Date Issued – 24th March 2025
Preview
Global markets opened the week on cautious optimism as U.S. and European stock futures rose, buoyed by hopes for narrower U.S. tariffs. Copper prices surged 12% YTD amid supply constraints, with bullish calls forecasting record highs. Meanwhile, Supermicro shares gained nearly 40% this year on AI infrastructure demand, and China’s equity issuance more than doubled in Q1 to $16.8 billion, as easing tech regulations and AI innovations like DeepSeek lure global investors. The Hang Seng Index is up 21% YTD, outperforming peers, with valuations in Chinese markets offering a 40% discount to U.S. counterparts. However, geopolitical risks and economic uncertainties continue to weigh on sentiment across asset classes.
Futures Climb Amid Hopes for Targeted US Tariffs
US and European stock futures edged higher on optimism that upcoming US tariffs may be more targeted than initially feared, easing concerns over a broad global impact. S&P 500 and Euro Stoxx 50 futures gained, along with Chinese equities, while broader Asian markets saw mixed performance. The 10-year US Treasury yield rose, the dollar held steady, and the yen weakened. However, global markets remain cautious ahead of the April 2 tariff announcement, with warnings from Chinese and Australian officials about potential economic shocks. In commodities, oil prices steadied, and gold hovered near record highs at $3,022 an ounce. Meanwhile, Chinese tech shares surged on AI innovation, while Indonesian stocks extended losses due to a deteriorating economic outlook. Investors are also monitoring volatility in Turkey and Canada amid political developments and policy responses.
Investment Insight
While optimism over targeted US tariffs has lifted market sentiment, investors should remain cautious. The uncertainty around geopolitical developments and trade policy could spark volatility, particularly in emerging markets and commodities. Focus on defensive sectors and high-quality assets to navigate potential turbulence, while monitoring key economic data this week—such as US inflation metrics and European activity indicators—for further cues on global growth trajectories.
Supermicro Gains Momentum as AI Infrastructure Demand Grows
Super Micro Computer (SMCI) shares have surged nearly 40% year-to-date, driven by heightened demand for AI infrastructure and bullish commentary from JPMorgan. The firm upgraded the stock, citing its role in supporting Nvidia’s Blackwell chip shipments, which are key to AI applications. Despite prior accounting challenges, Supermicro has regained investor confidence after filing delayed financial reports and projecting robust revenue growth in 2026. On the technical front, the stock recently retested an inverse head-and-shoulders neckline at $35, lifting its RSI above 50 and signaling potential for further upside. Key resistance levels lie at $66 and $97, while crucial support sits at $35 and $26.
Investment Insight
Supermicro’s rebound underscores the growing appetite for AI infrastructure investments, positioning the stock as a potential outperformer in the tech sector. However, investors should remain vigilant of its volatile price swings, particularly around critical technical levels. Consider scaling into positions near support zones like $35 while watching for momentum above $66 to signal continued strength. With AI adoption accelerating, Supermicro could benefit from long-term tailwinds, but risks tied to corporate governance and market sentiment warrant a balanced approach.
China Consumer Stocks Poised for Continued Gains, Says Top Fund Manager
A $3.4 billion Chinese equity fund managed by Fidelity International’s Hyomi Jie, which has outperformed 99% of peers with a 16% return in 2025, anticipates further upside in consumer-driven stocks. Jie cites a recovery in consumer confidence, backed by Beijing’s pro-consumption policies and cashed-up households, as a key driver for the rally. Top holdings in the fund include Tencent, Anta Sports, and NetEase, with the MSCI China consumer discretionary index up 27% this year alongside a tech-fueled market surge. The fund also has significant exposure to AI infrastructure plays like Tencent, Alibaba, and Baidu, which stand to gain from DeepSeek’s recent advancements in cost-efficient AI models.
Investment Insight
China’s consumer sector presents compelling growth opportunities as sentiment rebounds and retail sales recover. Investors should focus on high-quality companies in sportswear, e-commerce, and AI infrastructure, which are well-positioned to benefit from structural trends such as rising health awareness and technological innovation. However, while near-term performance is strong, longer-term risks tied to market volatility and economic uncertainty remain. Diversifying exposure across sectors and maintaining a medium- to long-term perspective can help navigate these dynamics effectively.
Copper Bulls Eye Record Highs Amid Global Supply Squeeze
Copper prices are surging, with benchmark LME copper up 12% this year to $9,855.50 a ton, as the market braces for a potential record-breaking rally. Mercuria’s Kostas Bintas predicts prices could climb as high as $12,000–$13,000 per ton, driven by U.S. tariff threats that are pulling significant copper inventories into the country, creating a stark global supply imbalance. With 500,000 tons of copper heading to the U.S., Chinese buyers—who account for over half of global demand—may face unprecedented competition for metal. Tightening inventories, coupled with dwindling U.S. scrap exports and robust electrification demand, underpin the bullish outlook. However, risks of a global economic slowdown could temper these gains.
Investment Insight
Copper’s structural demand tailwinds, fueled by electrification trends and constrained global supply, make it an attractive long-term play. Investors might consider exposure to copper producers or ETFs as prices climb. However, the market’s sensitivity to geopolitical developments and trade tensions warrants caution. While short-term momentum remains strong, monitor inventory levels and demand signals from China to gauge sustainability. Balancing exposure across the commodity and broader industrial metals could help mitigate downside risks from potential economic headwinds.
China Equity Issuance Surges as Global Investors Return
Equity issuance by Chinese firms doubled in Q1 2025 to $16.8 billion, as easing regulatory scrutiny of tech giants and disruptive innovations like DeepSeek’s low-cost AI software attract global investors. The Hang Seng Index is up 21% YTD, outperforming international peers, while China’s MSCI index trades at a 40% valuation discount compared to U.S. markets. President Xi Jinping’s recent summit with tech leaders signals growing government support for private enterprises, particularly in AI and quantum computing. Meanwhile, Hong Kong’s IPO activity has surged, with notable listings such as CATL expected to raise significant capital. Bankers suggest the valuation gap and favorable policies are driving renewed investor confidence.
Investment Insight
China’s equity market is regaining favor as easing regulations and tech innovation create new opportunities. Valuations remain attractive compared to global peers, offering a potential entry point for long-term investors. However, geopolitical risks, including Sino-U.S. tensions, warrant caution. Focus on sectors like AI, semiconductors, and green energy, which are likely to benefit from government backing and global demand. Diversifying exposure across developed and emerging markets can help balance potential risks while capturing upside from China’s re-rating process.
Conclusion
Markets are navigating a mix of optimism and caution as shifting trade policies, surging commodity prices, and technological innovation shape investor sentiment. While targeted U.S. tariffs and tightening copper supplies signal potential volatility, sectors like AI infrastructure and consumer-driven equities in China are emerging as key growth opportunities. Supermicro’s performance and renewed interest in Chinese IPOs highlight the global appetite for undervalued yet high-potential assets. However, geopolitical tensions and economic uncertainties remain significant headwinds. Investors should balance exposure across resilient sectors and regions, keeping a close eye on key data and policy developments to steer through this dynamic environment.
Upcoming Dates to Watch
- March 24th, 2025: Singapore CPI
- March 26th, 2025: Australia CPI, UK CPI
- March 27th, 2025: US revised 4Q GDP, Mexico trade & rate decision
- March 28th, 2025: Tokyo CPI, US core PCE price index
Find below some of our Buy/Sell Recommendations. Balfour Capital Group is a distinguished global boutique investment management firm with $350 million AUM and over 1000 Clients.
Disclaimer: This post provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.
