Originally published at: This week in charts: South Korea and France in turmoil – InvestEngine Insights
Martial law in South Korea
Tuesday saw South Korea impose martial law, announced in the evening, but subsequently reversed just six hours later. The South Korean president, Yoon Suk Yeol, is now facing impeachment.
From a market perspective, these events led to a decline in South Korean equities overnight, with the market down approximately 7%. However, given that South Korean firms constitute less than 1% of the global market, the impact on broader portfolios was limited, despite the high-profile nature of the news.
More broadly, the South Korean market has been a laggard this year, underperforming wider Emerging Market indices and far behind the global benchmark.
French government collapses
As was widely anticipated going into the vote, the French government collapsed following a vote of no confidence against Prime Minister Barnier. Despite this political turmoil, the French market was largely unaffected, and in fact rose 0.70% on the day.
This muted market reaction is largely due to the predictability of the outcome, which had already been priced in by investors, and had caused much of the country’s underperformance this year (as noted in last week’s blog post).
Following the collapse, French bond yields continued to trade roughly on par with Greece’s government debt.
Bitcoin breaches $100,000
Bitcoin surged past the $100,000 mark this week, reaching over $103,000 early on Thursday, before falling over 10%, back below $100,000, on Friday morning.
Contributing to the surge was president-elect Trump’s commitment to making the U.S. a global “crypto capital” and “Bitcoin superpower,” boosting investor confidence. The milestone was achieved following the announcement of Trump’s intention to nominate Paul Atkins, a cryptocurrency-friendly former SEC commissioner, to lead the Wall Street regulator, signaling a potential shift toward a more pro-crypto regulatory stance.
While the FCA has banned the sale of funds investing directly into cryptocurrencies for UK retail investors, investors can capture the cryptocurrency enthusiasm through digital asset and blockchain ETFs. Invesco’s BCHS ETF, which provides diversified exposure to companies in the blockchain ecosystem, is up almost 40% this year:
Bitcoin’s recent rise means there has now been only one stock to have outperformed the cryptocurrency over the past 10 years – NVIDIA:
All-time highs all round
Not only did Bitcoin reach all-time highs this week, but so did the stock market, with the US market notching its 56th of the year. At the other end of the risk spectrum, cash held in money market funds also reached an all-time high, at almost $6.8 trillion dollars invested:
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