that the Trump administration plans to restrict chip design software exports
to China led to a sharp drop in Cadence Design Systems and Synopsys shares.
Meanwhile, reports indicated that Tesla plans to launch its self-driving “Robotaxi” service in Austin, Texas, on June 12.
Trump Defends His Strategy
Trump reacted angrily to claims that Wall Street believes
He has no intention of following through with his tariff threats, saying:
“That’s called negotiating,” explained, “I start with a very high number, then go lower as talks progress.”
U.S. Assets and Asian Stocks Rise After Trump Tariff Freeze
Asian Stocks Rise Following Fed Decision and Tech Earnings: Asian stocks saw a slight increase on Thursday as investors assessed the Federal Reserve’s decision
to pause interest rate hikes and the earnings reports from major U.S. tech companies.
At the same time, the Japanese yen strengthened ahead of a speech by a central bank official.
Japanese stocks rebounded after an earlier decline, helping to boost the broader Asian stock index.
However, several major regional stock markets,
including Hong Kong, mainland China, and South Korea, remained closed due to the Lunar New Year holiday.
Now, the focus shifts to a speech by Bank of Japan Deputy Governor Ryozo Himino,
scheduled for 3:10 PM Tokyo time.
Last week, the Bank of Japan raised interest rates,
and traders believe that the Federal Reserve’s indication of a cautious approach
Rate cuts could give Himino room to adopt a more hawkish stance.
Shoki Omori, global strategist at Mizuho Securities in Tokyo, stated: “Himino has the opportunity to take a more optimistic view on further rate hikes,
and he may even adjust the language in the latest monetary policy statement.
Given that markets are not pricing in immediate rate hikes,
the yenwill likely strengthen quickly if Himino’s speech sounds hawkish about Japan’s economy and inflation.”
Tech Stocks Movements
According to an Asia-based currency dealer,
the Yen gained up to 0.5% against the dollar as fast-money traders placed bets on it.
During the U.S. trading session, investors in the region had plenty to consider,
though no clear direction emerged for the markets.
The Federal Reserve’s decision to keep interest rates unchanged was widely expected,
while earnings reports from major tech companies IBM, Meta, Microsoft,and Tesla sent mixed signals to investors.
Tesla’sshares rose after the company stated that it expects an increase in car sales this year following a challenging 2024, Meta’sstock rebounded after an initial dip post-earnings announcement, IBMshares surged due to better-than-expected sales and earnings, Microsoftshares declined due to slower growth in its cloud
computing business during the last three months of the previous year. Meanwhile, SoftBank shares fluctuated following
a report that the company is considering a $25 billion investment in OpenAI. Recent volatility among tech giants has been a major concern for Wall Street.
The performance of the S&P 500 has become increasingly dependent on a small number of companies,
a trend not seen in over twenty years. According to Michael Hartnett, a strategist at Bank of America,
data shows that less than one-third of S&P 500 companies have outperformed the index in the past two years.
U.S. futures showed slight gains, suggesting a potential recovery of major indexes after Wednesday’s small declines.
Fed’s Language Shift
Some traders searched for signals in the Federal Reserve’s statement,
as it removed a reference to progress toward its 2% inflation target.
Fed Chair Jerome Powell later clarified that this was simply
a shorter version of a previously longer statement, not an indication of a shift in monetary policy.
Win Thin, head of global market strategy at Brown Brothers Harriman in New York, commented: “I find it hard to believe, especially since the Fed knows that markets scrutinize every word and sentence.”
The dollar fell against a Bloomberg-tracked basket of currencies,
though it remained stable against the Euro and the British pound.
Reserve Bank of Australia Assistant Governor Brad Jones is set to speak on Thursday,
following weaker-than-expected inflation data for Q4.
According to Bloomberg Exchange data,
while traders have increased bets that the central bank may begin cutting rates next month,
markets have yet to fully price in a 25 basis-point cut.
Oil Prices Stability Amid Uncertainty Over U.S. Trade Policies
Oil prices remained stable in the commodities market as investors awaited more clarity on U.S. trade policy plans.
This comes after Donald Trump’s Commerce Secretary nominee stated that
Canada and Mexico might be able to avoid new tariffs under the next administration’s trade policies.
Asian Stocks Rise Following Fed Decision and Tech Earnings
Stock Recovery and Dollar Stability The Asian markets witnessed a notable recovery, with regional markets improving and the dollar showing relative stability.
Regional Index Rises 0.7% Amid Gains in Japan, South Korea, and Australia Asian markets recorded significant growth as the regional stock index rose by 0.7%,
supported by gains in Japan, South Korea, and Australia.
This performance followed a robust two-day rally in Wall Street.
Meanwhile, Chinese stocks showed mixed trends with mainland fluctuations,
and Hong Kong stocks saw slight declines at the start of trading.
Tensions between the United States and China impacted major companies like “Tencent Holdings,” whose shares fell by 7%,
and “Contemporary Amperex Technology,” which dropped 6% after being blacklisted by the U.S. Department of Defense.
Contract Stability
Global Market Recovery Amid Mixed Expectations U.S. futures remained stable during Asian trading after major indices such as the S&P 500 and Nasdaq 100 posted gains of 0.6% and 1.1%, respectively.
Nvidia reached a new record high, reflecting ongoing optimism in the technology sector.
In the currency market, the Dollar Strength Index trimmed its losses following reports suggesting a potential easing of U.S. tariffs
, later denied by former President Donald Trump.
The dollar stabilized in Asian trading, while the Japanese yen fell to its weakest level since July 2024,
with further declines anticipated ahead of U.S. jobs data.
Year Outlook
Prospects for 2025: Optimism and Caution Market experts predict that the new year will require more disciplined investment strategies.
Mark Hackett from “Nationwide” noted that the “buy-the-dip mentality remains strong”
but cautioned against over-reliance on tech stocks for significant gains.
Additionally, global credit markets continue to rebound,
with the Asia-Pacific region selling $7 billion worth of bonds in a single day,
signaling strong activity in the global debt market.
Elsewhere, Bitcoin surpassed the $100,000 mark, while oil prices rose after a six-session decline.
U.S. employment data, expected on Friday,
could provide insights into labor market trends and the Federal Reserve’s monetary policy directions in the coming months.
Tesla Makes a Leap in Market Value to $1.25 Trillion, Musk’s Wealth Increases Tesla’s stock surged during last week’s trading, solidifying its position among the world’s largest companies
by market value, reaching $1.25 trillion and setting a new record.
The stock of Tesla, led by billionaire Elon Musk,
closed with a 5.35% increase at $389.22 per share,
marking the highest closing price since January 3, 2022, when it reached $399.93. With this rise, Tesla’s market value again surpassed the $1.2 trillion threshold,
reaching $1.249 trillion at the end of trading, breaking its previous record of $1.235 trillion on November 4, 2021. These gains boosted Musk’s wealth by 3.25%, equivalent to $11.1 billion,
bringing his total fortune to $354.9 billion.
This solidifies his position at the top of Forbes’ list of the world’s richest people,
widening the gap between him and second-place billionaire Jeff Bezos to $114.1 billion.
Japan
Japanese Stocks Rise on Interest Rate Hike Expectations and Yen Weakness Japanese stocks ended Monday’s trading on a high note,
supported by expectations that the Bank of Japan
during its December meeting, interest rates will be raised following
an upward revision of third-quarter economic growth data,
alongside the yen’s decline against the dollar. The Nikkei Index rose by 0.18%, equivalent to 69 points, closing at 39,160 points,
while the broader Topix Index climbed 0.27% to reach 2,734 points.
Cabinet Office data showed that Japan’s GDP grew by 1.2% annually in the second reading for Q3,
compared to 0.9% in the initial estimate,
increasing the likelihood of the Bank of Japan continuing
its monetary tightening at its next meeting on December 18–19.
However, private consumption data was revised lower, showing a 0.7% increase compared to the previous 0.9%. Support for Japanese stocks also came from the dollar’s 0.1% rise against the yen,
reaching 150.15 yen.
However, the semiconductor sector underperformed,
limiting market gains.
Advantest shares dropped 4.71% to close at 8,400 yen,
marking the deepest loss among Nikkei stocks, following e-commerce firm Zozo, which fell by 5%.
Tesla Makes a Leap in Market Value to $1.25 Trillion, Musk’s Wealth Increases
Chinese Markets Decline Amid Interest Rate Hold and Potential Trade Tensions with the U.S.
Chinese markets saw a decline at the close of trading on Monday,
influenced by the central bank’s decision to maintain interest rates on medium-term loans,
alongside rising concerns about a potential trade war with the United States.
Additionally, stocks in Hong Kong fell to their lowest levels in two months.
The CSI 300 index closed 0.46% lower at 3,848 points, its lowest level since last October.
Meanwhile, the Shanghai Composite Index saw a slight drop of 0.11%,
closing at 3,263 points after hitting a three-week low.
Conversely, the Shenzhen Composite Index rose by 0.4% to 1,974 points,
while Hong Kong’s Hang Seng Index lost 0.41% to close at 19,150 points, erasing gains made since September.
Technology
The technology sector led the declines, with the chipmakers’ index dropping by 1.3%.
Similarly, the STAR 50 index, which focuses on technology companies, fell by 1.2%.
On the other hand, the index of renewable energy vehicle manufacturers rose by 1.6%,
supported by reports suggesting that Brussels and Beijing are nearing an agreement on tariffs for Chinese electric vehicles.
The People’s Bank of China kept the interest rate on medium-term loans at 2%,
while last week it maintained the one-year and five-year lending rates at 3.1% and 3.6%, respectively.
In the currency market, the U.S. dollar held steady at 7.2458 yuan.
Chinese Markets Decline Amid Interest Rate Hold and Potential Trade Tensions with the U.S.
Asian Stocks Performance Varies Amid Dollar Reaching Highest Level in a Year:
Asian markets witnessed a mixed performance in stock prices, with Japanese and Chinese stocks rising,
while stocks in the rest of the region declined.
Meanwhile, the dollar continued to climb, nearing its highest level in a year.
Chinese stocks rose after reports indicated that authorities plan to
cut taxes on home purchases to help revive the struggling real estate sector.
Meanwhile, U.S. stock futures remained stable after the S&P 500 posted gains for the fifth consecutive day.
Additionally, Bitcoin saw a record-breaking surge, exceeding the $89,000 mark.
Market Response to Stimulus Package
Investors are still assessing the impact of Beijing’s stimulus package, which was announced last Friday.
The package eased some of the local government’s debt burden.
However, it fell short of the broader financial support many investors hoped for.
Data released from China on Monday showed that credit expansion slowed more than economists had expected last month.
USA
U.S. Policy in the Spotlight
Rajeev De Mela, Chief Investment Officer at Gama Asset Management,
emphasized the importance of upcoming changes in U.S. policies,
noting that resolving trade issues with China is equally critical.
Bonds and Dollar Performance
U.S. Treasury yields in Asian markets fell after being closed on Monday due to a U.S. holiday.
The Bloomberg Dollar Index rose for the third consecutive day,
while oil prices remained largely unchanged following their biggest drop in two weeks.
Japan
Japanese Support for the Technology Sector
In Japan, Prime Minister Shigeru Ishiba announced a plan to support
the semiconductor and artificial intelligence sectors with more than $65 billion over the next decade.
This initiative aims to boost both domestic and international investments.
Shares of Renesas Electronics Corporation rose after the Japanese market opened following the announcement.
Expectations for a U.S. Market Rebound
A report from JPMorgan suggested that U.S. stocks could see a larger recovery
by the end of the year, following Trump’s victory in the presidential elections,
compared to the recovery after his first win eight years ago.
Strategist Ed Yardeni raised his forecast for the S&P 500,
predicting that it could reach 10,000 points by the end of the decade,
reflecting growing optimism on Wall Street following the U.S. elections.
Asian Stocks Performance Varies Amid Dollar Reaching Highest Level in a Year
Gold Prices Near Record High Amid Data Supporting Rate Cuts: Gold prices remained near a record high,
as upcoming U.S. data is expected to provide clues on
whether the Federal Reserve’s 50 basis point rate cut last week will be the first in a series of significant reductions.
Gold Prices Near Record High Ahead of Data That Could Bolster Major Rate Cuts
Gold prices hovered near a record high as markets anticipated upcoming U.S. data.
to provide clues on whether the 50 basis point rate cut by the Federal Reserve
last week will be the first in a series of significant reductions.
On Friday, bullion traded near $2,620 per ounce after hitting a record high of $2,625.77 per ounce.
A batch of economic data, including the U.S. personal consumption expenditure gauge and jobless claims,
is set to be released later this week.
Federal Reserve Board member Christopher Waller said on Friday that he will likely support
quarter-point cuts at the central bank’s upcoming policy meetings
in November and December if the economy evolves as expected.
However, he noted that another half-point cut could occur if the labor market weakens.
Asian Stocks Rise Amid Anticipation of Stimulus to Support Chinese Economy
Asian stocks rose amid expectations that China may introduce more stimulus
to revive the world’s second-largest economy after the U.S. started a monetary easing cycle,
while gold prices are approaching a record high.
The MSCI Asia Pacific Index advanced, with stocks rising in China, Hong Kong, and South Korea.
U.S. stock futures also climbed. On Tuesday,
China announced a rare economic briefing by three top financial regulators as it cut one of its short-term interest rates,
fueling speculation that a new stimulus plan could be announced.
Oil Prices Rise After Weekly Gains Amid Escalating Middle East Conflict
Oil prices rose after a second consecutive week of gains
as the market focused on the escalating conflict between Israel and Hezbollah.
Brent crude neared $75 per barrel after gaining 4%,
marking its most significant weekly rise since April,
while West Texas Intermediate (WTI) was traded above $71 per barrel.
Hezbollah launched around 115 rockets, shells, and drones toward northern Israel on Sunday,
prompting counterattacks against the Iran-backed group in Lebanon.
The escalation—and concerns it could draw in Iran (a member of OPEC)—brought back the risk premium in oil,
helping Brent surge more than 8% from its lowest level since 2021, which it reached earlier this month.
However, hopes that the Federal Reserve’s rate cut last week would boost consumption remained
subdued due to concerns over the deteriorating outlook for fuel demand,
which has made hedge funds the most bearish on diesel ever.
Gold Prices Near Record High Amid Data Supporting Rate Cuts
Asian Stocks Slide on U.S. Slowdown Concerns: Asian stocks fell to their lowest levels in three weeks on Monday,
led by declines in Japan after U.S. jobs data intensified fears
that the Federal Reserve may have delayed cutting interest rates for too long.
Asian Stocks Drop as U.S. Economic Slowdown Concerns Worsen
Asian stocks fell to their lowest levels in three weeks on Monday, led by declines in Japan,
after U.S. jobs data intensified fears that the Federal Reserve may have delayed cutting interest rates for too long.
Japan’s Nikkei 225 index dropped to its lowest level in a month as recent gains
in the yen impacted the profit outlook for export companies amid slower-than-expected economic growth.
Australia and South Korea stocks also recorded losses, pushing the Asia-Pacific stock index to its lowest since August 16.
The yen, which had previously risen due to the Bank of Japan’s interest rate
hike in July and expectations of a Federal Reserve rate cut traded below 143 yen per dollar.
Markets Await U.S. Inflation Data
Traders are awaiting U.S. inflation data this week amid growing concerns that the Federal Reserve
may have delayed rate cuts too long as recession risks rise.
Treasury Secretary Janet Yellen sought to calm fears over the weekend,
saying she saw no “warning signs” in the financial system.
She reiterated her view that the U.S. economy had achieved a soft landing despite slowing job growth.
In contrast, Federal Reserve Governor Christopher Waller said he was “open” to the possibility of a larger rate cut.
European Central Bank Prepares for Another Rate Cut Ahead of Fed Decision
The European Central Bank will likely cut interest rates on Thursday
in preparation for a U.S. move the following week as the global monetary cycle shifts toward more synchronized easing.
Eurozone officials have indicated they will deliver a second reduction in borrowing costs following the cut in July,
which will be closely watched by investors seeking policy signals for further actions later this year. At least one more cut is expected in 2024.
After the Bank of Canada cut its interest rate on September 4,
the timing of the European Central Bank meeting,
days before the expected initial reduction by the Federal Reserve on September 18,
underscores how major advanced economies are now pivoting more toward supporting economic growth as inflation risks fade.
Profit-Taking Puts Pressure on Gold: Goldprices declined during Tuesday’s trading as profit-taking increased
after the metalreached its highest level in over a week.
Profit-Taking Puts Pressure on Gold and Key Data That Could Push Prices to This Level
Goldprices fell during Tuesday’s trading as profit-taking increased after the metalreached its highest level in over a week.
Meanwhile, market participants await key U.S. inflation data
that may provide further insights into the Federal Reserve’s next monetary policy decision.
Gold at Monday’s Close:
Goldfutures prices extended their gains on Monday, with increased demand
For safe-haven assets amid renewed geopolitical tensions and expectations
that the Federal Reserve may end its tightening cycle in September.
At the close, December gold futures rose by 1.25% or $30.6 to $2,504 per ounce,
marking a new record high for the most actively traded goldcontract for the second time this month.
Asian Stocks Recover Losses After Last Week’s Setback
Asian stocks rose, fully recovering their losses from last week,
supported by the advancement of Japanese stocks.
Japanese stocks surged after the holiday,
boosted by a weaker yen.
The MSCI Asia-Pacific index climbed by as much as 1%,
erasing the losses incurred last week when risk aversion led to global stock indices collapsing.
The U.S. stock volatility index “VIX” (which reflects investor anxiety and fear) spiked above 65 points at one point,
compared to its historical average of about 19.5 points.
Expected 0.2% Increase in U.S. Overall and Core Inflation for July Compared to June
Inflation in the United States may have risen slightly in July,
but not to the extent that would prevent the Federal Reserve from cutting interest rates,
a move widely expected next month.
The Consumer Price Index is expected to increase by 0.2% from June for both the overall and core inflation,
which excludes food and energy.
While both are expected to accelerate compared to June,
they are expected to rise at the slowest annual pace since early 2021.
