This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
What To Note Today
Record For The S&P 500 Intraday
The U.S. market surged Wednesday. Though it retreated at the closing bell, the S&P 500 reached a new intraday high. On Thursday, Asia-Pacific stocks showed mixed results. As authorities encouraged state-owned funds and insurers to purchase shares, China’s CSI 300 saw gains of about 1%, leading gains in the region. After the disappointing GDP data release, South Korea’s Kospi index fell 0.8%.
South Korea’s GDP Fails Estimates
According to advance estimates, South Korea’s economy expanded by 1.2% year on year in the fourth quarter. That was less than the 1.5% growth in the third quarter of 2024 and fell short of the 1.4% predicted by a Reuters poll. Nonetheless, the GDP grew by 2% for the entire year, more than the 1.4% growth in 2023.
Operating Profit At SK Hynix Increased By Over 2,000%
One of the biggest memory chip manufacturers in the world, SK Hynix, cautioned that demand in 2025 is uncertain, which caused its shares to drop by about 2.7%. But thanks to robust sales of high bandwidth memory used in generative AI chipsets, the South Korean chipmaker reported a record operating profit of $8.08 trillion won ($5.6 billion) in the fourth quarter, a startling 2,236% increase over the same period last year.
Dimon Claims That Not All Tariffs Are Negative
Despite concerns about price increases and trade conflicts, Jamie Dimon, CEO of JPMorgan Chase, stated that U.S. President Donald Trump’s proposed tariffs might have good effects. In addition to remarks about “hugg[ing] it out” with Elon Musk and the stock market being “kind of inflated,” Dimon told reporters on Wednesday in Davos, “If it’s a little inflationary, but it’s good for national security, so be it.”
Musk Undercuts The Stargate Scandal Of Trump
Musk rejected the Stargate project, which Trump announced Tuesday. The project involved a $500 billion investment in artificial intelligence infrastructure through a joint venture involving OpenAI, Oracle, and Softbank. Musk undermined Trump’s announcement on Tuesday by writing, “They don’t actually have the money,” in response to an OpenAI post on X.
Morgan Stanley Advises Diversifying Away From US Stocks
Morgan Stanley Wealth Management advises that investors maintain a diversified portfolio. Although the S&P 500 index reached a new all-time high on Wednesday, U.S. stocks are still expensive, and valuations seem stretched. Instead of focusing too much on U.S. stocks, the bank suggested that investors invest in these assets.
Bottom Line
On Thursday, the S&P 500 recovered from the December slump and reached a new intraday high of 6,100.81. The broad-based index is only a hair away from its all-time high of 6,090.27, although it recovered to 6,086.37 when the closing bell rang.
It represents a shift from December when the S&P fell 2.5 percent as market sentiment echoed predictions of fewer rate reductions from the US Federal Reserve. It should be no surprise that technology stocks drove Thursday’s benchmark’s gain.
Following Trump’s announcement of Stargate, the massive investment deal in AI infrastructure, shares of companies like Oracle and Nvidia surged. As investors applauded the streaming service’s spike in fourth-quarter profitability and paid subscriptions, Netflix’s stock rose 9.7%. The stock market appeared to be returning to its peak in 2024 when the S&P shattered more than 50 closing records.
However, Jamie Dimon comes across as more circumspect.
“By any standard, asset prices are rather overstated. At the World Economic Forum in Davos, Switzerland, Dimon told reporters, “They are in the top 10% or 15%” of historical valuations.
He’s saying that there needs to be a solid foundation of support to maintain such horsepower behind stocks, but he’s not saying that brakes will be slammed or that an impact is about to happen.
Dimon states, “You need fairly good outcomes to justify those prices.” Pro-growth initiatives facilitate that process, but some drawbacks may surprise you.
The asset management division of J.P. Morgan shares that opinion.
Phil Camporeale, multi-asset portfolio manager at J.P. Morgan Asset Management, told reporters, “the number one risk that we’re looking at heading into this year are the valuations, which is why we feel very strongly that you need to have earnings back this up.”
Although Trump’s pro-business and pro-tax measures may serve as the catalyst, companies are ultimately what drive stock prices.
