AI Stocks Rise and China Economic Stimulus, Stock and Geopolitical News
Stock market news
• The market grew on the AI theme. MSFT and NVDA were the engines of growth of stock indices. US stocks entered a push-pull cycle - different themes and sectors grow alternately while others correct. The market is nervously and optimistically trying to anticipate the actions of the Trump administration. Oil and utility stocks were under pressure. The dollar rate stabilized. Bitcoin is again below $103 thousand.
• After days of speculation about Donald Trump's return to the White House, investors got a little entertainment on Thursday with the announcement of new measures by China to boost its sagging stock market. Beijing plans to funnel hundreds of billions of yuan a year from state insurers' funds into the stock market, including at least 100 billion yuan ($13.75 billion) in the first half of this year, according to China Securities Regulatory Commission chief Wu Qing.
• Chinese authorities are scrambling to shore up their slumping stock markets, with the main indexes down 3% since the start of the month despite gains in other major markets. China's blue-chip CSI300 and Shanghai Composite indexes jumped more than 1% on the news, as did the Hang Seng Index, although they have since given up some of their gains. The news from China provided little support for MSCI's broadest index of Asia-Pacific shares outside Japan, which retreated on Thursday after seven straight sessions of gains.
• European stocks also opened lower, along with U.S. ones, suggesting enthusiasm for Trump's massive AI infrastructure spending plans may be waning after Wednesday's rally.
• Trump has said little about how the $500 billion private-sector investment will be financed, although The Information reported that OpenAI and Japanese conglomerate SoftBank will each contribute $19 billion to the project.
• China announced expanded support for 10 target industries in the country. These include ferrous and non-ferrous metallurgy, chemical and petrochemical industries, building materials, mechanical engineering, automobile manufacturing, energy equipment, light industry and electronics.
• Every seventh American bought the TRUMP memcoin - study. 14% of US residents bought the TRUMP memcoin, and for 80% of these investors, the investments turned out to be profitable - these are the results of a survey conducted on January 20 by NFTEvening and Storible among 1,092 Americans.
• Interaktive Brokers (IBKR) CEO says retail margins are at their highest ever. The popular broker's shares rose 9% to an all-time high on a surge in trading volumes. The company beat earnings and sales estimates on strong consumer trading volumes.
• Oil prices fall on Trump's trade war plans - Bloomberg. Brent fell to almost $79 a barrel.
Oil companies expect revenues to fall, - FT. Supply will exceed demand in 2027, prices will stabilize and this will last for several years. This will affect Shell, BP and TotalEnergies in Europe and ExxonMobil and Chevron in the US.
All five groups have large LNG businesses that have benefited from rising prices, which have contributed to record profits in the industry.
• Trump says he's open to Elon Musk or Larry Ellison buying TikTok US - Bloomberg
• LinkedIn is being sued by premium customers who say the business platform shared their private messages with third parties without permission to train AI models - Reuters
• Ally Financial's (ALLY) fourth-quarter profit rose as its net interest margin beat analysts' estimates and its expenses and bad-debt provisions fell. The company's shares rose 4%.
• JPMorgan's Dimon says tariffs are good for U.S. security even if they're inflationary: 'Get over it.' He played down concerns Wednesday about new tariffs from the Trump administration.
• Venture Global Inc. has cut the market range for its initial public offering, leaving a potential valuation well below its $110 billion target - Bloomberg
• Johnson & Johnson (JNJ) shares fell 2% after Johnson & Johnson reported full-year 2024 results, beating Wall Street expectations.
• P&G stopped raising prices and sales still grew last quarter. Procter & Gamble Co.'s organic sales beat estimates on higher volumes, a reversal from previous quarters when most of the company's growth came from price increases. PG shares rose 2%.
• Amphenol (APH) beat expectations for demand from the data communications and defense sectors. Businesses looking to embrace artificial intelligence technologies and governments increasing their defense budgets in response to rising geopolitical tensions are driving demand for the company's connectors and sensors. APH shares rose 7%.
• The CEO of German insurer Allianz said he expects less "extortion" from fines under the Trump administration
than under the Joe Biden administration.
• More than 1,000 flights canceled in the U.S. as winter storm spreads. Flights continued to be canceled in the U.S. on Wednesday as a historic winter storm that has hit Louisiana, Texas and other Gulf Coast states continued to spread for a second day.
• Global industrial and technology stocks, including Oracle (+7%), rose on Wednesday after US President Donald Trump unveiled an artificial intelligence strategy.
• BlackRock CEO: 'strong believer' in Bitcoin, predicts it could rise to $700,000
• Sam Altman and Elon Musk take their personal animosity to a new level. Sam Altman responds to Elon Musk's claim that the Stargate project "doesn't really have the money." Musk They don't really have the money. SoftBank provided less than $10 billion (not $500 billion). I have it on good authority.
Altman: Not true, as you know. You want to visit the first facility that's already under development? That's great for the country. I understand that what's best for the country isn't always best for your companies, but in your new role, I hope you put America first.
• Electronic Arts (EA) shares fall 12% in premarket trading after demand for "EA Sports FC 25," released in the second half of last year, fell below expectations.
• Ardian CEO says private equity investment expected to recover under Trump
• Allianz CEO says he expects less 'extortion' from fines under Trump administration
• Insurance giant Travelers beat profit forecasts on stronger underwriting.
• HDFC Bank in India aims to grow lending in line with industry needs in FY26 and accelerate deposits.
• Sabadell's return will be a boost for Catalonia, says regional leader.
• Norway's FSA fines Danske Bank $4.4 million for market manipulation.
• UK-based Quilter beats forecasts on strong asset inflows and share gains
• Morgan Stanley's bonus payouts to Asia's top bankers will rise by 50%, sources say.
• Indian company ICICI Prudential Life's profit in the third quarter rose sharply thanks to sales of new policies.
• BlackRock and Weinstein's Saba reach agreement in closed-end fund dispute.
• Consumer lender Ally Financial will sell its credit card business to CardWorks.
• Suntory chief says Japanese companies must prepare for Trump tariff fallout
• TikTok owner ByteDance and DeepSeek lead China's push to develop AI thinking
• Melia exceeded its 2024 EBITDA target and expects better results next year.
• Aptiv to spin off power distribution systems business.
• Procter & Gamble beat quarterly earnings estimates on improved demand in the U.S.
• Abbott forecasts first-quarter profit below expectations.
• Insurance giant Travelers beat profit forecasts on stronger underwriting.
• The European data calendar is light on Thursday, with a rate decision coming from Norges Bank, which is expected to leave rates unchanged.
• The Bank of Japan began its two-day monetary policy meeting on Thursday, with markets largely priced in a 25 basis point rate hike after policymakers hinted last week. Both an expected rate hike and a clear promise of more hikes in the future are likely to be needed to stop fresh losses in the yen, which on Thursday continued to retreat from the one-month high hit earlier in the week.
• Stocks after earnings:
PG +1.9%
JNJ -1.9%
BAC -1.9%
ABT +0.9%
GEV +2.7%
APH +7%
TRV +3.2%
Premarket
KMI +0.7%
DFS +1%
Key events that could impact markets on Thursday:
- Norges Bank interest rate decision
- US weekly jobless claims
- American Airlines, General Electric earnings
Fundamental news
• If Trump decides to impose tariffs on Canada, Canada will respond. All options are on the table, says Canadian Prime Minister Justin Trudeau. He also warned that the alternative to Canada for the United States would be "more resources from Russia, China or Venezuela."
• A coalition of 22 U.S. states has filed a lawsuit against President Trump's decision to limit birthright citizenship - Associated Press.
• "There are Russian and Chinese submarines all over the place": Trump explained why the United States needs Greenland. Trump referred to threats from Russia and China. In particular, Trump said that Denmark is not able to "hold" Greenland due to a lack of funds.
• The Slovak parliament failed to consider the question of confidence in the Fico government. The opposition accuses the prime minister of disrupting the vote.
• Trump promised that Elon Musk's DOGE would act as an advisory body. But yesterday he made DOGE part of the federal government - Business Insider. DOGE now has the power to hire government employees and work on behalf of the government to update software and IT systems.
• The US has begun laying off civil servants and military personnel. More than ten high-ranking US State Department officials have faced demands to resign, CNN reported, citing sources. It is noted that although reshuffling of some posts after the arrival of a new administration is a common practice, what is unusual in this case is that the demands for resignation were received before the department was formally transferred to new management and before new candidates for the vacant positions were approved.
• The strategic movement of the United States from Europe to the Asia-Pacific region is a serious stab in the back. Perhaps this will make Europe think more about its own defense, - French Defense Minister Sebastien Lecornu in an interview with France Inter radio.
European politicians know how to pretend to be surprised. Although it has long been known that China is the main geopolitical rival of the United States, having challenged the States back in 2012.
• The European Union faces another potential showdown with Hungarian Prime Minister Viktor Orban
over his refusal to sign off on an extension of sanctions against Russia over its war in Ukraine. That puts the EU at risk of missing the deadline for extending the restrictions. But it has been reported that Orban will be influenced by Trump, not just Putin. Strange dancing.
• Trump signed an order to close the southern border. For illegal immigration.
• The Trump administration is discussing a 10 percent tariff on Chinese imports because fentanyl is shipped from China to the U.S. via Mexico and Canada.
• Americans buy $900 billion a year in goods from Mexico and Canada. American companies shipped $676 billion worth of goods to the two countries in 2023, about a third of all U.S. exports. Key exports include oil, computer chips, cars, and airplanes.
The combined trade deficit with Canada and Mexico was $241 billion in 2023.
Mexico recently surpassed China to become the U.S.'s largest importer.