journalfront

Futures

S&P 500 Futures Flat After New Record Close: Live Updates

2024-12-03

U.S. stock futures showed a relatively flat trend on Tuesday night. The S&P 500 had just posted a new record close, with futures tied to it adding a mere 0.1%. Nasdaq 100 futures advanced by 0.2%, while Dow Jones Industrial Average futures rose 86 points or 0.2%. During the regular session, the S&P 500 inched up by 0.05%, and the Nasdaq Composite added 0.4%, both closing at records. However, the 30-stock Dow was the laggard, with a decline of nearly 0.2%.

December Trading Month and LPL Financial's Outlook

The major averages had a tepid start to the December trading month compared to their strong November advance following Donald Trump's victory at the polls. According to LPL Financial portfolio strategist George Smith, the rally is likely to pick up again this month. "Turning the calendar ahead to December, momentum could continue for stocks as historically it has been a good month for stock market seasonals," he said. "These strong returns are historically often back-end loaded."

Impact of Labor Market Data

Labor market data, particularly the November payrolls report due on Friday, could shape the next stage of the rally. Data issued on Tuesday showed that job openings totaled 7.74 million in October, topping economists' forecasts. This indicates a healthy labor market, which is often a positive sign for the stock market.

Fed Front and Jerome Powell's Speech

On the Federal Reserve front, Chair Jerome Powell will be speaking in New York in a moderated discussion on Wednesday afternoon. The Fed's decisions and Powell's remarks often have a significant impact on the stock market. Investors will be closely watching for any hints or signals regarding the future direction of monetary policy.

Earnings Reports and Market Moves

On the earnings front, Chewy, Dollar Tree, and Foot Locker are among the companies scheduled to report earnings on Wednesday morning. Salesforce, a software stock, advanced 6% after posting a revenue beat in the third quarter. Revenue of $9.44 billion topped consensus forecasts calling for $9.35 billion. Meanwhile, adjusted earnings of $2.41 per share slightly missed estimates for $2.44 per share. Marvell Technology, a developer of integrated circuits, jumped 10% after issuing rosy guidance for the current quarter. The company sees fourth-quarter revenue coming in at $1.80 billion, compared to Wall Street's estimate of $1.65 billion. Adjusted earnings and revenue in the third quarter also topped expectations.

President Yoon Suk Yeol's decision to declare emergency martial law has sent shockwaves through South Korea's financial landscape. The dealing room at Hana Bank in central Seoul serves as a visual reminder of the turmoil. The South Korean currency, the won, has experienced a sharp decline against the U.S. dollar. During nighttime offshore trading after the declaration on Tuesday, it slid to as low as 1,441 won per dollar, the lowest level since October 2022. In onshore trading at 3:30 p.m., it was quoted at 1,402.9 won against the greenback, down 1.6 won from the previous session. Financial authorities are now considering the option of closing the stock markets due to the high chances of market volatility. A Korea Exchange official stated that it is yet to be decided if the markets will open on Wednesday. The benchmark Korea Composite Stock Price Index and the tech-heavy KOSDAQ markets are scheduled to open at 9 a.m. and close at 3:30 p.m. An emergency meeting on the economy is underway, with Finance Minister Choi Sang-mok presiding and Bank of Korea Gov. Rhee Chang-yong and the chiefs of the Financial Services Commission and the Financial Supervisory Service in attendance. The cryptocurrency market has also been affected, with Bitcoin beginning to drop significantly after the declaration and sinking 2.65 percent from the previous day as of 11:15 p.m. on Wednesday. Some cryptocurrency exchanges have reported disruptions in their services due to the surge in demand. The consequences of this martial law declaration are far-reaching and are being closely watched by market participants and analysts alike.

Unraveling the Financial Aftermath of Yoon Suk Yeol's Martial Law

Impact on the South Korean Won

The South Korean won's sharp fall against the U.S. dollar is a significant development. The previous low in 2022 was 1,444.2 won during intratrading. This recent drop indicates the volatility and uncertainty in the currency market. The nighttime offshore trading saw the won reach a new low of 1,441 won per dollar, highlighting the immediate impact of the martial law declaration. In onshore trading, the 1.6 won decrease from the previous session also shows the continuous downward trend. Financial authorities are now faced with the challenge of managing this volatility and its potential effects on the economy.

Moreover, the historical context of the won's performance is important. Such significant drops in the currency can have implications for imports, exports, and inflation. It affects businesses and consumers alike, as the value of goods and services changes. The authorities' consideration of closing the stock markets adds another layer of complexity to the situation, as it can further impact investor sentiment and market stability.

Effects on the Stock Markets

The scheduled opening and closing times of the benchmark Korea Composite Stock Price Index and the tech-heavy KOSDAQ markets at 9 a.m. and 3:30 p.m. respectively are now under a cloud. The uncertainty surrounding the market's opening due to the emergency meeting and the potential for high volatility has investors on edge. A Korea Exchange official's statement that the decision on whether the markets will open remains undecided adds to the ambiguity. The stock markets play a crucial role in the South Korean economy, and any disruptions can have wide-ranging effects on companies, investors, and the overall financial system.

The emergency meeting presided over by Finance Minister Choi Sang-mok and attended by key financial figures is a sign of the seriousness of the situation. The actions and decisions made during this meeting will likely have a significant impact on the future of the stock markets. The coordination between the Bank of Korea and other financial institutions is essential in navigating through these challenging times and ensuring market stability.

Impact on the Cryptocurrency Market

Bitcoin's notable drop after the martial law declaration is another aspect of the financial turmoil. A 2.65 percent decrease from the previous day as of 11:15 p.m. on Wednesday shows the sensitivity of the cryptocurrency market to such events. The surge in demand leading to service disruptions at some cryptocurrency exchanges further emphasizes the interconnectedness of different financial markets.

Cryptocurrencies have gained popularity in recent years, and their behavior during times of economic and political uncertainty is closely watched. The impact of the martial law on the cryptocurrency market raises questions about the stability and regulation of this emerging asset class. It also highlights the need for better understanding and management of digital currencies in the context of broader financial systems.

Dec. 3 (UPI) witnessed a significant event in South Korea. Political instability within the nation led to a sharp plunge in the value of the won and instilled a sense of unease in the stock market.

Unraveling the Ripple Effects of South Korea's Political Turmoil

Political Instability and the Won's Plunge

On Dec. 3, South Korea faced a challenging situation as political instability took hold. This instability caused the nation's won to experience a substantial drop in value. Investors, who previously regarded South Korean financial assets as strong investments, were now left reeling. The sudden declaration of martial law by South Korean President Yoon Suk Yeol on Tuesday, which was quickly lifted, triggered financial turmoil not only within South Korea but also in other parts of the world.This event serves as a reminder of the delicate balance between political stability and financial markets. The volatility in the won's value has significant implications for both domestic and international investors. It highlights the need for a stable political environment to ensure the smooth functioning of financial markets.

Impact on Stock Markets and Asian Markets

The negative impact of South Korea's political turmoil extended to its stock market and had a detrimental effect on investors in Asian markets. While competing markets in Latin America were able to benefit from their relatively stable economies and political systems, South Korea's stock market faced significant challenges. The Bank of Korea's scheduled emergency meeting on Wednesday is a clear indication of the seriousness of the situation. The central bank will need to carefully consider how to address the market volatility that has followed the initial 2.9% fall in the value of the won to 1,444 per U.S. dollar.After South Korean officials promised "unlimited liquidity" to stabilize the stock market, the won did recover slightly to 1,422 per U.S. dollar. This shows the importance of timely and effective measures in restoring market confidence. However, the road to recovery is likely to be long and challenging, as the effects of political instability can have a lasting impact on investor sentiment.

Nvidia and South Korean Memory Chips

Nvidia shares also experienced bumpy trading on Tuesday due to South Korea's political instability. The potential endangerment of Nvidia's supply of South Korean-produced memory chips, which are crucial for ensuring suitable performance of Nvidia technology, added another layer of uncertainty to the market.Nvidia Chief Executive Officer Jensen Huang recently urged producer SK Hynix to increase its production of new high-bandwidth memory chips, called HBM4, to support the production of Nvidia's Blackwell graphics processors. This highlights the interdependence between the technology and semiconductor sectors and the vulnerability of global supply chains to political events.In conclusion, South Korea's political instability has had far-reaching consequences for its financial markets. The plunge in the won and the volatility in the stock market have affected investors both domestically and internationally. It remains to be seen how the Bank of Korea's measures and the recovery of the won will impact the future of South Korea's economy and financial markets.