Macro

Central-bank selling drives gold toward $290

On 11 December 1997, after all-night talks, delegates from more than 150 nations meeting in Kyoto, Japan adopted the first treaty imposing legally binding greenhouse-gas targets, requiring 38 industrialized countries to cut emissions an average 5.2% below 1990 levels over 2008-2012, with the EU, US and Japan pledging cuts of 8%, 7% and 6%. Early US Senate ratification was cast in doubt over the exemption of developing nations, but the accord established the long-term carbon-constraint frame for fossil-fuel producers.

Asian demand slump drags crude lower

Raytheon has acquired Texas Instruments' defense business for $2.95 billion in cash, bolstering its position ahead of a potential bid for Hughes Electronics. The move strengthens Raytheon's competitive stance against Northrop Grumman and could lead to market dominance in the missile and radar sectors, with potential antitrust scrutiny minimal. The consolidation reflects Pentagon-backed industry trends, creating a few dominant defense contractors with significant market and political influence.

Defense sector sentiment remains neutral this month despite Raytheon’s $2.95B acquisition of Texas Instruments’ defense unit, a move signaling confidence in advanced electronics integration but not broadening sector momentum. While the potential pursuit of Hughes suggests strategic consolidation, no immediate follow-on deals or policy shifts have catalyzed wider market movement. The backdrop of stable defense budgets and ongoing geopolitical tensions supports underlying demand, but sector performance is muted by lack of near-term catalysts beyond individual corporate actions.

A steady year of restructuring under deregulation with stable rates, and the autumn Asian-crisis scare drove a defensive bid back toward our reliable dividends.

The International Monetary Fund finalized a rescue package for South Korea combined with bilateral support, one of the largest emergency financing arrangements ever assembled. The package required Seoul to restructure its banking sector and open markets further to foreign capital. Korean equities and the won remained volatile as the crisis persisted into 1998.

US finance boomed on a raging bull market, Amazon's IPO, and consolidation (Travelers-Salomon), even as the Asian crisis (Thai baht float, October 27 mini-crash) introduced volatility. Capital fleeing EM into US assets actually helped an owner's book;

Boeing finalized its $16.3 billion acquisition of McDonnell Douglas, effective August 1, 1997, creating a dominant aerospace and defense entity. Shareholders of McDonnell Douglas received 1.3 Boeing shares per share, and trading of McDonnell stock ceased on the NYSE. The merger consolidates two major defense contractors, signaling increased market concentration and potential long-term shifts in aerospace industry dynamics.

Industrial sector sentiment is positive this month, driven primarily by Boeing's $16.3 billion merger with McDonnell Douglas, a major consolidation that signals increased scale and competitive positioning in aerospace manufacturing. This deal has lifted broader industrial confidence, as investors view it as a strategic move to strengthen defense and commercial aircraft capabilities amid tight supply chains and elevated demand. The sector feels resilient, with this transaction setting a tone of strategic repositioning and long-term capacity planning.

A strong U.S. expansion, low unemployment, and capital fleeing the Asian crisis into safe U.S. assets supported domestic property values; the Asian turmoil barely touched U.S. real estate.

Amazon.com sold 3 million shares at $18 apiece on May 15, 1997, raising $54 million and valuing the online bookseller near $438 million. The roughly two-year-old, still-unprofitable retailer had booked about $32 million in trailing sales to some 340,000 customer accounts across more than 100 countries. The offering became the defining public-market debut of e-commerce, seeding a retailer that would go on to reshape consumer shopping.

A booming domestic economy and high consumer confidence, plus cheap imports from the Asian crisis, powered strong discretionary spending; the October mini-crash was a brief scare, not a demand shock.

The FDA requested withdrawal of diet drugs Redux and Pondimin due to links to heart valve damage, affecting the fen-phen combination therapy. Wyeth-Ayerst agreed to halt sales, prompting market concerns over drug safety and potential litigation, while phentermine remains available but no longer part of the combo regimen.

A booming pharma bull year, but September's FDA-forced fen-phen withdrawal over heart-valve damage hit Wyeth/AHP with enormous liability and re-introduced litigation risk; the October Asian-crisis wobble was cushioned by my defensiveness.

On 15 February 1997, 69 WTO member governments accounting for more than 90% of the world's basic telecommunications revenue agreed to open their markets to competition and foreign investment under the Fourth Protocol to the GATS. Most signatories also adopted a shared Reference Paper of pro-competitive regulatory principles, with the deal set to enter force on 1 January 1998.

Telecom/internet buildout and robust ad demand kept owners bullish, dipping only on the October Asian-crisis mini-crash before WorldCom's MCI bid revived M&A. High, with a brief scare.

A sharp pullback in technology and internet-related shares dragged the Nasdaq Composite down more than 10 percent from its March peak. Rising bond yields and fear of further Fed tightening drove the rotation out of high-multiple growth stocks. The index recovered within weeks as rate fears eased.

The tech sector is feeling optimistic this month, buoyed by Compaq’s $3 billion acquisition of Tandem Computers, a move signaling confidence in high-availability computing and enterprise expansion. This strategic consolidation reflects growing strength in core infrastructure plays, reinforcing a positive near-term outlook for the sector. The broader market backdrop supports this tone, but the momentum is clearly driven by decisive corporate action within tech itself.