- Dollar Slips, Chinese Stocks Rise on Tariff Report: Markets Wrap
Chinese stocks led Asia higher while the dollar weakened on news that members of President-elect Donald
Trump’s economic team discussed a gradual approach to ramping up tariffs. A dollar gauge fell for the first
day in six, with New Zealand’s currency leading gains among the Group-of-10 peers. Shares in China and
Hong Kong led gains in the region, with those in Sydney and Taiwan also climbing. US contracts climbed,
extending the slight gains seen in the S&P 500 on Monday. The possibility of gradually-implemented US
tariffs is stirring a note of optimism, given that Trump’s threats to impose levies of as much as 60% on
Chinese goods have loomed over markets in Asia. - Dow adds more than 350 points, but Nasdaq closes lower as investors rotate out of tech
The Dow Jones Industrial Average climbed Monday, outperforming the market, while the Nasdaq Composite
slipped as traders continued to sell off major tech stocks that have powered the bull market. The 30-stock
Dow rose 358.67 points, or 0.86%, to close at 42,297.12 as investors rotated into nontech shares such as
Caterpillar, JPMorgan and UnitedHealth. Meanwhile, the tech-heavy Nasdaq dropped 0.38% to 19,088.10.
The S&P 500 inched up 0.16%, ending at 5,836.22. All three benchmarks are down for the past two weeks,
with tech shares causing most of the damage. - Oil prices remain near four-month highs as markets weigh Russia sanctions impact
Oil prices slipped at market open on Tuesday but remained near four-month highs as Chinese and Indian
buyers sought new suppliers in the wake of the Biden administration’s toughest sanctions yet on Russian oil.
Brent futures slipped 22 cents, or 0.27%, to $80.79 a barrel by 0122 GMT, while U.S. West Texas Intermediate
(WTI) crude fell 16 cents, or 0.2% to $78.66 a barrel. That followed roughly 2% gains in Monday trading, after
the U.S. Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as
183 vessels that trade oil as part of Russia’s so-called “shadow fleet” of tankers. The move is expected to cost
Russia billions of dollars per month, according to one U.S. official. - Trump policy uncertainty lifts gold; U.S. data in focus
Gold prices gained on Tuesday, buoyed by uncertainty surrounding the incoming Trump administration’s
policies and investor positioning ahead of crucial U.S. data that will offer insights into the Federal
Reserve’s policy path. Spot gold rose 0.3% to $2,669.53 per ounce as of 0227 GMT. U.S. gold futures gained
0.3% to $2,685.50. The bullion fell about 1% on Monday as a strong U.S. dollar, boosted by robust jobs data
last week, dampened investor appetite for the precious metal. The strong jobs report also reinforced the
Fed’s cautious stance on rate cuts this year, while concerns grew that tariffs imposed by President-elect
Donald Trump could fuel inflation. - India’s inflation slows to lower-than-expected 5.22% in December, boosting case for rate cuts
India’s annual inflation declined for a second straight month year on year, coming in just below expectations
at 5.22% in December, boosting the case for prospective interest rate cuts. Analysts polled by Reuters had
forecast a 5.30% reading. The December print from the Ministry of Statistics and Programme Implementation
marked the slowest pace of growth in prices since August 2024. In October, the country’s inflation rate had
hit a 14-month high of 6.21%, breaching the 6% tolerance limit of the Reserve Bank of India. Reserve Bank of
India Governor Sanjay Malhotra on Dec. 24 forecast an inflation rate of 4.8% for the fiscal year ending March 2025.
Annual growth in food prices — a key metric — eased to 8.39% in December from 9.04% in November,
with the MoSPI noting a “significant decline” in inflation in vegetables, sugar, cereals and confectionary,
among others. Overall inflation for vegetables slipped to 26.56% in December, a step down from the 29.33%
of November but a plunge compared with the October print of 42.18%. Despite this, prices for peas, potatoes
and garlic observed the three highest year-on-year hikes last month. Agriculture is a major component of
India’s GDP, and Malhotra previously wrote that pressures in the food sector were likely to linger in the fiscal
third quarter, before starting to ease in the fourth one. This will be due to a seasonal correction in vegetable
prices and monsoon harvest arrivals, as well as a likely good output for winter crops and adequate cereal
buffer stocks. - Japan’s 40-Year Yield Rises to Highest Since Debut in 2007
Japan’s 40-year government bond yield reached an all-time high amid a global debt selloff and
expectations that the Bank of Japan will hike interest rates in coming months. The yield rose as much as
3 basis points to 2.755%, the highest since 2007 when the bonds were sold for the first time. Japan’s 20
year yield also rose to its highest since May 2011 this morning after the nation’s markets reopened
following a public holiday on Monday. Global yields have been rising amid worries about lingering
inflation and widening fiscal deficits. The US economy has seen stronger-than-expected data that’s
prompted traders to rein in expectations of rate cuts by the Federal Reserve, while the market is also
trying to assess the impact of President-elect Donald Trump’s victory. - Australia Consumer Sentiment Edged Lower on Gloomier Outlook
Australia’s consumer confidence edged down on concerns about the broader economy, including a weaker
currency and uncertainty about the timing of interest-rate cuts. Sentiment slid 0.7% in January to 92.1 points,
a Westpac Banking Corp. survey showed Tuesday. While the consumer mood has improved over the past
year it still remains gloomy, with 100 points the dividing line between pessimism and optimism. - China Trade Surplus Soars to $1 Trillion Ahead of Trump Return
China’s trade surplus hits a record ahead of Donald Trump’s return to the White House. UK Chancellor Rachel
Reeves returns from Beijing with deals and investments. And Europe’s largest pension fund sells its entire
stake in Tesla. Listen to the day’s top stories. China’s trade surplus soared to a record $992 billion in 2024,
with exports at an all-time high, as companies rushed to get goods out the door ahead of Donald Trump’s
return to the White House after he promised higher tariffs on goods coming to the US once he’s in power. - China considers selling TikTok U.S. operations to Musk, Bloomberg reports
The Chinese government is considering a plan for Elon Musk to acquire TikTok’s U.S. business, Bloomberg
News reported on Monday. The contingency plan is one of several options China is exploring as the U.S.
Supreme Court determines whether to uphold a law that could effectively ban TikTok in the U.S., the report
said. A TikTok spokesperson said in an email to CNBC, “We can’t be expected to comment on pure fiction.” - Bezos’ Blue Origin stands down on debut launch of New Glenn rocket
Jeff Bezos’ Blue Origin on Monday called off the inaugural launch of its New Glenn rocket following last
minute issues on the vehicle, in a blow to its bid to compete with Elon Musk’s SpaceX in the satellite space.
The launch was slated to take place out of Cape Canaveral in Florida as of 1 a.m. ET. “We are standing down
today’s launch attempt to troubleshoot a vehicle sub-system issue that will take us beyond our launch
window,” said Ariane Cornell, Blue Origin vice president of in-space systems, during a livestream of the
intended take-off. She added that Blue Origin was reviewing opportunities for the next launch attempt.
During its Monday mission, the rocket was ambitiously poised to land a first-stage booster on the ship Jacklyn
offshore in the Atlantic Ocean for future reuse, with the rocket’s second stage continuing into orbit.
For its test flight — a prerequisite often requiring repeats before rockets can be entrusted with national
security payloads — the New Glenn was intended to carry the company’s Blue Ring spacecraft that can
maneuver to multiple orbits and locations, along with hosting and deploying payloads. - Spike in UK borrowing costs raises spectre of public spending cuts
The march higher in U.K. government bond yields since the launch of the Labour government’s debut budget
plan in October sparked widespread concern last week, as borrowing costs rose to breach numerous decade
highs. The prospect of public spending cuts or further tax rises came into focus last week, as 30-year gilt
yields hit their highest level since 1998. Despite initially falling after Labour’s election victory in July, 2-year
gilt yields have also climbed back above 4.5%, while the 10-year yield reached levels not seen since 2008.
Waning investor confidence in the U.K. was particularly highlighted by a concurrent fall in sterling, which on
Friday hit its lowest level against the U.S. dollar since November 2023. Borrowing costs are also rising in the
euro area and the U.S., and economists point out that the U.K. is being weighed on by external factors
including the return of Donald Trump to the White House and expectations for broadly higher interest rates
than previously expected this year. But the surge in U.K. yields is nonetheless a major headache for the U.K.
government, which has pledged to reboot economic growth while ensuring debt declines as a share of the
economy within five years. U.K. public sector net debt currently stands at nearly 100% of GDP. - Eli Lilly acquires cancer program from Scorpion Therapeutics in $2.5B deal
Eli Lilly said Monday it would acquire a cancer program from startup Scorpion Therapeutics in a deal worth
up to $2.5 billion, as the Indianapolis company broadens its pipeline. Lilly has been using its war chest of
cash from sales of its obesity and diabetes drugs to snap up startups like Morphic Therapeutics, DICE
Therapeutics, Versanis Bio, and POINT Biopharma. - New Balance sales jump 20% in 2024, reach record $7.8 billion
New Balance posted another record-setting year in 2024, with global annual sales reaching $7.8 billion, a 20%
increase from the prior year, the company exclusively shared with Yahoo Finance. The business update offers
a rare glimpse into the Boston-based company’s financial performance. New Balance has long remained
private, unlike many of its publicly traded competitors, such as Nike (NKE), Hoka parent Deckers (DECK), and
Under Armour (UAA), and selectively releases its sales figures. CEO Joe Preston anticipates the company
reaching $10 billion in sales in the next few years. For comparison, Nike reported annual sales of $51 billion in
fiscal year 2023, Adidas (ADS.DE) brought in $23 billion, and Deckers saw sales of $4.3 billion in fiscal year 2024. - Nvidia stock falls after Biden administration releases updated export rule for AI chips
Nvidia stock (NVDA) fell nearly 2% Monday after the Biden administration released an updated export
rule aimed at controlling the flow of artificial intelligence chips to “adversaries” such as China.
The White House said the rule would cap the number of AI chips called GPUs (graphics processing units) that
can be ordered by most countries without a special license. Smaller orders of 1,700 or fewer GPUs would not
count toward the export cap. “Artificial intelligence is quickly becoming central to both security and
economic strength,” the White House said in a statement Monday. “The United States must act decisively to
lead this transition by ensuring that U.S. technology undergirds global AI use and that adversaries cannot
easily abuse advanced AI.” - Moderna cuts sales forecast on weaker vaccine demand
Moderna (MRNA) cut its 2025 forecast by $1 billion Monday, citing weak demand for its newest vaccine as
well as slow sales for its COVID-19 vaccine. The company now expects $1.5 billion to $2 billion in revenue for
Moderna’s stock slid more than 20% in early trading Monday on the news to $33.05 per share — a
fraction of its COVID highs of nearly $450 per share in 2021. CEO Stéphane Bancel revealed the forecast at
the annual JPMorgan healthcare conference in San Francisco and noted the company would continue its cost
cutting strategies into 2025. “In 2024, we achieved $3 billion to 3.1 billion in product sales, approval of our
RSV vaccine, and continued to adapt our COVID-19 business for the endemic setting. At the same time, we
reduced our cash operating cost by over 25% compared to 2023 and aim to reduce 2025 cash costs by $1
billion with a plan for an additional $500 million cost savings in 2026,” Bancel said in a statement.
The 2024 winter virus season has seen slower respiratory vaccine demand, including for COVID and RSV,
which most severely impact children and elderly adults. Moderna launched its RSV vaccine last year,
following earlier approved vaccines from Pfizer (PFE) and GSK (GSK).
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