Whalesbook
Global Markets Cool as US Rally Stalls
Global equity markets faced headwinds on Thursday, with Asian shares trading mostly lower and US stock futures declining as Wall Street's initial New Year's rally lost steam. The sentiment shift followed interventions from the US administration that dampened investor optimism.
Tokyo's Nikkei 225 index shed 1.6 per cent, dragged down by technology giants. SoftBank, a prominent tech investor, plummeted 7.6 per cent, while semiconductor equipment maker Tokyo Electron saw a 4 per cent drop. Hong Kong's Hang Seng index lost 1.2 per cent, though Zhipu, a Chinese AI rival, saw its shares surge approximately 15 per cent above its offering price on its trading debut. The Shanghai Composite dipped by nearly 0.1 per cent.
Trump's Housing Edict Sways US Markets
The cautious mood was partly triggered by President Donald Trump's pronouncements on Wednesday, aimed at addressing housing affordability. Trump signaled an intent to block large institutional investors from acquiring single-family homes. This declaration sent homebuilder stocks sharply lower. D.R. Horton shares fell 3.6 per cent, and PulteGroup dropped 3.2 per cent, reflecting immediate market reaction to the policy shift.
In corporate news, Warner Bros. Discovery officially rejected a revised takeover proposal from Paramount. The company advised its shareholders to favor an existing offer from Netflix. Warner Bros. Discovery shares edged up 0.4 per cent, while Netflix saw a marginal 0.1 per cent gain. Paramount Skydance declined 1 per cent.
Oil Jumps on Geopolitical Maneuvers
Oil prices registered gains on Thursday, driven by geopolitical developments. The United States seized two oil tankers as the Trump administration sought to solidify control over Venezuelan oil resources. This action followed earlier statements from President Trump indicating Venezuela might supply additional oil to the US.
Benchmark US crude oil futures rose 0.2 per cent to $56.22 per barrel, and Brent crude climbed 0.3 per cent to $60.22 per barrel. Oil prices have experienced significant volatility this week, influenced by evolving risks associated with the US stance on Venezuela, a nation possessing vast oil reserves.
Mixed Economic Data Leaves Bond Yields Uneven
In the bond markets, US Treasury yields displayed a mixed performance following the release of varied economic indicators. The yield on the 10-year Treasury note decreased to 4.14 per cent from 4.18 per cent, while the two-year yield held steady at 3.46 per cent.
A report indicated a stronger-than-anticipated expansion in US services sector activity for December. However, separate figures concerning the US job market presented a more fragmented picture. November saw a noticeable decrease in job openings posted by businesses and government agencies compared to the preceding month. Another report indicated that businesses added 41,000 jobs in December. Investors await Friday's comprehensive monthly jobs report for December from the US Labour Department.
Early Thursday dealings also saw the dollar weaken against the yen, falling to 156.53 yen from 156.77 yen. The euro, conversely, saw a modest increase, trading at $1.1682 compared to $1.1677.