On January 21, it was mostly cloudy, with some clear and dry periods during the day. The crisis over U.S. President Trump's attempt to acquire Greenland escalated, leading to a renewed tariff war between the U.S. and Europe. Global bond yields surged, and U.S. stocks fell sharply after the holiday on Tuesday. The Dow Jones Industrial Average opened down 354 points and fell further, with the decline reaching as much as 931 points. The Dow closed down 870 points or 1.76%, at 48,488; the S&amp;P 500 fell 143 points or 2.06%, at 6,796; and the Nasdaq dropped 561 points or 2.39%, at 22,954.
In individual stock performance, Nvidia and Tesla both fell over 4%, while Amazon and Apple dropped 3.4%. Meta fell 2.6%, and 3M plummeted 7%, making it the largest decliner among Dow components. IBM fell 4.7%. European stocks were under pressure across the board, with the UK, France, and Germany down 0.67%, 0.61%, and 1.03%, respectively. The so-called &#34;fear index,&#34; the VIX volatility index, rose above 20 for the first time since last November, surging 32% to 20.99.
<h2>Emerging Markets and Japanese Stocks Expected to Have Better Risk-Return</h2>
Investor concerns about the Japanese government's finances intensified, triggering a sell-off of $76 trillion in Japanese government bonds. The yield on 40-year Japanese bonds rose above 4% for the first time, leading to a spike in U.S. 30-year bond yields, which jumped 10.84 basis points to 4.9449%. The yield on 10-year bonds rose 8.36 basis points to a four-month high of 4.3065%.
Ronald Temple, Chief Market Strategist at Lazard Asset Management, pointed out that if Japanese bond yields continue to rise, rational Japanese investors will likely choose to repatriate their funds. Citigroup downgraded its rating on European stocks from &#34;overweight&#34; to &#34;neutral&#34; for the first time in over a year, citing deepening friction over Greenland between the U.S. and Europe. The firm's strategists stated that the tension and uncertainty over tariffs undermine the rationale for short-term investment in European stocks and damage the earnings outlook for companies in the region, believing that emerging markets and the Japanese stock market offer better risk-return profiles.
U.S. Treasury Secretary Janet Yellen stated at a press conference at the World Economic Forum in Davos, Switzerland, that the idea of Europe potentially selling U.S. bonds is illogical. She also revealed that Trump may announce his choice for the Federal Reserve Chair as early as next week, mentioning that there are currently four excellent candidates. Although the Secretary aimed to reassure, in reality, the U.S. is experiencing a triple whammy in stocks, currencies, and bonds, with safe-haven assets in demand. Spot gold prices rose above $4,700 for the first time, surging 1.88% to a high of $4,766.34, while spot silver prices also hit a record, rising 1.59% to $95.8857. The U.S. dollar index fell sharply by 1.15% to 98.246, and the yen rose 0.42% to 157.47 per dollar. The leading cryptocurrency, Bitcoin, plummeted 4.06% to $89,234.
<h2>Hang Seng Index Likely to Test the 20-Day Line Around 26,300 Level</h2>
Although the recently released economic data from the mainland was relatively positive, and targeted interest rate cuts were introduced, the Hong Kong and mainland stock markets still consolidated at high levels last week. However, over the weekend, U.S. President Trump announced plans to acquire Greenland and imposed tariffs on eight European countries opposing this move. This news led to a decline in U.S. stocks after the holiday on Tuesday, and other markets also fell amid escalating geopolitical tensions and uncertainty, with the Hong Kong and mainland stock markets not being exceptions. Yesterday, Hong Kong stocks fell for the fourth consecutive trading day, with the Hang Seng Index opening down 19 points. It briefly rose 74 points to a high of 26,638 before returning to a downward trend, dropping 200 points to a low of 26,363, with the closing decline narrowing to 76 points
Report 26487, transaction amount 237.7 billion.
Although the Hong Kong stock market reached a high of 27200 last week, it opened this Monday with a significant gap down. Although the gap down narrowed to 26715 to 26741, yesterday's rebound was clearly constrained within the gap down. Following the upward gap left at 26608-26729 last week, it surprisingly filled the upward gap with a gap down, resulting in an island pattern on the daily chart. Unless it can return above the top of the gap, specifically above the 26750 level, the Hong Kong stock market will turn bearish under the constraints of the island pattern, testing the 20-day moving average around the 26300 level. If it fails to hold this level, it will seek support around the convergence area of the 50 and 100-day moving averages, approximately 26100. If it cannot return to stabilize above the 20-day moving average and loses the critical level of 26000, the market may further seek support at the bottom of the daily Bollinger Bands, around the 25400-25500 level.
Goddess of Ancient Times

The crisis over Trump's attempt to seize Greenland has escalated, leading to a renewed tariff war between Europe and the United States. Global bond yields have surged, and U.S. stocks have fallen sharply, with the Dow closing down 870 points, and both the S&P and NASDAQ also experiencing significant declines. European stocks are under pressure across the board, and the VIX volatility index has risen above 20. Japanese government bonds have been sold off, causing yields to rise, and Citigroup has downgraded European stocks to neutral. U.S. Treasury Secretary Janet Yellen stated that the claim of Europe selling off U.S. bonds is illogical, and despite the demand for safe-haven assets, spot gold prices have risen above $4,700 for the first time

- On January 21, global stock markets fell sharply due to escalating geopolitical tensions and concerns over the U.S. economy, with the Dow Jones dropping 870 points and other indices following suit.  
- European stocks also experienced declines, as Citigroup downgraded their outlook amid uncertainties about tariffs and corporate earnings in the region.  
- Rising bond yields, particularly in Japan, led investors to reconsider their positions, with significant movements in gold and silver prices, indicating a flight to safe-haven assets.

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Trump's scheme to seize Greenland leads to a sell-off of dollar assets | Gu Tianhou