To The Moon

Optimism surrounding artificial intelligence has overshadowed market concerns over the situation in Venezuela, propelling global stock markets to extend their gains. Asian equities were particularly notable performers, with South Korea's KOSPI hitting a record high. Concurrently, geopolitical tensions have fueled a rise in safe-haven demand, driving precious metals higher across the board, while crude oil unexpectedly declined due to forecasts of a record global supply surplus. On January 5th, US stock index futures collectively advanced, European stocks opened higher, and Asian stock indices rose in unison. The US dollar gained, US Treasury yields edged lower, while Japanese government bonds came under pressure. Gold and silver prices rose together, crude oil fell, and cryptocurrencies moved higher. Market analysts widely believe that AI-driven tech optimism remains the dominant force in the current market. Although geopolitical risks are causing short-term volatility in safe-haven assets, their impact on overall risk appetite is being quickly absorbed by the market. Charu Chanana, Chief Investment Strategist at Saxo Bank, stated: "Artificial intelligence continues to be the most significant driver in the market right now. Tech optimism is persistently outweighing any other factors." Dilin Wu, a strategist at Pepperstone Group Ltd., commented: "Geopolitical noise dissipates very quickly. The sudden escalation in Venezuela has not materially impacted global risk assets, further confirming that markets tend to price geopolitical shocks briefly and digest them rapidly." Key market movements are as follows: Dow Jones futures rose nearly 0.1%, S&P 500 futures gained 0.17%, and Nasdaq futures climbed over 0.4%. The Euro Stoxx 50 index rose 0.73%, the UK's FTSE 100 index advanced 0.59%, France's CAC 40 index increased by 0.63%, and Germany's DAX 30 index was up 0.62%. Japan's Nikkei 225 index closed 3% higher at 51,832.80 points; the TOPIX index closed up 2% at 3,477.52 points; South Korea's KOSPI closed 3.43% higher at 4,457.52 points, setting a new record closing high. Samsung Electronics surged 7%. The yield on the 10-year US Treasury note fell 1 basis point to 4.18%; the yield on the 10-year Japanese Government Bond rose 6 basis points to 2.120%. The US Dollar Index rose 0.2%; the euro fell 0.2% to $1.1691; the yen weakened 0.1% against the dollar to 157.07 yen. Spot gold extended its intraday gains to 2%, reaching $4,419.7 per ounce; spot silver rose nearly 4% to $75.47 per ounce; Brent crude oil fell over 0.6%. Bitcoin rose 1.3% to $92,413.59; the price of Ethereum increased 0.3% to $3,153.53. US stock index futures advanced collectively, with the Nasdaq rising over 0.4%. Anna Paulson, President of the Federal Reserve Bank of Philadelphia, indicated that if the economic outlook remains robust, there might be room for moderate further interest rate cuts later in 2026, although this expectation is highly dependent on the evolution of subsequent data. Key economic data will also influence the market's trajectory in the coming week. Beyond the December employment report, the US Bureau of Labor Statistics will release November data on job openings, quits, and layoffs on Wednesday. The Institute for Supply Management's December surveys of manufacturing and service sector suppliers will also provide clues about employment conditions in those industries. This weekend, the US government will release October housing starts data, and the University of Michigan will publish the preliminary reading of its January Consumer Sentiment Index. South Korean stocks opened higher and continued to gain, with the KOSPI closing up 3.43%, setting a new record closing high. Heavyweight Samsung Electronics saw its shares surge nearly 7.5% to a record high, while SK Hynix also strengthened, rising nearly 3%. The strong performance of these two memory chip giants directly boosted market sentiment. The key driver behind this rally is the sharp fluctuations in memory chip prices. Simultaneously, the battle for High Bandwidth Memory (HBM) production capacity has intensified. Furthermore, TSMC's announcement that its 2nm process is on schedule for mass production further lifted market sentiment. Analysts generally believe the AI boom will continue into 2026, with institutions like Morgan Stanley significantly raising their forecasts for memory chip prices. Asian tech stocks are benefiting from robust industry fundamentals and sustained capital inflows. Amid dual concerns of fiscal expansion and intensifying inflationary pressures, Japanese Government Bonds faced selling pressure, leading to a significant climb in long-term bond yields. The benchmark 10-year JGB yield rose by 5 basis points to 2.12%, reaching its highest level since 1999. A US raid on Venezuela triggered significant geopolitical shockwaves, driving safe-haven demand and pushing gold prices back above $4,400. Spot silver rose nearly 4% to around $76 per ounce. Platinum and palladium also moved higher, with New York platinum rising over 4%. Market analysts pointed out that in the initial stages of a geopolitical crisis, capital typically flees risk assets first and reallocates to safe-haven precious metals. Comments from US Secretary of State Marco Rubio, suggesting the US would use its oil influence to pressure Venezuela into changes, further heightened market concerns about the complexity of the regional situation, thereby supporting gold prices. Crude oil, however, did not follow the traditional "war premium" logic. With forecasts pointing to a record global crude supply surplus, and Venezuela's production accounting for less than 1% of the global total—insufficient to sway the overall market—Brent crude fell over 0.6%. The Trump administration plans to revive Venezuela's oil industry, but rebuilding its oil infrastructure and restoring production to peak levels is estimated to require annual investments of approximately $10 billion over the next decade, with total costs potentially exceeding $100 billion. Key Venezuelan oil infrastructure, including Puerto Jose, the Amuay refinery, and the Orinoco oil field, remained operational and was reportedly unaffected by a series of US attacks in Caracas and other states.