Quantum stocks crash, corporate news, UK bonds rise, Trump's statements
Stock market news
• Attempts by bulls and bears to take control of the US stock market yesterday were unsuccessful. Today, the US markets are closed for the weekend to bid farewell to Carter. But before the opening tomorrow, data on the labor market will be released and volatility may resume.
Rising yields on US government bonds strengthened the dollar and returned Bitcoin to $94,000. Bitcoin is also suffering from the slowdown in the risky stock market.
• The UK bond market has become the focus of global investors for a number of unenviable reasons. Analysts have linked this week’s sharp 20 basis point rise in benchmark government bonds, to their highest since 2008, to a deepening crisis of confidence in the UK’s fiscal outlook, despite the lack of obvious catalysts for the current wave of selling. Some are speculating about the possibility of a rout similar to the one that followed former Prime Minister Liz Truss’s disastrous mini-budget in September 2022.
Of course, while the market sees government bonds as the centre of the bond storm, there are plenty of other reasons to sell. The eurozone is bracing for more bond supply amid accelerating inflation, which helped German bund yields hit a five-month high on Wednesday.
• The uncertain impact on inflation of tariffs and immigration curbs proposed by new U.S. President Donald Trump is worrying investors and Federal Reserve officials alike. U.S. economic data is already sending warning signs of the severity of price pressures, prompting traders to cap bets on Fed rate easing this year to just 41 basis points, down from the 50 basis points Fed officials had been talking about last month. Benchmark Treasury yields rose to their highest since April at 4.73% before the bonds found buyers.
• Caution is set to prevail in Europe today as the US heads into a holiday that will see Wall Street closed and Treasury trading volumes reduced. Also due are trade and manufacturing data from Germany, as well as retail sales data from the euro region.
• There are also a number of potentially revealing speeches from the central bank, with Bank of England Deputy Governor Sarah Breeden due to speak on the outlook for inflation and monetary policy at the University of Edinburgh Business School. Fed Governor Michelle Bowman, Boston Fed President Susan Collins, Kansas City Fed President Jeffrey Schmid, Philadelphia Fed President Patrick Harker and Richmond Fed President Thomas Barkin are also set to take to the podium at various venues. It comes ahead of the week's big macro event, the monthly US non-farm payrolls report, on Friday.
• US Treasury Secretary Yellen: We haven't seen much progress in the fight against inflation in the last few months. Before leaving office, she decided to throw Trump a curveball with high US Treasury yields?
• There is a negative trend in changes in global liquidity, which has a direct impact on the Bitcoin rate. Experts emphasize the relationship between global liquidity indicators and the dynamics of the cryptocurrency market, where a decrease in liquidity creates pressure on the BTC price.
• Nvidia CEO Jensen Huang sent quantum stocks tumbling with one phrase. Saying it will take 15 years to get “very simple quantum computers” is an estimate that is “probably too early.” As a result, RGTI, IONQ, QBTS, and QUBT stocks fell 39-45%!
And they fell right from the opening bell, and if people had protective stops, they were executed well below the required prices. This is the problem with illiquid stocks that retailers have piled into. Everyone wanted to get out of these stocks quickly, and the door was too narrow.
Nvidia itself is preparing to conquer the personal computer market. Chip makers INTC and AMD should be nervous.
• U.S. oil imports from Canada hit record high ahead of tariff threat, EIA data show.
• Exxon (XOM) falls after weak fourth-quarter earnings due to lower refining.
Exxon expects fourth-quarter earnings to be down about $1.75 billion from the previous quarter. Exxon and other oil companies have seen profitability decline for much of the past year.
• Instacart (CART) Joins S&P MidCap 400 Index Shares of Instacart rose Wednesday on news that the food delivery company will join a new index.
• Microsoft rolls back Bing Image Creator model after user complaints of declining quality. Ahead of the holidays, Microsoft said it was updating the AI model that powers Bing Image Creator.
• Treasury market yields first 5% - Bloomberg. The 20-year Treasury note provided a grim warning as a sell-off fueled by inflation fears engulfed global debt markets.
• Walmart CEO Doug McMillon met with Trump ahead of inauguration. Potential tariffs remain top issue for Walmart.
• Novo Nordisk (NVO) Expands AI Partnership with Valo Health to Develop Obesity Drugs - Bloomberg
• Albertsons (ACI) raised its adjusted full-year profit forecast, a positive sign for the grocer as it seeks to forge a new path after its proposed deal with Kroger fell apart. ACI shares rose 1% yesterday.
• Costco (COST) reported a 9.9% year-over-year sales gain in the final stretch of the holiday shopping season. This was highlighted by a significant 34% jump in online sales due to the later timing of big discount days this year.
COST shares are up 2% in premarket trading.
• Tesla could get more than €1 billion in compensation from rival automakers that need help meeting tougher pollution standards in the European Union - Bloomberg
• Fed chief Christopher Waller said he believes inflation will continue to decline toward the central bank's 2% target, prompting him to back more interest rate cuts.
• Moderna (MRNA) shares are rising as the first bird flu death in the U.S. draws attention to vaccine development. The company's shares are up 10% for the week through Wednesday.
• Trump accelerated the fall in wind energy stocks after pledging not to build wind turbines. Shares of some of Europe's largest wind energy companies fell on Wednesday.
• Shares of Ebay (EBAY) rose 11% on Wednesday after Meta (META) announced it would test listings from the e-commerce platform on Facebook Marketplace in the U.S., Germany and France.
• Meta (META) shares fell 1% as employees expressed concern over the decision to stop fact-checking.
• Micron Technology (MU) announced the opening of a new high-bandwidth memory (HBM) packaging facility in Singapore, scheduled to begin operations in 2026.
This strategic move aims to strengthen Micron’s capacity to meet the growing needs of AI, with significant expansion expected by 2027.
• JEF shares rose 0.7% yesterday / Jefferies' profit rose 212% y/y, while revenue rose 63%.
This is a sign of a long-awaited recovery in the M&A market.
• Quantum Computing Stocks Crash as Nvidia CEO Predicts Long Road Ahead
• Northvolt will continue to operate while pursuing financial rescue.
• Eurozone economy ends 2024 on a sour note amid trade concerns.
• TikTok's fate divides Trump and fellow Republicans ahead of Supreme Court decision
• Grocery chain Albertsons missed quarterly sales forecasts due to falling demand.
• Meta for testing eBay ad serving on Facebook Marketplace.
• Trump is considering declaring an economic emergency to allow a new tariff program, CNN reports.
• Lufthansa to acquire stake in Italy's ITA next week, source says
• Italian defense minister shuts down talk of Starlink secure communications deal
• Novo Nordisk expands AI partnership with Valo Health to develop obesity drugs
• Honeywell and NXP Semiconductors Expand Partnership to Develop Aviation Technologies
• AT&T will offer reimbursement for service outages to "make things right" for customers.
• Blockchain company Movement Labs is planning to achieve a $3 billion valuation in a funding round, a source says.
• Infinite Reality says $3B fundraising values it at $12.25B
• OpenAI CEO Sam Altman denies sexually assaulting sister after she sues him
Key events that could impact markets on Thursday:
- German industrial production and trade data (both for November)
- Eurozone retail sales (November)
- Bank of England Deputy Governor Breeden to speak
- Fed officials Bowman, Collins, Schmid, Harker and Barkin to speak
- US stock market celebration
Fundamental news
• US jobless claims fell to 201,000, the lowest in nearly a year,
pointing to a still-healthy labour market with historically low layoffs.
The ADP nonfarm payrolls change fell to 122,000 in December from 146,000. It was expected to be 139,000.
But the market will be waiting for official data on Friday.
• Consumer inflation in China has predictably fallen from 0.2% y/y to 0.1% y/y. This is called depression. The long-awaited "Japanization" of the Chinese economy has become a fact. How will Beijing respond - for now, the Chinese authorities are shifting the blame for what happened from themselves (traditionally for officials) to the United States.
• "Trump considers declaring national economic emergency to impose new tariff program," CNN. Using the IEEPA, it would allow him to impose tariffs without proving they are necessary for national security reasons.
• Trump's first day: The future president seems determined to act on tariffs, cryptocurrencies, energy and immigration. There is no chance that Canada will become part of the United States, Canadian Prime Minister Justin Trudeau responded to statements by US President-elect Donald Trump regarding Canada becoming the 51st state and Ottawa's complete military and economic dependence on Washington.
• Greenland's PM to meet Danish king after Trump demands island be ceded to US - RTRS.
Nearly 90% of Danes are categorically against handing over Greenland to the US, according to a Voxmeter poll. Only 4.5% supported the idea, while 6.3% found it difficult to answer.
• Musk is ruining US relations with its G7 allies - Bloomberg. American businessman Elon Musk is trying to ruin relations with the US's main allies in the G7 countries.
In a series of posts on X in recent weeks, Musk has criticized the governments of Germany and Great Britain, questioning the laws they have passed and their economic viability.
• Mexican President Claudia Sheinbaum showed on a map former Mexican territories that now belong to the United States
and offered to return them.
• The head of the Danish Foreign Ministry allowed for the independence of Greenland. But not for its accession to the USA.
• Wildfires have engulfed suburban Los Angeles, including the upscale Pacific Palisades neighborhood home to celebrities such as Adam Sandler, Tom Hanks and Bradley Cooper. Thirty thousand people have been evacuated, including Vice President Kamala Harris's home.
• At the end of December, a massive drone invasion took place in Germany. This happened at the end of December in the federal state of Rhineland-Palatinate at military facilities, the Bild newspaper writes, citing the state Ministry of the Interior. None of the drones were intercepted. It is not specified which military facilities are in question, but the region is home, among other things, to the American military base Ramstein.
• Miley has cut the salaries of the top management of the Tax Collection and Customs Agency by 80%.
The innovation became known a few hours after information appeared that the head of the government's tax department had appointed his wife to the post of head of the body that oversees large and medium-sized companies in Buenos Aires.
• Azerbaijani President Ilham Aliyev called Armenia a “fascist state” and threatened to “destroy this fascism.”
According to him, the country was led by bearers of fascist ideology for 30 years, and now either the Armenian authorities will get rid of it themselves, or Azerbaijan will do it.