US debt, but not only. There are many issues on the table on the eve of crucial stock market week for the agreement on the new ceiling on Washington's spending. The negotiation on US debt, as has been the case for more than a century now (the roof was placed for the first time in 1917) is destined to end with an agreement, however painful and troubled it may be. But other matches promise very different emotions.
Who goes up and who goes down in the week of the US debt
First of all, the commodity crisis. The Bloomberg Commodity Index fell to 99,45 points, extending the year-to-date loss to -11,70%. Down virtually all components, from copper, gold, oil, gas. A significant aid in the fight against inflation but which above all reflects the difficulty of China, the factory of the world.
La Chinese stock exchange ended the sixth week in the red of the last seven, slipping to its lowest since the beginning of the year. Several factors play against China, at least in the short term. The post-covid restart is much less exciting than the market expected and tensions over Taiwan have cooled relations with the United States.
Today bag di Hong Kong was closed, after the heavy -2% yesterday, caused by the fall of shares in the electric mobility sector. XPeng and Nio were down nearly -9%. But BYD Auto has announced it is in talks with the French government to build a factory in the Hexagon with the goal of starting production in 2025.
Another bad news for thegerman car. But, if Beijing loses blows, Germany, judging by the performance of the Frankfurt stock exchange close to the maximum, no. But the crisis in economic relations with China is probably the root cause of the fall into recession of the German battleship. In the first four months of the year, German exports beyond the Wall fell by 11,3% while the Eurozone as a whole rose by 2,9%. And significant cracks have opened in a stainless relationship in the years of globalization. Some examples: Volkswagen, which sells more cars in China than at home, reports a 15% drop in sales in the first quarter. It gets worse at Basf -29%, while engaged in a gigantic investment by the Land of the Dragon (10 billion dollars). Mashed potato Bosch, undermined by competition from local producers, marks -9,3%.
Stock Exchange Week: the positive news
The week however also registered positive news which are not escape the markets.
Of course, the tree ofArtificial intelligence. Thanks to purchases on Nvidia and associates, the Nasdaq has taken flight. Today the capitalization of Microsoft and Apple together is worth just under 18% of the entire US market.
But the explosion of Artificial Intelligence has underscored the growing weight of chips of competition between countries. It is no coincidence that the most effervescent price list is the Japanese one which has been rising for seven weeks thanks to the push of purchases on the chip production equipment giant Tokyo electron, which gained 4,4% and on chip-testing machine maker Advantest which has Nvidia among its customers - it was up 3,9% after yesterday's 16% surge - driving the Artificial Intelligence titles.
Triumphal march for South Korea's microchips
Less flashy but no less significant, the march of Kospi, the Seoul stock market, which reached its tenth day of gains on the back of the liquidity inflow to semiconductor stocks and the rally in EV battery stocks.
However, South Korea will soon have to make a very difficult decision in the context of confrontation between the US and China. Beijing has just excluded the American Micron among the suppliers of memories for home telecommunications, trusting to be able to count on the Koreans SK Hynix and Samsung. But Washington, as it has already done with the Dutch Asml and various Japanese companies, could veto or avoid interventions under the banner of derisking, or rather the peaceful coexistence of businesses even in the presence of strong geopolitical contrasts. To be opposed to decoupling, the wall to wall between the two superpowers that is much scarier than the US federal debt ceiling.
