Global Markets in Flux: South Korea’s Presidential Crisis and Beyond
Impeachment Looms in South Korea
In a dramatic turn of events, South Korea’s parliament has introduced a motion to impeach President Yoon Suk Yeol, following his controversial announcement and subsequent reversal of martial law. The opposition Democratic Party, which holds a majority in the 300-seat parliament, needs the support of eight lawmakers from the ruling People’s Power Party to achieve the required two-thirds supermajority.
France’s Government Collapses
Meanwhile, in France, the government has been toppled after a vote of no confidence, with 331 lawmakers supporting the motion. Prime Minister Michel Barnier will be forced to resign, paving the way for a new government.
US Markets Reach New Heights
In the United States, all three major indexes closed at record highs, driven by strong reports from tech companies Salesforce and Marvell Technology. The Dow Jones Industrial Average broke through the 45,000 mark, while the S&P 500 and Nasdaq Composite also rose significantly.
Fed Chair Powell Unfazed
US Federal Reserve Chair Jerome Powell expressed confidence that the central bank’s independence would be preserved, despite concerns that President-elect Donald Trump may try to politicize it.
Dollar’s Strength in Question
Some financial institutions, including UBS, are advising investors to bet against further strength in the US dollar, which has surged since September.
South Korea’s Investability in Question
The political turmoil in South Korea has raised concerns about the country’s investability. While some experts, like Morgan Stanley’s Jonathan Garner, believe the economy is not well-positioned in a global economic slowdown, others, like Capital Economics’ Thomas Mathews, are more optimistic, citing the country’s experience with impeachments and the potential for a swift resolution.
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