Morning Brew February 14 2025

Good Morning

Traders celebrated the plan to introduce reciprocal tariffs gradually and not all at once immediately, the the U.S. PPI came in higher than expected yesterday but the individual components indicate a lower core PCE inflation and hopes for peace talks for Ukraine boost sentiment.

All of the Magnificent 7 ended positive with Tesla almost 6% and Nvidia more than 3%, Apple 2%, Indexes ended higher with the S&P 500 +1 % to 6,115 points, the Nasdaq +1.5 % to 19,945, the Dow +0.75% 44,711.

The biggest earnings impact came from MGM, up 17% and the Trade desk at -33%

The Dax was the huge winner yesterday, benefitting from hopes of peace in Ukraine and the relatively dovish tariff announcements. The Official close was at 22600 yesterday and the performance so far this year shows that one should not try to deduct the Dax level from German news.

While headlines remain gloomy, the index has 6 Stocks up more than 20% this year and more than half of the index is up more than 10%. There are only 6 shares with a loss. The Hang Seng is also up  11% this year.

10 Year Yields are back at 4.53 and the USD Index fell to 107,10. EURUSD rose to 1.0450, GBPUSD 1.2550 and USDJPY 152,60. The Loonie traded at a 2-month high. The Russian Rouble reached a 6 month high.

One reason for he strong move in GBPUSD was the UK GDP which surprised positively yesterday.

Gold and Silver also benefited from the weaker USD, and technical signals and are now 32.85 and 2930. Gold is looking at 7 weeks of gains unless there is a massive surprise later today.

Bitcoin is lacking inspiration and trading at 96600, up 3.4% this year.

News hint at significant event risk, even if there is only the US Retail Sales in terms of economic data today:

• Germany was hit by a possible terror attack, as 30 people were injured by a car driving into an assembly. The fact that the driver was Afghan will fuel the immigration debate in the election
• Trump warns BRICS nations could face 100% tariffs
• US VP Vance threatens Russia with more sanctions,and military action to force Putin into a Ukrain deal
• Layoffs seem to have begun in the US Government acc to Reuters
• TikTok is back on Google and Apple App Stores

Key events:

• Friday: EU GDP, US Import Prices & Retail Sales.
• Monday: Japan GDP, EU Trade Balance
  Earnings UFPI
• Tuesday UK Labor data, Sweden, France and Canada CPI,
• Wednesday: Japan Trade, UK CPI,
• Thursday: China Loan Prime Rates, Denmark GDP, US Initial Jobless Claims, Philly Fed, EU Consumer Confidence, AU PMI,
• Friday: Japan CPI, UK Retail Sales, international PMI, University of Michigan Sentiment