Financial Daily: US tech sector sees capitalization drop, Microsoft plunges sharply; restart of China-UK relations draws market attention

- Focus

– China-UK relations set for reset as British Prime Minister visits China for the first time in 8 years

– The US Treasury strengthens exchange rate monitoring standards but finds no evidence of major trading partners manipulating their currencies

– US President Trump plans to announce his pick for the next Federal Reserve chair next week, stating that interest rates are still too high

– The number of Americans filing for unemployment benefits dropped last week, while the trade deficit for November widened by 94.6%

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- Stock Market

[US Market] Mixed performance in the three major US stock indexes, Nasdaq ends its winning streak

The market is particularly focused on whether the massive investments in AI will yield sufficient returns. Concerns over the return cycle of Microsoft's AI investments led to a sharp drop in its stock price, dragging down the broader US market. Funds flowed out of tech stocks and into more economically sensitive stocks, ultimately causing divergent performances in the three major US indexes, with the tech-heavy Nasdaq closing down over 0.7%.

At the close, the S&P 500 Index fell 0.13% to 6,969.01 points; the Nasdaq Index dropped 0.72% to 23,685.12 points; and the Dow Jones Industrial Average rose 0.11% to 49,071.56 points. In terms of sectors, regional bank, banking, and financial sector ETFs all gained more than 1%, while the photovoltaic sector plummeted by 2.81%.

The index of the seven US tech giants fell 0.90%, with Meta surging 10% due to strong earnings, while Microsoft plummeted 10%. The Nasdaq China Golden Dragon Index rose 0.35% to 7,919.48 points. Among popular Chinese stocks, Nio closed up nearly 4%, while Alibaba fell 0.7%.

[European Market] The pan-European index continued its decline on Thursday, with Germany's main index falling over 2%

On Thursday, the pan-European index extended its losses, with Germany's main index closing down over 2%. At the close, the pan-European STOXX 600 Index fell 0.23% to 607.14 points, and the pan-European STOXX 50 Index dropped 0.70% to 5,891.95 points. Hexbo fell 13.87%, Nokia dropped 9.40%, and Puma declined 7.84%.

Germany's DAX 30 Index closed down 2.07% at 24,309.46 points; France's CAC 40 Index closed up 0.06% at 8,071.36 points; the UK's FTSE 100 Index closed up 0.17% at 10,171.76 points.

[Asian Markets] Japan and South Korea indices slightly closed higher

On Thursday, Japan and South Korea’s indices slightly closed higher. By the close, the Nikkei 225 Index was up 0.03% at 53,375.60 points; Japan's TOPIX closed up 0.3% at 3,545.30 points. South Korea’s KOSPI Index closed up 0.98% at 5,221.25 points.

[Hong Kong Market] Mixed performance in Hong Kong's three major indexes, with Hang Seng Tech Index closing down 1%

On Thursday, Hong Kong’s three major indexes showed mixed performance, with the Hang Seng Tech Index closing down 1% due to a general decline in tech and AI stocks. By the close, the Hang Seng Index was up 0.51% at 27,968.09 points, continuing to hit a new high over the past five years; the Hang Seng Tech Index closed down 1.00% at 5,841.10 points; and the Hang Seng China Enterprises Index closed up 0.42% at 9,552.58 points. In terms of sectors, real estate stocks performed strongly, with China Overseas Land & Investment rising more than 6%, while Longfor Group and China Resources Land both gained over 4%. Technology internet stocks generally fell, with Horizonrobot and Huahong Semiconductor both dropping more than 5%.

[A-Share Market] A-shares narrowly traded, with divergent performances among the three major indexes

A-shares were narrowly traded throughout Thursday, with divergent performances among the three major indexes. A sudden surge in liquor stocks helped push the Shanghai Composite Index slightly higher. By the close, the Shanghai Composite Index was up 0.16% at 4,157.98 points; the Shenzhen Component Index closed down 0.30% at 14,300.08 points; and the ChiNext Index closed down 0.57% at 3,304.51 points. In terms of sectors, liquor stocks saw a rare surge, with several stocks including Wuliangye Yibin hitting their upper trading limits, and Kweichow Maotai rising more than 8%. Gold stocks continued their strong performance, with many stocks hitting their upper trading limits, including China Gold’s fifth consecutive limit-up. AI application stocks strengthened, with several stocks including Ince Group and Zhejiang Culture & Creativity hitting their upper trading limits. Semiconductor stocks generally declined, with Ming Microelectronics and others falling more than 7%. Notable declines were seen in sectors related to computing power hardware, commercial aerospace, and humanoid robots.%The index closed at 4,157.98 points; the Shenzhen Component Index fell by 0.30%, closing at 14,300.08 points; the ChiNext Index fell by 0.57%, closing at 3,304.51 points. In terms of sectors, liquor stocks saw a rare surge, with multiple stocks like Wuliangye hitting the daily limit, and Kweichow Moutai rising over 8%; gold stocks continued their strong performance, with several stocks hitting the daily limit, and China Gold achieving five consecutive limits; AI application stocks strengthened, with multiple stocks like Sai Group and Zhejiang Wenlian hitting the daily limit. Semiconductor stocks generally declined, with stocks like Mingwei Electronics falling over 7%, and sectors such as computing hardware, commercial aerospace, and humanoid robots experiencing significant declines.

– Bonds

[US Treasuries] US Treasury yields fall as investors await key economic data next week

US Treasury yields fell as investors awaited the release of the non-farm payroll report next week. In late New York trading, the yield on the 10-year US Treasury note fell 1.2 basis points to 4.235%; the yield on the two-year US Treasury note fell about 2 basis points to 3.561%.

[Non-U.S. Bond Markets] European government bond yields generally declined.

European bond yields generally fell on Thursday. In late European trading, the yield on Germany's 10-year bond dropped by 1.7 basis points to 2.840%, while the yield on Germany’s two-year bond declined by 1.7 basis points to 2.083%. The yield on France's 10-year bond fell by 0.9 basis points.

[China Bond Market] Treasury futures closed higher across the board on Thursday

On Thursday, treasury futures maintained strong performance and closed higher across the board. By the close, the 30-year main contract rose 0.07%, the 10-year main contract rose 0.06%, the 5-year main contract increased by 0.01%, and the 2-year main contract remained unchanged from the previous trading day.

– Foreign Exchange

[US Dollar] US Dollar Index weakened

The US Dollar Index weakened, with the daily trend showing an inverted V-shape. In late New York trading, the ICE US Dollar Index fell 0.21% to 96.245 points, and the Bloomberg US Dollar Index dropped by 0.12% to 1,178.02 points.

[Non-US Currencies] The US dollar weakened against most major currencies, with the yen rising about 0.2%

On Thursday, the US dollar weakened again against most major currencies. In late New York trading, the US dollar fell about 0.2% against the yen, to 153.055 yen. The euro rose about 0.5% against the US dollar, to 1.196 dollars.

[Renminbi] The offshore renminbi exchange rate stood at 6.9447 yuan per US dollar

In late New York trading, the offshore renminbi exchange rate against the US dollar was down 10 points from the previous trading day, closing at 6.9447 yuan. The onshore renminbi exchange rate against the US dollar fell 7 points from the previous trading day, closing at 6.9460 yuan.

[Cryptocurrency] Cryptocurrency market plummeted, with Bitcoin falling sharply by 6%

The virtual currency market plunged on Thursday, with Bitcoin falling 6% to a near two-month low, closing below $84,000; Ethereum fell 7%, dropping below $2,800.

- Commodities

[Energy] Crude oil futures prices rose for the third consecutive session

Political tensions between the US and Iran drove crude oil prices up for the third consecutive session, as the market worried about further escalation in Iran impacting global crude supply. In late US trading, Brent crude futures rose about 3.4%, settling at $70.71 per barrel, while US crude futures climbed about 3.5%, settling at $65.42 per barrel.

[Precious Metals] Gold and silver prices fluctuated sharply, ending gold's winning streak

Precious Metals:Gold prices saw volatile trading on Thursday, surging 3.3% in early trading before plunging nearly 9%, then narrowing losses. In late New York trading, spot gold fell about 0.1%, to $5,394.88 per ounce, while US gold futures dropped about 0.3%, to $5,318.40 per ounce.

Metals Futures Market:Silver prices, like gold, plummeted after rising in early trading but rebounded in late trading. In late New York trading, spot silver fell 0.61%, to $116.0075 per ounce, while US silver futures rose 2.87%, to $116.790 per ounce. Spot platinum fell 2.65%, and spot palladium dropped 2.34%.

[Disclaimer]

The above content is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office") and is compiled from market information sourced from various channels. Neither Harbor Family Office nor its group members participated in the preparation of the content, nor have they expressly or implicitly endorsed or approved the content. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently evaluate and judge this material and are advised to consult professionals before making any investment or trading decisions. Without authorization, no one may reproduce, copy, or publish the content in whole or in part to the public by any means. Copyright belongs to Harbor Family Office and related providers.

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