Interest rate in Japan, stock market news of companies, dollar and cryptocurrency, geopolitics
Stock market news
• A Japanese interest rate hike gave impetus to a wave of dollar selling in Asia as Donald Trump's first week in office proved less aggressive on trade policy than many market participants had expected.
• The US stock market is growing push-pull. One day, small-caps are in the lead. Another day, Value. Then Growth. And so on in a circle. This is based on a good reaction to the reports and expectations from Trump. The US dollar has stabilized, as have gold and Bitcoin.
• The dollar is down about 1.7% against the euro this week and slightly lower against sterling. The dollar index is down 1.5%. Tariffs are seen as a positive for the dollar because the US is a major importer and, in theory, if exporting countries cannot find alternative buyers, they could weaken their currencies to offset the trade levy and maintain market share. It looks like tariffs will be imposed, but the rough conclusion after a few days of Trump's second term is that they will be negotiated.
• Trump told Fox News he would prefer not to impose tariffs on China and that his phone call with Chinese President Xi Jinping last week was friendly. Trump earlier told the World Economic Forum in Davos via video link from Washington that he wants the U.S.-China trade relationship to be “fair.” “We don’t need to make it phenomenal,” he said.
• Hong Kong's Hang Seng rose 1.8 percent in the morning session. China's yuan hit a six-week high against the dollar. The Australian dollar, sensitive to Chinese moves, hit a five-week peak and MSCI's index of emerging Asian currencies is on track for its biggest weekly percentage gain in 18 months.
• The Bank of Japan raised short-term interest rates to 0.5%, the highest in 17 years. While the move was expected, traders pushed the yen about 0.6% higher to 155.12 per dollar. Attention now turns to a press conference by BOJ Governor Kazuo Ueda at 0630 GMT. UK and European PMI data are due later in the session, with services outperforming manufacturing.
• Futures pointed to a broadly flat open on Wall Street, putting the S&P 500, which hit a record closing high on Thursday, on track for a weekly gain.
• The Bank of Japan is expected to raise its interest rate to its highest in 17 years, from 0.25% to 0.5%, a level not seen since the 2008 global financial crisis. A broad global rally in stock markets is calming policymakers' fears that U.S. President Donald Trump's tariff threats could upend markets. The Japanese yen strengthened to 155 yen per dollar.
• CRISPR Therapeutics (CRSP) saw a massive 10% gain in its stock price following the disclosure of investments by Robert F. Kennedy Jr., President Trump's nominee for HHS secretary. Kennedy's shares in CRISPR and other tech stocks like Apple and Amazon were announced, with plans to divest within 90 days of confirmation.
• Santee Cooper's announcement that it is seeking bids to restart construction of a nuclear reactor at the VC nuclear plant boosted nuclear-related stocks. The move dovetails with tech companies' need for clean energy to support AI data centers, potentially attracting the likes of Amazon and Microsoft.
• Amazon (AMZN) announced it is closing seven facilities in Quebec, cutting jobs. The decision, which involves rapid inspections and a return to third-party delivery models, affects Canada's only unionized force, though Amazon denies the closures are union-related.
• Moderna (MRNA) has attracted attention as Oracle CEO highlights AI's potential to develop mRNA-based cancer vaccines
This is consistent with broader AI-based initiatives announced under Project Stargate, indicating a significant wave of investment in AI technologies.
• Bill Ford, the CEO of ByteDance shareholder General Atlantic, told reporters in Davos that he expects a deal to help TikTok avoid a U.S. ban to be struck, CNBC and Axios report.
Reddit (RDDT) and Snap (SNAP) are taking advantage of the uncertainty over TikTok’s future by offering discounts to advertisers who spend more on their apps.
• US approves world's first anti-depression spray - CNN The US Food and Drug Administration has expanded approval of Johnson & Johnson's (JNJ) Spravato nasal spray to allow it to be used as a stand-alone treatment for patients with severe depression, the company said Tuesday.
• Warner Bros. Discovery's (WBD) CNN plans to lay off hundreds of workers as it changes its broadcast format. The layoffs come as the company shifts its focus from linear television to digital subscription products.
• Senator Cynthia Lummis chairs the House Digital Assets Subcommittee. She aims to fast-track legislation to create a Bitcoin Strategic Reserve to bolster U.S. economic security. Lummis: “Wouldn’t it be funny if the U.S. bought Bitcoin and that scared China and Russia into buying Bitcoin and we had a race for Bitcoin instead of guns?” A very good expectation: why should China and Russia be scared?
• Trump creates task force to study bitcoin reserves and other cryptocurrency developments. The group will be led by David Sachs, the White House’s “czar” of cryptocurrency and AI. It will include the heads of the Treasury, Justice, and Securities and Exchange Commissions, as well as other agency heads. The group will submit a report to the president outlining regulatory and legislative proposals within 180 days. Soon, the creation of a bitcoin reserve did not happen. But there will probably be no more official U.S. sales of bitcoin. Also from the order: “Agencies are prohibited from creating or promoting central bank digital currencies (CBDCs) in the United States or abroad.”
• Billionaire investor Ray Dalio says he owns "a little" Bitcoin.
• GE Aerospace (GE) shares rose 7%. The company reported quarterly profit that beat Wall Street expectations and announced a significant share buyback plan. The company also forecast strong profits and cash flows for 2025.
• OpenAI and SoftBank (SFTBY) are each committing $19 billion to the AI-focused Stargate project, with Oracle (ORCL) and MGX also joining as partners. The total investment from these initial partners is about $45 billion, giving OpenAI and SoftBank a significant stake in the project. OpenAI and SoftBank are raising the resources themselves. Given that, Elon Musk was right when he said the group doesn’t have the money for a $500 billion project.
• D-Wave Quantum (QBTS) completed a $150 million stock offering, providing needed capital for its operating plans. The funds are intended to support ongoing technical development and business operations, with the company now sitting on a cash balance of approximately $320 million. Despite the successful fundraising, shares fell 3.5%.
• Hyundai Motor Company (HYMTF) announced talks with General Motors (GM) to supply commercial electric vehicles to the U.S. market. The partnership aims to strengthen Hyundai's presence in North America, with potential agreements for joint parts purchasing and vehicle development.
• Oil falls after Trump said he plans to ask/pressure OPEC to lower prices. For his part, the Saudi crown prince said during a call with Trump that the kingdom intends to invest $600 billion over the next four years.
• Trump also declared Yemen's Houthis terrorists. The expected cooperation between the US and Saudi Arabia could bear fruit in the form of a significant reduction in oil prices.
• Indonesia is close to reaching an agreement with Apple Inc on an investment plan that would lift a ban on sales of the iPhone 16 in the country, according to a government minister - Bloomberg.
• Twilio (TWLO) shares are up 15% in premarket trading after the company posted upbeat early results and talked about its long-term opportunities. The company reported positive GAAP operating income for the first time in the fourth quarter. Headcount has been cut by nearly 40% since Q3 2022, and the company has been focusing more on self-service in the sales process. Twilio now expects to be profitable on that metric in the new fiscal year and “every year thereafter.”
• Elevance Health (ELV) shares rise as company beats expectations, raises dividend. ELV reported stronger-than-expected results and raised its dividend as it benefited from higher premiums, acquisitions and growth in its pharmaceutical unit.
• Chinese EV makers challenge tariffs in EU court - Reuters Chinese electric vehicle makers BYD, Geely and SAIC have challenged EU import tariffs in the Court of Justice of the European Union (CJEU). EU plans EV subsidies to counter China - FT
• ChatGPT is becoming more active - a new feature called "Operator" is being tested.
What Operator can do:
- Control the browser and perform tasks like food delivery, shopping, booking events and travel.
- Show a mini-screen with real-time agent actions.
- Ask clarifying questions like time and number of people for the reservation.
- Allows you to save and share tasks with other users.
• Northern Trust's quarterly profit more than quadrupled on higher fee and commission income.
• Castle Creek-backed Northpointe Bancshares files for US IPO
• Britain to set up independent firm to incentivise variable recurring payments.
• Norway's central bank keeps the rate unchanged and plans to cut it in March.
• The closure of HSBC's payments app puts around 400 jobs at risk, a source says.
• Swedbank beats quarterly profit forecast, shareholders brace for bigger payday
• Derayah Financial to hold first IPO in Saudi Arabia in 2025 with 20% stake offer.
• Discover Financial boosted fourth-quarter profit as loan loss provisions fell.
• Railroad operator Union Pacific's quarterly profit rose 7%.
• According to KCC, the losses from the Los Angeles fires are estimated at $28 billion.
• The European Commission is examining the depth of the EU's security framework for stablecoin holders.
• American Airlines forecasts disappointing 2025 profit due to strategy flaw.
• JPMorgan cuts Panama position on Trump's threat to 'return' canal
• BMW CEO will not renew his contract after the summer of 2026, manager magazine reports.
• WTO chief says trade wars would be 'catastrophic' for global growth
• General Atlantic CEO says he is optimistic about TikTok deal in US
• Stocks after earnings
GE +6.6%
UNP +5.2%
ELV +2.7%
FCX -1.5%
ISRG -2.4% (premarket)
TXN -4.5% (premarket)
CSX -4.9% (premarket)
Key events that could impact markets on Friday:
- UK and European business activity indices.
Fundamental news
• The number of Americans receiving benefits rose to a more than three-year high, while initial jobless claims in the U.S. fell slightly. The U.S. labor market has weakened slightly. But investors have so far ignored warnings of a cooling economy.
• Trump's initiatives seem to be more important now. Trump plans to talk to Powell about interest rates and their reduction
"I would like to see interest rates reduced significantly."
• Japan's trade surplus with the US last year was well above the average during President Donald Trump's first term, risking his wrath as the president mulls tariff plans around the world - Bloomberg
• US President Donald Trump is preparing to send an additional 10,000 troops to the border with Mexico
- The Washington Post, citing a document in the publication's possession. US Secretary of State Marco Rubio is planning to visit Panama next week - Politico. Rubio's trip also includes visits to Guatemala, El Salvador, Costa Rica and the Dominican Republic.
• Trump signed an executive order initiating the process of formally designating Ansar Allah (Houthis) as a foreign terrorist organization. The document notes that the group, which receives support from Iran's Islamic Revolutionary Guard Corps-QF (IRGC-QF), is responsible for numerous attacks on military installations, civilian infrastructure and commercial vessels.
• Iran continues to expand its uranium enrichment program, reaching levels close to those needed for a nuclear weapon, IAEA Director General Rafael Grossi said at the World Economic Forum in Davos. At the same time, Iran's Supreme Leader Ayatollah Ali Khamenei has banned the development of nuclear weapons, Newsweek reported, citing a statement by the Chairman of the Judiciary of the Armed Forces of Iran, Ahmadreza Pourhaghan. This move is widely seen as an attempt to initiate negotiations with the Trump administration.
• China Moves Closer to Unlimited Clean Energy - Live Science China's "artificial sun" nuclear fusion reactor has broken its own world record for maintaining super-hot plasma, marking another milestone on the long road to nearly limitless clean energy.
• Merz has promised to ban illegal immigrants from entering Germany. The knife attack in Aschaffenburg showed a "new level of absolutely unbridled cruelty" which in turn was the result of "decades" of misguided immigration policy, said Friedrich Merz, the candidate for chancellor from the conservative CDU/CSU bloc.
• US journalist Candace Owens (2.66 million subscribers) has promised to publish evidence that Macron's wife is the husband.
Owens claims to have collected evidence that Brigitte Macron never existed and promises to publish the materials on January 30.