Asian stock markets fell and gold prices dropped. They opened at a record high this week but declined due to concerns over corporate earnings and trade tensions.
The MSCI Asia ex-Japan equity index hit a record high on Monday along with gold prices, but then fell back by about 0.6%. This reflected the decline in most major Asian stock markets, as investor sentiment in the region largely followed the tense tone of the US stock market. Gold prices dropped by about 0.4%.
This unease stems from both broad macro concerns and more domestic market-specific worries. The Trump administration has indicated it is considering restricting software exports to China, which could lead to a further escalation of trade disputes. But the biggest drops were seen in individual companies: Shares of Pop Mart International Group Ltd., which have more than doubled this year, plunged nearly 11% on Thursday as investors grew concerned about the long-term sales prospects of the toy maker.
The momentum trades that previously led multiple asset classes are now retreating. The greater risk lies in earnings. Strong earnings might stabilize market sentiment, but any disappointing earnings – especially from growth stocks or technology stocks – could exacerbate the current pullback.
In the US, assets favored by retail momentum traders suffered the biggest declines, including precious metals, cryptocurrencies and artificial intelligence stocks. The Nasdaq 100 index dropped 1% after Texas Instruments Inc. issued a disappointing earnings outlook and Netflix Inc. plunged 10%. In the late session, Tesla Inc.’s share price fell despite a surge in sales, as profits fell short of expectations. US stock futures edged higher in Asian trading on Thursday.
Gold prices continued to approach $4,000 per ounce, falling for the third consecutive day. Oil prices rose by about 3% after the United States announced sanctions against Russia’s largest oil producer in an effort to pressure President Putin to negotiate an end to the war in Ukraine.
The yen weakened against the dollar for the fifth consecutive trading day. The yield on the 10-year US Treasury note held steady after falling one basis point to 3.95% on Wednesday. The $13 billion 20-year bond issuance was strong. The dollar index rose 0.1%.
Chinese officials concluded their fourth plenary session in Beijing and are expected to release the meeting minutes later that day.
Goldman Sachs strategist Siu said she “advises investors to think more structurally about the Chinese stock market,” especially in the context of earnings growth. She also told Bloomberg Television that tensions between China and the US “will cause some volatility, but that’s also why we advise investors to buy on dips.”
Technical analysis:
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Gold: On Wednesday and Thursday, the price is attempting to recover the significant pullback left on Monday and Tuesday. We are closely monitoring the performance of the two key resistance levels at 4115/20 and 4150 intraday. If this area is reclaimed, it may trigger a further rebound correction. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: The Trump-style TACO market trend continues to unfold. Due to the marketing of a small article suggesting possible software control, the Nasdaq dropped sharply by nearly 1%. Today, we will continue to adopt the strategy of catching rebounds after low liquidity sweeps, which aligns with the trading characteristics of TACO. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: After stabilizing around 58.50, the price further rebounded and rose back to the 60-61 level. We believe that the pullback within the day should not be too deep. After sweeping liquidity at the 59.80 level, a signal for a continued upward trend may emerge. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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