Equities: AI reassessment shakes global markets – Deutsche Bank
Deutsche Bank strategists highlight a sharp reassessment of the AI (Artificial intelligence) trade with semiconductor and Korean equities suffering steep monthly losses despite strong YTD gains. European stocks outperformed as sector rotation and solid Eurozone growth supported broader indices.
Deutsche Bank strategists have highlighted a significant reassessment of the AI trade, causing steep monthly losses for semiconductor and Korean equities despite strong year-to-date gains. European stocks outperformed broader indices, driven by sector rotation and solid Eurozone growth. The Philly Semiconductor index experienced its worst monthly decline since 2008 at -20.6%, while the KOSPI index dropped by -22.2%, though both are still up over +50% year-to-date.
European stocks outperformed, and many broader indices are near record highs. The S&P 500 advanced by +1.05%, with the Mag-7 index gaining +4.16%; however, Apple and Meta saw declines following their earnings reports. Internationally, Korea's KOSPI index plunged -1.42% on the week despite a Friday surge, while the Nikkei and Hang Seng were down slightly.
Corporate earnings, including Palantir, SpaceX, AMD, Caterpillar, McDonald's, Toyota, Novo Nordisk, Siemens Energy, Siemens, and Rheinmetall, will be crucial in determining market sentiment. USD and gold prices saw minor recoveries, while AI and Iran headlines remain influential for risk sentiment.
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