Decline in Asian Markets: Impact of the Fall of American Tech Companies on Stocks, Currencies, and Bonds: Asian markets have significantly declined following
the drop in tech stocks on Wall Street.
This decline reflects the impact of various economic and political factors on stock, bond, and currency markets.

Content

Decline in Asian Stocks

Impact of Tech Companies

Expert Opinions

Stability of the Japanese Yen

Bank of Japan’s Expectations

U.S. Bond Market

U.S. Interest Rates

Performance of the Dollar and Other Currencies

Halt of the Tech Boom

Decline in Asian Stocks Following the Drop in American Tech Companies on Wall Street

The indices of Japan and South Korea fell by more than 2%.
Asian stocks began to decline as investors withdrew from betting on the AI frenzy that fueled this year’s bull market.
Stocks in Japan and South Korea fell by more than 2%, with chipmaker SK Hynix declining despite solid earnings.
The S&P 500 index fell by 2.3% in the United States, its worst performance since December 2022,
Ending its best continuous growth streak without dropping below 2% since the global financial crisis.

Impact of Tech Companies on Markets

The Nasdaq 100 index, dominated by tech stocks, fell by 3.7% due to the decline of the companies it includes.
Alphabet’s stock fell by 5% after it allocated more resources in its quest to outdo competitors in the AI field,
with higher spending than analysts expected.
Tesla’s stock fell by 12% following the loss of earnings and delay in the launch of its “Robotaxi” product, and Nvidia’s stock fell by 6.8%.

Expert Opinions

Peter Boockvar from The Boock Report said: “Investors have finally noticed the huge spending required by AI,
realizing that it requires much more spending at present, not as a revenue source.”

Stability of the Japanese Yen

The yen stabilized today, Thursday, after rising by more than 1% to its strongest level against the U.S. dollar since May,
reflecting a retreat in carry trade deals.
Charu Chanana, head of FX strategy at Saxo Capital Markets,
noted that this move is “likely to put pressure on yen short positions,
given that the current yen-funded trade has been a common strategy over the past few years.”

Bank of Japan’s Expectations

According to BlackRock, which has a pro-Japanese equities investment view,
the Bank of Japan is likely to keep interest rates low for a longer period, supporting stocks in the country.
The Bank of Japan meets later this month.

U.S. Bond Market

In the bond market, Treasury bonds rose today in Asian trading
after the curve steepened in the previous session due to bets that the Federal Reserve is nearing an interest rate cut.
Long-term Australian and New Zealand bond yields also rose.

U.S. Interest Rates

Former New York Federal Reserve President William Dudley called for a reduction in borrowing costs,
A move would be preferred for next week’s meeting.
For many analysts, such a step would be concerning as it suggests officials are rushing to avoid a recession.
Later today, investors in the U.S. will see more evidence of the economy’s health,
as seen by the release of U.S. GDP and initial jobless claims data.

Performance of the Dollar and Other Currencies

The dollar strength index remained almost unchanged today,
following similar stability yesterday.
The Canadian dollar declined from the previous day after the
Bank of Canada cut interest rates for the second consecutive meeting and hinted at more easing.

Halt of the Tech Boom

After leading stock gains for most of 2024, major tech companies hit a wall.
Traders shifted from significant companies to declining stocks in the market,
driven by bets on U.S. interest rate cuts and concerns that AI still needs to prove its worth.
Adam Crisafulli from Vital Knowledge said: “The problem with tech companies is not just that earnings are less than ideal,
but their stocks remain stuck due to the speed of portfolio reshuffling that began with the release of the June CPI.”

Decline in Asian Markets

Decline in Asian Markets

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