Circular Financing Worries Surround Nvidia

Market Sentiment - The beginning of December has seen a shift in market sentiment, with technology and cryptocurrency sectors experiencing declines after a solid rally in the previous week due to expectations of Federal Reserve interest rate cuts [1][2] - The Bank of Japan's Governor has adopted a more hawkish tone, raising expectations for a December rate hike, which has contributed to the current risk-off sentiment in the market [2][3] Impact on Carry Trade - Concerns are growing regarding the unwinding of the carry trade, where investors borrow in low-interest yen to invest in higher-yielding assets. A potential rate hike from the Bank of Japan could lead to repatriation of funds back to Japan [3][4] - The ten-year yield in Japan has reached a 17-year high, which may further exacerbate the unwinding of the carry trade and impact liquidity-sensitive sectors like technology and cryptocurrency [3][4] NVIDIA and Market Concerns - NVIDIA has faced significant pressure in the market, but recent comments suggest a potential turnaround in sentiment, although concerns regarding secular financing remain prevalent [6][7][8] - The latest earnings report from NVIDIA was positive, indicating strong performance despite market nervousness surrounding secular financing and its implications for the ecosystem [11][13] Cryptocurrency Market - The cryptocurrency market is experiencing challenges, with institutional demand remaining weak. November saw significant outflows from ETFs, totaling 3.48 billion, marking one of the worst months for the sector [15][16] - The unwinding of the yen carry trade is causing fears of reduced liquidity, which is particularly detrimental to the cryptocurrency market [15][16]