South Korean Retail Pours $73.6B Into US Stocks — Tax Breaks Can't Reverse the Skew

Investment Implications

Korean Savings Flow One Way: Into US Stocks

South Korean investors' net purchases of US stocks in 2025 jumped fivefold year-on-year, landing them third globally. The government even waived capital gains taxes to pull the money home — yet in January and February of this year, South Korea still held its title as the world's largest buyer of US stocks. When tax breaks can't stop the flow of savings into US assets, you're looking at something beyond a market preference.

According to data released by the Bank of Korea, US assets account for 63.4% of South Korea's foreign portfolio. Compare that to the developed-market average of 25.3% and the emerging-market average of 36.8% — this isn't a slight tilt, it's well outside the normal range. Citing US Treasury data the same day, reports pegged South Korea's 2025 net purchases of US stocks at $73.6B, roughly five times the prior year. That made it the third-largest buyer globally, behind Singapore and Norway.

More telling is what the government's redirection attempt hasn't accomplished. Seoul announced that profits from selling foreign stocks would be exempt from capital gains tax if reinvested in domestic equities for one year — yet in January and February 2026, South Korea still topped the world in net US stock purchases. The two-month tally: roughly $10B. When tax breaks can't turn the flow around, you're looking at something deeper than transient preference. This is a structured capital allocation pattern.

The structural skew produces two sector effects. First, for domestic brokerages and asset managers, offshore trade execution, FX conversion, and foreign ETF distribution fees now matter more to earnings growth than individual stock trading. Those platforms were the actual conduits for the $73.6B. Second, net assets in US large-cap ETFs and funds run by major Korean asset managers haven't shrunk, despite the tax disadvantage.

Here's the line investors should read first this week: Korean brokerages' Q2 earnings are likely to print a new record for the share of overseas stock custody fees. The direct evidence? That $73.6B in net purchases — untouched by the supposed counter-incentive of tax exemption.

Key Developments

Technology

Meta to Spend $135B on AI in 2026, Cuts 10% of Workforce

Meta plans to spend $135B on AI in 2026 — roughly equal to its combined AI spending over the prior three years. At the same time, the company notified employees of layoffs affecting 10% of its workforce (about 8,000 people) and froze thousands of planned new hires. Microsoft is also offering voluntary severance packages to thousands of long-tenured employees. (Source: BBC World)

Huawei to Invest $11.7B in Autonomous Driving Compute Over Five Years

Huawei plans to invest up to CNY 80B ($11.7B) over the next five years to expand computing power for autonomous driving training and testing, with CNY 18B earmarked for autonomous driving R&D in 2026 alone. (Source: South China Morning Post)

China's Power Sector to Pour Over CNY 10B Into AI Robots in 2026

Total 2026 investment in embodied AI (AI robots) by China's power utility sector is expected to exceed CNY 10B. State Grid and China Southern Power Grid are the main drivers, shifting transmission and distribution operations to robotic systems. (Source: South China Morning Post)

Three Chinese Optical Module Makers Rally 5-10x in a Year, Overtaking Kweichow Moutai by Market Cap

Shares of Shenzhen-listed Zhongji Innolight — the world's largest optical module maker — have risen tenfold over the past year, while Eoptolink Technology and Suzhou TFC Optical Communication have each more than quintupled. The combined market capitalization of all three now exceeds that of Kweichow Moutai. (Source: South China Morning Post)

Cohere Acquires Germany's Aleph Alpha; Schwarz Group Invests $600M

Canadian AI firm Cohere is acquiring German AI company Aleph Alpha, with Aleph Alpha's major backer Schwarz Group planning to invest $600M in Cohere's Series E round. Cohere has already raised $1.6B from backers including Nvidia and AMD, with a 2025 valuation of $7B. (Source: CNBC)

France Builds Europe's First Large-Scale Rare Earth Recycling Plant — Equal to 15% of Global Annual Output

In southwestern France, a joint venture with Japan is constructing Europe's first large-scale rare earth recycling facility. The plant targets 600 tons of heavy rare earths — including dysprosium and terbium — annually, equivalent to 15% of global yearly heavy rare earth production. (Source: Nikkei Asia)

White House Flags Chinese 'Distillation' Theft of US AI; Anthropic Confirms Attacks From Three Labs

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OpenAI Releases GPT-5.5; Cybersecurity Risk Rated 'High'

OpenAI announced its latest AI model, GPT-5.5. Coding, computer use, and deep research capabilities have improved, but the model was classified as 'High' risk in cybersecurity. It was released just two months after GPT-5.4. (Source: CNBC)

Economy

Brent Crude Hits $106.80 per Barrel — Back Above $100 in Two Weeks

Brent crude rose to $106.80 per barrel, crossing $100 for the first time in two weeks. The backdrop: the US is deliberately keeping the Strait of Hormuz closed until a deal with Iran is reached. (Source: Al Jazeera)

Jet Fuel Prices Double in Two Months — Airlines Cut Routes

Global jet fuel prices nearly doubled from around $99 per barrel in late February to $209 in early April. Lufthansa announced 20,000 short-haul flight cancellations over the next six months. (Source: LiveMint)

Lithium Supply Crunch Begins in 2026 — After Prices Crashed 80% in a Year

After a 12-month slide through mid-2025 that saw lithium prices drop 80%, Canaccord warned that a lithium supply deficit could begin in 2026 and persist through 2035. Australian miners have halted output at several projects, and China's CATL has suspended lithium production at one of its largest mines. (Source: OilPrice)

Copper Faces 10-Million-Ton Deficit by 2040 as Demand Surges 50%

S&P Global projects global copper demand to reach 42 million metric tons by 2040 — a 50% increase from today — while global production is expected to peak at 33 million tons in 2030 before declining to 22 million tons by 2040. Without new mines, the 2040 supply gap is projected at 10 million tons. (Source: Macon)

Hong Kong Life Insurance Premiums Hit Record $42.2B; Single Family Offices Top 3,380

Hong Kong's new life insurance premiums reached HKD 330.9B ($42.2B) in 2025, up 50.6% year-on-year and setting an all-time high. The number of single family offices (SFOs) operating in Hong Kong also exceeded 3,380 as of year-end 2025. (Source: South China Morning Post)

Nissan's China Sales Drop 47% From 2019 — Foreign Brands Bet on Tech

Foreign auto brands are losing ground in China. Nissan's March 2026 sales fell 47% from March 2019, while Cadillac dropped 39%. Cadillac is countering with the VISTIQ electric SUV — equipped with driver-assist software co-developed with Chinese autonomous driving startup Momenta — starting at CNY 468,000 (roughly $68,000). (Source: CNBC)

Hyundai Rotem Q1 Net Income KRW 202.7B; Defense Order Backlog at KRW 29.9T

Hyundai Rotem's Q1 2026 net income rose 29% year-on-year to KRW 202.7B. Operating profit came in at KRW 224.2B (+10.5%) on revenue of KRW 1.45T (+23.9%), with the defense segment posting operating profit of KRW 218.8B (+22.2%). The order backlog stood at KRW 29.9T as of end-March. (Source: Yonhap News)

Gold at $4,861 per Ounce — Indian Brides Turn to 1-Gram Alternatives

Gold prices hit an all-time high of $5,595 per ounce on January 29, 2026, and currently trade around $4,861. In South Asia's wedding market, demand for 1-gram alternatives is growing in place of traditional gold jewelry. (Source: Al Jazeera)

Environment

Global Wind Installations Hit Record 165 GW — China Alone Accounts for 73%

Global wind power installations rose 40% year-on-year to 165 GW in 2025 — an all-time high. China installed 120.5 GW, accounting for 73% of the total, with cumulative wind capacity reaching 640.5 GW (out of a global cumulative 1,299 GW). GWEC projects 969 GW of new global wind installations between 2026 and 2030, or an average of 194 GW per year. (Source: Eco-Business)

Fortescue to Spend AUD 952M on Industrial Green Grid — Fossil-Free Pilbara by 2030

Fortescue announced plans to invest $680M (AUD 952M) in off-grid renewable energy systems for industrial uses such as data centers. The company targets 2030 for fully eliminating fossil fuels from its Pilbara iron ore operations, with a 200 MW Stage 1 firm power system already under construction. The renewable supply system is slated for completion in 2028. (Source: RenewEconomy)

ISDS Suits Targeting Environmental Protections Hit 126 Cases in 2011-2021

Investor-state dispute settlement (ISDS) cases targeting environmental protection measures surged from 12 before 2000 to 37 in 2000-2010, and then to 126 in 2011-2021. Bolivia, Ecuador, India, Indonesia, and South Africa have already withdrawn from investment treaties. (Source: The Ecologist)

Politics

Japan's 2026 Defense Budget Hits Record $58B — Long-Range Missiles Deployed in Kumamoto

Japan set its FY2026 defense budget at a record $58B and, in late March 2026, deployed long-range missiles capable of reaching China at Kumamoto Prefecture. Since 2019, China has overtaken North Korea and Russia as Japan's top security concern, and a 2025 Asahi Shimbun survey found 77% of respondents skeptical that the US would protect Japan in a military crisis. (Source: Al Jazeera)

US Burns Through Half of Tomahawks and Other Key Munitions — Rebuilding Takes 1-4 Years

According to a CSIS analysis, the US may have depleted more than half of its pre-war inventory of at least four critical munitions — including Tomahawk missiles — in the war with Iran. Restoring pre-war stockpile levels is expected to take one to four years. (Source: CBS News)

US Supreme Court Rules Trump's Reciprocal Tariffs Illegal — Administration Pivots to Flat 10% Rate

The US Supreme Court ruled on February 20 that Trump's reciprocal tariffs were illegal. Since then, the administration has applied a 10% tariff rate to all trading partners. The Iran war and this ruling are the two main factors delaying an India trade deal. (Source: CNBC)

Korea-India Summit Targets $50B in Bilateral Trade by 2030

President Lee Jae-myung and Indian Prime Minister Narendra Modi held a summit and agreed to strengthen economic cooperation across critical minerals, energy, AI, finance, and shipbuilding. The two sides agreed to accelerate negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA), aiming to double bilateral trade from the current $25B to $50B by 2030, and signed 15 MOUs. (Source: Yonhap News)

US Navy to Deploy 30+ USVs and Thousands of Drone Boats in Indo-Pacific by 2030

The US Navy plans to deploy more than 30 medium unmanned surface vessels (USVs) and thousands of small drone boats and aerial systems to the Indo-Pacific region by 2030. Japan's Ministry of Defense is also pursuing a domestic drone industry capable of mass production in the event of a crisis. (Source: South China Morning Post)

Social

Global Famine Concentrated in Gaza With 640,700 People — 1.4 Million in IPC's Highest Tier

According to the Global Report on Food Crises 2026, famine was officially confirmed in parts of Gaza and Sudan in 2025 — the first simultaneous dual confirmation since the official famine reporting system began. Across 47 food-crisis countries, 22.9% of the population (roughly 266 million people) experienced acute food insecurity, and 1.4 million people fell into the IPC's highest tier (catastrophic conditions). Gaza was the worst affected, with 640,700 people (32% of the population) in famine conditions. (Source: Al Jazeera)

Early-Onset Colorectal Cancer Rising 1.4% Annually — Leading Cancer Killer in Under-50s

Early-onset colorectal cancer — diagnosed in people under 50 — is increasing worldwide at 1.4% per year, with roughly one-fifth of all colorectal cancer diagnoses now occurring in people under 55. Colorectal cancer is the leading cause of cancer-related death in both men and women under 50. (Source: Medical News Today)

14.3 Million Infants Got Zero Vaccine Doses in 2024 — 11 Million Measles Cases, Triple the Outbreak Countries

In 2024, roughly 14.3 million infants under age 1 received no routine vaccinations globally. Measles cases rose across every region, reaching approximately 11 million in 2024, and the number of countries experiencing large outbreaks has nearly tripled since 2021. (Source: WHO)

Japan's Foreign Residents Hit Record 4.12 Million, Up 9.5% Year-on-Year

Japan's foreign resident population reached a record high of over 4.12 million at the end of 2025 — a 9.5% increase from 2024, and the first time the figure has exceeded 4 million. (Source: Nikkei Asia)