Wall Street Stock News for Traders and Investors, Earnings Season, Trump's Action, Fundamental Reviews
Stock market news
• And again the stock market pendulum swung in the opposite direction. The Magnificent Seven stocks became the growth leader, pulling the Nasdaq-100 up by +2%. And the DJIA index barely went into the plus against the backdrop of sagging Value stocks. This is Trump's market. It will rock... The US dollar remains stable. Gold rose by 1% to $2772, and Bitcoin fell by 2% to $101 thousand. Today the Fed will announce its decision on monetary policy. No changes are expected. Investors will listen carefully to what Powell has to say.
• Calmer sentiment appears to be prevailing after China’s DeepSeek sparked a sell-off in AI stocks and light overnight gains swept through several Asian markets open for the Lunar New Year holiday. Investors are leaning toward the idea that the startup’s cheap AI assistant won’t knock the wind out of Nvidia and its ilk, just as they prepare to weigh in on the earnings parade that begins today for the so-called “Mag 7” tech megacaps. Facebook, Microsoft and Tesla owner Meta Platforms is on the scene today, and Apple tomorrow.
• Japan's Nikkei rose about half a percent by the midday break, on track to snap a three-day slide. Australia's stock index rose 0.9 percent, with additional momentum from a modest inflation imprint that has raised the chances of a rate cut at the Reserve Bank's meeting next month. But Asian stock markets were understandably cautious, given big Wall Street earnings results expected this week and a slew of central bank policy decisions, including by the Fed today and the ECB tomorrow.
• Adding to this is the uncertainty over how severe US President Donald Trump's upcoming tariff announcements might be. Following Trump's comments late last week that he would prefer not to impose additional tariffs on Beijing following a "friendly" phone call with Xi Jinping, the White House confirmed that tariffs on Canada and Mexico will be imposed this Saturday, while Chinese tariffs are still under review. That makes Lunar New Year celebrations a bit tense, with mainland markets closed until the middle of next week.
• The dollar has been twitching since Trump's inauguration, reacting largely to changing tariff expectations. The dollar index is up about 0.4% this week but down 2% from its two-year peak reached on Jan. 13.
• Traders expect the Fed to hold firm on monetary policy today, even as Trump pushes for lower rates. Market pricing is not priced in a quarter-point cut by June and then another by year-end. Instead, the ECB is expected to cut rates tomorrow, followed by swift cuts in March, June and possibly October. Europe is also in Trump's crosshairs on tariffs, so Saturday's announcement on Canada and Mexico could bring unwelcome news for the bloc too.
• The dollar strengthened after Trump's new tariff threats revived worries about a trade war that had already been in focus after a brief standoff with Colombia.
• Trump has said he wants the blanket tariffs to be "much higher" than the 2.5% that his new Treasury Secretary Scott Bessent reportedly plans to phase in.
• Saudi Arabia and other OPEC+ members have not responded to Trump's call to lower oil prices, - Reuters. Ministers from the countries in the organization held a meeting. After it, they said that OPEC does not plan to change the current plan, which provides for an increase in production from April.
• The world's 500 richest people saw their wealth fall by $108 billion as tech stocks slumped following the success of China's DeepSeek-R1 chatbot - Bloomberg. The biggest losses were suffered by Nvidia founder Jensen Huang, who lost more than $20 billion (20% of his fortune). Oracle Corp. co-founder Larry Ellison lost $22.6 billion (12% of his fortune), Dell founder Michael Dell lost $13 billion, and Binance founder Changpeng Zhao lost $12.1 billion.
• DeepSeek collects your IP addresses, typing data, device information, and other data, and then stores it all in China. And the best part is that all of this information can be requested by Chinese authorities at any time.
This is not a rumor - it is all directly stated in their privacy policy.
• Sam Altman wrote that DeepSeek's R1 model is impressive, especially given their pricing policy. However, OpenAI plans to release even more powerful models, while maintaining a strong focus on its research strategy. Altman emphasized that competition is inspiring, and the key to success is even more computing power.
• Microsoft (MSFT) is in talks to acquire TikTok. The number of suitors for TikTok is growing rapidly.
• The Arizona Senate Finance Committee has passed the Strategic Bitcoin Reserve bill. The next step is the Senate Rules Committee. If the bill passes the full Senate, it will move to the House for further debate.
• Senator Lummis: Bitcoin will help cut America's national debt in half in 20 years. How? Unless the bitcoin that the US government holds on its balance sheet goes into space. The US has about $20 billion in bitcoins, and the national debt is $36 trillion. How can $20 billion be turned into $18 trillion? Only if bitcoin rises in price to $100+ million (after all, the US national debt will also grow). And even if the US starts confiscating bitcoins left and right, its price is still unlikely to cover half of the US national debt.
• Retail investors bought a record $562 million worth of NVIDIA (NVDA) shares during Monday's deepseek selloff - Vanda research.
• Germans start boycotting Tesla because Musk supports the AfD. "I bought this car before Musk went crazy."
• Elon Musk's X Company Begins Its Advancement into the Financial Services Market with a Deal with Visa (V)
Users will now be able to:
- Instantly and securely top up their X Wallet via Visa Direct.
- Link a debit card for convenient P2P payments.
- Instantly transfer funds to a bank account.
XMoney promises to be another step towards creating a universal all-in-one application.
• Coca-Cola (KO) is recalling drinks in large numbers from stores in Europe after dangerous levels of chlorate were found. Drinks with elevated levels of the substance were reportedly distributed in Belgium, the UK, France, Germany, Luxembourg and the Netherlands since November. Five batches of the product have already been sold in the UK.
• AI bubble reminiscent of dot-com bubble extremes, warns Bridgewater founder Ray Dalio
Meanwhile, hedge fund manager Bridgewater Associates said the launch of its latest artificial intelligence (AI) models by Chinese startup DeepSeek could lead to a short-term correction in the stock prices of many tech companies, but is positive for the industry.
• Saudi Arabia and other OPEC+ members have not responded to Trump's call to lower oil prices, - Reuters. Ministers from the countries in the organization held a meeting. After it, they said that OPEC does not plan to change the current plan, which provides for an increase in production from April.
• Elon Musk's X is making a push into the financial services market with a deal with Visa (V). XMoney promises to be another step toward creating an all-in-one app, with even bigger announcements tipped for the company this year.
• Juniper Networks (JNPR) shares fell 6% after reports that the Justice Department may block the company's $14 billion sale to Hewlett Packard Enterprise (HPE). A potential DOJ lawsuit could delay the deal, which has already received approval from the European Union.
• Alibaba Cloud (BABA) unveiled its new Qwen2.5-VL AI models, which compete with offerings from OpenAI, Amazon (AMZN) and Google (GOOGL). The models demonstrate cutting-edge capabilities in text and image analysis, positioning Alibaba as a strong competitor in the AI space.
• Intuitive Machines (LUNR) announced the delivery of the Athena lunar lander for the IM-2 mission to Cape Canaveral. The mission, which is part of NASA's Commercial Lunar Resupply Services initiative, is scheduled to launch in February 2025 and will be Intuitive Machines' second mission to the Moon.
• General Mills (GIS) announced a quarterly dividend of $0.60 per share, continuing its long tradition of uninterrupted dividend payments for 126 years. The forward dividend yield is set at 3.9%, reflecting the company's stable financial performance.
• Sysco Corporation (SYY) reported a 4.5% increase in sales for the quarter, with gross profit up 3.9%.
Despite a slight decline in gross margin, effective management of product cost inflation helped adjusted operating profit rise 5.1%.
SYY shares fell 6% yesterday.
• JetBlue (JBLU) shares fell 26% on Tuesday as the airline's downbeat outlook for the first quarter and next fiscal year overshadowed its strong fourth-quarter performance.
• BMW sees margin squeeze on weak sales. BMW AG said its auto profit margin in 2024 would be at the lower end of its forecast after sales of its premium cars fell.
• Chevron, Engine No. 1, and GE Vernova team up to power U.S. data centers with focus on AI
Energy company Chevron is partnering with Engine No. 1 and GE Vernova to build natural gas-fired power plants in the U.S. that will be linked to data centers.
• GM's fourth-quarter profit beats estimates. The company's electric vehicle business beat expectations, and it raised its 2025 profit forecast. But investors are wary of cuts to incentives, including tax credits for electric vehicles, and say GM's guidance leaves little room for error.
GM shares fell 9% yesterday.
• Cement maker Titan America plans to raise up to $3.3 billion in US IPO European companies are increasingly looking to list their US units in New York in search of deeper capital markets, a broader investor base and higher valuations.
• AI data startup Turing triples revenue to $300 million The startup is one of a growing number of companies that provide human trainers for AI labs.
• Boeing (BA) reported a full-year loss of nearly $12 billion as a result of the strike and problems at key units. BA shares rose 1.5% yesterday.
• CrowdStrike (CRWD) shares rise 9% on ransomware detection victory.
• Stocks yesterday after reports:
SAP -0.7%
RTX +2.6%
BA +1.5%
LMT -9.2%
RCL +12.0%
PCAR -2.4%
GM -8.9%
KMB -1.5%
• Stocks today after earnings in premarket after earnings:
SYK -0.3%
SBUX +0.7%
CB +0%
PKG -4.4%
MANH -24.1%
FFIV +14.9%
• Today's reporters:
MSFT, META, TSLA, ASML, TMUS, NOW, IBM, DHR, PGR, ADP, LRCX, WM, CP, GD, NSC, AMP, URI, MSCI, NDAQ and others.
• Today, data will be released from GfK consumer surveys in Germany, GDP in Spain and Belgium, business and consumer confidence in Italy, and the unemployment rate in Portugal.
• Sweden also released GDP data and the Riksbank is widely expected to cut rates by a quarter percentage point.
• Later in the day, the Bank of Canada is seen as almost certain to cut rates by a quarter percentage point.
• The Bank of England will not announce a policy update until February 6, but its governor Andrew Bailey will testify on the Financial Stability Report to a parliamentary committee.
Key events that could impact markets on Wednesday:
- US earnings from Meta, Microsoft, Tesla
- Policy decisions from the US Federal Reserve, Riksbank, Bank of Canada
- Bank of England Governor Bailey testifies to a parliamentary committee
Fundamental news
• U.S. consumer sentiment worsened in January.
The Conference Board reported Tuesday that its consumer sentiment index fell to 104.1 this month from an upwardly revised 109.5 in December.
• U.S. home price growth slowed in November.
Higher mortgage rates are holding back demand, increasing the supply of homes on the market.
New orders for U.S.-made capital goods rose more than expected in December.
But business spending on equipment was likely muted in the fourth quarter.
• China celebrates the New Year. The Year of the Green Wooden Snake. The public holiday will be celebrated for 7 days. Many Chinese businesses will be closed for 14 days.
• The majority of the US Senate has supported President Donald Trump's nomination of Scott Bessent as Treasury Secretary, who will play a leading role in managing the country's economic, fiscal and sanctions policies.
• Trump is set to resume oil production in protected areas of Alaska, hoping that this could fully meet Asia's energy needs.
• Trump instructed the Pentagon to develop a plan to create the "Iron Dome" in 60 days. The US President signed a corresponding decree.
Trump: "Instead of taxing our citizens to enrich foreign countries, we should tax foreign countries to enrich our citizens" - plans to reduce taxes on American-made products to 15%.
• Trump announced that he would impose tariffs on Taiwanese imports of semiconductors and pharmaceuticals. He plans to impose 25-100% tariffs on Taiwanese-made semiconductors to push American companies like TSMC to move production back to the United States.
• Trump on DeepSeek: “The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries to be as focused as possible on winning. We have the best scientists in the world. That’s very special. We always have ideas. We’re always first.”
• The Trump administration announced it is offering compensation to all federal workers who choose to leave their jobs by next week, an unprecedented move to shrink the U.S. government at a breakneck pace.
The federal government employs more than 3 million people, making it about the 15th-largest workforce in the country.
• US Border Patrol comes under fire on Mexican border, allegedly by drug cartel gunmen. Is this all Trump needs to carry out counter-terrorism operation in Mexico?
• German demand for Russian LNG via European ports is growing - The Financial Times. Germany is still buying significant volumes of Russian liquefied natural gas via other EU countries, despite Berlin's move away from direct supplies of the Russian fuel, a report says.
• German industrialists expect a 0.1% decline in GDP in 2025. The Federal Association of German Industries (BDI) believes that industry in Germany is in a deep economic crisis and expects the country's economy to contract again in 2025 - by 0.1%. At the same time, GDP growth in the eurozone is expected to be at the level of 1.1%, and the global economy - by 3.2%.
• In Serbia, most of the government, including the prime minister, resigns due to large-scale protests - media. In turn, President Aleksandar Vucic complained that the protests are creating a problem for the country's economy.
• The EU will give Moldova €30 million to supply gas to Transnistria. As part of the emergency assistance package, the EU is ready to finance the purchase and transportation of natural gas to Transnistria to help restore electricity and heat supplies to more than 350,000 residents in the region by 10 February 2025.
• The Doomsday Clock has moved one second closer to "nuclear midnight," to 89 seconds. "This is the closest the world has ever come to midnight," said Daniel Holts, chairman of the Bulletin of the Atomic Scientists' science and security board.