I promised you a much shorter commentary this week, and I believe I’ve been true to my word.
The main events across the markets were the whipsawing of prices for precious metals, only to see them largely rebound. They are often deemed safe haven assets, but the price movements this week have certainly been the antithesis of safe havens.
As we know, when a rally becomes extended it is vulnerable to significant pullbacks, and of course, technology/AI stocks are a case in point. This week, we have seen ‘tech stocks’ hit by a new wave of selling. The euphoria is over for now!
The story is even worse for cryptocurrencies; Bitcoin has seen a fall of circa 50% since October last year, and overnight in Asia it touched $60. Ouch!
The rays of light this week are India whose currency and equity markets have risen on the back of the US trade agreement, lowering their levy from 50% to 18%. Then there is infrastructure, which has performed well since the start of the year as the inflation and interest rate outlook improves. It’s also proved resilient during this bout of volatility.
The Bank of England Governor, Andrew Bailey, in his statements this week, appeared to be more optimistic about the possibilities of an interest rate cut in March.
This week’s content:
- US tech stocks experience a fresh wave of selling
- A compelling future for tech though
- Gold and silver regain their poise
- Crypto collapse
- Trade deals good news for India
- Conclusion
US tech stocks experience a fresh wave of selling
This week, US stocks have been hit by a new wave of selling over fears about the impact of AI on software businesses with the sell-off extending to the AI ecosphere.
The Nasdaq 100 suffered its worst three-day correction since April/May’s dramas. A Bank of America analyst commented, “the current indiscriminate sell-off resembles the DeepSeek-driven decline of early 2025, which ultimately proved unfounded.”
Jim Reid, Head of Macro Research at Deutsche Bank, wrote: “Recent months have seen a clear shift in markets from AI euphoria towards more differentiation between companies, and growing concern about its disruption to existing business models.”
Continues…
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Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.
