The U.Sdollar index achieved a peak not witnessed in over two years on Thursday, as investors prepared for potential uncertainties with the dawning of a new trading yearThis surge in the dollar coincides with a harrowing revelation from HSBC, which indicated that nearly all asset classes are facing declines attributed to the hawkish stance from the Federal Reserve expressed during its December meeting.

Specifically, the dollar index rose by 0.7%, marking its highest level since November 2022. In a report from Hargreaves Lansdown, their head of currency and market analysis, Susannah Streeter, noted that consumers and businesses seem to be adapting to high interest rates, maintaining a low unemployment rate and outpacing expectations for economic growthThis stability underscores the dollar's strength amid global turbulence.

On the other side of the Atlantic, the European economy illustrated contrasting trends

The euro fell by 0.9%, hitting an exchange rate of 1.0271 against the dollar, its lowest since November 2022. Similarly, the British pound experienced a decline of 1.1%, settling at a mere 1.2381 against the dollar, reflecting levels not seen in over eight monthsDespite predictions that Europe may see economic improvement by 2025, the overall outlook remains pessimistic compared to the United States, primarily due to unresolved uncertainties impacting several European nations.

Recent revisions revealed stagnation in the UK's economy during the third quarter, while economists raised concerns about enduring structural issues that could impede growth in Germany, France, and other Eurozone countriesThese factors have significantly influenced the foreign exchange markets, as inflationary risks from various events are likely to prompt the Fed to temper its interest rate cuts in 2025, while both the European Central Bank and the Bank of England displayed a relatively dovish posture during their meetings in December.

According to Mohamad Al-Saraf, an assistant in forex and rate strategy at Danske Bank, the anticipation for a stronger dollar, coupled with waning confidence in the Fed's projected trajectory for interest rate cuts in 2025, has been contributing to the dollar's strength

• Dollar Index Soars
• Significant Depreciation of the Won
• Decline in European Corporate Profits
• Decline in U.S. Treasury Yields
• Wall Street Banks Seek Transparency

He emphasized that key data, such as weekly jobless claims reports and ISM manufacturing indices, would play a crucial role in evaluating the robustness of the U.Smacroeconomic landscape.

Moreover, Al-Saraf mentioned the potential for the euro to revert to parity with the dollar in the medium termHowever, he warned that the market's expectations for fewer than two 25-basis-point rate cuts this year might be overly aggressiveAny unexpected negative economic data from the U.Scould lead to a reversal in the dollar’s upward trajectory.

In parallel, commodities like gold and crude oil saw significant gains, with NYMEX WTI crude jumping by 1.95% to $73.12 per barrel and COMEX gold climbing 1.14% to $2671.2 per ounce, despite the dollar’s dominating performance.

U.SStock Market Performance

On the first trading day of the new year, U.S

equities experienced turbulence, with the Dow Jones Industrial Average dropping by 151.95 points, closing at 42,392.27, a decrease of 0.36%. The S&P 500 and Nasdaq Composite also reflected negative sentiment, with declines of 0.22% and 0.16%, respectivelyNotably, this marked the S&P 500 and Nasdaq's longest losing streak since April of the previous year, as both indices faced five consecutive days of decline.

HSBC suggested that almost all asset classes are starting to "suffer" due to the aggressive tone set by the Federal Reserve in DecemberIn a Thursday report, the bank's Chief Multi-Asset Strategist, Max Keitner, noted that the Fed’s hawkish shift has driven yields upward, pushing markets close to what they termed a "danger zone." He posited that January could continue to be volatile for all asset classes as a result.

The tech giant Apple bore a significant weight on the markets, tumbling by 2.6%, while Tesla saw a shocking decline of 6% following a report of falling annual delivery volumes for 2024. Conversely, chip manufacturer NVIDIA managed to gain 3%, partially mitigating the downturn of other large tech stocks.

Bond yields also exhibited volatility on Thursday, with the benchmark 10-year U.S

Treasury yield soaring close to 4.6% before retreatingHigher interest rates are becoming increasingly attractive to investors concerned about stock valuations, suggesting a shift of focus towards fixed income.

Liz Young-Tomas, the Chief Investment Strategist at SoFi, remarked, "If you’re not inclined to buy at historic high prices, there are still ample cash earning opportunities out there right now."

Apple's Competitive Pricing Strategy

In an initiative to boost sales in China, Apple recently announced a promotional campaign on its Chinese website, scheduled from January 4 to 7. During this period, consumers can save up to 800 yuan on selected products by utilizing eligible payment methods, with a limit of two items per product category per customer.

However, Apple cautioned that the number of products available for this campaign at its physical retail stores is limited

Specifically, the stock includes 29,300 iPhones, 3,500 iPads, 530 MacBooks, 8,350 Apple Watches, 2,590 AirPods, and 940 Apple PencilsOnce these items are sold out, the promotion will end.

In light of these promotions, there have been questions regarding price adjustments for purchases made prior to the promotion periodApple’s customer service indicated that items bought within 14 days before the sale could be returned and repurchased, effectively functioning as a price adjustment.

Despite these promotional efforts, Apple is confronting challenges in maintaining its market share in ChinaAccording to data from IDC, Apple briefly fell out of the top five smartphone vendors in China during the second quarter of 2024. Although the company rebounded in the third quarter with a market share of 15.6% — reclaiming the second spot — iPhone shipments still declined by 0.3% year-on-year in that quarter.

NVIDIA's Venture into AI Startups

NVIDIA has set its sights on further investments in 2024, including backing Elon Musk's xAI and significant financial support for notable AI model providers like OpenAI, Cohere, Mistral, and Perplexity

Additionally, NVIDIA's startup incubator, Inception, has aided thousands of startups in their early developments.

Recently, NVIDIA finalized its acquisition of Israeli-based Run:ai, with the European Commission announcing unconditional approval for the acquisition on December 20, 2024, deeming it non-threatening to competition within the European Economic AreaRun:ai specializes in optimizing GPU usage through software to enhance the management of AI workloads.

The spectrum of NVIDIA's investments spans a variety of sectors, which include medical technology, search engines, gaming, drones, chips, traffic management, logistics, data storage and generation, natural language processing, and humanoid roboticsThis diversified portfolio encompasses startups that have witnessed valuations skyrocketing into the billion-dollar range, such as CoreWeave and Applied Digital.

This impressive array of M&A activity has raised concerns regarding NVIDIA’s dominance in the AI space, particularly as both the U.S

and Europe ramp up antitrust scrutinyBill Kovacic, a former chair of the U.SFederal Trade Commission, asserted that competition regulators are closely monitoring the trend of “dominant players making extensive investments.”

Nonetheless, NVIDIA maintains, “We are focused on fostering our ecosystem, supporting excellent companies, and enhancing our platformWe rely on strength to compete and succeed, which is unrelated to our investments.”

X and Google’s Regulatory Challenges in Malaysia

According to Malaysia's internet regulatory authorities, as of the new laws enacted on Wednesday, the social media platform X, owned by Elon Musk, along with Google, which operates the video streaming platform YouTube, has yet to apply for the required social media operating licenses.

The Malaysian Communications and Multimedia Commission (MCMC) indicated that X claimed its user base in Malaysia did not surpass the required threshold of 8 million for licensing

The commission is currently verifying X's claims.

Meanwhile, Google is in ongoing discussions with MCMC to address concerns regarding its video-sharing capabilities and classification under licensing requirementsMCMC assured that it is actively discussing the issues raised and will ensure that YouTube and related platforms understand their obligations.

MCMC announced that WeChat and TikTok, operated by ByteDance, were among the first tech giants to comply with the new regulations, with Telegram approaching the final stages of the application process.

Last July, MCMC issued a directive mandating that any social media platform with more than 8 million users in Malaysia must secure an operational license by January 1, 2025. This initiative seeks to regulate social media operations, safeguard user rights, and bolster online securityIt further underscores the Malaysian authorities' commitment to holding large tech firms accountable for illegal content