North America News
S&P Hits New Intraday High but Falls Short of Record Close Amid Mixed Market Movements
The major US stock indices posted gains on Wednesday, marking the third consecutive day of upward momentum for the broader market. However, while the S&P 500 achieved a new intraday high of 6,100.81, it failed to close at a record level, settling just below its all-time high.
Key Market Performance
- Dow Jones Industrial Average: Gained 130.92 points (+0.30%) to close at 44,156.73.
- S&P 500 Index: Added 37.13 points (+0.61%) to end the day at 6,086.30, narrowly missing its record close of 6,090.27.
- NASDAQ Composite Index: Led the day’s gains, climbing 252.56 points (+1.28%) to close at 20,009.34, surpassing the psychological 20,000 mark.
- Russell 2000 Index: Declined by 14.24 points (-0.61%) to close at 2,303.71, snapping a six-day winning streak.
S&P 500: Record Intraday High, But No Close Above 6,090
The S&P 500 briefly touched an intraday high of 6,100.81, setting a new peak for the index. However, it fell short of closing above the record 6,090.27 level, reflecting some hesitation among investors despite the broader market rally.
Sector and Stock Highlights
- Biggest Winners:
- ARM Holdings: Surged +15.93%, continuing its momentum.
- Netflix: Jumped +9.69% on strong earnings forecasts.
- Moderna: Rose +7.27% on new vaccine developments.
- Nvidia (+4.43%) and Microsoft (+4.13%) saw notable gains as tech stocks drove the NASDAQ higher.
- Notable Losers:
- First Solar: Dropped -6.33%, leading the day’s declines.
- Trump Media: Fell -5.56%, amid concerns over regulatory challenges.
- Southwest Airlines (-4.27%) and Ford (-3.79%) faced pressure from sector-specific challenges.
Oracle Extends Gains
Oracle shares soared another +6.75% following a +7.17% rally the previous day. Investor optimism surrounding its cloud computing business continues to boost the stock.
Outlook
While the broader market showed strength, the inability of the S&P 500 to close at a new high indicates lingering caution among investors. With mixed performance across sectors, the focus remains on upcoming economic data and earnings reports, which will determine whether the indices can sustain their upward trajectory.
The NASDAQ’s breakthrough above 20,000 and the S&P’s near-record performance highlight robust momentum, but headwinds remain, particularly for small caps, as reflected by the Russell 2000’s decline. Investors will watch for further clarity in market drivers to gauge the potential for sustained gains.
US sells 20-year notes at 4.900% vs 4.911% WI
- Result of the 20-year auction
- High yield 4.900% vs 4.911% pre-sale WI
- Sells $13 billion
- Awards 98.74% of bids at high
- Primary dealers take 10.4%
- Direct 20.08%
- Indirect 69.52%
US MBA mortgage applications w.e. 17 January +0.1% vs +33.3% prior
- Latest data from the Mortgage Bankers Association for the week ending 17 January 2025
- Prior +33.3%
- Market index 224.6 vs 224.4 prior
- Purchase index 163.0 vs 162.0 prior
- Refinance index 558.8 vs 575.6 prior
- 30-year mortgage rate 7.02% vs 7.09% prior
Morgan Stanley: What we expect from the January FOMC
- The Fed decision is next Wednesday
Key Points:
- Labor Market Upgrade:
- The Fed is likely to revise its characterization of the labor market from “cooling” to “stable,” reflecting recent sideways trends in payrolls over the last 6-9 months.
- Inflation and Policy Stance:
- Chair Powell is expected to highlight ongoing progress on inflation and reaffirm that monetary policy remains at an appropriately restrictive level.
- March Rate Cut Possibility:
- Powell may stress data dependence and leave open the possibility of a March rate cut, citing uncertainty in the economic outlook and confidence in continued inflation declines.
- Balance Sheet Policies:
- The Fed is expected to discuss balance sheet policies in depth, potentially signaling that an end to the balance sheet runoff is near.
Conclusion:
Morgan Stanley projects no rate change at the January FOMC meeting but expects upgraded labor market language and a focus on inflation progress. The Fed may hint at a March cut while signaling a shift in balance sheet policies, adding nuance to its monetary stance.
Meta expands wearable tech lineup with Smart Glasses, AI-Enhanced devices to rival Apple
- Apple and Samsung in Zuck’s sights
Meta Platforms is advancing its wearable technology offerings, including Oakley-branded smart glasses designed for athletes.
- The company is also exploring AI-integrated smartwatches and camera-equipped earbuds.
- A premium smart glasses model, “Hypernova,” featuring a display and app functionality, is set to launch in 2025 at an estimated price of $1,000.
- Additionally, Meta is reviving its smartwatch development, aiming for a release this year.
- The company is also working on augmented reality (AR) glasses, with prototype launches expected in 2027, alongside innovative earbuds with built-in cameras.
UBS CEO sees sticky inflation, tariff risks – “don’t see rates coming down as fast”
- UBS on inflation
UBS CEO Ermotti spoke with CNBC on Tuesday, saying he sees rates not coming down as quickly as the market is expecting:
- “inflation is much more sticky than we have been saying,”
- “we need to see also how tariffs will play a role in inflation. Tariffs will probably not really help inflation to come down. And therefore I don’t see rates coming down as fast as people believe”
More at that link above.
Trump says talking about a 10% tariff on China
- February 1 date for tariffs
Infor via Reuters, Trump:
- we are talking about a 10% tariff on China
- February 1 date for tariffs
Trump announces AI project – Stargate to build infrastructure, beginning immediately
- Trump says will make it possible to get the electricity production needed
Trump announces AI project – says will help out through emergency declarations.
Oracle Chairman Ellison at the announcement:
- data centers are under construction in texas
- expansion to other locations as well
Canada December producer price index +0.2% vs +0.6% expected
- Canadian December 2025 producer price index
- Prior was +0.6%
- PPI y/y +4.1% vs +2.2% prior
- Raw materials price index +1.3% m/m vs -0.5% expected
- Raw materials price index +9.1% m/m vs +2.0% expected
Commodities News
Gold Prices Soar Amid Heightened US Trade Tensions and Geopolitical Uncertainty
Gold hits new 2025 highs as safe-haven demand surges in response to escalating trade policies and geopolitical developments.
Gold prices surged to fresh 2025 highs, signaling robust safe-haven demand despite strength in the US Dollar Index. The yellow metal climbed above the critical $2,650 mark late in the North American trading session, reaching $2,755 at the time of writing. Earlier in the session, gold had bounced from a low of $2,741 as investors digested a confluence of geopolitical and economic uncertainties.
Geopolitical Unrest Fuels Gold’s Rally
Geopolitical tensions are on the rise, with President Donald Trump broadening his trade rhetoric beyond traditional targets like China, Canada, and Mexico to include the Eurozone. Additionally, ongoing instability in the Middle East and potential US economic actions against Russia have added to market anxiety. These factors have pushed gold prices to their highest levels of the year, with buyers eyeing the all-time high of $2,790.
President Trump recently made waves on his Truth account, stating that he had invited Russian President Vladimir Putin to end the war and warned of potential sanctions, tariffs, and taxes on Russian goods should the conflict persist. His remarks contributed to heightened investor uncertainty, further bolstering gold’s appeal as a safe-haven asset.
Market Dynamics: US Yields and Trade Policy Impact
Gold’s rise comes alongside a modest increase in real yields, with the 10-year Treasury Inflation-Protected Securities (TIPS) yield inching up to 2.18%. While higher yields typically weigh on non-yielding assets like gold, the metal’s gains reflect investor concerns over broader market conditions.
President Trump also confirmed the potential for universal tariffs on all US imports, a development that could have far-reaching economic implications. “Trump’s slightly less hawkish stance on tariffs compared to earlier fears has eased some inflationary pressures, which markets interpret as a sign of possible rate cuts,” said Tai Wong, an independent metals trader quoted by Reuters.
Fed Rate Cut Speculation Adds Fuel to Gold’s Momentum
Market participants are increasingly pricing in the likelihood of Federal Reserve rate cuts, with near-even odds of two reductions by the end of 2025. Many anticipate the first cut to occur as early as June, a scenario that further supports gold’s upward trajectory.
Outlook: Gold Poised to Test Record Highs
With a backdrop of intensifying trade policies, geopolitical tensions, and shifting monetary policy expectations, gold remains a favored asset among investors seeking stability. As the metal trades just shy of its record high, its strong performance underscores its role as a hedge against economic and geopolitical turmoil.
Gold’s ascent in 2025 reflects the interplay of complex market forces, with the yellow metal standing out as a beacon of safety in an increasingly uncertain global landscape.
Crude oil settles at $75.44
- Down -$0.39 or -0.51%
The price of crude oil has settled at $75.44. That is down -$0.39 or -0.51% on the day. The price is now down -6.60% from the high on January 15 at $80.73. The low price today reached $75.31. The high was at $76.42.
Looking at the daily chart, the price is approaching the 200 day MA at $75.07. If the price can move below and stay below that MA, the sellers would be more in control technically.
Europe News
European equity close: FTSE 100 fades to finish at the lows, ending 5-day winning streak
- Closing changes in the main European market indexes
- Stoxx 600 +0.4%
- German DAX +1.0%
- Francis CAC +0.9%
- UK’s FTSE 100 -0.1%
- Spain’s IBEX -0.5%
- Italy’s FTSE MIB -0.6%
ECB’s Lagarde: We’re not overly concerned about export of inflation to Europe
- Remarks by ECB president, Christine Lagarde, to CNBC
- That’s the smart approach
- It doesn’t mean to say it won’t happen but will be more selective
- Not surprised by Trump’s tariff threats
- Europe must be prepared and anticipate what will happen in order to respond
- We’re confident inflation will be at target over the course of 2025
- We’ll see if the early stages of this year will deliver a reduction in services inflation
- We don’t see ourselves as being behind the curve
- Euro exchange rate will be of interest, may have consequences
- Gradual moves in rates come to mind at the moment
ECB’s Knot sees little obstacle to another rate cut next week
- Remarks by ECB hawk, Klaas Knot
- Data is encouraging, confirms that we’ll return to target
- Hopes to see recovery in economy, then we’ll take it from there
- There is new downside risk from trade policy on growth, impact on inflation not so clear
- But pretty comfortable with market expectations for the next two meetings
- But if recovery continues, not too convinced that we need to into “stimulative mode”
ECB’s Escriva: a 25 bps cut next week is a likely scenario
- Remarks by ECB policymaker, José Luis Escrivá
- A 25 bps cut next week is a likely scenario.
- ECB needs to wait for hard data to confirm forecasts.
- Incoming information points towards converging to 2% inflation goal.
- It is unclear whether there will be inflation spillovers from US policy.
- To retain full optionality is more important than ever.
ECB’s Nagel says confident inflation will return to 2% target by mid-year
- Remarks by ECB hawk, Joachim Nagel
- I am confident inflation will return to 2% target by middle of the year
- Mainly because wage momentum is normalising
- Also because economic developments in Europe remain subdued
ECB’s Villeroy: Disinflation process is still on track
- Remarks by ECB policymaker, Francois Villeroy de Galhau
- It is too early to tell but we could expect inflationary effects from new US policies
- There could be decoupling between ECB and Fed on rates, but it is a non-issue
SNB’s Schlegel: We cannot exclude negative interest rates
- Remarks by SNB chairman, Martin Schlegel, at Davos
- Inflation is well inside our target range and over our forecast cycle
- Not uncomfortable with inflation at the moment
- But cannot exclude possibility of negative interest rates
- If we have to do it, we will
- Swiss franc is traditionally treated as a safe haven
- Trade conflicts are not beneficial for Switzerland
- Ready to intervene in FX market if necessary
- Another currency cap is not something we are discussing
Asia-Pacific & World News
China will roll out a new round of growth initiatives for 10 key industries
- And increase support for major industrial provinces and cities
This from Global Times late on Tuesday ICYMI. In summary:
China’s Ministry of Industry and Information Technology (MIIT) announced plans to introduce new growth initiatives for 10 key industries while expanding support for major industrial provinces and cities, officials stated on Tuesday.
According to the MIIT, these sectors collectively contribute approximately 70% of the industrial added value from enterprises above a designated scale.
Zhang Yunming, vice minister of the MIIT, also promised to increase support for major industrial provinces and cities:
- “It will improve policies and mechanisms to promote the orderly transfer of industries, support regions in developing and expanding their unique and competitive sectors, and make greater contributions to industrial economic growth,”
More at that link above.
PBOC sets USD/ CNY mid-point today at 7.1696 (vs. estimate at 7.2642)
- PBOC CNY reference rate setting for the trading session ahead.
The People’s Bank of China injects 1157bn yuan via 14-day reverse repos in open market operations
- the rate on the 14-dayers is 1.65%
- 959bn yuan mature today
- net injection is 198bn yuan
Chinese Vice Premier Ding Xuexiang warned Tuesday that trade wars end with “no winners”
- Spoke Tuesday at Davos’ World Economic Forum
Trade tensions between China and the US are inevitable.
Chinese Vice Premier Ding Xuexiang warning of the cost.
Australian Leading Index shows “more modest momentum”
- Westpac-Melbourne Institute Leading Index for December 2024
The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index
- to 0.25% in December from 0.33% in November
- this measure indicates the likely pace of economic activity relative to trend three to nine months into the future
WPAC key points:
- Leading Index growth rate dips back to 0.25% but still slightly positive.
- Growth set to improve in 2025 but remain lacklustre.
- Modest lifts in commodities, consumer, equities and dwelling approvals.
RBNZ’s own preferred inflation model 3.1% y/y for Q4 2024 (prior 3.4%)
- The sectoral factor model is the Reserve Bank of New Zealand’s own preferred inflation measure
From the Reserve Bank of New Zealand now, its model falling well below Q3 and nearly to the top of its 3% band:
New Zealand Q4 2024 CPI slightly higher than expected
- +0.5% q/q (expected +0.5%) and +2.2% y/y (expected +2.1%)
New Zealand CPI (Q/Q) Q4:
0.5% q/q is inline with the consensus expectation a little lower than Q3
- expected 0.5%, prior 0.6%
2.2% y/y is a little higher than was expected and is unchanged from Q3
- expected 2.1%, prior 2.2%
Tradeable +0.3% q/q jumped above estimates and last quarter
- expected 0.1%, prior -0.2%
Non-Tradeables +0.7% have come in under median estimates and down from Q3 – the RBNZ will take encouragement from this.
- expected 0.8%, prior +1.3%
Poll shows 18 out of 19 economists expect a Bank of Japan rate hike on Friday
- The BoJ meet on January 23 and 24
CNBC conducted the poll, the main points:
- The Bank of Japan is expected to raise its benchmark interest rate this week by 25 basis points.
- A hike will put the BOJ’s key rate at 0.5%, its highest level since 2008.
- Public comments by Governor Kazuo Ueda and a speech by the Deputy Governor Ryozo Himino to business leaders last week have indicated BOJ’s willingness to hike rates, economists said.
More at that link.
Japan’s largest union boss agrees with BoJ that there is wage rise momentum
- The Bank of Japan is expected to raise short term rate on Friday this week
Rengo is Japan’s largest union.
The head of the organisation says he agrees with the Bank of Japan that is wage hike momentum in Japan’s regions.
Crypto Market Pulse
Ethereum’s Future Takes Shape: Lido Co-Founder Proposes “Second Foundation” Amid Leadership Scrutiny
Ethereum price climbs to $3,270 as community debates structural changes within the Ethereum Foundation.
Ethereum (ETH) is trading at $3,270 amid growing discussions around the Ethereum Foundation’s (EF) governance and its role in the blockchain ecosystem. The conversation took a dramatic turn when Konstantin Lomashuk, co-founder of staking protocol Lido, suggested the formation of a “Second Foundation” to address gaps in leadership and governance within the EF.
The Push for a “Second Foundation”
The proposal for a new foundation stems from widespread criticism of the Ethereum Foundation’s current leadership and decision-making processes. Community members have raised concerns over issues such as the EF’s selling activity, its roll-up-centric roadmap emphasizing Layer 2 scaling solutions, and allegations of centralization. Calls for greater transparency and responsiveness have also intensified, with some demanding the resignation of EF Executive Director Aya Miyaguchi.
In response to the criticism, Ethereum co-founder Vitalik Buterin emphasized the importance of distributing responsibilities across different organizations. “The EF should focus on what it does best and create room for others to address areas where it’s less effective,” Buterin wrote in an X post.
Prominent figures, including Uniswap founder Hayden Adams, echoed this sentiment, advocating for a spin-off organization dedicated to research and technical development, allowing the EF to concentrate on ecosystem support and broader community engagement.
Ethereum Price and Market Outlook
Ethereum’s price remains steady, with analysts projecting a potential 20% rally if it clears key technical barriers. The next significant resistance levels are near $3,550 and $3,770, with a break above the descending trendline potentially signaling further bullish momentum.
Adding to the bullish sentiment, Donald Trump’s World Liberty Financial recently staked 10,000 ETH, making it one of the top 0.1% holders of stETH, Lido’s liquid staking token. This high-profile stake underscores growing institutional interest in Ethereum’s staking infrastructure, further bolstering market confidence.
Community-Driven Innovation
The proposed Second Foundation marks a pivotal moment in Ethereum’s evolution, reflecting the blockchain’s decentralized ethos. By encouraging specialized organizations to take on distinct roles, Ethereum aims to address inefficiencies and empower its community to shape the network’s future.
As Ethereum approaches key price milestones and the debate over governance heats up, the blockchain’s ability to adapt and innovate remains a defining feature of its journey. With calls for leadership reform and structural diversification gaining traction, Ethereum is poised to navigate this transformative period with resilience and vision.
Dogecoin Bulls Eye $0.40 Breakout Amid Speculation Over Trump’s “DOGE Department”
Dogecoin price climbs 5% to $0.38 as market speculation intensifies following Trump’s executive order creating the DOGE department.
Dogecoin (DOGE) saw a significant 5% price surge on Wednesday, reclaiming the $0.38 mark after former US President Donald Trump signed an executive order officially establishing the DOGE department. This unexpected development has fueled excitement and speculation among traders and cryptocurrency enthusiasts, with many anticipating a potential breakout to $0.50.
The DOGE Department Sparks Buzz
The newly launched DOGE department has already become a focal point of intrigue. Its official website prominently features the Dogecoin logo, driving speculation about a formal connection between the cryptocurrency and the initiative. While no direct confirmation has come from Elon Musk or the department’s official X account, the association with Dogecoin has captured the market’s attention.
Media reports linking the DOGE department to Dogecoin have bolstered bullish sentiment, with traders closely monitoring developments for further announcements or clarifications.
Bullish Momentum Builds in Derivatives Markets
The excitement surrounding the DOGE department has spilled over into derivative markets, where bullish traders have mounted $140 million in leveraged long positions, betting on continued upside for Dogecoin. The surge in leveraged activity underscores traders’ optimism that DOGE could break above the psychological $0.40 resistance level and test the next major hurdle at $0.50.
Price Movement and Market Outlook
Dogecoin’s 5.2% price increase within 24 hours of the announcement reflects the market’s initial enthusiasm for the news. However, the rally remains measured as investors await additional details on the DOGE department’s scope and potential implications for the cryptocurrency.
Analysts suggest that clarity around the connection between Dogecoin and the initiative could be a decisive factor in determining whether the cryptocurrency extends its rally.
The Path to $0.50: Key Levels to Watch
For Dogecoin to maintain its bullish momentum, it must overcome immediate resistance at $0.40. A decisive break above this level could pave the way for a rally toward $0.50, a level that would mark a significant milestone for the meme-inspired cryptocurrency.
As speculation continues to swirl and market participants digest the implications of Trump’s executive order, Dogecoin remains in the spotlight. Whether the DOGE department proves to be a game-changer or just another moment of hype, the cryptocurrency’s resilience and ability to captivate the market remain undeniable.
The Day’s Takeaway
The markets closed on a positive note, with the NASDAQ leading the charge and the S&P 500 coming tantalizingly close to a record high close. Optimism in tech and healthcare stocks fueled gains, while profit-taking and sector-specific pressures weighed on small caps and certain cyclical stocks.
The broader upward trend reflects resilience among investors, buoyed by strong corporate performances and optimism in key growth sectors. However, the mixed performance across indices underscores the importance of caution as markets navigate both opportunities and uncertainties.
As the S&P 500 inches closer to new highs and the NASDAQ crosses key milestones, the focus will remain on upcoming economic data, corporate earnings, and sector-specific developments to assess the sustainability of the rally.
