Market reaction to new President Donald Trump and his first steps, company news and geopolitics
Stock market news
• Financial markets after Trump's inauguration. All is calm in Asia. The US dollar initially fell sharply by an average of 1%, but by the morning it had already regained half of its weakness. Oil fell on Trump's promises to flood the market with oil (he needs low inflation to lower interest rates and revive the economy). US stock index futures initially grew by an average of 1% (mainly on small caps), but by the morning they had lost all their growth. Bitcoin initially almost reached $110,000, but by the morning it had fallen to $101,000. Trump said nothing about crypto. Buy on expectations - sell on fact? The 4th year of Trump's second presidency has arrived, which will certainly be much more volatile. Trump loves to speak out and this will cause turbulence.
A great time for speculators and those who know what they are doing!
• All of investors’ fears about another Donald Trump presidency were confirmed in the early hours of Day 1, with currency traders in particular finding themselves in a quandary. The lack of tariff threats in Trump’s inauguration speech was seen as a green light to sell the dollar. Hours later, the new US president surprised with plans to impose 25% tariffs on Canada and Mexico from February 1. The Canadian dollar and peso fell sharply.
The moves reflect the volatility experienced during Trump’s first term as commander in chief, when markets needed to remain on high alert. But as was often the case then, Trump’s salvo may prove to be a negotiating tactic. Trump has always said he is a master dealmaker, and investors may have been encouraged by his comments on TikTok and China, which seemed like an invitation to talk and came with a warning of tariffs if Beijing tried to block a deal.
• Trump also said tariffs were just one way for the EU to "even out" its trade deficit. Another would be larger oil and gas sales from the US. Despite these comments, Trump rejected a general tariff, saying "we're not ready for that yet."
• Currencies have moved on strings in recent hours. But as of midday in Asia, the U.S. dollar was up against a basket of its biggest rivals, though not as much as it had earlier on Tuesday. China's central bank defended the yuan, setting its strongest peg since early November. But with China at the center of Trump's tariff warnings, analysts say continued strength seems unlikely.
• The euro and sterling each fell about 0.3% while the yen strengthened. The Japanese currency was supported by bets on tightening by the Bank of Japan on Friday, despite some concerns about the impact of any US tariffs on the auto industry.
• Meanwhile, Trump's meme coin has soared to a market value of more than $10 billion, helping to lift other cryptocurrencies along with it. That included Bitcoin, which jumped to a new all-time high above $109,000, though it has dipped back below $102,000 in recent trading.
• Trump ordered an assessment of trade relations with China, Canada and Mexico. He is not going to introduce duties right away - WSJ.
Trump effect: the dollar and oil fell before the inauguration, currencies and stocks rose.
Yesterday, a state of emergency was declared in the US energy sector. This is a program of increased drilling, - Trump.
Trump promised to launch increased drilling for oil and reduce prices for energy resources.
• Melania Trump, following her husband, also launched her own memecoin, $MELANIA.
And Bitcoin hit a record high on the eve of Trump's inauguration, but collapsed afterwards. So did memecoins.
Cryptocurrency project leaders warn that Trump memecoins are hurting the industry - Bloomberg.
Donald Trump and his wife Melania's new memecoins have drawn criticism from cryptocurrency executives who expected the digital asset sector to be taken seriously.
• Instagram and X are taking advantage of TikTok's problems by launching new video apps. Instagram's new Edits app is coming in February, and X's new video tab has already been made available in the US.
• Apple (AAPL) is in talks with banks to replace Goldman Sachs as its credit card issuer. Two potential partners are Barclays and Synchrony Financial.
• Incumbent card issuer Goldman Sachs has long sought to divest Apple's card portfolio as part of its exit from consumer markets, a failed project that left the investment bank with huge losses on its investments.
• Guggenheim expects Fed to cut rates roughly quarterly through 2025. Guggenheim Partners' chief investment officer predicted Monday that the U.S. Federal Reserve will likely cut interest rates.
• Canadian firms see sales improving, but worried about possible US measures - central bank survey. Canadian firms see demand and sales improving next year, largely due to lower rates.
• Nancy Pelosi reported on new transactions. She bought call options on VXT ($1 million), GOOGL ($500 thousand) and NVDA ($500 thousand), TEM ($100 thousand), AMZN ($250-500 thousand).
• Jefferies analyst downgrades Apple shares, sounding cautious about the next few quarters and broader demand for AI. New price target for Apple shares is $200.75 (closed Friday at $230). Downgrades to underperform from hold.
• EU says Facebook, X and YouTube will take stronger action against online hate speech.
• Circle CEO expects US President to issue executive orders to expand cryptocurrencies soon.
• US TikTok enthusiasts are relieved that the 'magic' will return as the app is restored.
• True Trump Media devotees are betting on stocks to rise as the presidency begins.
• China is both hopeful and wary of Trump's return to the White House.
• Trump crypto token market cap rises to $10.7 billion, Bitcoin hits record high
• Markets are optimistic about Trump's return to the White House.
• Malaysia and EU resume free trade talks.
• An investigation has been launched in the United States into about 295,000 Honda vehicles for unintended automatic emergency braking.
• US retrofit tests 129,000 Ford vehicles for hands-free technology.
• UK watchdog launches probe into KPMG's audit of Entain
• Signs of growing asset quality stress are spooking Indian bank stocks.
• Barclays appoints former Goldman banker Paul Johnson as head of Asia Pacific equities.
• Hedge funds have charged nearly $2 trillion in fees since 1969, according to LCH.
• Santander is reviewing its presence in the UK retail banking sector amid a wider assessment, a source said.
• Commerzbank is considering cutting thousands of jobs after UniCredit approached, the FT reports.
• Bank of America to award employees with stock options following strong performance in 2024, memo says
• Leading Canadian banks quit global climate coalition ahead of Trump's inauguration.
• BlackRock Agrees to New ESG Disclosures in Tennessee Settlement
• Vanguard to pay $106 million in settlement with SEC after saddling investors with big tax bills
• Today's economic calendar in Europe includes UK employment data and Germany's ZEW opinion polls.
• EU finance ministers meet in Brussels to discuss ways to boost competitiveness.
• ECB Vice President Luis de Guindos joins the ECOFIN meeting, which is also taking place in the Belgian capital.
• There are no Fed speakers scheduled to speak this week as officials enter a quiet period ahead of next week's policy meeting.
Key events that could impact markets on Tuesday:
- UK Wages (December)
- Germany ZEW Surveys (January)
- Canada CPI (December)
Fundamental news
• Donald Trump became the 47th President of the United States.
His first statements:
- We will end the wars we never fought and build the most powerful military in the world.
- We will trade the Gulf of Mexico for the Gulf of America.
- As of today, official U.S. policy is that there are only two genders: male and female.
- All illegal entry will cease immediately, and we will begin the process of returning millions of criminal aliens to where they came from.
- We will take back the Panama Canal.
In response to a reporter's question, Trump said the administration was considering imposing 25% tariffs on imports from Mexico and Canada as early as February 1.
Trump promised to release documents on the Kennedy assassination.
• The US President-elect has promised to make public information about the assassinations of President John Kennedy, his brother Robert Kennedy and Martin Luther King in just a few days. Donald Trump announced this at a rally in his support on the eve of his inauguration.
• Authorities learned from TikTok about a secret tunnel connecting the US and Mexico, which took at least a year to build - now they promise to fill it in.
It connects Ciudad Juarez with the city of El Paso in Texas. On the Mexican side, it is 300 meters long, and is equipped with lighting and ventilation. The passage was hidden in the storm sewer system that runs between the cities.
• Donald Trump risks failing in his dealings with Ukraine and could be drawn deeper into Putin's military conflict, just as Richard Nixon, the 37th US president, suffered from attempts to withdraw troops from Vietnam, Trump's former chief strategist Steve Bannon told Politico.
• China conducts final test of hypersonic air-to-air missile - South China Morning Post.
• The issue of banning the far-right Alternative for Germany party (supported by Elon Musk) could be on the agenda of the Bundestag next week - Zeit. It is the second most popular party in Germany now.
• Vivek Ramaswamy has officially resigned from DOGE. Ramaswamy is scheduled to announce his candidacy for Ohio Governor early next week.
• Houthis say US, UK ships can safely pass through Red Sea - Bloomberg The Houthis said they would stop attacking US and British ships in the Red Sea in response to a ceasefire agreement between Israel and Hamas.
• Transnistria will run out of gas in 11 days - authorities of the unrecognized republic. "We have enough gas for 11 days if it is used in the mode in which it is currently used, for those consumers who are currently receiving heat. That is, in accordance with the forecast, as we said, until the end of January," said the first vice-premier of the unrecognized republic, Sergei Obolonik, at a meeting of the operational headquarters.