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This pace of the EM equity rally cannot continue. Can it? McGeever
South Korean shares have surged by 50% in the first two month of 2026, and other emerging markets are also showing double-digit gains. Even the most ardent EM bulls must wonder if this raging?rally will continue. South Korea's figures are stunning. The benchmark KOSPI has more than doubled over the past six months and is now up 175% since the "Liberation Day tariff chaos" of U.S. President Donald Trump in April last year. This is after a 75% increase in the calendar year 2025. Shares of Samsung, the top memory chipmaker in the world, almost doubled this year and more than tripled within six months. The country has attracted capital due to its market-friendly regulatory and tax reforms, as well as its booming semiconductor and artificial intelligence industries. The Korean won was trading on Thursday at its highest level against the U.S. Dollar in four months. Goldman Sachs says that the KOSPI has reached the lowest level of financial conditions in 24 years, since it launched the South Korea Financial Conditions Index. It is possible that speculations are at work based on the rapid rise of KOSPI. Even though "FOMO",?might play a role, it's not the main story. KOSPI actually trades at its lowest multiple based on forward 12-month earnings since June. Many investors buy because they are expecting to see a huge increase in earnings. How bullish is too much? KOSPI's gains early in 2026 may be outliers, but the direction of travel is not. The MSCI benchmarks for emerging markets and Asia ex Japan are both up by 15% this year. Meanwhile, the main equity indexes in Taiwan and Brazil have risen by nearly 25% and 20% respectively. Taiwan Semiconductor Manufacturing, the largest maker of chips for AI applications in the world, is a key player in the global AI supply chains of companies like Nvidia and Apple. Taiwan's Statistics Office has just increased the country's GDP growth forecast for 2026 from 3.5% to 7.7%, reflecting the anticipated AI windfall. This is a remarkable revision within a short time. All of this suggests that the supposed U.S. tech and AI advantage - which was once at the core of the "American Exceptionalism' narrative - has been rapidly eroding. Investors are reallocating their funds to emerging countries, particularly in Asia. Bank of America's global fund manager survey revealed that in February, the?rotation away from U.S. stock and into emerging market stocks surged and investors are now most overweight EM shares they have been for five years. The survey revealed that investors have the largest overweight in emerging markets. Analysts at TS Lombard have a?certainly a commitment to the cause. Their EM equity allocation has reached a record high and is now double what they allocate to U.S. stock. They believe that investors have not been this bullish about emerging markets for more than 20 year. This over-optimism is reminiscent of a bubble that's just beginning to form. If you believe that the global AI story is going to be a success for a very long time, as Nvidia's recent sales and outlook indicate, then this reallocation away from the U.S. would make strategic sense. It may also make financial sense. Although the S&P 500 valuation premium remains high, it may have decreased a little this year. Despite the recent outperformance, EM stocks remain relatively inexpensive. Capital may be able to continue flowing into emerging markets, given the relatively benign macroeconomic background of a softer US dollar, stable Treasuries Market, and a Federal Reserve that is dovish. The rotation may still have some room to grow. The opinions here are those expressed by Jamie McGeever. A columnist for. Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Russia declares local truce to allow repairs at Zaporizhzhia Nuclear Plant
A local ceasefire was declared near the Zaporizhzhia Nuclear Power Plant in southeast Ukraine on Friday, to allow repairs of an external power line. The plant is the largest in Europe. Under Russian Control Since shortly after the beginning of the war, in 2022. The plant does not produce electricity and relies on outside power to maintain its nuclear material cool in order to avoid a catastrophic incident. Russia and Ukraine accuse each other frequently of putting the safety of the plant at risk by staging attacks near it. Last year, a similar 'local truce' was established when the power lines were down for several weeks and the site had to rely on diesel generators. In a press release, the Russian management stated that Rafael Grossi, head of the International Atomic Energy Agency (IAEA), had helped to implement the latest ceasefire. Officials in Russia said that one of the external power lines is still operational, while repairs to the other would take a minimum of a week. The management said that radiation levels were normal. Ukraine has not yet commented on this issue. One of the 'contentious issues' in slow-moving is who should operate and control a 'huge plant. Peace talks mediated by the U.S. Next month, the talks will resume in Geneva.
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Iron ore prices fall on tepid market demand despite high margins
Iron ore futures recouped their losses on Friday. A tight physical market and high port margins for seaborne ore supported prices. However, upcoming steel production cuts, as well as a tepid demand for feedstocks, curbed the upside. The most traded May iron ore contract on China's Dalian Commodity Exchange (DCE), which ended the daytime trading 0.27% higher, was 750.5 yuan per metric ton ($109.47). The contract has fallen by 0.8% in the last week and by 5.67% for this month. As of 0705 GMT, the benchmark April iron ore traded on the Singapore Exchange was $98.45 per ton. The contract is expected to lose around?5.1% per month. As seen in the increase in hot metal production, steel production is still recovering after the Lunar New Year. This provides a floor for prices. The port margins for seaborne ore are at an all-time high. A trader said that traders are able to resell the imported cargo for a high profit, signaling an onshore tight physical market. The?trader said that the spread between spot prices at portside and benchmarks on seaborne markets was also a sign of tightness. Spot prices rose faster than the offshore markets, which triggered restocking. The market is expecting a tepid demand for feedstocks due to the imminent undefined steel production cuts that will begin on March 4. A?note published by the Shanghai Metals Market on Thursday said that overall supply?remains?relatively loose. Port inventories are still high with limited 'destocking. The World Steel Association reported on Thursday that crude steel production in China, which is the world's largest producer and consumer of the metal, fell 13.9% to 75,3 million metric tonnes?in January. Coking coal and coke, two other steelmaking ingredients, also lost ground on the DCE. They were down by 0.73% and 1.03 %, respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Both rebar and stainless steel gained 0.03%. Hot-rolled coils fell 0.25%, while wire rod dropped 0.53%.
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Marty Fridson explains why gold won the race against Dow Jones in a landmark race.
Recently, the financial markets reached two milestones. Gold reached $5,000 per ounce on January 26 for the first time and 11 days later, Dow Jones Industrial Average broke 50,000. Bullion reached its mark first - which wasn't expected to happen. Imagine that a December 2020 prediction market offered a bet on the historic breakthrough which would occur first. The Dow Jones was 61% of the way to its big round number at that time, while gold was only 37%. If you extrapolated data trends between 1985 and 2020, then you would have predicted that the Dow would reach 50,000 in 2027. Gold wouldn't hit $5,000 until 2035. Gold's price has risen dramatically in the past five years. The price of gold doubled from 2022 to 2024. This surge allowed the precious metal to beat the stock index in what is essentially a photo finish. When Trendlines Fail Why did the trendlines not predict the outcome of the election? The Dow Jones index has been gaining speed over the past few years, as investors flooded into U.S. stock markets following the pandemic. However, this increase was nothing compared to the sudden spike in yellow metal. Analysts have given several reasons for the rapid increase in gold prices. Geopolitical instabilities are one of the main factors. In the past, instability has tended to increase demand for safe haven assets. There have been many reasons for concern in recent years. These include the four-year old Russia-Ukraine conflict, conflicts in the Middle East and U.S. president Donald Trump's trade war drama, as well as his pledge to take control of Greenland. Gold's appeal has been boosted by inflationary fears, which are stoked in part by Trump's attempts to increase political influence on the Federal Reserve. President Trump has called for lower interest rates since he was elected. Kevin Warsh's nomination as the new Fed chair, who was a former proponent of a tighter monetary policy, calmed fears at the end January. Gold dropped from its peak of January 28. It remains above the $5,000 threshold. Concerns about inflation have also undermined the confidence in the dollar. As a result, central banks in a number countries have increased their gold purchases instead of U.S. dollars. China's central banks and households have certainly taken this direction. Investors and householders in China also contributed to the rally. World Gold Council reports a 28% increase year-over-year in the purchases of gold coins and bars by 2025. Chinese gold ETFs also saw record inflows during the past year. The Dow's rapid rise was a continuation of an existing trend, while the gold's explosive surge depended on many factors, including speculation, which is impossible to predict in advance. The Suppression of Round Numbers Does it really matter if we reach these financial "milestones"? Analysts and financial journalists made some predictable statements about the achievements. Some analysts and financial press claimed that these assets had crossed "critical" thresholds in terms of psychological perception. They suggested that this could create momentum. Even if investors are influenced by large round numbers such as $5,000 or $50,000, the effect is likely to be temporary. Take a look at what happened when the Dow hit previous psychologically significant thresholds. In two instances, the Dow increased by double digits over the following?12 month period, while it fell in the other two. The excitement that comes from a commodity or an index reaching a new, seemingly significant level can quickly fade when new information is released. Some may say that factor-based and passive trading will amplify the positive momentum gained from breaking a large round milestone, but recent gold moves suggest this isn't necessarily true. Investors would do well to avoid extrapolating past trends in price or relying on the long-term effects of the most recent headline-grabbing market successes. Milestones are great for copy but not so good as a strategy. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Wall Street Journal, February 27,
These are the most popular stories from the Wall Street Journal. The Wall Street Journal has not verified the accuracy of these stories. Paramount Skydance has emerged as the winner of a long-running battle to buy Warner Bros Discovery after Netflix refused to increase its bid on Thursday. - ?Artificial intelligence company Anthropic said it wouldn't back down in ?a dispute with the Department of Defense over artificial-intelligence guardrails, complicating ?efforts to reach a compromise ahead of a Friday deadline. Jack Dorsey’s Block announced on Thursday that it would cut?over 4,500 jobs, or nearly?half of its workforce as part of a revamp to embed artificial Intelligence across its operations. Shares of the payments company rose 25% after-hours in trading. Vanguard Group has agreed to pay $29.5m and improve its passive investment approach as part of a settlement with 13 Republican state attorneys general who claimed that the fund manager, along with 'rivals', had violated antitrust laws through their climate activism. Walmart has agreed to settle claims by the Federal Trade Commission that it misled its delivery drivers regarding the amount of money they could earn and the tips they would receive. Brink's Company plans to buy NCR Atleos, for approximately $4 billion in cash or stock. This deal will combine two major players in ATM business.
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Asian shares fall, Treasuries and yen rise as geopolitical worries, AI are at play
On Friday, Asian shares slid while the yen and U.S. Treasuries climbed as fears about geopolitical tensions and technology company valuations affected sentiment. Stocks in Japan and South Korea were volatile, while Chinese equities fell after the artificial intelligence sector's leading company Nvidia failed to impress investors. This dragged Wall Street down. Gold and crude oil prices rose. The Omani mediator in the U.S.-Iran nuclear talks was optimistic about the latest round, but there were no signs that a breakthrough would be achieved to prevent a possible U.S. strike. Pakistan's Defence Minister also spoke of an "open war" with Afghanistan following overnight bombings against Taliban government targets. In a recent note, Mantas vanagas, senior economics at the Westpac Group, stated that "AI and geopolitics remain front and center for financial markets. This has led to a move away from risk assets towards safe havens." He said that "with no major breakthroughs announced, the crude markets remain in wait-and see mode and continue to price in significant risks of military escalation between both countries." MSCI's broadest Asia-Pacific share index outside Japan was flat, while Japan's Nikkei index rose by 0.22%. China's blue chip CSI300 index fell 0.34%, while South Korea's 'Kospi' dropped 0.6%. Nvidia reported better-than expected results for the first quarter of 2019 on Wednesday, and also forecast revenue that is above market expectations. The U.S. stock market ended lower, and Nvidia's stock was unchanged in after-hours trade. Tony Sycamore, an IG analyst, said in a note that the Street?wanted more or isn't willing to chase Nvidia stock at its current high valuation. The dollar index (which measures the greenback versus a basket of currency) fell by 0.05%, to 97.68. Meanwhile, the euro rose 0.09%, to $1.1808. The yen gained 0.2%, to 155.78 dollars. After consultations in the capitals of both countries, the U.S. plans to resume talks with Iran over Tehran's nucleo programme. Omani Foreign Minister Sayyid Bahr Albusaidi announced this in a post made on X following the day's meeting in Switzerland. A significant step forward would reduce the chances that U.S. president Donald Trump will carry out his threatened attack against Iran, which many fear could escalate to a wider conflict. Air and ground attacks were also carried out against Taliban posts, headquarters, and ammunition depots along the border. Brent crude increased 0.35% to $71.00 a barrel. U.S. crude was up 0.54% at $65.56 per barrel. Gold spot rose 0.15%, to $5194.48 per ounce. The yield on benchmark U.S. 10 year notes dropped 1.7 basis points from 4% to 4%. The 30-year bond rate fell 1.3 basis point to 4.6556%, from?4.669% at the end of Thursday. Data from?Japan revealed a cooling of inflation in Tokyo, and weakened factory output than expected. This made it harder for the central bank to increase policy rates. Sanae Takaichi, the Prime Minister of Japan, nominated two members of the Bank of Japan board who shared her dovish outlook. Satsuki Katayama, the Japanese Finance Minister, signaled heightened vigilance regarding currency movements. He told parliament that 'the government is closely monitoring the recent drop in yen with a sense of urgency. The British Labour Party, led by British Prime Minister Keir starmer, lost an election in Greater Manchester that it had controlled for nearly a century. Sterling rose 0.07% at $1.3489. Hannah Spencer, a member of the left-wing Green Party, won the race for the vacant Gorton and Denton parliamentary seat. Nigel Farage, the anti-immigration Reform UK Party, came in second place, while Labour was pushed to third. Early European trading saw the Euro Stoxx 50 futures up 0.1% to 6,176. The German DAX futures increased 0.07% to 25,330. And FTSE futures grew 0.24% to 10,859.5. The S&P 500 E-minis futures in the United States were down by 0.23% to 6,903.8. (Reporting and editing by Tom Hogue, Sam Holmes and Rocky Swift)
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Acerinox Q4 profits fall as price and low demand pressures bite
Acerinox, a Spanish'steelmaker, announced a?net loss for the fourth quarter on Friday. The?results?were affected by low'seasonal demand'?for stainless-steel, tariff tensions, and price pressures. The company recorded a net loss in the third quarter of 47 million euro ($55 million), down from a net profit of 63 million euro a year earlier. Acerinox will?benefit from increased protection within the European Union, thanks to the newly enacted Carbon Border Adjustment Mechanism. However, the steelmaker stated that prices in Europe?trended down due to an increase in imports as a result of these measures. The European Commission also proposed additional safeguards to the industry. cutting import quotas They are expected to be implemented in July. Even though Tariffs of 50% on Steel The erratic U.S. Trade Policy has also caused supply-chain interruptions, and has made companies delay investments and purchases. Acerinox said that the oil and gas industry would be "sluggish in 2025 due to the lack of new projects" and also added "that the demand for chemical processing has been significantly lower".
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Northam Platinum's profits surge on higher metal prices, dividends up
Northam Platinum, a South African company, announced on Friday a?25-fold?surge in its?half-year?profit, due to higher metal prices and an increase in production. They also announced a record-breaking interim dividend. Northam's headline earning per share was?15.24 Rand ($0.9583) for the six-month period ended December 31, 2025. This is up from 0.61 rand one year earlier. The Johannesburg-based miner announced a record dividend of 7 Rand per share, up from 0.15 Rand a year ago. Northam's refined metal output increased 3.7%, to 467 818 ounces, during the first half of the year, while sales of metals jumped by nearly 14%. Revenue increased 60% to 23.2 billion Rands on the back of stronger sales and a 53% rise in the basket price. Spot platinum prices more than doubled by 2025, and reached a record high of $2,700 per ounce in January. This was due to tight supplies and a growing demand for precious metals from investors. Platinum's key role in catalytic converters that reduce vehicle emissions, as well as the European Union's U turn on a combustion-engine ban for 2035, further supported prices. $1 = 15.9039 rand (Reporting and editing by Nelson Banya, Sumana Nandy, and Muralikumar Aantharaman).
Holcim Q4 Sales Hit by Strong Swiss Franc
Holcim, the Swiss 'building materials manufacturer', reported lower sales and earnings on Friday due to the appreciation of the Swiss Franc.
Analysts had predicted that sales would be 3.81 billion Swiss Francs. However, the cement, aggregates and concrete pre-cast maker reported that its sales fell by 4.8% in the quarter ending December to $3.82 billion Swiss Francs.
The recurring operating?profit fell by 0.8%, to 601 millions francs. This was ahead of the?forecasts of 583 million.
The fourth quarter saw a reduction of 206 million francs in reported sales due to currency effects. The safe-haven currency franc increased in value against the Argentinian Peso, US dollar, British pound, and euro. Operating profit also decreased by 41 million francs.
Sales rose by 3.4% in local currency, reducing the impact of the franc appreciation. The recurring operating profit grew?by 12.2%.
Holcim's results are a good indicator of the health of the construction industry, as the company supplies cement, ready-mix concrete, as well as walling and roofing systems.
The company stated that it expects to increase its sales by 3-5% when currency effects and acquisitions are removed in 2026 and to improve its operating profits by 8%- 10%. $1 = 0.7727 Swiss Francs (Reporting and editing by John Revill)
(source: Reuters)