Market Opportunities in the AI Era, Jason Lau of KCM Trade Discusses the Future of Investments with SBS Radio

In the interview, Jason and the host discussed the latest trends in the global market, covering the steady growth of the US stock market and the dazzling performance of technology stocks, how tech giant NVIDIA is leading the AI boom, the diversified development of Asia-Pacific stock markets, the similarities and differences between the current AI boom and the 2000 dot-com bubble, also, the key focal points of global interest rate policies.

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Regarding the stock market, Jason emphasized, "The US stock market showed a steady growth trend in the first half of 2024. However, the performance of technology stocks was particularly outstanding. Both the Nasdaq and the S&P 500, which include a significant number of technology stocks, rose by 13% and 11%, respectively."  

Jason attributed this growth to the heightened focus on technology stocks in the current market landscape. Speaking of leading tech companies, Jason stated that NVIDIA is undoubtedly the most prominent star. Since 2022, NVIDIA's stock price has multiplied several times. Its CEO, Jensen Huang, has given numerous speeches globally, promoting the development and application of AI technology, thereby driving activity across the entire stock market.

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Moving forward to the Asia-Pacific stock markets, the Australian market saw a growth rate of only about 1% since the beginning of the year due to the relatively small proportion of the technology sector. In contrast, the Japanese stock market reached a new high in March, with the Nikkei index briefly surpassing 40,000 . Although it has since pulled back, it remains stable above 38,000, achieving a growth rate of 16%. Also, the Taiwanese stock market performed particularly well, with the weighted index rising by 20%. This impressive performance is partly attributed to Taiwan's advanced semiconductor industry and the benefits enjoyed by 43 suppliers associated with NVIDIA.

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When discussing the AI boom, the reporter asked, "Will the current AI boom repeat the history of the 2000 dot-com bubble?" In response Jason identified clear differences between the two: the market in 2000 was filled with numerous underperforming startups, whereas today's AI market is primarily dominated by seven major tech giants, including NVIDIA. These companies not only possess strong research and development capabilities but also have sufficient financial strength to withstand potential losses. Therefore, despite the risk associated with the high concentration of technology stocks, the overall market appears healthier based on current price-to-earnings ratios and company performance, making a bubble burst less likely.

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Interest rate policies are another topic investors are keenly interested in. Recognizing the importance of this issue, Jason offered an analysis of interest rate policies in the first half of the year. He pointed out that so far this year, major central banks globally have been relatively cautious in their actions. Japan and Switzerland took action in March, while other regions such as Australia, the Eurozone, and the UK have adopted a wait-and-see approach. Jason mentioned that this week, the market widely expects the European Central Bank to cut interest rates by 0.25 percentage points to 3.75%, while the likelihood of a rate cut by the Bank of Canada is about 30%. These decisions could significantly impact on the market and are worth investors' attention.

In conclusion, Jason summarized that the global stock market had a promising start in the first half of 2024, especially with the performance of technology stocks. However, investors still need to remain cautious, keeping an eye on market dynamics and changes in central bank policies to make wise investment decisions.

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Click here for the SBS Cantonese exclusive interview with Jason

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