Whalesbook
Mixed Trading Across Asia
Asian shares presented a mixed picture on Thursday, with South Korea and Australia recording gains while Taiwan and Japan saw declines. US equity-index futures also dipped, following a broader drop in underlying gauges on Wednesday as investors shifted away from technology stocks.
Traders are closely monitoring the ongoing rotation out of tech. Key US economic data has not altered expectations for a Federal Reserve interest-rate cut, now anticipated only around the middle of the year. Asian markets have outperformed Wall Street year-to-date, buoyed by comparatively lower valuations and optimism surrounding artificial intelligence.
Commodities Under Pressure
Crude oil prices registered their first decline in six days, influenced by US President Donald Trump signaling a potential pause in military action against Iran. Precious metals also retreated from recent peaks. Silver slipped 1.3% as Trump held off on imposing new tariffs on critical mineral imports, while gold also saw a retreat.
US Economic Signals and Fed Outlook
The US Supreme Court did not issue rulings on challenges to Trump's tariffs on Wednesday, leaving markets to await a decision on the signature economic policy. The South Korean won edged lower, reversing some of Wednesday's gains that followed verbal support from US Treasury Secretary Scott Bessent regarding excessive currency declines.
The Bank of Korea maintained its benchmark interest rate, a widely predicted decision, as the won weakened 0.2% against the dollar. Attention also focused on Japan, where Prime Minister Sanae Takaichi is expected to call a snap election, a prospect that had previously driven the country's equities higher and pressured the yen.
Small Caps Outshine
Despite the S&P 500 falling on Wednesday amid a broad slide in its 'Magnificent Seven' components, over 300 companies within the index actually rose. Small-cap stocks continued their strong performance, with the Russell 2000 index outperforming the S&P 500 for a ninth consecutive session, marking the longest such streak since 1990.
Macroeconomic data from the US showed retail sales rising in November by the largest margin since July, fueled by auto purchases and resilient holiday shopping. Wholesale inflation picked up slightly due to higher energy costs, though prices for services remained unchanged.