U.S. stocks are holding near their highs, while the Trump administration's policy direction and trade uncertainty are being viewed as economic risks, and the Buffett Indicator is signaling that stock prices are overvalued. AI- and semiconductor-related activity is expected to continue in the Japanese and Chinese markets.
The U.S. stock market is holding near its highs, while uncertainty over former President Trump's policies and trade policy is viewed as a burden on the economy, and the Buffett Indicator is signaling concerns that the stock market is overvalued. Major stock indexes briefly reached record highs in early August, but price movements became more volatile in the latter half of the month.
The Dow Jones Industrial Average closed down $60 from the previous day on 8/10, as higher crude oil prices and rising interest rates weakened investor sentiment. The Dow then fell $184 on 8/11 and $21 on 8/12, extending its downward trend. By contrast, alternative asset managers such as Apollo and Blackstone also saw periods of gains. With the release of inflation indicators such as the CPI and PPI approaching, the market's focus shifted to the future course of monetary policy.
In Japan, the Nikkei 225 staged a sharp rebound, rising ¥1,363 from the previous day to ¥66,970 on 8/10 and ¥553 to ¥67,524 on 8/12. AI- and semiconductor-related stocks drove the market, while TOPIX also posted its fifth consecutive daily gain. As the reallocation of stocks with a high contribution to the index progressed, there were also signs that contributions to the Nikkei 225's gains were beginning to broaden.
In China, the Shanghai Composite rose 26 points from the previous day to 3,966 on 8/10, fell 32 points to 3,934 on 8/11 and rose 12 points to 3,946 on 8/12. Expectations for government economic measures and support for domestic demand provided support, while weak domestic demand and trends in crude oil prices and interest rates also exerted downward pressure. It was also reported that ¥745.0 billion would be invested in a joint venture between Sony and TSMC for next-generation image sensors.
As a dramatic development, attention is focusing on efforts to advance new technologies through the establishment of a Sony-TSMC joint venture, with applications in autonomous vehicles and robotics expected to grow as generative AI becomes more widespread.