Morning Brew January 22 2025

Good morning,

Markets are pleased with Donald Trump, as he has not firmly imposed tariffs but is only threatening to do so. Canada announced that it would retaliate against any tariffs dollar for dollar. Goldman Sachs lowered its probability of a universal tariff introduction in the US to 25%.

The Dow gained 1.24%, the S&P 500 rose by 0.88%, and the Nasdaq increased by 0.64%. 3M exceeded expectations and rose by 4.2%, GM was rated better by DB and gained 5.7%, while Apple lost value due to a downgrade by Jefferies. Moderna gained more than 5% after receiving government funding for bird flu vaccinations. Netflix rose 13% after hours on strong results. Japanese shares increased by 1.6% following Trump’s announcement on AI: He announced an investment of up to $500 billion in infrastructure for artificial intelligence, funded by private enterprises. OpenAI, SoftBank, and Oracle are reportedly planning a joint venture called Stargate.

Rheinmetall broke the 700 mark for the first time yesterday, and the GER40 remains at all-time highs. In Switzerland, UBS is the best-performing SMI share, up almost 14% year-to-date. European Wind energy companies suffer from the US suspension of offshore wind parks, Orsted falls 17%

US yields are stable at 4.58% on the 10-year, and the USD Index is at 108.14. EUR/USD is at 1.0410, GBP/USD at 1.2330, and USD/JPY at 155.85. Gold and silver remain strong but are struggling to break the next resistance levels. Gold is at 2750 and needs to break 2760 for an attempt at the all-time high of 2790. Silver is trading at 30.80 and needs to tackle 31 to reach 31.50, with 30 as the key support.

Donald Trump continues to make headlines, with the biggest task being to separate words from actions. His tendency to put out ideas fairly unfiltered and then proceed with what seems well-received or beneficial will take some getting used to. He vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports. He also issued executive orders to end DEI programs, some of which date back to 1965.

Today is void of significant economic data; there are some important earnings, but I assure you that Team Trump headlines will remain the key driver.

 It feels like markets want to go higher if there is no major disruption—trade safely.

Wednesday
P&G, Abott, Johnson & Johnson, Halliburton, Travelers, Kinder Morgan, Alcoa,
Thursday
Japan Trade,  France Business Climate Norway & Turkey Rate decision, US Initial Jobless Claims,  EU Consumer Confidence
GE Aerospace, American Airlines, Texas Instruments,
Friday
Australia PMI  Japan CPI  & Rate Decision Global PMI
Verizon, American Express, Ericsson
Christine Lagarde and BlackRock CEO Larry Fink speak at Davos

Physically Settled Futures

• VXF5 will expire on 22-Jan at 1400 UTC
• VXMF5 will expire on 22-Jan at 1400 UTC
• FVSF5 will expire on 22-Jan at 1100 UTC
• TWNF5 will expire on 23-Jan at 0550 UTC
• ECOG5 will expire on 24-Jan at 1000 UTC