Fed decision sparks Trump criticism 30/01/2025

                                                       HOT stories for today





Fed Decision Sparks Trump Criticism
 

• The Federal Reserve kept its key interest rate unchanged on Wednesday, pausing its recent trend of monetary easing as it navigates a complex political and economic landscape. As widely expected, the Federal Open Market Committee left the benchmark borrowing rate within the 4.25%-4.5% range. The move comes after three consecutive rate cuts since September 2024, totaling a full percentage point. It also marks the first Fed meeting since Donald Trump returned to the White House, where he quickly reiterated his desire for lower interest rates.
• Following the meeting, Trump weighed in with a statement on his social-media platform, accusing Fed Chair Jerome Powell and the central bank of failing to address inflation. “Powell and the Fed failed to stop the problem they created with inflation,” he wrote. Trump, who initially appointed Powell but has since been a vocal critic, also used the message to reinforce key campaign promises, including ramping up energy production and “reigniting American manufacturing.”

 
 
Stocks on the move:       

• International Business Machines (IBM): Shares of the tech firm surged 9%, fueled by robust fourth-quarter earnings. IBM posted adjusted earnings of $3.92 per share on $17.55 billion in revenue, surpassing expectations.
• Meta Platforms (META): The stock climbed 5% after exceeding revenue and earnings projections. According to The Wall Street Journal, President Donald Trump has signed a settlement agreement requiring Meta to pay approximately $25 million in connection with a 2021 lawsuit.
• Microsoft (MSFT): Shares of the software giant slipped 2% despite reporting stronger-than-expected revenue and earnings. Azure, Microsoft’s cloud computing division, expanded by 31% in the fiscal second quarter, slightly missing the 31.1% forecast by StreetAccount.
• Tesla (TSLA): The electric vehicle maker’s stock rose 2%, even as fourth-quarter results fell short of expectations. Tesla reported adjusted earnings of 73 cents per share on $25.71 billion in revenue, below analyst estimates of 76 cents per share and $27.27 billion in revenue, according to LSEG.
• ServiceNow (NOW): The enterprise software company saw its shares tumble more than 7% after its fourth-quarter earnings and revenue matched analyst projections. ServiceNow posted earnings of $3.67 per share on $2.96 billion in revenue, aligning with forecasts from LSEG.

 
 
Today’s action

• Asian markets climbed on Thursday, moving opposite Wall Street, which declined overnight after the Federal Reserve left interest rates unchanged. Several Asia-Pacific markets remained closed for the Lunar New Year holiday. Japan’s Nikkei 225 rose 0.21%, while the Topix index increased 0.18% in volatile trading. Tech stocks continued their upward momentum, with Advantest gaining 3.46% and Tokyo Electron up 1.79%. Meanwhile, shares of SoftBank Group dropped 1.22% following reports that the company is in talks to invest up to $25 billion in OpenAI. Toyota Motor retained its position as the world’s top-selling automaker for the fifth consecutive year, reporting 2024 sales of 10.8 million vehicles.
• In the U.S., stock futures rebounded Wednesday night as investors assessed earnings from major tech firms. S&P 500 futures added 0.35%, while Nasdaq 100 futures climbed 0.62%. Dow Jones Industrial Average futures rose 84 points, or 0.19%. Traders are now focusing on key economic data releases, including fourth-quarter GDP figures on Thursday and the December personal consumption expenditures price index, which will be released on Friday.

                                             Wahtclist: MSFT, META, TSLA, IBM, NOW, MA, CAT, UPS

Bitcoin

• Bitcoin continued its upward momentum following the Federal Reserve’s latest policy meeting, gaining 1% to trade around $105,000 as of 12:15 p.m. Thursday in Singapore. This added to a 3.5% jump from the previous U.S. trading session. Smaller cryptocurrencies, including Ether and Solana, also advanced. The Fed opted to pause its monetary easing cycle, with Chair Jerome Powell signaling that further rate cuts would require more evidence of inflation cooling.
• During the post-meeting briefing, Powell briefly addressed the regulatory landscape for digital assets, stating that banks can "serve crypto customers" as long as they properly assess and manage associated risks. He also noted that additional Congressional oversight on crypto regulation would be "very constructive." Powell’s comments, though neutral, come amid rising expectations for crypto-friendly policies under President Donald Trump, who has expressed strong support for the industry. Bitcoin’s recent price action has been closely linked to U.S. tech stocks, and a rise may have influenced Thursday’s gains in Nasdaq 100 futures as investors reacted to significant corporate earnings.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 3000-3800, Solana: 160-220

Forex

• EUR/USD edged higher on Thursday during Asian trading hours, reaching around 1.0420 after three consecutive losses. The uptick was driven by a technical pullback in the US dollar, although the Federal Reserve’s cautious monetary stance supported the greenback. Meanwhile, the US Dollar Index (DXY) hovered slightly below 108.00 as traders anticipated a 25-basis-point rate cut from the European Central Bank (ECB) at its policy meeting.
• The Japanese yen maintained substantial intraday gains, trading near a one-month high against the US dollar. Market sentiment continues to favor expectations of further rate hikes by the Bank of Japan (BoJ), providing additional support to the yen. A fresh decline in US Treasury bond yields has further narrowed the US-Japan yield differential, benefiting the lower-yielding yen. However, the Fed’s hawkish pause may support USD/JPY soon.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 155-158.50

Basic Materials

• Gold prices continued to consolidate within their weekly trading range during the Asian session on Thursday, hovering near a multi-month high reached last week. A further decline in US Treasury bond yields provided support for the non-yielding metal, while the Federal Reserve’s hawkish pause acted as a limiting factor. Additionally, investor concerns over potential economic disruptions from President Donald Trump's proposed tariffs further bolstered demand for the safe-haven asset.
• Meanwhile, West Texas Intermediate (WTI) crude oil fell to around $72.60 in late US trading on Wednesday. The decline followed data from the Energy Information Administration (EIA) showing that US crude oil inventories increased by 3.463 million barrels last week, exceeding expectations. A stronger US dollar also weighed on oil prices, adding further pressure to the commodity.
  Watchlist: GOLD 2600-2750, US Oil: 70.00-79.00

Key Economic Events Today:


EST time
08:15 am: EUR Monetary Policy Statement
08:30 am: USD Advanced GDP
08:30 am: USD Unemployment Claims
08:45 am: EUR RCB Press Conference
10:00 am: USD Pending Home Sales
06:30 pm: JPY  Tokyo Core CPI

Earnings:
BMO (Before the US Market opens)

MA               Mastercard Inc.  
TMO            Thermo Fisher Scientific
CAT             Caterpillar Inc.
CMCSA       Comcast Corp.
UPS             United Parcel Services

AMC (After the US Market closes): AAPL, V, KLAC, INTC

The TEFS Analyst team wishes you a successful day!