The wave of euphoria on Wall Street yesterday is also spreading to Asian markets and there is a good chance that it will also reach the shores of Europe. The movement started yesterday with the US inflation data, which raised hopes for a still accommodating monetary policy by the Fed, to which were added strong data on the balance sheets of the big US banks. In all this, yesterday evening came the news of the peace in Gaza: the truce begins on Sunday. The agreement provides for three phases, the first two lasting 42 days each, with a ceasefire and the release of the first hostages. Not to mention the fact that in Gaza.
All this news has boosted stocks, reducing US Treasury yields and weakening, but only in part, the dollar. Now the wait is shifting to the inauguration of Donald Trump at the White House on Monday with his arsenal of measures and tariffs that raises a big question mark over the repercussions on economies. Beige Book The Federal Reserve's January 2025 report released last night indicated that U.S. economic activity continued to grow at the end of 2024, but traders were concerned about the potential for tariff increases and other measures proposed by President-elect Donald Trump, such as changes in immigration policy.
Wall Street closes higher, supported by major banks
On Wall Street, all three major indexes posted their biggest daily percentage gains since November 6 (the day after the US presidential election) supported by solid earnings from major banks which showed robust and mostly above-expected Q4 202 financial results. Dow Jones closed up 1,65%, continuing the streak of three consecutive increases that began last Monday. Along the same lines, the'S&P-500 which ends at 5.950 points. A clear improvement in the Nasdaq 100 (+2,31%), while the S&P 100 jumps (+2,11%).
The consumer secondary (+500%), telecommunications (+3,01%) and financial (+2,66%) sectors stood out in the S&P 2,58. The one that shone in particular wasKBW US Bank Index with a gain of +4%. At the top of the ranking of the American giants that make up the Dow Jones, Goldman Sachs (+ 6,02%), American Express (+ 4,00%), Home Depot (+ 3,35%) and Intel (+2,71%). At the top of the Wall Street technology giants are positioned Tesla Motors (+8,04%). Positive closing also for JP Morgan Chase (+1,95% to 252,3 dollars).
Yesterday in the US data showed that the index of consumer prices (CPI) rose in line with expectations to an annual rate of 2,9% in December, from 2,7% in November. However, core inflation, which excludes food and energy prices, rose to 3,2%, below the 3,3% forecast.
The inflation report led traders to expect near-even odds that the Fed will cut interest rates twice by the end of the year. “The disinflation process is still underway. But we have not yet reached our 2 percent target, and it will be some time before we can sustainably reach it,” said the president of the Federal Reserve Bank of New York, John Williams, at an event.
This took some of the momentum away from the dollar against most currencies, with the dollar index, which measures the greenback against six other units, at 109,03. The yen rose to a one-month high of 155,675 per dollar. The euro was steady at $1,02965, while the pound fell slightly to $1,22335.
I bond yields U.S. Treasuries slipped after the inflation data, with the yield on the benchmark 10-year U.S. bond falling 13,5 basis points to 4,653%. It was last seen in Asian hours at 4,661%.
On the energy markets, the crude U.S. crude rose 0,29% to $80,27 a barrel and Brent crude rose 0,17% to $82,17 a barrel. Their spot hit a monthly high of $2.702,09 an ounce in Asian trading hours, after interest rate expectations changed.
Bitcoin Resumes Climb Towards $100.000
The renewed appetite for risk on Wall Street and the idea that the cost of money could start falling again during the year have brought Bitcoin back close to the discriminating threshold of 100 thousand dollars, which has long been a barrier to any new upward moves. Yesterday the increase was 3,5%, rising to 99.780 dollars. Graphic analysts say that the reconquest of the 50-day moving average (97.500 USD) has mended last week's bearish tear. While waiting for the Trump administration's proposals on the crypto theme, the 100 thousand area is still considered a sales area and the 90 thousand area as an entry threshold.
In Asia, the spotlight is on Taiwan Semiconductor Manufacturing
The upbeat sentiment rebounded in Asia, where MSCI's largest index of Asia-Pacific shares outside Japan rose 1,4%. Chinese blue-chip shares rose 0,67% while Hong Kong's Hang Seng index rose 1,5%.
Taiwanese stocks Tech stocks rose 2% as investors awaited results from AI chipmaker Taiwan Semiconductor Manufacturing Co, Asia’s most valuable company, which trailed the Nasdaq by 4,2%. The world’s largest contract chipmaker reported a 57% jump in net profit to NT$374,68 billion ($11,4 billion) in the quarter ended Dec. 31, a record for any quarter and in line with estimates. Revenue jumped 39%. TSMC forecast revenue growth of 37% for the current quarter. Taiwanese companies invested a record amount of money in the U.S. and Japan last year. Flows to the United States reached $14,1 billion in 2024, bringing total Taiwanese foreign direct investment to $48,6 billion, both records, according to Bloomberg News calculations based on a statement from the Ministry of Economy.
The index Tokyo Nikkei gains 0,2%. Bloomberg reports that the Bank of Japan's top brass sees a good chance of an interest rate hike next week, assuming Donald Trump's arrival in the White House doesn't change the picture. There is a high probability of a rate hike from 0,25% at the end of the two-day meeting on January 24, barring any surprises from the White House. The very favorable exchange rate contributed to a tourism boom last year, with the number of foreign visitors to Japan surpassing 36 million for the first time.
South Korea. Kospi +1,8%. The Bank of Korea maintained its benchmark interest rate at 3,0%, defying widespread expectations of a 25 basis point cut. The move appears to be an effort to stabilize the South Korean won, which has fallen to a 15-year low against the U.S. dollar.
European stock exchanges
Le European stock exchanges positive expectations: +0,30% the future on the Eurostoxx50. Eyes on Business Square on financials after the records recorded yesterday: Banco BPM recorded a maximum since 2016, BPER (top since 2010), Generali (top since 2008), Unipol (top since 2010). The Ftse Italian Banks Index (+1,20%) reached the highest levels since 2010 and being a “weight” sector on the main index of Piazza Affari, the FtseMib of the first 40 blue chips (+1,5%) marked its maximum since 2008, while the FtseMib Total Return (including dividends paid) updated the historical record. The ten-year BTP +1,17% marked the best session since May 2024.
Germany. Inflation will rise again in December 2024. This was reported this morning by data published by the Federal Statistical Office, in line with the end-of-month data, which indicated an increase of 2,6% on an annual basis, after +2,2% the previous month. On a monthly basis, it recorded a +0,5%, higher than the +0,4% of the preliminary estimate, after -0,2% in November. As for harmonized inflation, it recorded an increase of 0,7% on a monthly basis (as per the initial estimate) and an increase of +2,8% on a yearly basis (the preliminary data was confirmed).
The final reading of the is scheduled for 10am.inflation in Italy still in December (preliminary: +0,1% month on month, +1,3% year on year), at 11 the total trade balance (previous: 5,2 billion euros) and the EU trade balance in November of Italy (previous: -0,7 billion euros). The same data then of the Eurozone (previous: 6,8 billion euros).
Banca Sella Holding has opened to the evaluation of the offer of Bank Ifis su illimity Bank, of which it holds 10%, La Repubblica writes today. The board of directors appreciated the interest of a “solid and credible” counterparty and the industrial prospects of the operation, but did not make any definitive decisions, limiting itself to declaring interest in further evaluating the offer, as the newspaper continues. In the meantime, the market continues to support the deal, with Moody's having put illimity's rating under review for a possible upgrade and some hedge funds increasing their short positions on the stock. The 3,55 euros offered could be enough to conclude the operation.
Unicredit and Banco Bpm. The government is not considering a decree to expand the special powers under the golden power on M&A operations in the financial sector, as stated by the Minister of Economy, Giancarlo Giorgetti, denying speculations about the adoption of a decree that would give the government more room to intervene in Unicredit's takeover bid for Banco. Meanwhile, the European Commission has approved Unicredit's acquisition of exclusive control of Unicredit Cnp Vita.
Generali, as reported by MF-Milano Finanza, aims to become the leading foreign insurer in Spain by 2027, overtaking Zurich, Axa and Allianz, according to what the CEO of Generali Spain, Carlos Escudero, announced in an interview released a few days ago to Expanción, where he also revealed the group's intention to sign new bancassurance alliances in Spain. Meanwhile, the management of the Trieste-based insurance company aims to bring a preliminary agreement with Natixis Investment Managers to the board of directors already convened on January 20 for the integration of asset management activities.
stellantis has released its global consolidated quarterly shipment estimates. In the fourth quarter of 2024, they are estimated at 1.395.000 units, down 9% from the same period in 2023. This result, however, represents an improvement compared to the 20% decrease recorded in the third quarter of 2024, thanks to the completion of inventory reduction initiatives and the launch of new products in Europe.
Cartier owner Richemont reported fiscal third-quarter sales that beat analysts' average estimates, which could support Moncler and Ferragamo
stm to watch as Taiwan Semiconductor Manufacturing reported record quarterly profit and said it expects strong revenue growth in the first quarter of 2025 on rising demand for chips used in artificial intelligence processing.
Avio has signed a memorandum of understanding with Japanese startup Bull to develop the application of a space debris prevention device on board the Vega C rocket.
Juventus has reached an agreement with Vitória Sport Clube for the definitive purchase of Portuguese defender Alberto Costa for 12,5 million euros, payable in four financial years, plus additional costs of 1,3 million. To this will be added bonuses of up to 2,5 million upon reaching certain sporting objectives.