Broadcom's disappointing sales forecast caused its stock price to plummet 11%, further exacerbating investor concerns about betting on artificial intelligence, as US stocks retreated from record highs on Friday (December 12). The Bank of Japan (BOJ) is expected to raise interest rates by 25 basis points after its December 19 meeting, increasing the benchmark rate to 0.75%, marking the first resumption of a rate hike cycle since January. Market concerns about yen carry trade unwinding pressure put pressure on the cryptocurrency market. Bitcoin (BTC) fell from 93K on Friday to above 88K this morning, while Ethereum (ETH) also fell below $3,000, bringing the total cryptocurrency market capitalization down 1.8% to $3.02 trillion.
The Federal Reserve may only cut rates by 25 basis points next year; Broadcom's earnings report triggers selling pressure in the market.
Broadcom's disappointing sales forecast caused the chipmaker's stock to plummet 11%, dragging down competitors and further fueling investor concerns about betting on artificial intelligence, as U.S. stocks retreated from record highs on Friday (December 12).
The market enthusiasm sparked by the Federal Reserve's third consecutive rate cut was dampened by a sell-off. Furthermore, the Fed officials' projection of only one rate cut in 2026, based on the dot plot, has also confused investors.
Cleveland Federal Reserve President Beth Hammack stated that she would prefer a slight tightening of interest rates to continue putting pressure on inflation, which remains excessively high. Following this news, the yield on the 30-year U.S. Treasury note rose 6 basis points, reaching its highest level in three months.
Jeff Schmid of the Federal Reserve Bank of Kansas City also pointed out the pressure on consumer prices. He opposed the Fed's decision to cut interest rates this time because inflation is still too high and economic growth momentum remains strong.
Investors seek diversification, and investment banks remain optimistic about the stock market next year.
For most of this year, tech giants led the stock market rally, but now investors’ concerns about overvaluation and huge capital expenditures are prompting them to look for other investment opportunities.
Goldman Sachs analyst Mark Wilson believes that diversification has become a necessary price to pay for maintaining adequate equity investments. South Korea, Japan, China, and the broader emerging markets all present highly attractive investment opportunities.
Meanwhile, Goldman Sachs predicts that the stock market will reach new highs next year, with strong economic growth and the wider application of artificial intelligence supporting corporate profits. Several other companies, including Morgan Stanley, Deutsche Bank, and Royal Bank of Canada, also forecast that the U.S. stock market will rise by more than 10%.
Market forecasters are generally optimistic about the European market; none of the 17 strategists surveyed by Bloomberg expect a sharp decline in European stocks.
With no recent headwinds, Ecofi Investissements fund manager Karen Georges said many investors are expecting a stock market rally during the Christmas season.
Investors are keen to buy stocks that have underperformed this year, and now is a good time to diversify their portfolios.
The Bank of Japan may raise interest rates this week, causing Bitcoin to fall to 88K.
The Bank of Japan (BOJ) is expected to raise interest rates by 25 basis points after its meeting on December 18-19, bringing the benchmark rate to 0.75%, marking the first resumption of a rate hike cycle since January. Market concerns about yen carry trade unwinding are putting pressure on the cryptocurrency market.
Bitcoin fell from 93K last Friday to above 88K this morning. Liquidations totaled $220 million in the last 24 hours, with Bitcoin long positions making up the majority.
Ethereum also fell back above $3,000, and the overall market capitalization of cryptocurrencies dropped 1.8% to $3.02 trillion.
This article, titled "Bank of Japan May Raise Interest Rates This Week, Bitcoin Falls to 88K," first appeared on ABMedia, a ABMedia .
