Category: 3. Business

A burst of solid business news in the US was supposed to calm markets, which have been in retreat in recent weeks.

But strong sales at artificial intelligence (AI) chip giant Nvidia and the world’s largest retailer Walmart, better-than-expected hiring in September, and even a pickup in home sales have so far done little to quell investor worries.

The three biggest US stock indexes US resumed their slide on Thursday, reversing course after an early morning rally. The S&P 500 ended the day 1.5% lower, the Dow Jones Industrial Average fell 0.8% and the Nasdaq lost more than 2%.

Major stock markets in Asia also lost ground on Friday morning.

In New York, shares in Nvidia, which had surged in Thursday morning trading, fell by more than 3%.

“The reaction is noteworthy, because what should have happened, didn’t happen,” said James Stanley, a senior analyst at StoneX, referring to the sudden fade in the broader US market rally on Thursday.

“You’ve got to ask what’s happening under the surface.”

In Asia, Japan’s Nikkei 225 was down by nearly 2%, with technology investment giant Softbank plunging by more than 8%.

South Korea’s Kospi was down by 3.2%. Shares in chipmaker SK Hynix fell by almost 8% and Samsung was more than 4% lower.

Hong Kong’s Hang Seng opened around 2% lower.

The price of Bitcoin also fell on Thursday, extending recent declines and falling below $90,000 to its lowest since April. Analysts attributed the drop to, in part, concern about AI valuations.

Fears of an AI bubble continue to swirl, even though Nvidia’s results, which showed the chip giant powering on amid robust demand for its AI chips, briefly lifted stocks after-hours on Wednesday and early Thursday.

Chief executive Jensen Huang dismissed concerns that AI companies are overvalued. “From our vantage point, we see something very different,” he said on a call with analysts.

But fears on Wall Street persist, investment analysts said, despite Mr Huang’s reassurance and blockbuster results from the chip-maker, which is seen as a bellwether for the AI boom. Those fears have picked up this month.

Speaking to the BBC this month, Alphabet chief executive Sundar Pichai warned of some “irrationality” in the current AI boom.

Analysts with Oxford Economics said the recent technology draw-down signals “a healthy correction rather than the start of something more threatening”. Earlier this week, they warned that tech stocks might suffer from profit taking in the near term, but noted that “it’s too early to call an end to the AI investment boom”.

At the same time, investors remain on edge about the path forward for interest rates. They are still awaiting key inflation data that had been delayed during the US government shutdown, which could inform the Federal Reserve’s pace of cuts into next year.

The S&P 500 index is more than 4% lower so far in November, putting it on track for its worst month since March.

Investors, Mr Stanley said, are “squaring up” as they grapple with uncertainty about the state of the economy, and whether the Fed will be forced to keep interest rates higher if inflation heats up.

“There’s a lot of trepidation about where inflation is,” he said. “There’s a lot of opacity.”

Thursday’s jobs report did little to offer clarity on the Fed’s upcoming decisions about interest rates, said Eric Teal, chief investment officer at Comerica Bank.

While employers added 119,000 jobs in September – more than double what many analysts had expected – the unemployment rate ticked up from 4.3% to 4.4%, the Labor Department figures showed. The mixed data, analysts said, leaves more questions than answers about whether the Fed will cut at their next meeting in December, and into 2026.

Mr Teal pointed to continued AI adoption and lower interest rates as two key aspects of the economic backdrop that need to remain intact in order to keep propelling stocks to new highs.

Growing jitters about an AI bubble and inflation could inject even more volatility into financial markets beyond this month, he added.

“When you have a market that’s priced at perfection, you need all of the external catalysts behind it to keep driving it higher,” Mr Teal said.

“A lot of those things, over the past three weeks, have been called into question.”

“People often think cardamom is a lucrative crop – it may be. But it’s also the toughest crop a farmer can cultivate,” says Stanley Pothan, who has been farming cardamom in the southern Indian state of Kerala for decades.

Prized for centuries for its complex, aromatic flavour, cardamom is fiendishly difficult to grow.

“Cardamom is a very delicate plant – prone to diseases and pest attacks. You have to be constantly in the field, watching every leaf, every flower. It demands attention every single day,” says Mr Pothan.

It’s also extremely sensitive to weather conditions.

“Last year’s summer was brutal – we lost a significant portion of our crop to the heat. Guatemala, the world’s largest cardamom producer, lost almost 60% of its crop that season, and we too suffered badly here in Kerala,” he adds.

That poor harvest contributed to a 70% jump in cardamom prices last year to 1,178 rupees (£10; $13) per kilo, up 70% compared to the previous year, according to figures from India’s Spice Board.

Cardamom has always been expensive, usually the third costliest spice by weight, after saffron and vanilla.

Farmers would be keen to raise their output, but it’s not easy.

“One bad summer or unexpected rain can wipe away the entire effort. That’s the harsh reality of cardamom farming,” says Mr Pothan.

The government-funded Indian Cardamom Research Institute (ICRI) is trying to ease the burden of tending to cardamom’s needs.

“Our focus is on crop improvement, pest and disease surveillance, soil management, capacity building, and technology transfer related to cardamom,” says A.B. Rameshwari, Director of the ICRI, which is part of the government’s Spices Board of India.

One of its tools is an app that farmers can use to monitor the health of their soil and gives them tailored recommendations on how to best manage it.

“Technology is no longer separate from farming. It is now a daily tool for cardamom growers, from checking soil health on an app, to monitoring rainfall and disease alerts on their phones,” says Dr Rameshwari.

“Even small farmers today are using digital tools. They don’t have to depend only on local advice, they can check the soil quality, moisture, and even disease symptoms right from their field.”

Meanwhile, scientists are looking for hardier cardamom varieties.

“We are mainly focusing on developing cardamom varieties that are tolerant to major diseases and pests, while also being high yielding and climate resilient,” says Preity Chetty, assistant professor at the Department of Plant Breeding and Genetics, Kerala Agricultural University.

They have made one breakthrough, by finding a cardamom variety that can grow with limited water.

The researchers are also delving into the genetic make-up for cardamom to find genetic markers for desirable traits. That knowledge should speed up the breeding of more productive plants.

“Unlike other spices, studies on cardamom are limited, especially at the molecular level. There’s a lack of molecular markers for reproductive or yield traits, which we are now trying to address,” says Dr Chetty.

One key process in cardamom farming is drying the pods once they have been harvested.

Traditionally only the larger farms could afford to set up their own dryers, often fueled by wood.

“Smaller farmers had to depend on middlemen or neighbours for drying, which often affected the quality,” says Annu Sunny, who founded the social enterprise, Graamya, in 2016 to help farmers in Kerala.

“As cardamom is the queen of spices and a cash crop lot of people have started get in to cultivation,” she says.

“It’s a very tricky crop. It takes 10 to 12 years to really understand cardamom, how it behaves, what it needs, when to act and when to wait. Every season is like a new experiment,” she adds.

To help farmers with the drying process, Graayma has introduced heat-pump dryers.

Graayma charges 10 rupees per kilo, which is significantly cheaper than wood drying which cost around 14 rupees per kilo.

“The finish of the product is much better, there’s no smoke, no uneven heating, and the pods retain their natural green colour. That’s very important because colour decides the price.”

Growing cardamom with the help of fertilisers and pesticides is hard enough, but some farmers are going a step further, by taking an organic approach to cultivation.

“When I first started, I had no idea what I was getting into,” says Mathews Geroge, formerly a banker who turned to farming in Kerala in 2020.

“When I first spoke to scientists at the Cardamom Research Institute, they discouraged me. They said cardamom is too sensitive and difficult to grow organically.”

Initially they appeared to be right – around 90% of his first crop was destroyed by pests and local traders rejected his cardamom because, to them, it looked in poor condition.

After two years of experimentation he turned to the ancient Indian cultivation methods of Vrikshayurveda, which he says has bought more success. But it’s still not easy.

“Even today, I wouldn’t say I’ve mastered cardamom farming. It’s still a challenge. Some seasons are good, some aren’t. But now I understand the rhythm of the crop – when to act, when to wait, when to let nature do its job.”

Ultimately, Mr Geroge thinks organic farming will be able to compete with traditional methods.

“Sustainable farming begins with reducing input costs. Many farmers think organic means expensive, but if you make your own inputs and understand your soil, you can actually earn better with less dependence on chemicals.”

One aspect of cardamom farming that is unlikely to change soon is the need for skilled workers.

Mr Pothan estimates that labour accounts for 75% of his costs and most of that is spent at harvest time.

“Harvesting is a skilled job – mostly done by women. They know exactly which capsule is ready and which isn’t. They may pluck one or two from a bunch and return to the same plant after 45 days for the next round. That’s why it’s so labour-intensive,” Mr Pothan says.

Ms Sunny says those jobs are likely to be secure.

“Mechanisation in cardamom is limited. You can mechanise spraying or de-weeding, but not pruning or harvesting. Every innovator who visits our farm looks at cardamom and says ‘we’ll solve this’. But nothing concrete has come out yet.”

Mr Pothan agrees and adds that cardamom demands more than just good process.

“In cardamom, there’s no shortcut. You can’t automate everything. It’s one of those crops that needs both science and soul.”