🌐 Market Report.
📊 Positive data from the United Kingdom: retail sales proved stronger than expected, rising by 1.7% in January compared to the anticipated 0.4%. This has discouraged the Bank of England from implementing successive rate cuts. Since Wednesday, the pound has gained nearly 1% against the dollar, pushing the GBP/USD pair to the 1.2675 zone.
🇯🇵 Japan’s inflation rate in January climbed to 4% year-on-year, the highest level since January 2023. BOJ Governor Kazuo Ueda said the central bank stands ready to increase government bond buying if yields rise sharply, while a BOJ board member stated the bank needs to raise rates further. Japan’s GDP growth beat expectations in the previous quarter, but full-year GDP growth for 2024 is expected to slow to 0.1% from 1.5% in 2023.
🏦 Federal Reserve officials discussed at their last policy meeting the possibility of slowing or pausing the ongoing drawdown of their balance sheet due to uncertainty over how the U.S. Treasury will manage debt issuance in the coming months.
📉 The U.S. Securities and Exchange Commission (SEC) under acting chair Mark Uyeda has implemented new policies that give corporate boards more power over investors, potentially curtailing investor-initiated reform efforts on issues like climate policy and director contests.
🛠️ The SEC’s actions align with other Trump administration efforts to dismantle diversity programs and withdraw from the Paris Climate Agreement, reflecting skepticism towards environmental, social, and governance (ESG) investment considerations.
📈 A new group of stocks, dubbed the “MAGA Seven,” have become popular with traders and seen significant gains since Donald Trump’s presidential election victory.
💹 The MAGA Seven stocks have benefited from factors such as a crypto-friendly regulatory environment, Trump’s relationship with Elon Musk, and strong business performance in areas like e-commerce and home goods.
🚀 The top-performing MAGA Seven stocks since the election have shown impressive gains, led by AppLovin with a 107.3% increase, followed by Robinhood at 92.9%, MicroStrategy at 74.1%, Tesla at 69.6%, Ubiquiti at 56.0%, Coinbase at 52.3%, and Williams-Sonoma at 50.4%.
🛒 Amazon outperformed Walmart in terms of quarterly revenue for the first time. The company’s retail division is its largest revenue generator, but its cloud computing services also contribute significantly. Walmart, on the other hand, is still predicted to generate the most income in the globe each year.
📊 Alibaba, the Chinese digital juggernaut, reported a staggering 239% year-on-year increase in net earnings in the fourth quarter of 2024. CEO Eddie Wu attributed the company’s dazzling performance to development in its cloud business and triple-digit expansion in artificial intelligence over the last six quarters.
⚖️ Argentina’s judge is investigating allegations of fraud against President Javier Milei for promoting a cryptocurrency called $LIBRA, which collapsed shortly after its launch. Milei initially promoted the cryptocurrency to fund small businesses and startups, but later deleted the post. Lawyers have filed fraud complaints against Milei, alleging he was part of an illicit association.
💳 The ECB wants to establish a blockchain-based payment system that would allow financial institutions to settle transactions with central bank money in a potential step toward introducing a wholesale digital currency.
🏅 Gold, Donald Trump caused a stir by publicly questioning the status of the United States’ gold reserves, suggesting the possibility of an inspection at Fort Knox. ‘Are we going to go to Fort Knox to make sure the gold is there?’
📉 Market View:
📈 US futures started the session on a positive note, although with some correction from the previous close. The mini S&P 500 fell to 6,100 points before recovering to the current 6,135 points. Nasdaq 100 futures also fell momentarily below 22,000 points, although they have managed to recover to 22,150 points.
💵 The dollar continued to weaken, with the dollar index falling below 106.50. The EUR/USD pair has once again approached the 1.05 area, where it recently formed a double top.
🇪🇺 In Europe, DAX 40 futures have fallen almost 3% from Wednesday’s highs, now standing at 22,400 points.
🛢️ In the crude oil market, a barrel of Brent reached $77 yesterday, but has fallen slightly since then, currently trading at $76.25.
🏆 Gold seems to be consolidating at around $2,950, getting ever closer to the $3,000 mark.
💻 On the other hand, Bitcoin has staged a recovery during the week, although it has not yet managed to significantly exceed the 98,000 points mentioned in previous days.
🌍 Geopolitics:
⚠️ U.S. National Security Advisor Mike Waltz blamed Zelenskyy for “aiming insults” at Trump and described the U.S. president as “very frustrated” with the Ukrainian leader. Bessent claimed Zelenskyy had assured him Ukraine would sign a $500 billion deal handing over mineral rights to the U.S., but then declined to do so. This deal was part of a broader plan by Trump to end the war while compensating the U.S.
🕵️♂️ The US Senate confirms Kash Pastel as the new FBI director, who plans to investigate former President Zelensky for alleged money laundering and lies about the conflict. Pastel will ask Congress to examine the destination of US funds sent to Ukraine. He also questions the events in which Zelensky accused Russia of launching a missile attack on Poland, when in fact it was Ukraine. Zelensky’s deceptions could have brought the world to the ‘brink of a global confrontation,’ according to the FBI director.
📰 Bloomberg surprisingly claims that Trump criticises the European Union’s initiatives to prevent electoral interference. However, European leaders have pointed to cases of electoral interference by the European Union itself in their countries.
📣 Recently, the President of Poland, Andrzej Duda, asked the European Union to refrain from interfering in his country’s upcoming elections. Likewise, a few days ago, the European Commissioner, Thierry Breton, caused controversy by threatening in an interview to invalidate the results of the German elections, ‘as was done in Romania,’ if the Germans vote for the wrong candidate.
