Friday’s rally took a breather 27/01/2025

HOT stories for today


 

Trump’s tariffs remain a threat

• President Donald Trump's renewed focus on tariffs is stirring investor concerns and signaling potential volatility on Wall Street. With corporate earnings calls increasingly referencing tariff impacts, businesses are bracing for higher costs and disrupted global supply chains.
• At the World Economic Forum, Trump reaffirmed his commitment to tariffs to bolster U.S. manufacturing, though analysts warn this could stoke inflation and complicate economic growth. The Federal Reserve, already cautious after last year’s rate cuts, may need to reassess its approach if tariffs push prices higher, leaving markets on edge ahead of its next meeting. While the goal is to strengthen domestic industries, the unintended consequences of these policies could challenge both businesses and investors, requiring careful navigation in an unpredictable economic climate.

 
 
 
Stocks on the move:       

• Texas Instruments (TXN) dropped 6.7 percent after issuing disappointing guidance.
• Grindr (GRND) surged 7 percent following the release of fresh guidance.
• Twilio (TWLO) rallied 22 percent after providing an optimistic forecast for the coming years.
• Meta Platforms (META) gained about 1 percent on Friday, reaching an all-time high after CEO Mark Zuckerberg outlined the company’s artificial intelligence goals for the year.
• Intuitive Surgical (ISRG) fell 4 percent on Friday afternoon, heading for its worst daily performance since October 12, 2023, when shares dropped more than 5.6 percent.

 
Today’s action

• Asia-Pacific markets were mostly higher on Monday as investors digested China’s manufacturing and industrial profit data. Japan’s Nikkei 225 slipped 0.68%, while the Topix edged up 0.39%. Shares of Japan’s chip-related companies tumbled, with Advantest dropping 8.5%, Tokyo Electron slipping 4.72%, and Renesas Electronics falling 1.33%, amid concerns over Chinese AI startup DeepSeek’s new open-source large-language model challenging U.S. AI dominance. Hong Kong’s Hang Seng index rose 0.88%, while the mainland CSI 300 remained flat. China’s factory activity unexpectedly contracted in January, with the official PMI coming in at 49.1 compared to Reuters’ estimate of 50.1, despite December’s 11% jump in industrial profits year-over-year.
• In the U.S., stock futures declined early Monday as investors brace for a busy earnings week, with futures tied to the Dow Jones Industrial Average dipping 182 points (0.41%), S&P futures shedding 0.98%, and Nasdaq 100 futures sliding 1.96%. Major earnings are expected from companies like Starbucks, Boeing, General Motors, Visa, and Exxon. Additionally, the Federal Reserve’s January meeting on Wednesday and key inflation data from the personal consumption expenditures price index, the Fed’s preferred measure, will be closely watched on Friday.

Wahtclist: NVDA, AVGO, T, SOFI, META, ISRG, TXN, TSLA

Bitcoin

• In crypto, a group of Ethereum leaders announced a new scaling strategy to improve the network's efficiency. Meanwhile, MicroStrategy’s Michael Saylor shared his Bitcoin tracker for the 12th consecutive week, and Coinbase CEO Brian Armstrong plans to revamp the exchange’s asset listing process. Ethereum saw a 7% drop in January, though historically the next two months tend to yield strong gains. On Sunday, Bitcoin’s price slid to an intraday low of $101,957 after peaking earlier at $105,424, triggering over $128 million in liquidations of long positions in crypto derivatives markets within four hours.
• The Crypto Fear and Greed Index, currently at 71, signals “greed” as the dominant market sentiment. Recent Bitcoin price fluctuations underscore the ongoing tug-of-war between bullish optimism and lingering market uncertainty as January comes to an end.
  Watchlist: Bitcoin: 89 000-109 000, Ethereum: 2900-3800, Solana: 220-296.5

Forex

• The Japanese Yen (JPY) surrenders much of its intraday gains against the US Dollar (USD), hovering near the lower end of its daily range. While the Bank of Japan's (BoJ) hawkish stance and the narrowing US-Japan yield differential favor the JPY bulls, these gains are offset by dip-buying in the US Dollar, lifting the USD/JPY pair toward the 156.00 level. Additionally, the White House's announcement that Colombia will accept illegal migrants returned from the US added downward pressure on the safe-haven Yen.
• Meanwhile, the EUR/USD pair edges lower to around 1.0480 during the Asian session on Monday, as the US Dollar Index (DXY) rebounds from its monthly low of 107.22, reached on Friday, and trades near 107.60. The US Dollar finds support amid uncertainty surrounding President Donald Trump’s policies. In contrast, the Euro struggles due to market expectations that the European Central Bank (ECB) may cut its Deposit Facility rate by 25 basis points during its meeting on Thursday.
  Watchlist: EUR/USD: 1.0170-1.0500, USD/JPY: 154.7-159

Basic Materials

• Gold prices (XAU/USD) start the week on a weaker note, retreating from Friday’s peak near $2,786, the highest level since late October. A modest recovery in the US Dollar (USD), following its worst week since November 2023, has weighed on the precious metal. However, Fed rate cut bets and declining US bond yields are likely to cap further USD gains, while renewed trade war concerns could provide support for the safe-haven asset, making dip-buying at lower levels a possibility.
• West Texas Intermediate (WTI) crude oil prices are under pressure, reversing gains from the previous session and trading near $73.90 per barrel during Monday’s Asian session. US President Donald Trump renewed calls for OPEC+ to reduce crude prices, framing the demand as a strategy to impact Russia's finances and accelerate the end of the Ukraine conflict. The White House also confirmed an agreement with Colombia on trade terms, following the threat of Trump-imposed tariffs, further fueling trade concerns and adding to the bearish sentiment in the oil market.
  Watchlist: GOLD 2600-2795, US Oil: 73.00-79.50

Key Economic Events Today:

EST time

03:10 am: EUR ECB Presdient Lagarde speaks
04:00 am: EUR German ifo Business Climate
10:00 am: USD New Home Sales

Earnings:

BMO (Before the US Market opens)

T                AT&T Inc  
SOFI          SoFi Technologies Inc.

AMC (After the US Market closes): BRO, NUE, WRB, WAL

The TEFS Analyst team wishes you a successful day!