- Asian Stocks Rise on Trump’s Tariff Reluctance: Markets Wrap
Asian equities rose, with Chinese stocks leading gains after comments from US President Donald Trump
hinting at a potentially softer approach toward tariffs on China. The yen strengthened after the Bank of Japan
raised interest rates. A gauge of Chinese stocks in Hong Kong jumped, while the dollar weakened and the
yuan extended gains, after Trump said in an interview with Fox News that he would rather not have to use
tariffs against the world’s second-largest economy. - S&P 500 closes at a new record, Dow jumps 400 points as Trump pushes for low rates, oil
The S&P 500 rallied to record highs on Thursday after President Donald Trump called for lower interest rates
and cheaper oil prices. The broad market index added 0.53%, notching an all-time intraday high for the
second straight session. The benchmark finished the day at 6,118.71, surpassing its prior all-time closing high
of 6,090.27 recorded in early December. The Dow Jones Industrial Average advanced 408.34 points, or 0.92%,
to 44,565.07, while the Nasdaq Composite rose 0.22% to 20,053.68. Thursday marked the fourth straight
winning session for all three major indexes. Stocks took a leg up after Trump said Thursday in a virtual
address to the World Economic Forum that he would “demand that interest rates drop immediately.” The
president also said he would ask Saudi Arabia to lower the price of oil, which pulled crude into the red. Short
term Treasury yields fell following Trump’s comments. - Oil falls on prospect of Trump pushing up crude supplies
Oil markets sank on Friday, a day after U.S. President Donald Trump pressured OPEC and its de facto leader
Saudi Arabia to lower prices in a broad push to drive up crude production. Brent crude futures were down 50
cents at $77.95 a barrel by 0044 GMT. U.S. West Texas Intermediate crude (WTI) shed 31 cents to $74.31.
Trump, during his speech on Thursday at the World Economic Forum in Davos, Switzerland, said he would
demand the Organization of the Petroleum Exporting Countries bring down the cost of crude barrels. Trump
also said he would ask Riyadh to increase a U.S. investment package to $1 trillion, up from $600 billion
reported by the Saudi state news agency earlier in the day. Uncertainty over Trump’s tariffs policies, and the
potential the newly inaugurated president will push for higher U.S. oil output, also weighed on crude futures,
analysts said. Shrinking U.S. crude inventories, which hit their lowest level since March 2022 last week
according to the U.S. Energy Information Administration, kept oil prices from falling further. The EIA report,
issued a day late because of a U.S. holiday on Monday, said crude stockpiles fell by 1 million barrels to 411.7
million barrels in the week to Jan. 17, marking a ninth consecutive weekly decline. - Gold jumps to near all time-high, set for weekly gain
Gold prices soared to near three-month highs on Friday and were on track for a fourth straight weekly gain as
uncertainty about U.S. President Donald Trump’s trade plans took the wind out of the dollar’s sail, boosting
demand for safe-haven bullion. Spot gold jumped 0.8% to $2,774.49 per ounce as of 0255 GMT and has
gained more than 2% so far this week. Earlier in the day, prices rose to $2,777.10, the highest since Oct. 31,
when they hit a record $2,790.15. U.S. gold futures climbed 0.6% to $2,781.80. The dollar is down more than
1% on the week, headed for its worst weekly fall in two months, making bullion less expensive for foreign
buyers. - Japan’s Inflation Jumps to 3%, Giving Support to Rate-Hike Case
Japan’s key inflation gauge hit 3% for the first time in 16 months, underscoring the nation’s sustained price
momentum just hours before the central bank is expected to hike rates for a third time under Governor
Kazuo Ueda. Consumer prices excluding fresh food rose 3% from a year earlier in December, accelerating
from 2.7% in the previous month through higher energy costs, the Ministry of Internal Affairs reported
Friday. The reading matched the consensus estimate and marked the first time it hit 3% since August 2023.
The acceleration was consistent with earlier inflation data for Tokyo, where higher energy prices were the
primary driver following the phasing out of gas and electricity subsidies. Nationally, energy prices climbed
10.1% in December. Service inflation also accelerated a tad to 1.6%, while an index excluding energy costs
and fresh food prices advanced 2.4%, unchanged from the pace in November. The solid inflation data support
the case for the Bank of Japan to raise interest rates later on Friday, a move widely anticipated by markets
and economists. Speculation of a January rate hike has intensified especially after the BOJ top brass pointed
to positive developments regarding wage hikes, and markets kept relatively calm in the first days of US
President Donald Trump’s second term. - Monte Paschi Explores Deal for Italy’s Mediobanca
Italian lender Banca Monte dei Paschi di Siena SpA is exploring a potential deal for Mediobanca SpA, people
with knowledge of the matter said. Monte Paschi is considering a move to acquire full or partial control of
Mediobanca, the people said, asking not to be identified because the information is private. An
announcement may come as soon as Friday, according to the people. Shares of Monte Paschi have more than
doubled over the past 12 months, giving it a market capitalization of roughly €8.8 billion ($9.2 billion). Shares
of Mediobanca have risen 28% over the same period, for a market value of about €12.7 billion. In addition to
its core banking business, part of Mediobanca’s value comes from a stake in Italian insurer Generali SpA
that’s worth €6 billion at current market prices. Mediobanca may oppose any approach from Monte Paschi
and consider various countermoves, some of the people said. A deal for Mediobanca would represent the
latest consolidation move in the Italian financial sector. Banco BPM SpA launched a takeover bid for asset
manager Anima Holding SpA in November, while UniCredit SpA has been pursuing both Banco BPM and
Germany’s Commerzbank AG. - Singapore Pivots to Monetary Easing as It Flags Growth Risks
Singapore’s central bank loosened its monetary policy settings for the first time in nearly five years on
expectations price pressures will keep abating and growth momentum will slow. The Monetary Authority of
Singapore, which uses the exchange rate as its main policy tool rather than interest rates, will “reduce
slightly” the slope of its policy band, according to a statement Friday. There was no change to the width of
the band or the level at which it is centered. - US weekly jobless claims rise slightly as labor market stays on solid ground
The number of Americans filing new applications for unemployment benefits rose marginally last week,
suggesting no deterioration in labor market conditions and reinforcing expectations that the Federal Reserve
would not cut interest rates next week. Though layoffs are still low, new opportunities for workers who lose
their jobs are dwindling as employers remain cautious about increasing headcount. The report from the
Labor Department on Thursday showed jobless rolls swelling to the highest level in just over three years in
early January. “The labor market is historically tight but some sectors are slowing the pace of hirings,” said
Jeffrey Roach, chief economist at LPL Financial. “The data suggest minimal stress in job markets. As long as
wage growth outpaces the rate of inflation, the economy will chug along, and the Fed will not cut rates as
much as expected only a few months ago.” Initial claims for state unemployment benefits increased 6,000 to
a seasonally adjusted 223,000 for the week ended Jan. 18. Economists polled by Reuters had forecast
220,000 claims for the latest week. Claims were likely lifted by the wildfire in Los Angeles, with unadjusted
applications increasing in California, but falling in the majority of states. Freezing temperatures that have
gripped large parts of the country as a well as blizzards in the South could temporarily boost claims in the
weeks ahead. But through the distortions, the labor market will likely continue chugging along, keeping the
economic expansion on track. - NATO chief ‘very happy’ with Trump’s sanctions threat to Russia
NATO’s Secretary-General Mark Rutte hailed newly inaugurated U.S. President Donald Trump’s warning on
Wednesday that Russia could expect more tariffs and sanctions if it did not end the war in Ukraine. “I was
very, very happy with the position of Trump to put more sanctions on Russia. We know that the Russian
economy is doing terribly bad[ly], and the sanctions will help,” he told CNBC on the sidelines of the World
Economic Forum in Davos, Switzerland.” - Apple and Google’s massive mobile empires face dual UK antitrust probes
The U.K. Competition and Markets Authority said it was opening dual probes into both Apple and Google to
assess whether they hold “strategic market status” in their respective mobile ecosystems. Mobile ecosystems
refer to the operating systems, app stores and smartphone-based browsers that underpin the two U.S. tech
giants’ smartphone software. The CMA is probing the two firms under a new U.K. law called the Digital
Markets, Competition and Consumers Act, or DMCC, which seeks to prevent anti-competitive behavior in
digital markets. - Share of U.S. companies in China looking to relocate hits a record high, survey finds
A record share of U.S. companies in China are accelerating plans to relocate manufacturing or sourcing,
according to the American Chamber of Commerce in China. The increase — to 30% of respondents having
considered or started such diversification in 2024 — surpassed the prior high of 24% in 2022, according to
annual surveys from the American Chamber of Commerce in China. The latest AmCham China survey covered
368 members from Oct. 21 to Nov. 15. Trump was re-elected U.S. president on Nov. 5. - Boeing expects $4 billion loss for fourth quarter after chaotic 2024
Boeing said Thursday that it likely lost about $4 billion in the fourth quarter, adding to troubles at the
manufacturer, which began 2024 with a midair accident and ended it with a crippling labor strike and layoffs.
The company said it expects to post a loss of $5.46 per share for the fourth quarter. It said it expects its
revenue to be $15.2 billion, less than analysts’ expectations, according to LSEG estimates. Boeing said it likely
burned through $3.5 billion in cash during the quarter. The company raised more than $20 billion in the
quarter to boost liquidity during its crises. Boeing has not posted an annual profit since 2018.
The company expects to take a $1.1 billion charge on its 777X and 767 programs because of the strike
and new contract. “Although we face near-term challenges, we took important steps to stabilize our business
during the quarter including reaching an agreement with our IAM-represented teammates and conducting a
successful capital raise to improve our balance sheet,” Boeing CEO Kelly Ortberg said in a news release.
Boeing has struggled to regain its footing after a door plug blew out midair in January 2024, sparking a new
safety crisis at the company that was trying to put behind it the fallout from two fatal crashes in 2018 and 2019.
The near-catastrophic accident brought new federal scrutiny and a slowdown of deliveries of new
planes. A nearly two-month machinists strike that started in September shut down most of its commercial
aircraft production. The workers, mostly in the Puget Sound area, won a new contract in November.
The all-important commercial airplane unit revenue will likely come in at $4.8 billion, with a negative
operating margin of nearly 44%. Boeing’s problems also extend to its defense unit, for which it expects to
record pretax charges of $1.7 billion on the KC-46A tanker, and the long-delayed 747s that will service as the
new Air Force One aircraft, as well as its space programs. - Tesla starts sales of revamped Model Y in U.S. for about $60,000
Tesla will start deliveries of a revamped version of its Model Y SUV in the U.S. in March, according to new
listings on the company’s website. The Model Y Juniper has a price tag of $59,990, not including a federal tax
credit of $7,500 for new electric vehicle purchases. It features a redesigned fascia, front and rear light bars
and an upgraded interior with ventilated seats, reclining second-row seats and faster Wi-Fi, the website
shows. Tesla began taking orders for the new Model Y variant from customers in Canada and Europe on
Thursday, and started sales in China about two weeks ago. CEO Elon Musk shared a video from the Tesla
account on X Thursday night showing off the new Model Y. Tesla is looking to revitalize its core automotive
business, which faces increased competition across the globe. Executives are expected to discuss Tesla’s
fourth-quarter and year-end results on Wednesday after markets close. Tesla’s last new model, the angular
steel Cybertruck, began rolling out to customers at the end of 2023. While it became the best-selling electric
truck in the U.S. last year, sales didn’t make up for a decline in overall deliveries, which fell for the first time
in 2024. Musk, who also runs SpaceX and owns social media site X, has been at the center of attention in
recent months because of his hefty financing of President Donald Trump’s 2024 campaign and his position in
the newly elected president’s inner circle. The strong subscriber gains come as the streamer ended 2024 with
two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match, and the return of “Squid
Game.” To that end, the company said price hikes will be hitting the service — which analysts had
consistently teased heading into the print. The company raised the price of its ad-supported plan to $7.99
from the prior $6.99. Its Standard, ad-free tier will now be $17.99, up from $15.49, while its Premium plan
will increase by $2 to $24.99. Users who want to add an extra member will now pay $8.99, an increase of $1. - Chip stocks fall as Nvidia supplier highlights market uncertainty
Chip stocks fell across the board early Thursday after a Nvidia (NVDA) supplier made comments on its
earnings call that indicated uncertainty in semiconductor demand this year. South Korea-based SK Hynix
(000660.KS) makes memory chips used in Nvidia’s GPUs (graphics processing units) — chips used in data
centers to power artificial intelligence software. After reporting fourth quarter earnings that surpassed
analysts’ expectations, SK Hynix head of finance Woo-Hyun Kim remarked on the year ahead in a post
earnings call: “2025’s memory demand outlook is clouded by inventory adjustments from PC and smartphone
OEMs [original equipment manufacturers] as well as strengthened protective trade policies and geopolitical
risks.” Following the comments, Nvidia sank as much as 2% but reversed direction to end the day flat. British
chip designer Arm (ARM) dropped more than 9%, and SK Hynix rival Micron (MU) fell 4%. - American Airlines (NASDAQ:AAL) Posts Better-Than-Expected Sales In Q4 But Stock Drops
Global airline American Airlines (NASDAQ:AAL) announced better-than-expected revenue in Q4 CY2024, with
sales up 4.6% year on year to $13.66 billion. Its non-GAAP profit of $0.86 per share was 30.1% above analysts’
consensus estimates. American Airlines (AAL) Q4 CY2024 Highlights: Revenue: $13.66 billion vs analyst
estimates of $13.42 billion (4.6% year-on-year growth, 1.8% beat); Adjusted EPS: $0.86 vs analyst estimates
of $0.66 (30.1% beat); Adjusted EPS guidance for the upcoming financial year 2025 is $2.20 at the midpoint,
missing analyst estimates by 10.1%; Operating Margin: 8.3%, up from 5% in the same quarter last year;
Revenue Passenger Miles: 60.68 billion, up 2.35 billion year on year (1.0% beat vs expectations of 60.02
billion); Market Capitalization: $12.26 billion. The American Airlines team achieved a number of important
objectives in 2024, said American’s CEO Robert Isom. One of the ‘Big Four’ airlines in the US, American
Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its
domestic and international flights. Airlines, hotels, resorts, and cruise line companies often sell experiences
rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying
“things” (wasteful) to buying “experiences” (memorable). In addition, the internet has introduced new ways
of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional
airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with
innovation. Reviewing a company’s long-term sales performance reveals insights into its quality. Any business
can have short-term success, but a top-tier one grows for years. Over the last five years, American Airlines
grew its sales at a sluggish 3.4% compounded annual growth rate. This was below our standard for the
consumer discretionary sector and is a tough starting point for our analysis. - General Electric (NYSE:GE) Reports Bullish Q4, Stock Soars
Industrial conglomerate General Electric (NYSE:GE) reported Q4 CY2024 results topping the market’s revenue
expectations , with sales up 27.2% year on year to $10.81 billion. Its non-GAAP profit of $1.32 per share was
26.9% above analysts’ consensus estimates. General Electric (GE) Q4 CY2024 Highlights: Revenue: $10.81
billion vs analyst estimates of $9.47 billion (27.2% year-on-year growth, 14.2% beat; Adjusted EPS: $1.32 vs
analyst estimates of $1.04 (26.9% beat); Adjusted EPS guidance for the upcoming financial year 2025 is $5.28
at the midpoint, in line with analyst estimates; Operating Margin: 18.4%, up from 15.8% in the same quarter
last year; Free Cash Flow Margin: 14%, down from 56.3% in the same quarter last year; Market
Capitalization: $203.9 billion. One of the original 12 companies on the Dow Jones Industrial Average, General
Electric (NYSE:GE) is a multinational conglomerate providing technologies for various sectors including
aviation, power, renewable energy, and healthcare. Automation that increases efficiency and connected
equipment that collects analyzable data have been trending, creating new demand for general industrial
machinery companies. Those who innovate and create digitized solutions can spur sales and speed up
replacement cycles, but all general industrial machinery companies are still at the whim of economic cycles.
Consumer spending and interest rates, for example, can greatly impact the industrial production that drives
demand for these companies’ offerings. A company’s long-term sales performance can indicate its overall
quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Unfortunately, General Electric’s 2.8% annualized revenue growth over the last five years was sluggish. This
fell short of our benchmarks, but there are still things to like about General Electric. - Enphase Energy Announces U.S.-Produced IQ8 Microinverter Compliance with Build America, Buy
America (BABA) Act
Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier
of microinverter-based solar and battery systems, today announced that its IQ8™ Microinverters for
residential and commercial applications, specifically the IQ8HC-72-M-DOM-US and IQ8P-3P-72-E-DOM-US
SKUs, are now in compliance with the Build America, Buy America (BABA) Act. This compliance allows
Enphase microinverters made at its U.S. contract manufacturing facilities to be used in federal infrastructure
projects eligible for participation in programs like the Environmental Protection Agency’s (EPA) $7 billion
Solar for All initiative. The BABA Act requires federal investments to prioritize products produced in America
to boost domestic manufacturing and job creation. Through Solar for All, the EPA has awarded grants to
states, territories, tribal governments, municipalities, and eligible nonprofits to expand access to solar for
low-income and disadvantaged communities, including multi-family homes and small commercial projects.
The program’s goal is to unlock access to affordable, resilient, and clean solar energy for millions of people.
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