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Good evening,
Thursday was a risk-off day for markets as investors placed greater emphasis on disappointing tech earnings released yesterday after the close and Powell’s hawkish comments rather than the positive US-China trade headlines today. While the tariffs truce brought some optimism, concerns about higher AI spending and uncertainty over further rate cuts in December weighed on sentiment, driving major indexes lower. Today was also active on the monetary policy front with the ECB and BoJ meetings with rates on hold, as well as mega-cap earnings after the bell.
Meta shares plunged 11% as net income fell sharply due to a one-off tax charge and rising capex, and Netflix announced a 10-for-1 stock split, sending shares up 3% in extended trading.
Away from stocks, core bond yields barely moved, the $ appreciated mainly against the ¥, gold closed above $4,000 again, and cryptos fell sharply.
Trade: Trump and Xi Jinping met in South Korea and agreed to lower trade tensions, reducing the average tariff on Chinese goods to around 47%. The US specifically cut tariffs related to fentanyl production to 10%. China committed to buying 12mn metric tons of American soybeans this season and 25mn annually for the next three years, marking a temporary trade truce.
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