Global Markets — Taiwan and Korea Fall 11%, China and India Rise 6%, Oil Drops 12%

1 · This Week's Action

The global view. The ex-US world index closed the week at 79.25, down 1.64% — under 80, and under the summer-low support near 80.3 it had held for two weeks. The path: Monday 80.86, Tuesday 80.51, Wednesday 82.10, Thursday 79.10, Friday 79.25, with an intraday low of 78.84. The index sits 8.3% under its September 4 record of 86.41 and 8.9% above its spring low of 72.75.

The all-world index fell 2.32% to 151.73 — under its July low close of 152.22, and further under the August–October range of 156.82 to 162.39. The S&P 500 fund fell 2.70% to 735.29, 5.6% under its October 6 record; the Nasdaq 100 fund fell 4.98% to 656.10, 13.6% under its own. Wednesday was the best close of the week everywhere; Thursday took it back and more.

America's lead for the year is gone — almost to the decimal. The S&P 500 fund is +7.83% for 2026, the world ex-US +7.74%, the all-world index +7.56%. A week ago America led the world ex-US by 1.3 points; this week by a tenth of one. The house cointegration monitor still lists the VEU/SPY pair as breaking, but the spread has come back to 0.85 standard deviations below its mean, from 1.8.

The week, in one line: the chip corridor broke, and most of the world did not follow it. Taiwan and Korea lost 10 to 12 percent; India, China's large caps, Hong Kong and Mexico rose 3 to 7 percent. Oil fell 12 percent, gold rose almost 5. Twelve of the thirty-three regional funds we can price rose — two more on the board carry a vendor data error this week and are left out. The best-to-worst spread was 18.4 points, from 27.4 a week ago, and this time it was a region, not one country.

The corridor: Thursday in New York, Friday in Asia. The chip index fell from 10,269 to 9,011 on Thursday — 12.2% in one session — after a call for a pause on advanced AI, a Texas governor-elect who wants a moratorium on new data centres, and a Microsoft spending gap tied to a Texas site all landed on the companies that build AI. On Friday Korea's Kospi fell as much as 8.8% and stopped trading for 20 minutes; Japan's Nikkei closed 20.6% under its high, a bear market by the usual definition; Taiwan fell as much as 9%. Back in New York the chip index rose 4.2% on Friday to 9,390, after a jobs report showing 165,000 new payrolls against about 60,000 expected. The week: −12.2% for the chip index, −11.2% for the chip majors fund SMH to 463.96, 30.6% under its June record.

Asia's chip markets, in their own currencies. Korea: the Kospi −11.7% to 5,060, the Kosdaq −11.1% to 644, its lowest close of the past year; the dollar fund EWY −10.4%. Taiwan: the Taiex −12.2% to 39,702; the fund EWT −11.7% to 89.24. Japan: the Nikkei −9.3% to 57,435, the TOPIX −6.5%, the dollar fund −5.0% — the yen weakened from 157.55 to 158.43 per dollar. Hong Kong's Hang Seng +5.1% to 24,482, China's large caps +5.7%, the A-shares +1.5%. India: the Nifty +8.6% to 25,030, the Sensex +8.8%, the dollar fund +6.6%. Australia's ASX 200 rose 1.3%.

The regional board — twelve green of thirty-three. The top: India +6.64%, China large caps +5.65%, Hong Kong +3.55%, Mexico +3.05%, Spain +2.72%, France +1.54%, the A-shares +1.53%, Indonesia +1.10%. The bottom: Taiwan −11.74%, Korea −10.39%, Argentina −6.96%, Norway −6.36%, Japan −5.00%, international momentum −4.42%, Thailand −3.16%, Southeast Asia −3.02%. Brazil, last week's 24% loser, fell another 1.48% to 31.98; the Latin America fund ended flat.

The cross-asset backdrop — the metals rose, oil fell, the dollar held its high. Five green of twelve: silver +5.09% to 46.87, gold +4.71% to 372.52, the dollar +0.45% to 29.13 — level with its high close of the year — the belly +0.11% and the long bond +0.10% to 81.92. The red: oil −12.10% to 148.41, the Nasdaq top-30 fund −5.91%, the Nasdaq 100 −4.98%, the US top-20 fund −3.38%, the S&P −2.70%, the bitcoin fund −1.11% and copper miners −0.99%. The volatility index closed at 25.64, from 19.42 a week ago, after 28.18 on Thursday; the week ran from 16.57 to 28.36.

The tech ETFs — three of twenty-one green, and the AI funds at the bottom. The red was led by the chips and the AI baskets: the WisdomTree AI fund −13.09%, SMH −11.20%, cybersecurity −9.89%, the fabless fund −9.37%, defence technology −8.75%, XSD −8.01%, quantum −7.82%, cloud −7.74%. Software (IGV) fell 5.19% to 98.88 — back under 100. The green was small: video games +6.32%, lithium and batteries +1.84%, fintech +1.32%. Last week the chips ended flat because Monday to Wednesday paid for Friday. This week nothing paid for Thursday.

The global sectors — seven of eleven green, and energy and tech at the bottom. Discretionary +3.49%, communication +2.64%, real estate +1.97%, materials +0.98%, financials +0.67%, staples +0.58%, health care +0.27%. The red: utilities −0.13%, industrials −2.72%, technology −8.25% to 123.58 and energy −11.15% to 57.03 — from a record close of 64.19 a week ago. Seven sectors up and the world index down 2.3%: once again the two that fell are the two that weigh.

Was the sector week global, or one region carrying it? Technology fell in every region: America −8.2%, Europe −7.3%, developed Asia −10.7%, emerging markets −8.0%. That is the week's one global fact. Energy split by region: America −12.0% and developed Asia −16.6%, against Europe +2.6% and the emerging markets +2.0%. Communication services: America +4.9%, Europe −1.5% — a US-minus-Europe spread of +6.4 points, a reversal of last week's −8.4. Health care rose most in the emerging markets, +2.3%.

The Global Compass

Regions: emerging over developed, for the first time in four weeks. VWO −0.40% against VEA −2.22%. The emerging basket carries India and China, two of the week's winners, and Taiwan, its worst; the developed basket carries Japan and Korea without China and India to offset them.

Sectors: defensives over cyclicals in all four regions, a fifth week. The engine's cyclical-minus-defensive spread was −3.1 points in the US, −4.2 in Europe, −0.6 in developed Asia and −4.0 in the emerging markets. Last week three regions leaned defensive; this week all four did. On the month the US spread is −12.6 points, and on the year −11.1.

Sectors: the leaders' bench. Technology 123.58, 19.2% under its October 6 record. Industrials 182.02, 12.0% under August. Financials 130.05, 5.1% under the September 3 record. Materials 107.50, 9.3% under its August high.

Stay home vs go global — the US view. This week the world beat America again: VEU −1.64%, VT −2.32%, SPY −2.70%. On the year the three now sit within three tenths of a point of each other: +7.83% for America, +7.74% for the world ex-US, +7.56% for the world.

Stay home vs go global — the Europe view: flat in euros, lower in dollars. In local terms: the STOXX 600 +0.24% to 648.33, the DAX +0.01% to 25,820, the CAC +1.62% to 8,099, the Euro Stoxx 50 +0.64% to 6,170 — and outside the euro the FTSE 100 −0.93% to 10,630 and Switzerland's SMI −0.10% to 14,797, after a record close of 15,023 on Wednesday. Spain's IBEX rose 3.84%. The dollar-listed Europe fund fell 0.26%, the euro-hedged one rose 1.36%; the euro ended at 1.1147. The French fund rose 1.54% to 42.89, 4.0% above the low of the year it made on 12 October.

Europe split — the south and France up, the chip and oil markets down. Spain +2.7%, France +1.5%, Switzerland +0.4%, Austria +0.1%, against Germany −0.7%, Britain −1.3%, Poland −1.4%, the Netherlands −1.5% and Norway −6.4%. The Netherlands is Europe's chip-equipment market; Norway is its oil market. The two lost for the same reasons the corridor and the oil funds did.

Stay home vs go global — the Asia view: the chip markets against the rest. Korea: EWY −10.39%, the Kospi −11.7%. Taiwan: EWT −11.74%, the Taiex −12.2%. Japan: the dollar fund −5.00%, the Nikkei −9.3%. China and Hong Kong +1.5 to +5.7%. India: the dollar fund +6.64%. Asia ex-Japan as a whole fell 3.63%. Last week the markets that own the AI hardware rose into Wednesday and fell on Friday. This week they fell on Thursday and Friday, and the markets that own almost none rose all week.

Stay tech vs go broad — broad won, everywhere, by more. The equal-weight S&P −1.04% against the S&P's −2.70% and the Nasdaq 100's −4.98%; the world −2.32% against global tech's −8.25%. Small caps fell 2.03%. On the year tech still leads, but by far less: global tech +17.7% against the world's +7.6% — a week ago it was +28.3% against +10.1%.

Momentum vs defensive — min-vol at a record, then lower. International min-vol closed at a record 97.61 on Wednesday and ended the week 1.16% lower at 95.13; global min-vol made its own record, 131.37, the same day and ended at 128.23. International momentum fell 4.42% to 48.71. On the year min-vol leads, +10.3% against +1.5%.

The Closelook letters — where this one sits. The house thesis, compressed: the stock market is a growing system at the aggregate level in which most constituents slowly fade while a small group massively outperforms — and that group changes; it never stays static. Own the aggregate, know the current winner group, watch for the rotation. For most of 2026 the winner group sat in the chip corridor — Taiwan, Korea, the memory makers, the equipment makers. This week the corridor fell 10 to 12 percent and the money went to places that own almost none of it: India, China, Mexico, Spain. One week does not make a rotation. It is the first week this year that looked like one. This letter reads the map; Sunday's US letter reads the tape and the AI indices' patterns; Sunday evening's Hypergrowth letter reads the names.