Stock news and geopolitics, new Trump tariffs, corporate and fundamental reviews
Stock market news
• The week began with the now-familiar bang: President Trump used the media frenzy on Air Force One to announce 25% tariffs on U.S. steel and aluminum imports, promising more retaliatory tariffs on Tuesday or Wednesday. Meanwhile, new Chinese retaliatory tariffs on U.S. imports came into effect, and German Chancellor Scholz said the EU was ready to respond to the tariffs “within an hour.”
• Investors sold the Australian dollar and the euro, both falling early on, although they have since pared their losses. Wall Street futures also started lower, but did not stay low for long: they are now up about 0.3%. European futures are also quiet for now.
• Perhaps the tariffs are losing their shock value, or the markets suspect the whole thing is a bid bluff and Trump will quickly reverse course. Some analysts argue that Trump is very sensitive to moves on Wall Street and would give in if the markets actually crashed — another version of the Fed's put option. Then again, the markets would have to crash first, and the current stability in stocks would surely only embolden him.
• Trump also made some frankly baffling comments about the Treasury market, suggesting that the U.S. debt was not as large as thought because some of it was “fraudulent.” That raised alarm bells because Trump has floated the idea of walking away from U.S. debt in the past, essentially defaulting. Such a move would be a global financial disaster, so analysts assume he will never do it. But even the slightest hint of such a risk could cause chaos.
• Fed Chairman Powell's testimony: No doubt these are all questions that Fed Chairman Powell will be asked when he testifies before Congress on Tuesday and Wednesday, and he will have to be as diplomatic as possible to answer them without irritating the White House. Plus, consumer price data for January are due out Wednesday, giving the Fed a chance to respond in real time.
• Gold has hit another all-time high, helped by speculation that Trump might impose tariffs on the metal, an odd move given the popularity among some conservative US commentators of what John Maynard Keynes once called a “barbarous relic”. Talk of tariffs has sparked a rush for physical bullion in London, Switzerland and Asia to ship to the US before the new tax is imposed. Demand was apparently so great that the Bank of England was unable to meet it, partly because of the outdated way it issues its bars, causing a painful crash in the market. It gives “liquid gold” a whole new meaning.
• Meta plans massive layoffs from Feb. 10 - Reuters. The company said in January it planned to fire about 5% of its least effective workers.
• Tether CEO: Any Bitcoins in lost wallets, including Satoshi's (if he's not alive), will be hacked and returned to circulation. How is this possible? Are we expecting quantum computers?
• Donald Trump's DJT Wants to Launch a Bitcoin ETF. Trump Media wants to launch a Bitcoin exchange-traded fund.
• Starbucks (SBUX) is offering a rare perk on Monday: free coffee. Having trouble selling?
• Investments in France's AI ecosystem reach $85 billion. Canadian investment firm Brookfield plans to invest €20 billion by 2030 in artificial intelligence projects in France, according to La Tribune Dimanche.
• Lynn Forester de Rothschild, who fought for good capitalism, is adapting to the Trump era - WSJ. She said ESG investing, which encourages companies to treat the environment and workers better, is no longer the right approach.
• China to cut clean energy subsidies after boom - Reuters. China's top economic planning agency said on Sunday it was taking steps to cut subsidies for renewable energy projects after a boom in solar and wind farm construction.
• Porsche resumes development of internal combustion engines - the company officially acknowledged that the strategy of transition to electric vehicles was wrong. The German concern announced a radical change in its plans and allocated €800 million specifically for the development of models with traditional engines.
• The National Bank of Poland has refused to include BTC in its national reserves. The National Bank of Poland (NBP) has categorically rejected the possibility of adding Bitcoin to its national reserves, citing security and stability issues.
• TikTok's (BDNCE) U.S. operations are set to be spun off from Chinese parent ByteDance, a move that follows a law requiring the company to be sold or banned on national security grounds. High-profile figures including Kevin O'Leary and Frank McCourt, as well as Microsoft, have expressed interest in acquiring the platform. Oracle could play a role in the process, according to recent discussions. Elon Musk has said he has no interest in acquiring TikTok in the U.S.
• Anduril, a military startup, is in talks to double its valuation to $28 billion with a new funding round. The drone maker is reportedly looking to raise up to $2.5 billion, including $1 billion from Founders Fund. Anduril’s revenue has doubled to $1 billion in 2024, and the company is partnering with Palantir Technologies (PLTR) to expand AI capabilities for U.S. military applications.
• Skechers (SKX) suffered a double-digit loss as fourth-quarter results fell short of expectations. The company's fiscal 2025 outlook was impacted by macroeconomic issues in China and currency concerns. Despite this, analysts maintain a positive long-term view on the stock.
• Roblox (RBLX) is under investigation by the U.S. Securities and Exchange Commission (SEC) over concerns about child safety on its platform. The company reported a big loss for 2025 and missed fourth-quarter estimates, sending shares down 11% on Friday.
• Shell to go ahead with £400m North Sea sale despite buyer's fraud allegations Shell is pressing ahead with plans to sell 5% of Britain's North Sea gas output to an energy tycoon who is fighting fraud allegations.
• Christie's Announces AI Art Auction, and Not Everyone Is Happy Fine art auction house Christie's has sold art created by artificial intelligence before. But it is soon planning its first show dedicated exclusively to works created by artificial intelligence, and the announcement has been met with mixed reactions.
• Trump wants to impose tariffs on prescription drugs. Experts warn that this could have negative consequences. Tariffs on imported drugs will not help bring manufacturing back to the US, experts warn.
• Experts warn Strategy's (MSTR) lofty valuation has 'no rational explanation' and investors face double the risk
The company, which rebranded from MicroStrategy to "Strategy" this week, is worth nearly double its bitcoin holdings.
• PlayStation outage: This is the biggest outage of the PS Network in 14 years. Users complain that their games will not start: digital copies require license verification, and disc versions cannot confirm authenticity over the Internet.
• U.S. Senator Cynthia Lummis: I encourage people to buy and hold Bitcoin. I encourage them to put Bitcoin away for retirement, for their future.
• What to expect this week: In a research note Friday, BlackRock Global Fixed Income chief investment officer Rick Rieder said it would likely take two weak jobs reports to start a discussion about resuming the Fed's rate-cutting cycle. But he added that risks from Trump policies, including tariffs and immigration restrictions, cloud the outlook.
• Investors are again focused on inflation data, which could hint at interest rate cuts, with more data on price inflation due Wednesday. Wall Street economists expect the January CPI to show headline inflation at 2.9% in January, unchanged from the previous month. On a monthly basis, economists expect prices to rise 0.3%, down from the 0.4% increase in December.
• The first monthly retail sales report of 2025 is due on Friday. Economists estimate that retail sales were unchanged in January from the previous month.
• More than 62% of S&P 500 companies have reported earnings, and the index's year-over-year growth rate continues to accelerate.
As of Friday, S&P 500 companies had posted earnings growth of 16.4% year-over-year. That would be the fastest pace of growth in three years and well above the 11.8% that analysts had expected in early January.
• Stock futures pared early losses after Trump announced he would impose 25% tariffs on U.S. steel and aluminum imports.
Key events that could impact markets on Monday:
- Speeches by ECB President Christine Lagarde and ECB Executive Board Member Isabelle Schnabel, as well as Bank of England policy Catherine Mann.
- EU Sentix investor confidence survey.
- New York Fed inflation expectations.
Fundamental news
• On Sunday, Trump suggested that Elon Musk's DOGE team had found irregularities at the U.S. Treasury Department. And that the U.S. may not be obligated to make certain debt payments because of fraud.
"There may be a problem — you've read about this, with Treasuries, and that may be an interesting problem."
"It may be that a lot of these things are not being accounted for. In other words, some of what we're finding is very fraudulent, so maybe we have less debt than we thought."
• EU-UK rapprochement: Is Brexit off the table? The EU and the UK have begun a reset of relations against the backdrop of Trump's rise to power and the growing Russian threat. British Prime Minister Keir Starmer was invited this week to an informal EU defence summit for the first time in five years – the only "foreign" guest at the meeting. Following the meeting, politicians agreed to hold a new bilateral EU-UK summit on 19 May, this time in London.
• The Trump administration has ordered the Consumer Financial Protection Bureau to cease nearly all of its work, effectively shutting down the agency.
It was created to protect consumers after the 2008 financial crisis and to combat illegal trade.
• The military in Iran has asked for a religious ban on nuclear weapons to be lifted. The supreme leader has banned the development of weapons of mass destruction, but pressure has recently increased on him. Iran has stressed that the fatwa is the last obstacle to creating an atomic bomb.
• The EU has increased its oil purchases from the US to a 10-year high, according to media reports citing data from the US statistical service.
For the entire year of 2024, the volume of purchases amounted to $12.17 billion. Compared to 2023, European imports of petroleum products from the US have increased by 40%.
• Musk stated that the US Treasury Department pays $100 billion annually to unidentified persons. It was decided between representatives of DOGE and the Treasury Department that now all government payments will be properly classified for further audit.
In addition, any money transfer will have to be accompanied by an explanation of the need for this payment.
• The Pentagon's $800 billion-plus budget is inefficient, says National Security Adviser Mike Walz.
• Trump has instructed Musk to hire 45 new DOGE agents, selected at his discretion, to vet the FBI, CIA and Pentagon.
• US President Donald Trump said he would announce mirror tariffs on a number of countries next week - Reuters.
Trump did not specify which countries would be hit with the new tariffs, but made it clear that it would be a wide-ranging initiative that he believed would also help reduce the US budget deficit.
• Trump 'angry' over not enough migrants being deported - NBC News He promised more and the current situation "makes him mad," a source told NBC News.
• Trump imposes sanctions on South Africa for its failure to support Israel and its racial discrimination against Afrikaners (whites in South Africa) and the seizure of their land without compensation. He orders a freeze on all aid to South Africa and directs federal agencies to prioritize humanitarian aid and the admission of Afrikaners to the United States.
• US President Donald Trump may seriously consider annexing Canada as he seeks to control the country's natural resources, Prime Minister Justin Trudeau said.
• A US court has ordered USAID employees to return to work, but has refused to restore grants. Washington Judge Carl Nichols has upheld a lawsuit filed by unions and suspended an order to suspend about 2,700 employees of the US Agency for International Development (USAID), US media report.
• Donald Trump has once again stated that he intends to restore relations with North Korean dictator Kim Jong-un. The head of the White House expressed this opinion during a joint press conference with Japanese Prime Minister Shigeru Ishiba. According to Trump, Japan likes his idea of contacts with Pyongyang.
• International Criminal Court (ICC) prosecutor Karim Khan, who issued an arrest warrant for Putin, has been placed on the US list of candidates for personal sanctions - Reuters.
• European far-right politicians held an event in Madrid called “Make Europe Great Again.” It is noted that the event was attended by Hungarian Prime Minister Viktor Orban, informal leader of the French National Rally party Marine Le Pen, Italian Deputy Prime Minister Matteo Salvini and leader of the Dutch Freedom Party Geert Wilders.
They “celebrated” Donald Trump’s return to the White House and condemned the “leftists.”
• EU to impose sanctions on 25 Chinese companies for helping Russia in war - South China Morning Post. The move is said to be part of a new package of measures aimed at weakening Russia's war economy.
• Trump has instructed Musk to review the US Department of Defense - it has the largest defense budget in the world. Donald Trump announced this the day before, talking about the work of the new Department of Government Efficiency (DOGE) headed by Elon Musk. "I have instructed him to re-examine education again, to re-examine the Pentagon, that is, the army," AFP quotes him as saying.
• Chinese Assistant Foreign Minister Zhao Zhiyuan made a serious representation to Panama over its intention to terminate the memorandum of understanding on joint implementation of Belt and Road Initiative projects. China has no intention of giving in to the US.
• Newsweek: China is secretly supplying minerals to Russia's war machine in Ukraine. State-linked Chinese companies are supplying Russia with three strategic minerals (germanium, gallium and antimony) critical to military technology, despite Beijing's claims of neutrality.
• Brazilian President Lula da Silva urged citizens to eat less to reduce inflation in the country. And became a target for criticism - Metropoles
In 2024, Brazil's economy faced rising inflation, currency depreciation and a loss of investor confidence.
Experts predicted that these problems would worsen in the new year.
• Inflation in China came out slightly higher than expected. 0.5% y/y versus expectations of +0.4% and the previous +0.1%. Does this mean the end of the depression? - unlikely, but we'll see.