Markets today, dollar and oil, stock and bond markets, geopolitical news
Stock market news
• Stocks opened sharply higher yesterday. But optimism quickly faded and the close was under selling pressure. Value stocks ended the day lower, while Growth stocks managed to hold on to gains. The dollar index slipped, but for now it looks like a correction rather than a reversal. Asian stocks extended the rally in European and global equities into Tuesday after U.S. stocks rose for a second straight day and the dollar fell against both developed and emerging market currencies. Europe's major stock indexes jumped on Monday, with France's CAC 40 up 2.2% and Germany's DAX up 1.5%. The auto sector jumped nearly 3%, its best performance in a year.
• Investors betting the European Central Bank will cut rates by almost a percentage point in the first half of 2025 could be in for a disappointment, judging by the latest inflation data from Germany and Spain. The euro area’s Harmonised Index of Consumer Prices (HICP), due out later today, is expected to rise 2.4% in December, down from 2.2% in November. Indicators already released show rising prices amid faster-than-expected inflation in Spain and Germany.
This week’s price data will be the last before the ECB’s next meeting on January 30. Any sign of further inflation moderation would give the ECB an opportunity to ease policy and support the struggling economy.
• Energy could become a thorn in the ECB's side as natural gas prices hit 14-month highs. Faster-than-expected inflation in Germany in December was driven by a smaller fall in energy prices. There will be no repeat of the 2022 surge, but prices are likely to remain high due to lower gas storage levels than in previous years and the end of a decade-long deal between Russia and Europe to supply gas via Ukraine.
• Britain faces a similar dilemma as rising wages add to inflationary pressures, with 30-year UK government bond yields on Monday close to their highest since 1998.
• Markets continue to believe that US President-elect Donald Trump's tariff program will not be as aggressive as feared, despite Trump denying a Washington Post report that he would ease up. If US tariffs are lower overall than Trump promised on the campaign trail and are targeted only at "critical" sectors, global growth prospects should improve and the dollar should weaken.
• Trump's denial has kept Treasury yields high ahead of debt auctions this week. The 30-year yield is the highest in a year, approaching 5.00%.
• Strive Asset Management has filed to launch a “Bitcoin Bond” ETF, a new type of investment product that could combine the characteristics of bonds with exposure to Bitcoin. Bitcoin has soared above $100,000 for the first time this year.
• Chinese stock exchanges have asked some major funds to limit share sales early in the year - RTRS.
• Oil rises for sixth straight day, extending its longest streak of gains in 16 months, supported by risk sentiment in markets.
• Japanese stocks likely to hit new highs in 2025 on corporate earnings, reforms - Bloomberg
• Gold falls on US inflation concerns.
• Comments from Fed officials over the weekend reinforced views that the U.S. central bank will take a more cautious approach to cutting interest rates this year.
• Traffic jams are expected at US spaceports due to the increase in launches. 2024 was a record year for the number of space flights - more than 150. The busiest were the launch complex at Cape Canaveral in Florida (67 launches), Vandenberg Air Force Base in California (47 launches), and Kennedy Space Center in Florida (26 launches).
• The first AI agents will be integrated into OpenAI's workflows as early as 2025, CEO Sam Altman said.
At the same time, according to him, OpenAI's long-term goal is to create superintelligence (AGI), which in the traditional sense is already under control.
OpenAI is losing money on its new $200 ChatGPT Pro subscription. OpenAI is losing money on its recently launched $200 per month ChatGPT Pro subscription. This was announced by the company's CEO Sam Altman.
• The Washington Post (a newspaper considered to be the mouthpiece of Congress) writes that Trump's advisers are considering imposing tariffs on all countries, but only on critical imports. The dollar collapsed on the news - EURUSD and other currencies jumped. Trump himself denied this report.
• CrowdStrike (CRWD) has regained the $30 billion in market value it lost after the global Windows outage caused by a faulty update to its antivirus software last summer.
The company's shares - which fell by more than a third in the two weeks after the incident - are now worth more than they were before the outage.
• Biden officially announced a ban on offshore oil and gas drilling off the country's Atlantic and Pacific coasts. Trump said he would immediately lift Biden's ban on oil drilling.
• Nippon Steel and US Steel are suing after Joe Biden blocked their $14 billion-plus deal. The companies say President Biden's order blocks the deal for "purely political reasons that are unrelated to and harmful to U.S. national security."
• Uber Technologies (UBER) saw its stock price jump after announcing a $1.5 billion accelerated share repurchase agreement. The repurchase is part of a larger $7 billion share repurchase authorization aimed at repurchasing a significant portion of its common stock. The initial delivery will include more than 18 million shares, with the final quantity based on a volume-weighted average price over the life of the deal, which is expected in the first quarter.
Regional Health Properties (RHE) and SunLink Health Systems (SSY) announced they will merge, with RHE acquiring SSY in an all-stock deal.
The deal will result in SunLink shareholders owning approximately 43% of the combined company as the companies look to leverage their combined resources and expertise in healthcare real estate.
• AST SpaceMobile (ASTS) has secured long-term access to up to 45 MHz of spectrum in the United States for satellite programming. This agreement with Ligado Networks gives AST SpaceMobile spectrum rights for more than 80 years, expanding its capabilities in direct-to-device satellite communications.
• Kratos Defense & Security Solutions (KTOS) has been awarded a five-year contract for the Multi-Service Hypersonic Test Facility 2.0 with Enhanced Capabilities valued at up to $1.45 billion.
This contract will support ground hypersonic testing and system-level flight testing.
• The CFPB says a unit of Warren Buffett's Berkshire Hathaway ignored red flags in home-building loans. The lawsuit alleges that borrowers couldn't afford the mortgages they got to buy existing homes from another Berkshire company.
• XPeng and Volkswagen have teamed up to build a super-fast electric charging network in China. They will work together to build a network of more than 20,000 electric charging stations.
• Qualcomm (QCOM) is bringing its Snapdragon X chips to the mid-range laptop and desktop market.
The Fed's vice chairman for oversight said Monday he will step down next month,
avoiding a potential confrontation with the incoming Trump administration and Senate Republicans, Michael Barr wrote in a letter to President Joe Biden.
• Disney is moving closer to a deal to merge its Hulu + Live TV business with Fubo (DIS, FUBO). In the deal, Disney would merge its Hulu + Live TV business with FuboTV, creating a new entity that would be 70% owned by Disney and the rest by FuboTV.
FUBO shares soared 251%.
• American Airlines (AAL) shares rose 3% yesterday. The stock received three upgrades, reflecting an improvement in 2025. Analysts agree that last year's difficulties were temporary.
• Paychex (PAYX) is in talks to buy smaller rival Paycor (PYCR). The world's leading cobalt miner is set to produce a record volume of the metal in 2024 thanks to a rapid ramp-up of capacity at its giant mines in Africa.
• Italy plans to sign a $1.6 billion telecommunications security deal with SpaceX to provide secure telecommunications for the country's government, the largest such project in the world.
• HSBC appoints Lisa McGeough as US CEO.
• Indian private equity lender HDFC Bank says deposit growth outpaced lending in the third quarter.
• Fannie Mae and Freddie Mac shares surge after federal agencies unveiled privatization path.
• Goldman Sachs appoints Alex Golten as chief risk officer.
• Brookfield is delaying the sale of its Citypoint office tower in London, a source says.
• Wells Fargo says Citi shares could double in three years.
• Milind Nagnur of India's Kotak Mahindra Bank is stepping down as chief operating officer and chief technology officer.
• SoFi shares fall after KBW downgrade on valuation concerns
• Morgan Stanley to leave sector climate coalition.
• The total value of UK pensions deals will be worth $56 billion in 2024, according to the report.
• Disney is close to a deal to merge its Hulu + Live TV business with Fubo, Bloomberg News reports.
• US Steel and Nippon accuse Biden of constitutional violations in lawsuit over blocked deal
• The chairman told the newspaper that copper production at Chile's Codelco mine would increase "slightly" in 2024.
• Futures rise as shares of chip makers rise.
• Morning trades: Pre-Trump trades lift US bond yields, yuan shaky
Disney, Fox and Warner Bros. will go to court to lift the ban on the launch of the Venu Sports service.
• Netflix and WWE aim to fuel interest in wrestling around the world.
• Trump policies may not lead to inflation, Bernanke and others say
• Argentines, hit by high prices, are looking abroad for cheaper Nikes and Big Macs.
• Boardroom diversity is being hampered by a conservative backlash.
Key events that could impact markets on Tuesday:
- Economic data: Halifax house prices (UK), Italian CPI, French CPI, euro area CPI and unemployment rate, ISM non-manufacturing PMI (US).
- Fed speakers: Richmond Fed President Thomas Barkin speaks in Raleigh.
- Bond auctions: Germany resumes two-year auction, UK resumes 30-year auction.
Fundamental news
• Indonesia joined BRICS as a full member.
• S&P Global Composite Purchasing Managers' Index (December) 55.4 (forecast 56.6; previously 54.9)
Services Purchasing Managers' Index (December) 56.8 (forecast 58.5; previously 56.1).
• Winter storm grounds flights in eastern and central US, closes federal offices in Washington and knocks out power in six states - Bloomberg
• Inflation in Germany rose from 2.2% to 2.6%. 2.4% was expected.
• Elon Musk 'destabilises' Britain: US must free Britons from PM Keir Starmer's 'tyranny'
In his Twitter/X post, he included a poll showing nearly 66% of people agreed with his view.
• North Korea launched a ballistic missile towards the East Sea during Blinken's visit to Seoul - Reuters. South Korea said the DPRK missile flew about 1,100 km.
• Canadian Prime Minister Justin Trudeau has announced his resignation. He will leave office immediately after a new leader of the Liberal Party of Canada is elected.
• Elon Musk: The people of Greenland should decide their own future, and I think they want to be part of America!
And Trump is talking about joining the US again.
• Germany rules out the possibility of Scholz visiting Moscow before February 23, the German government's press secretary said.
Hamas agrees to release 34 hostages if Israel agrees to a permanent ceasefire and the withdrawal of troops from the Gaza Strip - Reuters. The list of hostages was handed over to the militants by the Israeli side.
• A delegation of Slovak parliamentarians is heading to Moscow following Prime Minister Robert Fico - ta3. The vice-speaker said the purpose of the trip was to establish a dialogue with the Russian Federation. To do this, he plans to talk to Russian parliamentarians and ministers.
• Bulgaria faces eighth parliamentary elections in four years. Talks to form government fail - Euractiv.
• Water outages have begun in Transnistria due to a shortage of electricity - NewsMaker. On January 5, several villages in the Slobodzeya district were left without water due to the inability to maintain sufficient pressure in the pipes. Earlier, water was cut off in several districts of Tiraspol.