9/12/2024
Global Financial Market Dynamics: Semiconductor Rivalries, Political Instabilities, and Emerging Opportunities
Semiconductors and Geopolitical Developments
The Biden administration introduced expanded restrictions on advanced chip exports to China, targeting semiconductor equipment and high-performance memory chips. This move is expected to benefit non-Chinese semiconductor firms, with U.S. companies like Applied Materials and Lam Research seeing notable gains. Meanwhile, Intel faced turbulence with the abrupt resignation of its CEO, leading to a 5% drop in its stock price.
South Korean Political Instability
Impeachment proceedings against President Yoon Suk Yeol have intensified after his brief imposition of martial law. This turmoil impacted South Korea’s financial markets, with the KOSPI index declining 1.44% and the South Korean won reaching a two-year low before a modest recovery. The iShares MSCI South Korea ETF (EWY) also saw significant losses.
Sector and Asset Class Performance
Technology stocks led the market rally last week, supported by consumer spending growth over Black Friday. Consumer Discretionary gained 3.6%, while defensive sectors underperformed. Growth stocks outpaced value stocks, driven by improving economic indicators. Crude oil saw gains amid Middle Eastern uncertainty following the political destabilization in Syria. Gold remained steady, while the U.S. Dollar strengthened on renewed tariff threats against BRICS countries.
Cryptocurrency Milestone
Bitcoin breached the $100,000 mark, propelled by favorable credit conditions and expectations of crypto-friendly policies under President-elect Donald Trump. Ethereum also surged, reaching $3,908. The Chicago Fed’s National Financial Conditions Index reflected easing liquidity, further supporting the cryptocurrency rally.
Monetary Policy Outlook
China’s shift toward a “moderately loose” monetary policy raised expectations for additional stimulus during the weekend, with Asian equity markets, including Hong Kong’s Hang Seng index, showing gains. In Europe, political instability weighed on sentiment, but the ECB is expected to continue rate cuts, while the Federal Reserve may deliver a 25-basis-point cut at its upcoming meeting (December 17th and 18th).
Looking Ahead
Key data releases, including U.S. inflation figures (December 11th) and the Chinese Economic Work Conference (December 11th and 12th), are expected to shape monetary policy expectations. Investors will monitor geopolitical developments in South Korea and Syria, as well as central bank actions from the ECB, Bank of Canada, and others.
Events
- EU Harmonized Index of Consumer Prices (YoY) (Nov):
Date: December 10, 2024
Time: 07:00 GMT - US Consumer Price Index (MoM) (Nov):
Date: December 11, 2024
Time: 13:30 GMT - US Consumer Price Index (YoY) (Nov):
Date: December 11, 2024
Time: 13:30 GMT - US Consumer Price Index ex Food & Energy (MoM) (Nov):
Date: December 11, 2024
Time: 13:30 GMT - US Consumer Price Index ex Food & Energy (YoY) (Nov):
Date: December 11, 2024
Time: 13:30 GMT - EU ECB Monetary Policy Statement:
Date: December 12, 2024
Time: 13:15 GMT - EU ECB Main Refinancing Operations Rate:
Date: December 12, 2024
Time: 13:15 GMT - EU ECB Rate on Deposit Facility:
Date: December 12, 2024
Time: 13:15 GMT - US Producer Price Index ex Food & Energy (YoY) (Nov):
Date: December 12, 2024
Time: 13:30 GMT - EU ECB Press Conference:
Date: December 12, 2024
Time: 13:45 GMT
IMPORTANT DISCLAIMER
The information in this report is of a general nature only. It is not a piece of personal financial advice. It does not take into account your objectives, financial situation, and personal needs.
a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.
