Dow slid 116, advancers over decliners about 5-4 & NAZ retreated 125. The MLP index was off 1 to the 305s & the REIT index hardly budged in the 426s. Junk bond funds edged lower & Treasuries were sold which raised yields. Oil was 1+ higher to the 68s, lifted by fall of Syria’s Assad, & gold jumped 31 to 2691.
Dow Jones Industrials
Nvidia (NVDA) shares were under pressure after a regulator in China said it was investigating the chipmaker over possible violations of the country's antimonopoly law. The State Administration for Market Regulation opened an investigation into the chipmaker in relation to acquisition of Mellanox & some agreements made during the acquisition, the Chinese gov said. NVDA acquired the Israeli technology company that creates network solutions for data centers & servers in 2020. “In recent days, due to Nvidia’s suspected violation of China’s anti-monopoly law and the State Administration for Market Regulation’s restrictive conditions around Nvidia’s acquisition of Mellanox shares ... the State Administration for Market Regulation is opening a probe into Nvidia in accordance with law,” according to a statement. The news comes as competition heats up between the US & China over chipmaking capabilities, with the Biden administration on Dec 2 announcing a final slew of curbs targeting semiconductor toolmakers The news could also be a response mounting trade tensions as Pres-elect Trump readies for office in Jan, promising to slap hefty tariffs on foreign goods. The US has amped up restrictions on chip sales to China in recent years, barring NVDA & other key semiconductor manufacturers from selling their most advanced AI chips in an effort to limit China from strengthening its military. The company has worked to create new products to sell in China that abide by the US regulations. The stock dropped 4.79 (3%).
Nvidia shares fall after China opens investigation over possible violation of antimonopoly law
The dramatic toppling of Bashar al-Assad's Syrian regime at the hands of rebel forces this weekend could have far-reaching consequences for the Middle Eastern country, global alliances & markets. Over the past fortnight, rebel forces led by the Islamist militant group Hayat Tahrir al-Sham carried out a lightning-fast offensive across the country, seizing key cities along the way. The faction finally claimed the capital Damascus at the weekend, prompting Pres Bashar al-Assad to flee the country & seek refuge in Russia. The overthrow of Assad was greeted cautiously by Western nations who are wary of the potential for further bloodshed & of a power vacuum in Syria, if a chaotic & contested transition of leadership takes place. A country driven with 13 years of brutal civil war Syria has seen competing factions, including the terrorist group that styles itself the Islamic State, fight each other as well as Assad's force in recent years, raising the potential for rival power grabs. For now, however, the fall of the Assad dynasty after over 50 years in power has more immediate global ramifications, with Russia & Iran seen as “losers” from the ousting of the Syrian dictator, while the US, Turkey & Israel are viewed among the main beneficiaries from regime change. “The rapid collapse of the Assad regime in Damascus will have repercussions well beyond Syria. The great losers are Iran and Russia, without whose support Assad would have lost the almost 14-year civil war long ago,” Holger Schmieding, chief economist at Berenberg Bank, said. “Iran has likely lost its major route to send weapons to the Hezbollah terror militia in Lebanon. Despite a potential power vacuum in parts of Syria for a while, the Middle East could eventually be a little less unstable as a result,” Schmieding added. Starting with the US, economists point out that the fall of Assad, & the accompanying weakening of Russia & Iran after the loss of a key ally in the region, will give US Pres-elect Trump & Western powers a welcome boost. “The new reality is when Donald Trump assumes office on January 20th 2025 he will be facing a threat board where the opposition looks massively weakened, and how the U.S. holds many of the cards,” market strategist Bill Blain said. “That doesn’t mean the world is much less dangerous – it’s entirely unclear what kind of new Syria might emerge from Assad’s overthrow – but it feels like power and the global initiative could be shifting back to the West,” he added.
From Trump, to Russia and Iran — Syria’s crisis has huge global consequences
Pres-elect Trump said he will not try to replace Federal Reserve Chair Jerome Powell, whose term runs thru May 2026. In an interview Trump said, “I don’t,” when asked if he plans to cut short the central bank chief's term. “The chairman of the Federal Reserve, Jerome Powell, said he will not leave his post even if you ask him to. Will you try to replace Jerome Powell?” was asked during the interview. “No, I don’t think so. I don’t see it,” Trump replied. “But, I don’t — I think if I told him to, he would. But if I asked him to, he probably wouldn’t. But if I told him to, he would.” In the followed up, he was asked: “You don’t have plans to do that right now?” “No, I don’t,” Trump replied.
Trump says he won’t try to remove Fed chief Jerome Powell
US stocks pulled back as NVDA shares slipped amid a Chinese antitrust probe & as investors prepared for this week's consumer inflation report. The next test for stocks comes in a consumer inflation report, which will set the stage for the Federal Reserve's final interest rate decision of the year. The Nov Consumer Price Index on Wed will stress-test the widespread expectation for a qtr-point rate cut on Dec 18 after the latest monthly jobs report failed to shake that conviction.
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