North America News
US Stock Indices Close Mixed as Nasdaq Recovers, Dow and S&P Slip
Wall Street saw mixed trading on Wednesday, with the Nasdaq (+0.03%) managing a slight gain after recovering from an earlier -228 point drop, while the Dow Jones (-0.50%) and S&P 500 (-0.27%) closed lower but off session lows.
📉 Closing Market Performance:
- Dow Jones: -225.03 points (-0.50%) at 44,368.62
- S&P 500: -16.56 points (-0.27%) at 6,051.94
- Nasdaq Composite: +6.09 points (+0.03%) at 19,649.95
- Russell 2000: -19.81 points (-0.87%) at 2,255.88
Meta (+0.76%) extended its record 18-day winning streak, while Apple (+1.83%) and Tesla (+2.44%) advanced. However, Nvidia (-1.25%), Amazon (-1.65%), and Microsoft (-0.58%) dragged the market lower.
Robinhood Delivers Record Q4 Earnings on Crypto Trading Boom
Robinhood ($HOOD) posted strong Q4 results, with crypto trading revenue soaring over 700% YoY, helping drive total revenue to $1.01 billion (+115% YoY).
📊 Key Financial Metrics:
- Q4 Net Income: $916M, up over 10x YoY
- Q4 Adjusted EBITDA: $613M, up 300%+ YoY
- Full-Year Net Income: $1.41B, reversing a $541M loss in 2023
- Gold Subscribers: +86% YoY to 2.6M
Key Growth Drivers:
- Crypto transaction revenue hit $358M (+700% YoY), leading Robinhood’s 200% YoY transaction-based revenue growth.
- Net Deposits reached a record $16.1B, with Assets Under Custody (AUC) up 88% YoY to $193B.
- Expansion into futures trading, UK & EU markets, and upcoming Asia-Pacific launch signal global growth ambitions.
With strong user growth and surging engagement, Robinhood is positioning itself beyond retail equities trading, though regulatory risks remain a concern.
Reddit & Cisco Earnings Highlights
✅ Reddit ($RDDT) – Beat Expectations
- Q4 Revenue: $427.7M (vs. $405.3M expected)
- EPS: $0.36 (vs. $0.25 expected)
- Daily Active Uniques: +39% YoY to 101.7M
- Q1 Revenue Outlook: $360M-$370M (vs. $358.1M expected)
Reddit’s strong revenue and user growth reinforce momentum ahead of its highly anticipated IPO.
✅ Cisco ($CSCO) – Announces $15B Buyback & Dividend Hike
- Q3 Revenue Guidance: $13.9B-$14.1B
- FY 2025 Revenue: $56B-$56.5B
- New $15B stock buyback authorization & dividend raised to $0.41
With earnings season delivering major surprises, investors will now watch inflation data and Fed policy cues for market direction.
US treasury sells $42 billion of 10 year notes at a high yield of 4.632%
- WI level at the time of the auction 4.623%
- High yield 4.632%
- WI level at the time of the auction 4.623%
- Tail 0.9% versus six with average of 0.1%
- Bid to cover 2.48X vs. six month average of 2.54X
- Directs (domestic demand) 13.6% versus six with average or 17.4%
- Indirects (international demand) 71.5% vs 6 month average of 68.8%
- Dealers 13.6% versus six point average of 17.4%
US January core CPI +3.3% vs +3.1% expected
- US CPI for January
Headline CPI:
- CPI +3.0% vs +2.9% expected
- Prior was +2.9% y/y
- m/m reading at +0.5% vs +0.3% expected
- Month-over-month unrounded 0.467%
Core measures:
- Core CPI 3.3% vs +3.1% expected
- Core CPI m/m +0.4% vs +0.3% expected
- Core unrounded +0.446% vs +0.225% m/m prior
- Real weekly earnings -0.3% vs -0.1% prior
- Core services ex shelter +0.757%
- Core-CPI services ex-rent +0.5%
- Services ex energy +0.5%
US January Federal budget deficit $129.0B vs $95.5B expected
US House budget projects $1.9 trillion deficit for fiscal year 2025, or 6.2% of GDP
- Full Budget resolution here
- US House budget aims to raise debt ceiling by $4 trillion
- National debt would surpass $36 trillion, or 123% of GDP
- The proposal calls for a $2 trillion reduction in mandatory spending over the next decade
- Entitlement expenditures now account for more than 70% of the federal budget
- The Education and Workforce Committee must reduce the deficit by $330 billion,
- The Energy and Commerce Committee faces an even steeper $880 billion in required savings
- the Armed Services Committee authorized to increase the deficit by $100 billion
- Homeland Security and Judiciary Committees will collectively add another $200 billion
US MBA mortgage applications w.e. 7 February +2.3% vs +2.2% prior
- Latest data from the Mortgage Bankers Association for the week ending 7 February 2025
- Prior +2.2%
- Market index 230.0 vs 224.8 prior
- Purchase index 153.1 vs 156.7 prior
- Refinance index 640.6 vs 584.3 prior
- 30-year mortgage rate 6.95% vs 6.97% prior
Fed’s Bostic: The labor market is performing incredibly well
- Atlanta Fed Pres. Rafael Bostic is speaking
- Labor market is performing incredibly well.
- Latest inflation number show careful monitoring still needed.
- Deployment of AI will likely mean fewer workers are needed in some industries.
- May be a wide gap in skills between the jobs destroyed by AI and those created by it
- The Fed is sitting tight until there is more clarity
- The Fed will not move until it has enough information to do so
- Tariff discussion has lots of moving parts. Impact will depend on final details
- Patience suggests that the next cut will happen later in order to have time to get more information.
- Would not be comfortable moving again on rates until there is more clarity on direction of the economy.
Feds Goolsbee: Latest inflation read is sobering
- Fed’s Goolsbee speaking to the NY Times.
- Inflation Report: Austan Goolsbee called the latest inflation data “sobering” but cautioned against overreacting to one report.
- Policy Impact: He emphasized that multiple months of high inflation would indicate the job is not done.
- Rate Outlook: Goolsbee expects interest rates to settle “a fair bit below” current levels but needs confidence inflation is on track to 2% before supporting further cuts.
- Long-Term Inflation Expectations: He finds some reassurance that households and businesses still expect inflation to decline over time.
- Trump’s Policies & Fed Challenges: He warned that policies like tariffs could complicate the Fed’s ability to interpret inflation drivers, making policy decisions more challenging.
- Supply vs. Demand Inflation: The Fed will need to distinguish between inflation caused by supply shocks (e.g., tariffs) and demand-driven overheating.
Powell: Today’s inflation print shows we’re close but not there yet on inflation
- That’s a positive spin
- We want to keep policy restrictive for now
- We have to wait and see what the effects of policies are before we can think about what we will do
- There is uncertainty over policy
- Underlying economy is very strong
- wants to see more progress on inflation
- did not see much progress on core inflation last year
- the luxury of being able to wait for progress on inflation given the strong economy
- labor supply from immigration came down sharply in H2 last year. Expect more of that going forward.
- Have to see how supply and demand and labor matchup
- Making clear progress on housing services inflation but not there yet
- Last few jobs report have shown significant job creation, may have tipped up at and of year.
- Offer a note of caution on today’s CPI reading. We target PCE inflation which is a better measure
- We will know what PCE readings are late tomorrow after PPI data
- The dot plot is NOT forward guidance.
- If DOGE cut $1 trillion off spending, hard to say how it would affect the economy.
- Best thing we can do is to achieve price stability, maximum employment
- Will tell House financial services committee should anyone from DOGE tried to access Fed systems.
- We control access to our payment systems very carefully
- Commercial real estate has lots of embedded losses but it does not seem to be getting worse
- The markets are not pricing in higher inflation, but may be pricing in the risk of it
- Increase in LT rates is mostly not about inflation or Fed policy
- Repeats that he won’t resign if asked by Trump
- Says he would be very careful with monetary policy rules
Wall Street Journal on ‘what we know’ about Trump’s reciprocal tariffs
- Not a lot is confirmed but given Trump’s actions so far, reciprocal tariffs are on the way
The Wall Street Journal piece is gated:
- What We Know About Trump’s Reciprocal Tariffs
- Senior aide Peter Navarro is a major driver of the idea inside the White House
In brief:
- Trump’s team is working on reciprocal tariffs this week via executive action, bypassing Congress.
- Peter Navarro, a key Trump trade adviser, has long supported this policy.
- The plan aims to match or exceed tariffs imposed on U.S. exports by other nations.
- It may also target non-tariff barriers, like foreign subsidies, taxes, and regulations. Japan, the EU, and China could face higher U.S. tariffs under this approach.
Mitch McConnell wrote a strong rebuff of tariffs today; it’s going to be tough to get it through Congress.
Trump trade adviser: Australia ‘killing aluminium market’ – blow to tariff exemption hope
- Trump’s trade adviser Navarro says volume of US imports of primary aluminium from Australia has surged
Media reports on comments from Trump’s trade adviser Navarro are weighing on Australian hopes for an exemption on tariffs:
Navarro spoke with CNN:
- “Australia is just killing our aluminium market,”
- (on exemptions_ “President Trump says no, no, we’re not, we’re not doing that anymore.”
- “What they do is they just flood our markets”
- “That’s what we’re dealing with. Our aluminium industry is on its back.”
Hassett: Reciprocal tariffs are a work in progress
- Trump White House economic advisor Hassett:
- Reciprocal tariffs are a work in process, conversations with other countries began earlier on Wednesday
Fidelity’s global macro director says the uptrend in US equites “feels like late innings”
- Wariness creeping in
Jurrien Timmer is Director of Global Macro at Fidelity:
- trend remains up for US equities
- this cyclical bull market remains in place at 28 months old
- only 62% of stocks are above their 200-day moving average
- the chart below shows a series of negative divergences, the likes of which tend to happen in the more mature stages of bull markets
- It feels like late innings to me
Trump says “we’ll see” when asked if reciprocal tariffs are coming Wednesday
- Trump comment comes at an event to welcome home a hostage released by Putin.
BOC Minutes: A long trade conflict with US would permanently cut level of GDP
- Comments from the BOC minutes
- Even if no tariffs imposed, a long period of uncertainty would almost certainly damage business investment
- 25 bps cut would help support growth and better balance inflation risks
- Uncertainty due to US tariffs also supported case for a cut
- Tariffs would likely represent a one-time increase int he level of prices, saw risk of higher import prices feeding into other prices
- In setting mon pol, they plan to continually assess trade conflict
More info on US 25% steel tariffs would stack on other levies on Canada
- Would total 50%
- Trump’s planned 25% tariffs on all steel and aluminum imports would be added onto other levies on Canadian goods, resulting in a total 50% tariff, a White House official said on Tuesday.
- Canada has not been told about the stacking of the tariffs, a government source told Reuters, adding that it “sounds plausible.”
Read here for more.
Commodities News
Gold Steadies as Powell Maintains Restrictive Policy Stance
Gold prices held firm at $2,897 on Wednesday after Fed Chair Jerome Powell reaffirmed a cautious monetary policy approach, signaling that rate cuts are not imminent despite inflation concerns.
Key Market Drivers:
- US CPI rose above 3% YoY for the first time in six months, prompting traders to reduce Fed rate-cut bets to just 30 bps for 2025.
- Treasury yields and the US Dollar initially surged after the inflation data, but DXY later erased gains, closing near 107.98.
- Central bank demand for gold remains strong, with the World Gold Council reporting over 1,000 tons in purchases for the third consecutive year.
With inflation proving sticky and Powell holding firm on restrictive policy, gold remains supported by safe-haven demand, though short-term upside may be capped by Fed policy uncertainty.
WTI Crude Drops Nearly $2 on Speculation Russian Oil Flows Will Resume
WTI crude settled $1.95 lower at $71.37 per barrel on Tuesday, as speculation surrounding a potential resolution to the Russia-Ukraine war weighed on prices.
Market Sentiment Shifts on Peace Talks
- The White House signaled that negotiations are progressing, aligning with prior comments from Ukrainian President Zelensky and US President Trump.
- Reports suggest that lifting Russian oil sanctions could be a multi-year process, but markets appear to be pricing in a faster-than-expected shift.
- Crude may face challenges holding gains as steps toward peace continue, keeping volatility elevated.
With global supply dynamics evolving, traders will closely monitor geopolitical developments and OPEC+ policy adjustments for future price direction.
Iron Ore Jumps to Four-Month High on Australian Supply Concerns
Iron ore prices surged toward $108/t, the highest level since October 2024, as a tropical cyclone threatens Australia’s Pilbara region, home to some of the world’s largest iron ore ports.
Key Supply Risks & Market Reactions
- Cyclone Zelia is expected to intensify, leading Port Hedland authorities to suspend operations and clear berths.
- Heavy rainfall in Pilbara has already impacted Q1 production, adding further pressure to supply chains.
- Nickel market also faces tightness, with Indonesia’s smelters experiencing ore shortages and the Philippines considering restrictions on raw mineral exports.
Bullish Sentiment in Base Metals
- Investors increased net long positions in copper (+5,224 lots), aluminum (+2,109 lots), and zinc (+2,992 lots), signaling continued optimism in industrial metals.
With supply disruptions looming and Chinese demand holding steady, iron ore and base metals could remain elevated in the near term.
Gold Remains in Focus Amid Trade Uncertainty but Faces Near-Term Pullback
Gold surged to an intra-day high of $2,942, driven by trade tensions and sustained central bank buying, before retreating to $2,892.
Key Drivers & Near-Term Outlook
- China added to its gold reserves for the third consecutive month, reinforcing demand from global central banks.
- Fed Chair Powell’s testimony signaled no urgency for rate cuts, increasing the opportunity cost of holding gold and leading to profit-taking.
Technical View: Retracement Likely Before Further Gains
- Support: $2,860 | $2,792 (21DMA)
- Resistance: $2,942 | $2,960
- Momentum remains bullish, but a retracement lower is possible before the next leg up.
With US debt concerns fueling de-dollarization narratives and global trade friction persisting, gold remains well-positioned for long-term gains despite short-term pullbacks.
Crude oil inventory for the current week build 4.070M vs estimate 3.028M
- Weekly oil inventory data
- Prior week oil inventory build 8.664M
- Crude oil inventory buildup 4.070M versus 3.028M estimate
- Gasoline drawdown of -3.035M versus estimate of a build of 1.403M
- Distillate build of 0.135M vs drawdown of -1.539M estimate
- Cushing build of 0.872M vs. last week drawdown of -0.034M
- Weekly refining utilization 0.5% versus 0.5% expected. Previous +1.0%
- Crude production change 0.12% versus +1.8% last week
Europe News
European equity close: A solid day despite the CPI blip
- Closing changes in Europe:
- Stoxx 600 +0.1%
- German DAX +0.5%
- France CAC +0.2%
- UK FTSE 100 +0.35%
- Spain IBEX +1.0%
- Italy’s FTSE MIB flat
BOE’s Greene: Disinflationary process is broadly on track
- Comments from Greene
- Evidence suggests to me that this weakness is more a question of constrained supply
- I believe it is appropriate to maintain a cautious and gradual approach to removing monetary stimulus
- Considerable risk recovery in productivity growth will remain elusive
- UK may now have lower threshold in which short-term inflation rise feeds through to second round effects
ECB’s Nagel: Closer we get to the neutral rate, the more appropriate for gradual approach
- Bundesbank Chief Nagel is speaking
- The closer we get to the neutral rate the more appropriate for a gradual approach.
- The limits of the neutral rate concept are clear, risky to base policy decisions mainly on R-star estimates.
ECB’s Villeroy: US tariffs will most likely have a negative impact on the economy
- Remarks by ECB policymaker, Francois Villeroy de Galhau
- There will very likely be a negative effect
- Protectionism is a seductive short-term policy
- But in the long-term, it is a losing strategy
- France still likely to avoid economic recession in 2025
ECB’s Holzmann: Inflation is still a threat due to tariffs
- Remarks by ECB policymaker, Robert Holzmann, to CNBC
- A 50 bps rate cut this year would not be a good decision
- Our job is to deal with inflation
- We want to come close to the neutral rate but unsure of when we will reach it
- Wage pressures are moderating
Asia-Pacific & World News
PBOC sets USD/ CNY reference rate for today at 7.1710 (vs. estimate at 7.2971)
- PBOC CNY reference rate setting for the trading session ahead.
- The People’s Bank of China has injected 558bn yuan via 7 day reverse repoos at an unchanged rate of 1.5%
Australian Q4 New home lending +1.4% q/q
- Australian Q4 2024 data:
- New housing finance +1.4% q/q
- There was a 4.2% q/q rise in owner occupier loans
- investor lending -2.9% q/q
- overall loan volumes -0.4% q/q (investors -4.5%, own-occupiers +2.2%)
Reserve Bank of New Zealand preview – likely the final 50bp interest rate cut
- ANZ have published their forecast for the RBNZ meeting on Wednesday 19 February 2025
In brief:
- We expect a 50bp cut in the OCR to 3.75% next Wednesday. That would be consistent with RBNZ November messaging, economists’ forecasts, and market pricing. Data since the November Monetary Policy Review has been mixed, but overall consistent with the RBNZ’s guidance.
- With the OCR now much closer to neutral and the economy showing clear signs of life, we expect more caution from the RBNZ from here – this is likely the last 50bp cut. However, given the RBNZ’s central estimate of neutral is 3%, the risks are tilted towards a lower OCR trough than the 3.5% we are forecasting.
On the currency:
- Assuming we don’t see a big change in the RBNZ’s track, we don’t think we will see significant market moves on the day, and volatility (in FX and interest rate markets) will likely continue to be driven by offshore events.
Japan’s Foreign Trade Council says USD 1tln investment plan in the US is challenging
- Japan’s Foreign Trade Council Chairman says Japan’s USD 1tln investment plan in the US is challenging but achievable
Japan’s Foreign Trade Council Chairman says Japan’s USD 1tln investment plan in the US is challenging.
But achievable if public and private sectors work together in a strategic manner.
Bank of Japan Governor Ueda will monitor the impact of US tariff and immigration policies
- Both are thought to be (US) inflationary, which will spark Ueda’s interest
Bank of Japan Governor Ueda:
- says will monitor the impact of US tariff and immigration policies
- very interested in the new US administration’s policies
- the pace of monetary policy adjustment should depend on the economic situation
Japan Industry Minister requested the US exclude Japan from steel & aluminium tariffs
- Japan industry minister Muto requested the US exclude Japan from steel and aluminium tariffs
Current indications from Trump are ‘no exclusions’.
South Korea will hold an ‘export strategy meeting’ next week to discuss new Trump tariffs
- Acting President Choi Sang-mok with the announcement
South Korea’s government plans to hold an export strategy meeting next week to address the impact of recent U.S. tariff increases, according to acting President Choi Sang-mok on Wednesday.
- Choi acknowledged rising global trade uncertainties
- stressed the need for a thorough assessment of potential impacts on various industries
- indicated that the government would take necessary countermeasures if required
- upcoming strategy meeting will focus on assisting exporters and exploring ways to diversify export markets
Crypto Market Pulse
Crypto Market Update: Binance, Dogecoin, & Bitcoin in Focus
Binance Coin (BNB) extended its 7-day winning streak, surging past $650 following reports that Binance liquidated over $5.9 billion in BTC, ETH, and SOL holdings. The market is watching whether these strategic trades by Binance’s parent company will continue to support further BNB price gains.
Meanwhile, Dogecoin (DOGE) stabilized at $0.25, showing resilience amid a broader market downturn. On-chain data suggests institutional interest and speculation over a potential DOGE ETF approval are keeping long-term holders from selling. Bloomberg analysts hinted that DOGE could be classified as a commodity, boosting its approval chances alongside Litecoin.
Bitcoin’s Coinbase premium indicator flipped negative, indicating that overseas BTC buyers are leading demand ahead of the US Consumer Price Index (CPI) report. This shift suggests that institutional investors are positioning for potential inflation-related volatility in the crypto space.
The Day’s Takeaway
Day’s Takeaway: Markets React to Mixed Earnings, Fed Signals, and Geopolitical Developments
US stock indices ended the day with mixed results, as the Nasdaq managed a slight gain (+0.03%), while the Dow Jones (-0.50%) and S&P 500 (-0.27%) closed lower after recovering from deeper losses earlier in the session. Meta extended its record 18-day winning streak, while Apple and Tesla posted gains. Meanwhile, Nvidia, Amazon, and Microsoft declined, dragging the broader market lower.
Robinhood’s Q4 earnings beat expectations, driven by a 700% surge in crypto trading revenue, pushing total revenue to $1.01 billion (+115% YoY). Reddit also posted strong results, with revenue and daily active users exceeding forecasts. Cisco announced a $15 billion stock buyback and raised its dividend, reflecting confidence in its financial position.
Gold prices steadied at $2,897 after an initial decline, as Federal Reserve Chair Jerome Powell reaffirmed a restrictive monetary policy stance, citing persistent inflation. The latest US Consumer Price Index (CPI) report showed inflation climbing above 3% YoY, leading traders to slash Fed rate-cut expectations to just 30 bps for 2025. Despite this, strong central bank demand continues to support gold, with purchases exceeding 1,000 tons for the third consecutive year.
In the energy markets, WTI crude settled nearly $2 lower at $71.37, as speculation of Russian crude resuming exports and reports of potential peace talks between Russia and Ukraine weighed on prices. Iron ore prices surged to a four-month high due to supply concerns from Cyclone Zelia in Australia, which has forced Port Hedland operations to shut down.
Geopolitical developments also took center stage as President Trump confirmed a potential meeting with Russian President Vladimir Putin in Saudi Arabia, alongside Saudi Crown Prince Mohammed bin Salman. Trump stated that Ukraine “has to make peace” and that US Treasury Secretary Bessent would be visiting Ukraine to oversee financial matters.
With tariffs, inflation data, earnings surprises, and geopolitical tensions shaping market sentiment, investors will remain focused on upcoming economic reports and Federal Reserve commentary for further direction.
