Tech Stocks Fall, Gold Rise, Corporate and Geopolitical Reviews

Stock market news

• Semiconductor stocks fell ahead of the NVDA report this Wednesday. Interestingly, the equally weighted RSP did not fall. DIA also held steady. Bitcoin is trampling $92 thousand and the crypto market is screaming red - lest the problems with liquidity in crypto spill over to other assets (we are watching MSTR today). Mag-7 shares were also weak, except for AAPL. Everything is trading calmly on futures this morning.

• A sea of ​​red has descended on Asia as investors grapple with the risk of the U.S. intensifying its tech war with China in areas as diverse as artificial intelligence, quantum computing and aerospace. The U.S. is also seeking to tighten restrictions on exports of semiconductor technology to China, particularly chips from AI leader Nvidia, with help from allies, according to Bloomberg.

Hong Kong's Hang Seng Index initially fell 2.7%, driven by a nearly 8% drop in tech giant Alibaba after a 10% plunge in its American depositary receipts. However, the sell-off faded as investors looked to buy the dip given the stock's recent unprecedented rally. The Hang Seng Index was last down 0.6% as Hong Kong-listed tech companies pared initial losses amid rising demand for DeepSeek's low-cost AI models.

On Wall Street, investors continue to question the justification for big AI spending, as evidenced by the cautious mood ahead of Nvidia's earnings release on Wednesday, where analysts expect a whopping 72% jump in quarterly revenue.

• Gold is benefiting from the US presidency of Donald Trump, who has been busy with Russia advocating for a quick end to the war in Ukraine while ratcheting up tariff rhetoric against Canada and Mexico. The old-fashioned asset set a record overnight, tantalisingly approaching $3,000 an ounce.

• Risk appetite is being curbed by a series of weak US economic data, including retail sales, consumer confidence and surveys of the manufacturing and services sectors. All were weak and pointed to mounting price pressures that are undermining confidence in the US economy's exceptionalism.

• Market participants have now fully priced in the prospect of the Federal Reserve cutting interest rates by 50 basis points this year, up from 40 basis points last week.

• Treasury yields duly touched new lows in the Asian trading session. Benchmark Treasury yields hit a two-month low of 4.377%, while two-year yields hit 4.156%, the lowest since early December.

• A survey of U.S. consumer sentiment by the Conference Board has analysts fearing a repeat of the decline seen in a similar survey by the University of Michigan.

• Dallas Fed President Laurie Logan and Richmond Fed President Thomas Barkin are scheduled to speak later in the day in what central bank watchers expect to be a repeat message that the Fed will be cautious in cutting rates.

• European Central Bank Executive Board member Isabel Schnabel will also speak in London on the future of the central bank's balance sheet.

• Nvidia has reserved 70% of TSMC's capacity for CoWoS-L due to high demand for Blackwell. Capacity will grow by 20% quarterly, with annual volume exceeding 2 million units. Hopper H100/H200 production will be cut in favor of Blackwell.

• AMD plans to sell its server business in the US for $4 billion. Potential buyers include Taiwanese Compal, Inventec, Pegatron, Wistron. The buyer will also become a supplier to Nvidia.

• Apple to spend over $500bn in US over next four years - RTRS. Plans include building a new plant in Texas that will double US manufacturing capacity. Plans include creating a Manufacturing Academy and accelerated investment in AI and Silicon Engineering.

• Iraq awaits Turkish approval to restore pipeline, with Kurdish oil exports expected to resume in two days
Iraq will adhere to OPEC+ quotas after Kurdistan oil exports resume.

• Alibaba (BABA) has pledged to invest more than $53 billion in AI infrastructure such as data centers over the next three years, underscoring its ambitions to become a leader in artificial intelligence.

• Microsoft (MSFT) has begun canceling leases on data center capacity in the U.S., which may reflect concerns about whether it is building more AI computing power than it needs, according to a report from TD Cowen.

• SEC Closes Robinhood Crypto Investigation Without Taking Action

• Strategy (MSTR) buys 20,356 BTC at an average price of $97,514. Strategy currently holds about 499,096 BTC, which it purchased at a total purchase price of about $33.1 billion and an average purchase price of about $66,357 per BTC. At current prices, that's $46 billion with MSTR's Mcap of $77 billion.

• Ken Griffin's Citadel Securities is preparing to enter the crypto trading market. Financial giant Citadel Securities, founded by Ken Griffin, is planning to launch cryptocurrency trading, according to Bloomberg. This could be a major step for institutional adoption of digital assets.

• Google (GOOGL) has signed a seven-year, $2.5 billion contract with Salesforce (CRM) to use cloud services.
Salesforce previously relied heavily on AWS cloud solutions.

• Tesla (TSLA) is preparing to finally release a software update for its electric vehicles in China, adding FSD and city driving assist features.

• Gold ETFs saw biggest weekly inflows since March 2022, WGC says
Physically backed gold exchange-traded funds (ETFs) saw their biggest weekly inflows since March 2022 last week, data from exchange-traded funds (ETFs) traded on the stock market showed.

• Palantir (PLTR) shares fell 11%, extending a four-day slide on news of Pentagon budget cuts.

• Google, Meta face fines for anti-competitive behaviour towards South African media. Google could be ordered to pay up to R500 million ($27.29 million) a year in compensation to South African media.

• Starbucks (SBUX) is laying off workers and cutting its menu in an attempt to get business back on track and speed up service.
Starbucks is removing cookies and cream, white chocolate and other Frappuccino drinks from the menu.

• Aluminum continues to fall as traders weigh signs of weak U.S. economy - Bloomberg

• European deals are finally showing signs of life, with a takeover worth more than $10 billion announced earlier this week.

• Equinox Gold Corp. has agreed to acquire Calibre Mining Corp. for C$2.6 billion ($1.8 billion),
giving it the ability to expand gold production in the United States and Nicaragua.

• SMCI shares fell 8% yesterday and are down another 2% in premarket trading. Investors expect the company to meet its deadline to provide updated financial results by Tuesday, but the server maker still faces other hurdles.

• ZM shares fall 3% after report. The company gave a weak outlook.

• HIMS shares fall 18% after earnings. HIMS' Q4 sales nearly doubled from a year ago. And profits were in line with expectations. HIMS gave strong guidance for Q1 and 2025.

But the market remained in a fear zone due to: “On February 21, 2025, the FDA announced an end-of-shortage period for semaglutide, which may limit our ability to continue to provide access to compounded semaglutide on our platform after our current inventory is sold out.”

• QIA evaluates eight new venture firms for inclusion in $1 billion Fund of Funds.

• Apple plans to build an AI server factory in Texas and create 20,000 research jobs.

• U.S. producers see metal prices rise as tariffs loom.

• Brazilian airline Azul will return to its roots after a difficult 2024.

• Bain Capital is offering to buy London Stock Exchange-listed defence firm Chemring, Sky News reports.

• Nvidia chip demand under scrutiny as DeepSeek raises doubts about AI spending

• Nestle India considering price hike to counter commodity inflation, says executive

• Alibaba to invest over $52 billion in AI over the next 3 years.

• India and Britain plan to speed up negotiations on a proposed trade deal.

• Futures rise after Wall Street sell-off, Apple falls on AI spending plan

• The Reserve Bank of India (RBI) has allowed depositors of New India Co-op Bank to withdraw up to Rs 25,000.

• Goldman Sachs reports that hedge funds are exiting tech and media stocks at the fastest pace in six months.

• Canadian banks are expected to build reserves to cushion tariff uncertainty.

• It is fair to use the proceeds from the reinsurance deal to increase AllianceBernstein's share.

• Fitch says Indian non-bank lender IIFL Finance may see annual profit fall.

• Piraeus Bank posts profit rise in 2024.
 
• Bank of Ireland boosts shareholder returns with positive 2027 outlook.
 
• Consumer watchdog drops case against online lender under Trump.
 
• UK court approves Mastercard settlement despite funders' objections.
 
• Four banks fined $132m for leaking UK bond market information.

Key events that could impact markets on Tuesday:
- The Conference Board's U.S. consumer sentiment survey.
- The Richmond Federal Reserve's manufacturing survey.
- European Central Bank Governing Board member Isabel Schnabel speaks.
- Dallas Fed President Lori Logan and Richmond Fed President Thomas Barkin speak. 

Fundamental news

• Eurozone inflation and labor market indicators:
Flash Core CPI m/m -0.9% (exp. -1.0/ pop. -0.5%) y/y 2.7% (exp. 2.7%/ pop. 2.7%)
Flash CPI y/y -2.5% (exp. 2.5%/ pop. 2.4%) m/m = -0.3% (exp. -0.3/ pop. 0.4%)

• FBI Director Cash Patel said the Fed is a private entity that manipulates the currency for its own benefit. He believes this needs to be stopped.

• Trump backed Musk's demand that federal employees explain their latest achievements by the end of Monday
or risk being fired, though government agency officials have been told that compliance with Musk's order is voluntary.

• Musk's DOGE uncovered "hundreds of billions of dollars in fraud" as it suggested federal paychecks were going to non-existent employees. But officials are fighting back. Even Trump's own officials - FBI Director Cash Patel told his staff not to respond to DOGE's email.
Trump previously said, "ELON IS DOING A GREAT JOB, BUT I WOULD LIKE TO SEE HIM GET MORE AGGRESSIVE."
The ultimatum expired yesterday. We await more.

• No more excuses: Europe under pressure over defence spending three years after Russian invasion - The Guardian Even before Trump spoke to Putin, western European diplomats had long acknowledged privately that Europe would not be able to fill the gap left by the end of US military aid to Ukraine.

• In recent days, the Trump administration released a memo asking a key government committee to limit Chinese spending on technology, energy and other strategic American sectors - Bloomberg.
It is part of a series of moves on investment, trade and other issues that raise the risk that ties between the two countries could soon deteriorate.

• Trump is closing a NATO military base in Alexandroupolis, Greece, which played a key role in the logistics of arms supplies to Ukraine, the Greek newspaper Democracy reported. The base was used by the US and NATO to move forces into Eastern Europe.

• Europe will probably have to create its own armed union instead of NATO so that this alliance does not depend on the United States, - German chancellor candidate Friedrich Merz.

• Chinese navy conducts live-fire exercises in the Tasman Sea, between Australia and New Zealand - The Warzone.