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China’s Yuan Devaluation: The Aftermath [Chart]

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China's Yuan Devaluation: The Aftermath [Chart]

China’s Yuan Devaluation: The Aftermath [Chart]

Oil and copper get decimated; Euro an unlikely winner

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Sometimes it feels like the market is one giant ant farm. Investors and traders build all of their little tunnels, and then all of a sudden someone shakes the ant farm causing impending chaos for the hapless ant denizens.

In this case, it was the People’s Bank of China (PBOC) that shook the ant farm – and they did it multiple times this week.

It all started early Tuesday morning as China moved the midpoint of the yuan’s peg by 1.9%, the biggest move since 1994. The PBOC called this change a “one-time adjustment” and said its fixing will now become more aligned with supply and demand. They then proceeded to devalue the yuan two other times throughout the week for a combined 4.4% decrease in value. The Chinese central bank now claims that the yuan will move more according to market forces, which is necessary to get included into the International Monetary Fund’s basket of currency known as Special Drawing Rights (SDR).

We most recently warned about the inevitability of such central bank moves about a month ago, when the Bank of Canada decreased its benchmark rate for the second time in six months. However, it wasn’t until these moves by the PBOC that the market really felt uneasy, and the term “currency war” entered back into the public vernacular.

Investors are clearly shaken up, as all sorts of trading went haywire in the aftermath of the yuan devaluation. Some currencies, like the Canadian dollar, tanked early and then bounced back to take some gains against the USD. The euro fell initially and then bounced back in a big way, gaining 1.8% in the week’s trading. It’s now trading at eight-week highs.

Countries that are inextricably linked to China by regional trade, such as Singapore, Australia, and New Zealand, all had their currencies fall as well. Some emerging markets were also affected strongly, with the Indian rupee dropping -2.3% through the course of the week against the USD.

However, the biggest impact was to commodity prices. A lower yuan means imports are more costly and creates incentive to buy from domestic Chinese producers of base metals and energy. The devaluation was also interpreted by traders as an admission by the Chinese government that the economy is weak, and this helped copper and oil (WTI) tumble. Copper is at its lowest price ($2.35/lb) since the tail-end of the Financial Crisis, and WTI oil continued its worst summer in trading history to end up in a similar position at $42.35/bbl.

Gold is up on the week by about 1%, but it is also bouncing off of its lowest price since 2010.

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Ranked: Top 10 Single-Day Market Cap Gains

Nvidia broke the record for the largest single-day market cap gains after adding nearly $250B on Feb. 22, 2024.

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The 10 Biggest Single-Day Market Cap Gains

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Since the COVID-19 pandemic, U.S. tech stocks have led in terms of market cap gains, sometimes boosting their valuations by hundreds of billions of dollars in a single day.

In this graphic, we’ve ranked the largest single-day gains ever recorded, using data from Bloomberg.

Top 10 List

The top 10 list includes just 5 companies, and all are based in the U.S.

RankDateCompanySingle-day
Market Cap Gain
(USD billions)
1Feb 22, 2024NVIDIA$247.0
2Feb 2, 2024Meta$196.8
3Nov 10, 2022Apple$190.9
4Feb 4, 2022Amazon$190.8
5May 25, 2023NVIDIA$184.1
6Jan 28, 2022Apple$178.9
7Jul 31, 2020Apple$169.0
8Oct 28, 2022Apple$150.5
9Mar 13, 2020Microsoft$150.4
10Apr 26, 2023Microsoft$148.3

To put these massive gains into context, consider this: As of May 2023, the average market cap of an S&P 500 company was $30.4 billion.

Meta’s $197B Record Didn’t Last Long

On Feb 2. 2024, Meta set a new record for the largest single-day gain after reporting strong quarterly earnings, as well as announcing $50B in share repurchases and its first ever dividend payment.

This record lasted only 20 days, however, as Nvidia’s massive Q4 2024 earnings beat sent it to all-time highs. The firm is now nearing a $2T valuation, firmly placing it among the world’s most valuable corporations.

More on Nvidia’s Earnings…

Nvidia reported $12.3B in net income during Q4 2024, which is 769% higher than the same quarter last year. Revenues are also up 265% from last year, largely driven by demand for its AI chips like the H100 Tensor Core GPU.

Nvidia’s earnings have seemingly shifted the AI craze into another gear, boosting other chip stocks like AMD and Super Micro Computer (SMCI) to double-digit % gains for the day (Feb 22).

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