Chapter 1640 Opening

David listened carefully, but his expression was still a little confused.

"I agree with short-term risk aversion. But giants like Qualcomm and Samsung should be more aware of the risks than we are."

He refilled their glasses again:

"Remember the bank report from the day before yesterday? They mobilized a huge amount of liquidity into their accounts. They're probably preparing to buy back shares. Does this mean they're more optimistic about the mid- to long-term industry landscape and their own position than we are? Or perhaps they've received some kind of guarantee?"

"Optimistic? Guaranteed?"

Richard shook his head decisively and warned, "David, I have to remind you that this is the biggest change since the end of the Cold War, or at least since 911/. Perhaps those semiconductor industry giants do have their own reasons, but for us, the most important thing is to avoid risks."

"Since the next moves of both parties are still unclear, the most prudent strategy now is to avoid the entire semiconductor and highly related technology hardware sectors, reduce or even completely liquidate positions, and wait and see. Once the dust settles and the bottom line and subsequent moves of both parties are clearly understood, then decide whether to buy the dip or switch to other areas."

David was silent for more than ten seconds, obviously engaged in a fierce ideological struggle.

Finally, he nodded slowly: "You convinced me, Richard."

"Safety first. Then, as you say, significantly reduce holdings in semiconductor and related tech stocks by at least 50%. However..." He then changed the subject, "Withdrawn funds can't just sit there idle. Even cash will depreciate under inflation expectations, so it needs to go somewhere."

Richard seemed to have a plan in mind:

"Of course, we can't idle... But the Nasdaq isn't just about semiconductors. There are always some relatively safe havens outside the center of the storm. My advice is: invest heavily in utilities and energy... especially new energy."

"Energy?" David was a little surprised. "That's a... prudent choice, but it seems lacking in imagination."

"We don't need imagination right now; we need certainty and defensiveness," Richard emphasized. "Think about it, David. No matter how this technological war is fought, whether the future holds artificial intelligence, unmanned factories, electric vehicles, or the 'all-scenario smart life' envisioned by the Chinese, it all depends on an adequate power supply!"

He directly opened the newspaper and pointed to the relevant report and said:

"Rigid demand is relatively less affected by macroeconomic cycles and geopolitics. While it's unlikely to skyrocket, in the current environment, there's almost no significant downside risk. It also offers stable dividend returns, making it a good place to park funds. We can park most of the withdrawn funds here, waiting for the semiconductor storm to subside, or look for other more aggressive opportunities."

David picked up the wine glass, shook it gently, looked at the wine hanging on the wall of the glass, and fell into deep thought.

"Okay, stability first." After a few minutes, he finally made a decision. "But I'm afraid the power sector doesn't meet the investment goals of most of our clients. New energy does provide a good buffer... I agree with this allocation adjustment. When we get back to the office this afternoon, have the team immediately develop a detailed plan for the specific targets and proportions. We must ensure that the instructions are fully implemented today so that they can be executed at the opening of tomorrow's market."

The department they are in charge of mainly connects with the technology industry. Investors who inject funds into their pool will not want to see their money thrown into things like oil or coal.

"Okay!" Richard also breathed a sigh of relief and raised his refilled glass. "To... uh, lose as little money as possible?"

David smiled bitterly and clinked glasses with him: "To keep the boat steady."

……

The next day, January 1th, Friday.

North American stock markets reopened after a brief New Year's Day break.

The atmosphere in the trading hall was solemn. On the huge electronic screen, the lines representing the major stock indices plummeted downward as if being pulled by a heavy object the moment the opening bell rang.

Without exception, the three major indexes opened significantly lower.

Especially the Nasdaq, which is dominated by technology stocks, is in a grim state.

Most of the decline was contributed by several companies involved.

Qualcomm opened 4.5% lower, Intel opened 3.8% lower, Nvidia opened 5.2% lower, Applied Materials opened 6.1% lower, and Lam Research opened 5.7% lower...

The Philadelphia Semiconductor Index (SOX), which represents the overall performance of the semiconductor industry, fell nearly 4%.

Panic permeated the cold data, and companies that relied on the Chinese market bore the brunt of the impact.

However, the panic selling wave lasted less than five minutes.

As David and Richard expected, and as suggested by the pre-market repurchase plans of companies such as Qualcomm and Samsung, powerful "market-supporting" forces quickly entered the market.

The influx of huge buy orders pulled up the prices of many stocks abruptly, and the SOX index narrowed its decline from 4% to around 1.5% within half an hour after the opening.

Obviously, not everyone is bearish.

Those forces that believe that the US technological barriers are insurmountable, that China will eventually succumb, and that Qualcomm and Samsung will have the last laugh are also taking action.

Wenkkonen’s “declaration of technological supremacy” on CBS a few days ago now seems to have become one of the cornerstones supporting market confidence.

At the same time, sectors such as electricity, automobiles, and basic materials saw a slight but clear rise, confirming that Richard and Elizabeth's strategy of shifting funds to "safe havens" was beginning to bear fruit.

Panic did not spread on a large scale, and the market showed a trend of cautious wait-and-see and structural adjustment.

Including ASML itself, although it fell nearly 5% at the opening due to the overall environment, it quickly rebounded and the decline narrowed to less than 2%.

The market seems to have temporarily accepted its assertion that "EUV technology barriers are insurmountable", believing that the actual business impact of China's sanctions on it is relatively limited (although losing the market itself is a huge loss), and its long-term technological leadership remains solid.

By the close of trading, the losses of major stock indexes narrowed, with the Nasdaq ultimately falling 2.1% and the semiconductor sector index falling 5.8%. Although it was a sharp drop, it was far better than the tragic scene under the shadow of circuit breakers at the opening.

The market initially withstood the first wave of impact. Richard and David's team's order to reduce holdings was executed smoothly, and most of the funds were transferred to public utilities, essential consumer goods and some new materials stocks, successfully avoiding the main impact of the semiconductor plunge. The overall portfolio net value remained basically stable.

On the following Saturday and Sunday, the market waited anxiously.

There remains a puzzling silence on both sides of the Pacific, with no major new announcements or actions.

The media is filled with analysis, speculation and expert interviews, but the core information has not been updated.

Juchang and Huaxing Technology have not made any further statements. Their official websites and social media maintain a normal business promotion rhythm, as if the global sanctions storm has nothing to do with them.

This "calm before the storm" made many market participants, including Richard and David, feel a little strange, but the market performance in the past three days - stabilizing after the sharp drop on January 1, and no new panic signals before the opening of Monday, January 2, made them relax their tense nerves a little.

Monday, April 1th.

It was seven in the morning, in a lounge reserved for senior managers on the upper floors of Morgan Stanley's Times Square headquarters.

Richard and David were enjoying coffee and bagels while watching the morning financial news on CNBC.

On the screen, the host and guests were reviewing last Friday's market performance, discussing whether the semiconductor sector had bottomed out and its likely trajectory this week. The atmosphere was relatively calm.

"It seems our decision last Friday was the right one," David said, taking a sip of coffee with a look of relief on his face. "We reduced our holdings in semiconductors and increased our holdings in defensive sectors and some future-oriented sectors, successfully hedging most of the risks. The market seems to have initially digested the most immediate impact."

He glanced at the net asset value curve of the portfolio he managed on his tablet computer. After a slight drop on Friday, it showed stability before the market opened today.

"Hmm, the Chinese side...seems genuinely stunned by this heavy blow? Aside from their rhetoric, they haven't come up with any substantial countermeasures."

Richard nodded and cut the meat pie on the plate:

"That hypersonic vehicle is impressive, but to the capital market, it's more of an achievement in national defense technology, and its short-term impact on the industrial and economic landscape will be limited." He paused, with a hint of self-mockery, "Unless they really come and blow up Wall Street, the market will still be more concerned about chips and orders."