Access all our platforms from a single account.
Key Stories from the past week: European indices lead vs the US YTD
Equities end a busy week packed with key economic data as well as the start of 4Q earnings. At the time of writing, EU benchmarks are up 3%-5% ytd with the Stoxx 600 on course for it’s strongest week since September. Quantum computing names remain in the headlines seeing a decent bounce after last week’s sell-off. Rigetti Computing, D-Wave, IonQ and Quantum Computing Inc all saw an increased in open positions across Saxo’s client base. Oil has continued its surge gathering further momentum from increased sanctions on Russia’s oil industry and heating fuel demand. And rounding off the week, China achieved its growth target with a 5% rise in GDP indicating stimulus measures are having an impact. More below on this week’s key stories.
Yields reverse on both sides of the Atlantic
Inflation data was the main macro meal of the week with both UK and US CPI numbers out on Wednesday. Both came in softer than expectations giving Treasury and Gilt yields across the curve a reason to reverse their recent highs. Rate cut expectations from Fed and BoE increased while the greenback and sterling weakened on the week. The soft inflation reports boosted equities; clients used the Nasdaq 100 as their preferred vehicle for exposure.
Stocks and Bond Rally After Inflation Data
US Bank earnings
This week, several major U.S. banks reported their fourth-quarter earnings, surpassing Wall Street estimates and showcasing the sector's resilience. Despite a mixed reaction in financial stocks end week, the results highlighted the banks' strong performance and growth potential. Morgan Stanley: Reported a net income of $3.5 billion, driven by strong performance in wealth management and investment banking. Bank of America Corp: Posted a net income of $7.2 billion, benefiting from higher net interest income and robust loan growth. U.S. Bancorp: Achieved a net income of $1.745 billion, with a return on tangible common equity of 18.3%. Goldman Sachs: Reported a net income of $3.8 billion, up 22%. Key drivers where Investment Banking and asset management fees. JPMorgan Chase: Managed total revenue of $43.7 billion, up 10% from last year. Strong performance across all business segments, particularly in investment and consumer banking.
Big Banks Continue to Beat
Taiwan Semiconductor logs a record quarter on AI surge
TSMC's profit surged 57% in the December quarter to NT$374.7 billion ($11.4 billion), beating estimates and fueling investor optimism for ongoing AI hardware investment into 2025. It forecast growth for 2025 to achieve mid-20% levels in USD terms and annually for the next five years. Shares gained +6% to move just below their all-time high.
TSMC Projects AI Revenue to Double in 2025
Apple facing pressure
Apple is experiencing its largest monthly decline since September 2023, having breached a significant technical level, the 100-Day Moving Average, on November 16th. Despite being approximately 20% higher on a 12-month basis, the stock is facing increasing pressure from various sources. Firstly, its China shipments fell by 17% annually, with a 25% decline in the fourth quarter of 2024, allowing Vivo and Huawei to surpass Apple in market share. Additionally, Apple is encountering challenges in China due to locally made chipsets and the growing popularity of domestic brands offering foldable and AI-capable smartphones. At Saxo, we observed a 1% increase in client holdings of Apple on a week-on-week basis.
These Stocks are Moving the Most Today
Next week starts with the Inauguration of Donald Trump as US president on Monday and then the first days of the new administration as they set to work. The Bank of Japan will hold their latest interest rate decision on 24th January where they are expected to raise the target rate. Next week’s key data is expected to be the collection of PMI released on Friday, along with US Michigan Consumer Sentiment (Fri). Earnings highlights include Netflix (Tues), Proctor & Gamble, Johnson & Johnson, Abbott Laboratories (Weds), GE Aerospace, Texas Instruments, Union Pacific (Thurs), American Express, Verizon, Ericsson (Fri).