Month: January 2025

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Trump Media, the company behind President Donald Trump’s social media platform Truth Social, is expanding into financial services and  financial technology (fintech) with the launch of a new brand called Truth.Fi that the company says will help protect American patriots from censorship, de-banking, and other threats from Big Tech and “woke corporations.”

Trump Media and Technology Group (TMTG), which is listed on the Nasdaq stock exchange as DJT, announced on Jan. 29 that its board of directors approved a strategy that aims to diversify the company’s offerings and strengthen its position in the fintech sector.

A central pillar of the strategy is the launch of Truth.Fi, a brand the company describes as rooted in America First principles. It aims to prioritize investments in U.S. growth, manufacturing, and energy sectors, along with ventures that bolster what it calls the “Patriot Economy.”

As part of the move, TMTG plans to invest up to $250 million of its cash reserves (of more than $700 million as of Dec. 31, 2024) into various financial instruments and products. These investments will be managed by Charles Schwab and may encompass customized separately managed accounts, exchange-traded funds, and cryptocurrencies such as bitcoin.

Devin Nunes, CEO and chairman of TMTG, expressed enthusiasm about the new venture, saying that developing America First investment vehicles aligns with the company’s goal of creating a financial infrastructure that empowers individuals and businesses to invest in U.S. growth while resisting pressure from tech monopolies and politically motivated financial exclusion.

“Developing American First investment vehicles is another step toward our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, de-banking, and privacy violations committed by Big Tech and woke corporations,” Nunes said in a statement.

The company stated that Truth.Fi products and services are set to launch in 2025, pending finalized funding levels and required approvals from financial regulators.

The announcement sent DJT stock soaring. Shares of the company jumped by more than 15 percent in early trading on Wednesday before settling around 6 percent up on the day. The stock opened at $30.04, reached an intraday high of around $35.20, and was priced at $31.97 as of 12:44 p.m. EST.

The launch of Truth.Fi and the announcement that its mission would include protecting Americans from being de-banked comes days after Trump criticized large banks for allegedly refusing to serve some conservative individuals and organizations for political reasons.

“I hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank,” Trump said, while singling out Bank of America and JPMorgan Chase for criticism.

In statements to The Epoch Times, both banks denied charges of political bias in their decisions.

“We never close accounts for political reasons and don’t have a political litmus test,” a Bank of America spokesperson told The Epoch Times, while a JPMorgan spokesperson said that it has “never and would never close an account for political reasons, full stop.”

Both Trump and his wife, First Lady Melania Trump, have claimed that banks have denied them services in recent years, alleging the decisions were politically motivated. Also, in April 2024, more than a dozen state attorneys general wrote a letter to Bank of America alleging that the bank “appears to be conditioning access to its services on customers having the bank’s preferred religious or political views.”

The attorneys general claimed that the bank used ambiguous criteria to terminate banking relationships, such as reputational risk and allegations of promoting “intolerance” or “hate.”

Kevin Stocklin contributed to this report.

Several US Defense Department employees connected their work computers to Chinese servers to access DeepSeek’s new AI chatbot for at least two days before the Pentagon shut off access, according to Bloomberg, citing a defense official familiar with the matter.

The Pentagon’s Defense Information Systems Agency moved to block the Chinese startup’s website late Tuesday after defense officials raised concerns over Pentagon workers using the tool. According to DeepSeek’s privacy policy, it stores user data on servers in China, and governs that information under Chinese law.

That said, while some Pentagon work screens showed a “website blocked” message, citing operational concerns, others could still access DeepSeek, according to the defense official and correspondence reviewed by Bloomberg.

The Pentagon’s IT experts are still determining the extent to which employees directly used DeepSeek’s system through a web browser, the official said.

US military personnel started downloading an earlier release of DeepSeek code on their workstations in the fall of 2024, according to the person familiar with the matter. At the time, the downloads didn’t raise concern with Defense Department security teams as the connection to China wasn’t clear to them, the person added. -Bloomberg

DeepSeek and its AI model they claim to have developed for less than $6 million rattle markets earlier this week, after their model raised questions about hundreds of billions of dollars that major US tech companies are spending on AI infrastructure. That said, a deeper analysis showed that DeepSeek is only 17% accurate, and hallucinates a lot. Then again, the deep state’s favorite censorship outlet NewsGuard was the one that came up with that analysis, so who actually knows.

According to the report, the DeepSeek phenomenon has triggered efforts throughout the military to find and remove code from China-origin chatbots on employees’ individual machines, however thousands of DoD personnel appear to be using DeepSeek through Ask Sage – an authorized software platform that doesn’t connect to Chinese servers, according to Nicolas Chaillan, founder and CEO of the platform.

On Friday, the Navy prohibited any use of DeepSeek over potential security and ethics concerns associated with the model’s origin and usage, CNBC reported. According to Navy spokeswoman Lieutenant Commander Lauren Chatmas, the Navy already has guidance against the use of open source AI systems for official work, while recent internal Navy correspondence named DeepSeek in connection with that guidance.

The Air Force, meanwhile, hasn’t issued any specific guidance on DeepSeek, but has a longstanding prohibition on the use of commercial generative AI systems in conjunction with sensitive information, according to spokeswoman Laura McAndrews.

The Army issued guidance in June of 2024 warning of “unique challenges in terms of data privacy, security and control over the generated content,” which urges individual commands to develop appropriate governance processes. That said, it has not banned generative AI tools outright.

By Alex Kimani of Oilprice.com

An overnight attack by Ukrainian drones on Russia’s Andreapol oil pumping station, part of the oil export route via the Baltic Sea port of Ust-Luga, has forced oil flows to stop, Bloomberg has reported. The attack also hit a Russian missile storage facility, causing a string of explosions. Ukraine has stepped up drone strikes on Russian military and energy facilities in recent weeks as the third anniversary of the war approaches. Ust-Luga port is one of the main ports used by Russia’s shadow fleet of tankers.

Russia’s oil shipments via the Baltic Sea declined 10% over the final four months of 2024 due to the impact of EU sanctions against Russian oil and gas exports, the Finnish Border Guard has reported. Finland’s Coast Guard monitors the shadow fleet that Russia uses to export crude via the Gulf of Finland.

“In the last four or five months of last year, we saw a roughly 10% decline in the amount of oil leaving from Russia,” the Finnish Border Guard’s Head of Maritime Safety Mikko Hirvi told Reuters late last week. “That is of course very good, but on the other hand, older vessels have been added to the traffic on the Baltic Sea at the same time. The vessels in operation are in worse condition than before,” he added, saying it’s difficult to determine whether the decline will only be temporary.

Last month, the Biden administration announced the harshest sanctions yet on Russian oil. Reuters reported that a purported U.S. Treasury document circulating among traders in Europe and Asia, revealed that some 180 vessels, several senior Russian oil executives, dozens of traders and two major oil companies are targeted by the sanctions.

Later, it emerged that the Biden administration targeted Surgutneftgas and Gazprom Neft, two firms that handle 25% of Russian oil exports. The two companies shipped an average of 970,000 bbls a day in 2024.

A day after STMicroelectronics—one of Europe’s largest chipmakers—said that 2024 was one of the worst years for the industry and forecasted first-quarter revenue below the Bloomberg Consensus estimates, the company is reportedly planning to cut thousands of jobs. 

Bloomberg cited sources close to the Franco-Italian chipmaker that say about 6% of the workforce could be slashed through early retirements and attrition amid a prolonged downturn in auto and industrial sectors. 

Here’s more from the report:

The job cuts under discussion, which could be announced as soon as next month, are in the range of 2,000 to 3,000 workers and will affect its operations in both Italy and France, according to the people, who asked not to be identified because the information isn’t public. The decision isn’t final and the scale of the reductions is still under review, the people added.

The Italian government, which together with France holds a 27.5% stake in the company, is seeking to limit the impact of the restructuring on the Italian workforce, the people said.

A spokesperson for STMicro confirmed to the media outlet that workforce restructurings were ahead:

“In the coming weeks, we will start engaging a constructive dialog with employee representatives around end of career support programs, built on a voluntary basis, including early retirement.” 

On Thursday, CEO Jean-Marc Chery told analysts that providing a framework for full-year guidance would be difficult because of poor visibility and elevated inventory correction among customers. He added, “We think its fair to consider Q1 as the low point of 2025.” 

Goldman’s Alexander Duval, James Saunders, and Anant Jakhar provided clients this morning with key takeaways from STMicro’s earnings report:

1. STM expects meaningfully sub-seasonal growth in 1Q25, with limited visibility into timelines for a recovery,

2. The company’s revenues in automotive face several headwinds in 2025, including company/customer specific factors, with sales likely to decline yoy, in our view,

3. Industrial semis market demand remains soft, with excess channel inventory still a headwind to any potential sales recovery, and

4. We remain cautious on near-term gross margins given high unloading charges and persistent excess inventory. Remain Neutral.

The analysts were “Neutral” rated on STMicro with their 12-month price targets of €24.5 / ADR $25.5 (vs €27 / ADR $28.5 prior) based a 6x CY26 (rolled forward vs 6x 2HCY25E+1HCY26E prior) EV/EBITDA multiple.

Slippery slope…

STMicro also told analysts that some production across its fabs, assembly, and test plants will be idle in the coming days. 

“We also have a plan for temporary closing of many of our fabs during this quarter. Our expectation is that in Q2, we will continue … to have a significant amount in terms of unloading,” finance chief Lorenzo Grandi said.

Competitors like Texas Instruments also provided investors with forecasted first-quarter profit below Bloomberg Consensus estimates, citing sluggish demand and higher manufacturing costs.

Meanwhile, data center chip companies have been buoyed by the Stargate AI infrastructure project and robust Capex spending projections by Mag7 companies.

However, DeepSeek’s new AI models unveiled at the start of the week put all that Capex spending into question.

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

Researchers with cybersecurity company Wiz said on Wednesday that sensitive information from the Chinese artificial intelligence (AI) app DeepSeek was inadvertently exposed to the open internet.

Hangzhou-based DeepSeek prompted a global selloff in tech shares last week when it launched its free, open-source language learning model DeepSeek-R1.

DeepSeek’s flagship v3 model cost $5.6 million to train, amounting to a fraction of the money spent by America’s leading tech companies to train models including OpenAI’s ChatGPT.

The popular app has also raised national security concerns in Washington.

In a blog post, Wiz said it set out to assess the external safety of the chatbot and identify any potential vulnerabilities after it saw a surge in registrations and became the most downloaded free app on Apple’s App Store last week.

Within minutes, researchers with the New York-based cybersecurity company found a publicly accessible database linked to the chatbot that was “completely open and unauthenticated” and “exposing sensitive data,” Wiz said.

The database contained more than a million lines of data that were left unsecured, according to Wiz.

This included sensitive information, along with digital software keys, and chat logs that appeared to capture prompts being sent from users to the company’s free AI assistant, according to the cybersecurity company.

“More critically, the exposure allowed for full database control and potential privilege escalation within the DeepSeek environment, without any authentication or defense mechanism to the outside world,” the blog post stated.

Wiz said the level of access posed a critical risk to DeepSeek’s security as well as to its end-users, including allowing bad actors to retrieve sensitive information and plain-text chat messages.

Additionally, the vulnerabilities could allow bad actors to exfiltrate plaintext passwords, Wiz said.

The Wiz Research team “immediately and responsibly disclosed the issue to DeepSeek, which promptly secured the exposure,” according to the blog post.

Wiz noted that the widespread and fast adoption of AI by companies poses ongoing risks, particularly for those that have “rapidly grown into critical infrastructure providers without the security frameworks that typically accompany such widespread adoptions.”

White House Evaluating DeepSeek National Security Implications

The Epoch Times contacted a DeepSeek spokesperson for comment but did not receive a response by publication time.

DeepSeek said on Monday it would temporarily limit user registrations following “large-scale malicious attacks” targeting its services.

The company reported a major outage was affecting its application programming interface (API) and user logins but did not provide further details regarding the attacks or when it would lift the pause on registrations.

The White House is evaluating the potential national security implications of DeepSeek, White House press secretary Karoline Leavitt told reporters on Tuesday. She said that President Donald Trump “believes in restoring American AI dominance.”

Leavitt’s remarks echoed those made by Trump during a speech to Republican colleagues in Florida on Monday.

During his appearance, Trump said the release of DeepSeek last week and its subsequent impact on the stock market should serve as a wake-up call for American tech companies.

Trump said he hoped the app would prompt U.S. companies to come up with a cheaper, faster method of AI.

“We always have the ideas. We’re always first. So I would say that’s a positive that could be very much a positive development,” Trump said. “So instead of spending billions and billions, you‘ll spend less, and you’ll come up with, hopefully, the same solution.”

Trump on Jan. 21 announced $500 billion in private sector investment to build artificial intelligence (AI) infrastructure in the United States.

OpenAI, Softbank, and Oracle will invest in the infrastructure through their joint venture, Stargate.

Trump described it as the “largest AI infrastructure project by far in history.”

Emel Akan, Reuters, and The Associated Press contributed to this report.

With constant fearmongery about Trump’s tariffs prompting a panic-flation, it is interesting to note that inflation data has been serially disappointing in recent weeks (printing below expectations)…

Source: Bloomberg

And this morning we get The Fed’s (old) favorite inflation indicator (until they changed their minds because it didn’t fit the narrative) – Core PCE – print at +2.8% YoY (flat from the prior month).

Source: Bloomberg

Headline PCE rose to +2.6% (as expected)…

Source: Bloomberg

The so-called SuperCore inflation remains very sticky, well above The Fed’s mandate…

Source: Bloomberg

While Cyclical PCE continues to slide, Acyclical inflation (the segment that The Fed can’t really ‘manage’), pushed higher…

Source: Bloomberg

As the cost of goods keeps rising, so does income and spending (the former +0.4% as expected and the latter +0.7%, more than expected)…

Source: Bloomberg

Remember when the Biden admin scrambled to revise GDP higher and artificially inflated the savings rate to make it possible.  

Well guess what happened after all the data revisions…

Finally, not a pretty picture…

Source: Bloomberg

So will inflation be resurgent due to Trump tariffs… or the lagged impact of the money supply surge of the last 12 months to try and pump Bidenomics?

US equity futures are higher this morning on the last day of a volatile week, amid healthy earnings results post market close yesterday. As of 8:00am, S&P futures are up 0.5%, while Nasdaq futures gain 0.8% with AAPL up +3.5% after first sliding after disappointing iPhone sales only to reverse losses on the company’s (rather modest) guidance; Intel gained +1.4% as results were better-than-feared while Mag7 stocks were mostly higher (GOOGL +0.5%, AMZN +0.9%, AAPL +4%, MSFT +1%, META +0.5%, NVDA -1% and TSLA +0.2%). Europe’s Stoxx 600 index headed for its best month in two years as strong earnings reports burnished the appeal of the region’s stocks over pricier Wall Street equities. As we get closer to the Feb 1 deadline, headlines on Trump’s tariffs took the central stage. Trump’s reiteration of the 25% tariffs on Canada/Mexico led to some volatility yesterday, but the markets quickly rebounded and still managed to finish in the green. 10Y treasury yields were flat at 4.52% while the dollar gained ahead of President Donald Trump’s weekend tariff announcement. Today, key macro focus will be December PCE and Energy earnings (XOM and CVX).

In premarket trading, Apple rose 4% after the iPhone maker gave a modestly better-than-expected outlook (it guided single digit growth in sales, which probably is better than guiding to a contraction), helping to offset disappointing iPhone and China revenue in its first-quarter results. Chevron (CVX) declines 1% as profit underperformed expectations amid shrinking crude prices and fuel-making margins. Intel (INTC) rises 1.4% after the chipmaker reported fourth-quarter results that were better than investors expected as it navigates a difficult return to competitiveness. Here are some other notable premarket movers:

• AST SpaceMobile (ASTS) rises 6% after the company said that the Federal Communications Commission has granted it special temporary authority permitting testing service in the US with partners AT&T and Verizon Communications.
• Atlassian (TEAM) surges 20% after the software company reported second-quarter results that beat expectations and raised its full-year forecast.
• Autoliv (ALV) slips 2% after the seatbelt manufacturer’s 4Q sales fell short of estimates.
• Baker Hughes (BKR) rises 1.5% after the oil field services firm’s earnings beat estimates, with analysts saying this was impressive given the high bar as shares have risen 56% over the past 12 months.
• Boot Barn (BOOT) falls 7% after providing a fiscal 4Q profit forecast range with a midpoint that falls short of estimates.
• Cipher Mining (CIFR) jumps 11% after the Bitcoin mining company announced a $50 million PIPE investment from SoftBank that will support the high-performance computing business.
• Deckers Outdoor (DECK) slumps 14% after the footwear and apparel firm’s fiscal-year revenue forecast fell short of Wall Street expectations. Other footwear stocks trade lower: ON Holding (ONON) -2%, Crocs (CROX) -0.9%
• Vertex (VRTX) climbs 4% after the biotech’s non-opioid analgesic Journavx received FDA approval for moderate-to-severe acute pain in adults.
• Viavi (VIAV) surges 19% after the company’s net revenue forecast for the third quarter beat analysts’ estimates.
• Visa (V) gains 1.8% after the payments network company reported first-quarter adjusted earnings per share that were ahead of estimates.
• Walgreens Boots Alliance (WBA) falls 11% after the drugstore retailer suspended its quarterly dividend to conserve cash and strengthen its balance sheet.

Investors are starting to come around to the European region, and Bank of America’s Michael Hartnett recommended diversifying away from the big tech stocks that underpinned last year’s US outperformance. Meanwhile, Trump is poised to unleash his first wave of tariffs on Canada and Mexico on Saturday, taking a gauge of dollar strength toward its best week since mid-November. The cost of hedging against price swings in the Canadian dollar over the next week rose to its highest level since October 2022 in anticipation of greater currency volatility.

“Markets are being too simplistic about Trump,” said Daniel Loughney, head of fixed income at Mediolanum International Funds Ltd. “We feel he will negotiate and threaten, but there will also be carrots.”

In economic data, investors will be watching the latest core price index numbers from the US, the Fed’s preferred inflation gauge, which is expected to pick up slightly in December. Meanwhile, the tech-sector concerns about competitive threats from China, which dominated at the start of the week, showed signs of abating. Reports from some of the largest technology companies in the US have proved resilient, helping stocks recover after Chinese startup DeepSeek shook up markets with its cheaper AI model.

Europe’s Stoxx 600 index headed for its best month in two years as strong earnings reports burnished the appeal of the region’s stocks over pricier Wall Street equities. The European benchmark was set for a 6.5% jump in January amid robust corporate results, European Central Bank easing and speculation the region can avoid US tariffs. Stoxx 600 rose 0.5% on Friday with tech and healthcare are the biggest gainers, while real estate and telecoms are the only declining sectors. Here are some of the biggest movers on Friday:

• Novartis shares rise as much as 3.6% after the Swiss drugmaker reported better-than-expected profit and sales for the fourth quarter and forecast both operating income and net sales growing in 2025.
• Smiths Group shares rise as much as 17%, hitting a record high, after the company announced plans to unlock value by selling two divisions while increasing the size of its buyback.
• Ferragamo shares rise as much as 11% after the Italian luxury goods maker’s fourth-quarter revenue beat expectations, with analysts positive on signs of a turnaround.
• ALK-Abello shares rise as much as 8.2%, the most in more than five months, after Jefferies upgraded the stock to buy from hold, citing optimism about the Danish allergy drugmaker’s growth profile.
• Atoss Software shares gain as much as 6.5%, the most since July, after full-year results from the German workforce management solutions firm surpassed expectations, with analysts highighting margin strength.
• Sanofi shares rise as much as 1.1% after the French firm was upgraded to hold from sell at Deutsche Bank, which sees a “diminishing number of reasons to remain outright cautious” following the drugmaker’s 4Q results.
• Umicore shares fall as much as 7.9% after Kepler Cheuvreux downgraded the Belgian chemicals company to hold from buy, saying the upcoming capital markets day is unlikely to reassure investors about the return objectives of the battery materials business.
• Mexico-Exposed European stocks are underperforming broader markets in Europe on Friday as US President Donald Trump is set to impose tariffs on goods from the country.
• Crayon falls as much as 15%, the most since November 2023, after the Norwegian software and IT firm published preliminary full-year figures that fell short of the company’s own guidance.
• UK Housebuilders are underperforming on Friday after Nationwide Building Society’s report showed house prices stagnated at the start of 2025, suggesting the property market could finally be succumbing to high borrowing costs.
• Elisa shares decline as much as 5.6% after the telecom firm gave tepid guidance for the year, citing a stalling Finnish economy, competition in the domestic market and uncertainties around Russia’s war in Ukraine.

Earlier in the session, Asian equities slip, dragged by losses in Korean tech shares catching up with concerns about the artificial intelligence market after extended holidays. The MSCI Asia Pacific Index fell as much as 0.3%, with AI-trade beneficiary SK Hynix dropping 10%, and Samsung Electronics falling after missing profit expectations. Even with the recent concerns over the impact of DeepSeek’s cheap AI model, the regional benchmark is on track to post a gain for the Lunar New Year week, and its first monthly advance since September. The weakness in Korean memory chipmakers comes after the global selloff sparked by DeepSeek earlier this week. While the Seoul bourse reopened after a four-day holiday, markets remain closed in mainland China, Hong Kong, Taiwan and Vietnam.

In FX, the dollar gained ahead of President Donald Trump’s weekend tariff announcement; the Bloomberg Dollar Spot Index rises 0.2%. The yen underperforms with a 0.3% fall, while the euro slumped as well.

In rates, 10-Y Treasuries fell on bets the potential tariffs could spur inflation and keep interest rates high, while gold was on track for its best month since March as the danger of a trade war spurs haven demand.  Long-end Treasury yields are ~1bp cheaper on the day following US President Trump’s late-Thursday repeated pledge of 25% tariffs on imports from Canada and Mexico on Feb. 1, with short-end little changed. US 10-year yield, up 1.2bp at 4.52%, underperforms Germany’s by 5bp, UK’s by 2.5bp; 2s10s and 5s30s spreads are ~1bp wider, near Thursday’s highs. European rates outperform, led by Germany’s, where soft regional inflation gauges unleashed a curve-steepening rally. Focal points of US session include December personal income and spending data including PCE price indexes and a speech by Fed Governor Bowman.

In commodities, oil prices are little changed, with WTI at $72.70. Commodity markets are pricing in elevated odds that crucial raw materials like oil will be included in sanctions against Canadian imports, Goldman Sachs said.

Spot gold surged to a new record high above $2800 and is now in a fast track to hit $3000 over the next few months.

The US economic data calendar includes 4Q employment cost index and December personal income and spending (8:30am) and January MNI Chicago PMI (9:45am, several minutes earlier to subscribers). Fed’s Bowman speaks on the economy and banks at 8:30am

Market Snapshot

• S&P 500 futures up 0.5% to 6,128.00
• STOXX Europe 600 up 0.6% to 542.02
• MXAP little changed at 184.07
• MXAPJ down 0.1% to 576.11
• Nikkei up 0.1% to 39,572.49
• Topix up 0.2% to 2,788.66
• Hang Seng Index up 0.1% to 20,225.11
• Shanghai Composite little changed at 3,250.60
• Sensex up 0.9% to 77,462.05
• Australia S&P/ASX 200 up 0.5% to 8,532.30
• Kospi down 0.8% to 2,517.37
• German 10Y yield little changed at 2.47%
• Euro down 0.2% to $1.0373
• Brent Futures down 0.2% to $76.75/bbl
• Gold spot up 0.1% to $2,796.29
• US Dollar Index up 0.48% to 108.32

Top Overnight News

• President Trump’s advisers are considering several offramps to avoid enacting the universal tariffs on Mexico and Canada that he had pledged, even as he reiterated Thursday that the tariffs are coming. Some officials are now concerned about using emergency powers for tariffs after a federal judge earlier this week temporarily blocked a White House Office of Management and Budget memo that sought to freeze federal grants and loans. WSJ
• US President Trump said China is going to end up paying a tariff as well.
• US President Trump posted on Truth Social that the US will require commitment from BRICS countries to neither create a new BRICS currency nor back any other currency to replace the mighty US Dollar or they will face 100% tariffs.
• US officials are probing whether DeepSeek dodged export curbs on advanced Nvidia chips by buying them through third parties in Singapore, people familiar said. Bloomberg Intelligence said scrutiny probably won’t dent China’s AI progress as it boosts supplies from Huawei. Samsung won approval to supply a less-advanced AI chip to Nvidia for the Chinese market, people familiar said. Shares in rival supplier Micron dipped premarket. BBG
• Japan’s Tokyo CPI for Jan was very hot on the headline at +3.4% (vs. the Street +3%) although core was inline at +1.9% (up slightly from +1.8% in Dec). WSJ
• Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates. WSJ
• France’s CPI for Jan runs slightly cooler at +1.8% (flat vs. Dec and below the Street’s +1.9%). WSJ
• German regional CPIs show a sharp cooling in Jan in certain cases, including Bavaria (+2.5% vs. +3% in Dec), Saxony (+2.4% vs. +3.2% in Dec), Baden Wuerttemberg (+2.3% vs. +2.6% in Dec), and North Rhine Westphalia (+2% vs. +2.5% in Dec). BBG
• Vertex Pharmaceuticals (VRTX) +8% in pre-mkt on light volume following FDA approval of Journavx, an oral, non-opioid painkiller. BBG
• The SEC approved part of an application for a novel ETF that would track the two largest cryptocurrencies, Bitcoin and Ethereum. BBG
• Apple climbed premarket (+3.5%) after reassuring investors that sales will rise in the low- to mid-single digits in the current quarter. Its Greater China revenue and iPhone sales missed. Evercore said the results show Apple can manage the China headwinds with growth elsewhere. BBG
• Buybacks… GS corporate repurchase window opened this Monday with ~28% of the corporate window open today, ~45% next Monday, and 60% by the end of next week (2/7). This demand dynamic switches on in full force next week. GS corporate trading team estimates a record ~$1.16 Trillion worth of executions in 2025 (including S&P and R3000). I use the word “Trillions” a lot. There are 250 trading days in 2025: this is $4.64 Billion per day on average days. This jumps up to ~$7 Billion during open window and drops to ~$3 Billion during closed windows.

A more detailed look at global markets courtesy of Newsquawk

Asian stocks were mostly higher but with gains capped at month-end and as participants digested earnings and tariff threats. ASX 200 printed a fresh all-time high with the index led by strength in gold miners and tech although the defensive sectors lagged. Nikkei 225 remained afloat albeit with momentum restricted by a choppy currency and a slew of earnings. KOSPI underperformed on return from the holiday closure with tech names pressured as SK Hynix got its first opportunity to react to the DeepSeek debacle and Samsung Electronics was also negative despite better-than-expected earnings for Q4 as it provided a pessimistic view for the current quarter.

Top Asian News

• Kalyan Ups Investor Outreach as Social Media Chatter Roil Shares
• RBI Injects $5.10 Billion Via Currency Swap to Ease Cash Crunch
• Asian Stocks Drop as Korean Tech Shares Fall After Holidays
• Philippines’ Stock Benchmark Plunges 4%, Enters Bear Market
• Gold Hits Record High as Trump Tariff Threats Aid Haven Demand
• Philippines’ Marcos Seeks Reassurances From Trump Over Alliance

European bourses (Stoxx 600 +0.5%) opened modestly firmer and continued to edge higher as the session progressed, with indices generally near highs. Overnight, a turnaround in futures began around the time the WSJ posted an article which suggested that the US administration could announce new tariffs by Saturday, but with a grace period to allow for negotiations (the grace period was not initially touted). European sectors opened mixed but now hold a strong positive bias. Tech is the outperformer today, with sentiment in the sector lifted by post-earning strength in Apple, which is higher by around 3.5% in US pre-market trade. Healthcare takes the second spot, lifted by post-earning strength in Novartis (+3.3%). US equity futures are mixed, with the RTY (-0.1%) marginally in the negative territory whilst the tech-heavy NQ (+0.6%) outperforms following results from Apple and Intel (details below).

Top European News

• ECB’s Muller says rates are nearing the point where they will not curb investment, via Bloomberg
• ECB’s Rehn says “we are confident that inflation will stabilise at its target as projected and monetary policy will cease to be restrictive in the near future”; estimates during the spring and summer.The pace and magnitude of rate cuts will be decided separately at each meeting
• ECB Consumer Expectations Survey (Dec): See inflation in next 12 months at 2.8% vs. Exp. 2.7% (prev. 2.6%); 3y ahead sees 2.4% (prev. 2.4%)
• ECB Survey of Professional Forecasters; sees 2025 inflation at 2.1% (prev. 1.9%); 2026 1.9% (prev. 1.9%), 2027 2.0%

Earnings Summary

• Apple (AAPL) +3.5% pre-market: Q1 revenue rose 4%, but iPhone sales missed expectations, and China sales fell; Mac and iPad sales improved, while wearables declined. The strong growth in its services segment supported its rise afterhours
• Intel (INTC) +1.4% pre-market: Better-than-expected Q4 earnings, though it issued weak guidance, citing seasonality and competition.
• Chevron Corp (CVX) -0.1% pre-market: Q4 EPS missed though revenue beat, announced USD 1.115bln impairment.Announces a 5% increase in Quarterly dividend
• Novartis (NOVN SW) +3.1%: Beat, lifts dividend, requests extended buyback authorisation.
• Samsung Electronics (005930 KS) -2.4%: Forecast slow sales for its AI chips in Q1 due to US export restrictions on China, and struggles to meet Nvidia’s (NVDA) requirements, while also forecasting limited earnings growth amid weak memory chip demand.

FX

• DXY is extending on the upside seen yesterday following comments from US President Trump that he will put a 25% tariff on Canada and Mexico because of fentanyl, and stated that China is going to end up paying a tariff as well. It is worth noting that there was a more conciliatory piece overnight in the WSJ noting that the US Administration could announce new tariffs by Saturday, but with a grace period before implementation to allow for negotiation. For today’s docket, focus will be on monthly PCE metrics for December, which follows yesterday’s quarterly print. DXY has been as high as 108.37 with the next target coming via the 23rd Jan high at 108.51.
• EUR/USD is lower for a fourth consecutive session as the dust settles on yesterday’s widely-expected 25bps rate cut from the ECB. Sources in the wake of the meeting revealed that if the GC delivers another 25bps cut in March,it will likely drop the “restrictive” reference to rates. Additionally on the inflation front, French CPI came in softer-than-expected whilst the regionals from Germany appear to be cooler than consensus for the mainland print at13:00GMT. EUR/USD has been as low as 1.0366; lowest since 21st January.
• JPY is softer vs. the USD with havens generally lagging vs. the USD. Overnight saw a deluge of data from Japan whereby headline Tokyo CPI came in firmer than expected, core in-line, IP and retail sales Y/Y beat. USD/JPY currently sits within yesterday’s 153.78-155.23 range.
• GBP is slightly softer vs. the USD as UK-specific newsflow remains light in the run up to next week’s BoE rate decision and MPR. GBP/USD has just slipped below the bottom end of yesterday’s 1.2407-67 range with the next downside target coming via the 1.2392 low.
• Antipodeans are both firmer vs. the USD and attempting to claw back some of the losses from Trump’s aforementioned tariff rhetoric yesterday.

Fixed Income

• USTs are in the red, weighed on by the latest Trump-tariff rhetoric. Action which has propped up yields stateside with the short-end leading ever so slightly given the potential near-term tariff implications of any measures. Action which took USTs to a 108-31 trough in the early European morning. However, the complex began to make its way gradually off lows as no late-Thursday announcement came from POTUS as some had guided us towards. Additionally, a WSJ sources piece implied that officials are working to find a way to dial-back the tariff rhetoric/situation. US PCE due.
• EGBs derived a bid from the Prelim. French HICP figures which came in cooler than expected. Thereafter, cooler German State CPIs than implied by the forecasts for the 13:00GMT mainland release alongside a cut to the growth view in the ECB SPF sparked a dovish reaction, though perhaps somewhat capped by a jump in EBC SCE inflation views. Specifically, Bunds lifted from just below the 132.00 handle to a 132.45 session high over the course of five/six minutes vs current 132.30.
• Gilts moved in tandem with peers throughout the morning. Began the session with very modest upside, as the dovish impulse from the French data and general UST pickup off lows served to offset bearish pressure from the Trump tariff updates. Gilts currently around 92.60.

Commodities

• Crude benchmarks find themselves at session lows though the pressure is only modest thus far, WTI and Brent at the trough of USD 72.63-49/bbl and USD 75.69-76.44/bbl bands. Focus of course on the tariff situation and in particular Trump’s remark that he would be deciding by Thursday (i.e. yesterday) on whether or not to impose tariffs on oil on Canada and Mexico.
• Gold made fresh record highs above the USD 2800.00/oz mark. Thus far, has eclipsed the figure by exactly one dollar. Upside which has been driven despite the USD strength and overnight yield advances.
• Base metals are mixed, albeit with a slight downward bias; price action has been relatively rangebound with 3 LME copper within a USD 9,068-9108.80/oz range.
• Russian gas supplies to Europe via Turkstream pipeline have reached record monthly high of more than 50mcm per day in January
• Oman Crude OSP calculated at USD 80.26/bbl for March, up USD 7.10 vs Feb
• Kaztransoil says Kazakhstan plans to supply 22,000 T of oil from Kashagan field via Baku-Tbilisi-Ceyhan pipeline in January.
• Ukraine’s Military says it struck an oil refinery in Russia’s Volgograd region, causing a fire.
• Commerzbank sees upside potential for Palladium prices, expects it to rise to USD 1150/oz by end-2025

Geopolitics

• Lebanese media Al Mayadeen posted on X that Israeli warplanes struck several areas on Lebanon’s eastern border with Syria which it stated marked another set of blatant violations of the ceasefire agreement.
• US military said it killed a senior operative of Al-Qaeda affiliate terror group Hurras Al-Din in northwest Syria.
• Israeli PM Netanyahu “will hold security consultations today to discuss the possibility of stopping the deal and the possibility of returning to fighting immediately”, according to Al Jazeera.

US Event Calendar

• 08:30: Dec. Personal Income, est. 0.4%, prior 0.3%
  • Dec. Personal Spending, est. 0.5%, prior 0.4%
  • Dec. Real Personal Spending, est. 0.3%, prior 0.3%
  • Dec. PCE Price Index MoM, est. 0.3%, prior 0.1%
  • Dec. PCE Price Index YoY, est. 2.6%, prior 2.4%
  • Dec. Core PCE Price Index YoY, est. 2.8%, prior 2.8%
  • Dec. Core PCE Price Index MoM, est. 0.2%, prior 0.1%
• 08:30: 4Q Employment Cost Index, est. 0.9%, prior 0.8%
• 09:45: Jan. MNI Chicago PMI, est. 40.0, prior 36.9

DB’s Jim Reid concludes the overnight wrap

It’s a sad day today. My 5 year fixed mortgage at 1.45% runs out. If you’ve seen UK yields recently you know what comes next. While I reduce the kids pocket money tonight to help offset the sizeable increase, we come to the end of a frantic week, and month end, with a busy couple of days still ahead with US core PCE and European inflation data today and a self imposed tariff deadline from Trump to Canada and Mexico tomorrow.

This latter topic moved back to the top of investors’ attention late in the US session yesterday as Trump said that he plans to follow through on his threat to impose 25% tariffs on Feb 1, saying that “we’ll be announcing the tariffs on Canada and Mexico for a number of reasons”, citing trade deficits, immigration and fentanyl flows. In the context of fentanyl, Trump also again raised the prospects of new tariffs on China. Trump’s comments did leave an open question on the exact scope of tariffs to be announced, notably saying he was still considering whether Canadian oil would be exempted. We’ll have to wait and see just what measures are implemented, or indeed if last minute concessions might yet be reached, or if the most aggressive tariffs are short lived. But it does look less likely that Feb 1st will pass with no tariff action and the exact approach may be instructive for how the new administration are going to approach the tariff question more broadly. I mentioned at the start of the week that Mr Trump has to follow through on some of his threats or he will lose some negotiating power.

Markets again showed that they’re reactive to tariff headlines even if only a relatively mild tariff agenda is broadly priced in. The most persistent reaction last night came in FX, with the broad dollar index trading +0.38% above yesterday’s European close as I type, while the Mexican peso and Canadian dollar closed -1.05% and -0.46% weaker respectively. Trump’s comments also drove a broader risk-off reaction, though this proved mostly short-lived as the exact scope of the tariff threat remained unclear. The S&P 500 fell from trading up +0.7% to being flat on the day, but then recovered to close +0.53% higher. Traditional US automakers were particularly affected, with GM and Ford initially slumping by -6% and -2% respectively, though they reversed about half of the drop by the close.

The other main event overnight were Apple’s results after the bell. The world’s most valuable company (taking over from Nvidia on Monday) delivered a marginal earnings and sales beat, with disappointing iPhone sales and China revenues offset by strong growth in the company’s services division. On the whole, investors appeared reassured by guidance that revenue growth is expected in the low- to mid-single digits in the coming quarter, with Apple’s shares rising 3% in after-market trading after retreating -0.74% in the regular session yesterday. This morning in Asia, S&P 500 (+0.24%) and NASDAQ 100 (+0.54%) futures are higher with the former exactly where it was now before the tariff headlines last night.

Notwithstanding the tariff-driven volatility late in the US session, markets put in a solid performance yesterday, with the S&P 500 (+0.53%) seeing 413 stocks advance, whilst gold prices (+1.28%) closed at a record high of $2,74.59/oz. That was supported by a robust set of US data, which showed the economy rounded out 2024 in decent shape, whilst the weekly jobless claims also came in beneath expectations. However, it was a very different story in Europe, where data showed the German and French economies contracted in Q4, whilst the Euro Area as a whole was stagnant. Yet despite the clear divergence in economic outcomes, European assets still put in the much stronger performance yesterday, with the STOXX 600 (+0.86%) up to another record.

Looking at the US data in more detail, Q4 GDP growth came in at an annualised pace of +2.3% (vs. +2.6% expected), whilst the full-year number for 2024 was at +2.8%, just a tenth beneath the +2.9% rate in 2023. So there was little in the way of obvious warning signs, and the inflation numbers were broadly as expected too, with core PCE running at a +2.5% rate. At the same time, there were fresh signs that the labour market was still strong into 2025, with the weekly initial jobless claims down to 207k in the week ending January 25 (vs. 225k expected). Moreover, that pushed the 4-week moving average down to 212.5k, which is its lowest level since April.

This helped US equities advance, with broad positive sentiment outweighing lingering concerns around big tech. The overall positivity saw the equal-weighted S&P 500 rise +1.03% on the day, whilst the small-cap Russell 2000 was up a similar +1.07%. On the other hand, the Magnificent 7 underperformed (+0.04%). This was mainly because of Microsoft’s decline (-6.18%) following its earnings the previous day, but there was also heightened volatility for Nvidia, which at one point was down -4.5% to within a percent of its Deep Seek inspired lows from Monday, but recovered to close +0.77% higher on the day. Separately, UPS (-14.11%) posted its worst daily performance since it went public in 1999, after its revenue forecast for 2025 fell short of analysts’ expectations. In the meantime, US Treasuries posted modest gains, with the 10yr yield ending the day down -1.3bps to a new 2025 low of 4.52%. They are back to 4.54% overnight.

Over in Europe, the main story was the ECB’s latest decision yesterday, where they delivered a 25bp rate cut as expected. That took their deposit rate down to 2.75%, meaning that they’ve now cut by a total of 125bps since they began last June. Looking forward, it was clear that further cuts were on the agenda, as the statement still described monetary policy as “restrictive”, and President Lagarde said “we are not at the neutral rate”. However, Lagarde didn’t want to signal how long they’d keep cutting for, saying that “it would be premature at this point in time to talk about the point where we have to stop”. Our European economists did not see anything in yesterday’s press conference to suggest that a “skip” has become more likely at the upcoming meetings. They maintain a baseline of 25bps continuing through H1, predicated on their view of below-trend growth and inflation falling moderately below target. Later in the day, we did hear some more hawkish ECB sources stories suggesting that ECB could drop the description of stance as “restrictive” at the next meeting in March and that some of the policymakers were open to the possibility of a pause by the April meeting.

European bonds rallied across the continent, with yields on 10yr bunds (-6.6bps), OATs (-5.8bps) and BTPs (-6.3bps) all falling. However, much of the decline in yields came earlier on after data showed that major economies saw weaker growth than expected in Q4, which added to the sense that the ECB would have to keep cutting rates in the months ahead. For example, the German economy contracted by -0.2% (vs. -0.1% expected), while France contracted by -0.1% (vs. 0.0% expected). In turn, that meant the Euro Area as a whole saw no growth in Q4 (vs. +0.1% expected). But despite the weak growth momentum, European equities continued to rally, with the STOXX 600 up +0.86% to a new record high. In fact, that now brings its YTD gains for 2025 up to +6.15%, which means it’s already surpassed the +5.98% gain it made in 2024.

Elsewhere in Europe, we’re now just over three weeks away from the German election, which is taking place on February 23. Our German economics team published an interesting blog on the campaign yesterday (link here), where they write how the campaign has become more heated and fraught in the last week. That comes after the CDU tabled a plan for a material tightening of German migration policy, which passed with the votes of the AfD, marking the first time that a centrist party has submitted a motion implicitly relying on AfD support. They point out how these events could cause a material shift in the polls, and challenge mutual trust between the Conservatives and the SPD and the Greens, thus challenging the cohesion of the next coalition from the start.

In Asia, the Nikkei (+0.26%) and the S&P/ASX 200 (+0.55%) are trading higher while the KOSPI (-1.21%) is trading sharply lower following a four-day break after index heavyweight – Samsung Electronics reported a smaller-than-expected profit. Elsewhere, markets in mainland China and Hong Kong remain closed for the Lunar New year holiday.

Early morning data showed that retail sales in Japan surged at its fastest pace since June 2024, jumping +3.7% y/y in December (v/s +3.2% expected), much higher than the +2.8% increase in the previous month. Meanwhile, industrial output rebounded +0.3% m/m in December (v/s +0.2% expected), picking up from the -2.2% contraction seen in the previous month. Separately, Tokyo CPI, excluding fresh food, rose +2.5% y/y in January, compared with +2.4% the previous month. This was is in line with Bloomberg estimates. Japan’s unemployment rate for December fell to 2.4% from 2.5% in the previous month (2.5% expected). Australia’s PPI rose +3.7% through the year to the December 2024 quarter. This is the lowest reading since the December 2021 quarter.

To the day ahead now, and data releases from the US include PCE inflation for December, the Employment Cost Index for Q4, and the MNI Chicago PMI for January. Meanwhile in Europe, there’s the German and French CPI prints for January, and in Germany we’ll also get December’s retail sales and January’s unemployment. From central banks, we’ll hear from the Fed’s Bowman and the ECB’s Villeroy. Finally, earnings releases include ExxonMobil.

Update (0825ET): President Trump has chimed in, confirming the altitude of the Black Hawk was too high…

Additionally, it appears the chopper had a few close-calls that night…

TRANSTERROR? Was the Blackhawk pilot actively trying to hit a passenger jet? Flight tracking seems to show that the pilot had three near misses before hitting the American Airlines jet. pic.twitter.com/vjWUqV7zPN

— @amuse (@amuse) January 31, 2025

*  *  *

While there are countless facts still left to be uncovered and scrutinized, there’s an early indication that the worst US air disaster since 9/11 may have resulted from a flight-path deviation by the Army helicopter that collided with a passenger jet landing at Washington’s Reagan National Airport. Remarkably, it appears an identical disaster may have been narrowly avoided just one day earlier, when an airline pilot chose to abort landing after deeming another helicopter was dangerously close. Control-tower staffing is also emerging as a major concern — including a decision to allow one controller to leave work early. 

Exclusive dash-cam video obtained by The Washington Post shows a previously unseen angle of the moment a plane and helicopter collided over the Potomac River on Wednesday night. https://t.co/1VErSdPVDW pic.twitter.com/kTicwRejsz

— The Washington Post (@washingtonpost) January 30, 2025

Based on a determination of the UH-60 Black Hawk helicopter’s last location before colliding with American Airlines 5342 from Wichita, the Army chopper was flying above its authorized flight path, according to anonymous sources who spoke to the New York Times. The American CRJ300 stopped transmitting tracking data at 375 feet — suggesting impact occurred far above the 200-foot ceiling imposed on helicopters in that area. 

The Black Hawk was reportedly under the command of a female pilot with more than 500 hours of flight time. The male instructor pilot had more than 1,000 hours, while the crew chief is also said to have logged hundreds of hours. Given the shorter duration of helicopter flights, those hours are substantial, according to Jonathan Koziol, a retired Army chopper pilot who’s assigned to the Unified Command Post that’s been organized to coordinate the post-disaster efforts at the airport.

The Army has not released the names of the crew members, but the names of the two males aboard the Black Hawk have emerged via other channels: Staff Sgt. Ryan O’Hara and Chief Warrant Officer 2 Andrew Eaves. All were assigned to Bravo Company, 12th Combat Aviation Battalion, headquartered at nearby Fort Belvoir. While there are many social media posts purporting to identify the female pilot as a male-to-female trans National Guard member who on Tuesday publicized his transition, ZeroHedge cannot find authoritative confirmation of those claims as this article is being written. On Monday, President Trump issued an executive order barring transgender people from openly serving in the military. 

The Army says the crew was conducting a routine nighttime qualification flight, with the focus on safely navigating helicopter routes in and around Washington. However, more specifically, Secretary of Defense Pete Hegseth said the crew was training for a “continuity of government mission.” That’s the name given for a response to an attack on the capital, or a major disaster that hits the city. In such an event, helicopters would be used to evacuate senior federal officials. The crashed helicopter was a standard UH-60; the battalion also flies the VH-60M variant: Distinguished by its gold top, it’s used for VIP transport. 

Every day, more than a hundred helicopters buzz around Reagan National’s flight paths. Roughly 24 hours before Wednesday’s catastrophe, one of those helicopters alarmed the pilot of another commercial flight to the extent she aborted landing and went around. There are no reports on the type of helicopter.   

A female voice in the cockpit of Republic Airways Flight 4514 informed the tower of the problem at roughly 8:05 p.m. Tuesday, according to the audio recording of air traffic control traffic. The plane took a sharp turn to the west, made a loop to try to make a second approach, and safely landed at 8:16 p.m., flight tracking records indicate. — Washington Post

Reagan runway chaos: AA jet avoids chopper CATASTROPHE — one day BEFORE ‘Black Hawk’ smash

Flight AA4514 was forced to abort its landing and circle back after a rogue helicopter crossed its path—an alarming incident now under investigation.

What is going on? pic.twitter.com/yoixbX945A

— RT (@RT_com) January 31, 2025

Meanwhile, concerning details have also emerged about the workloads assigned to the Reagan National air traffic controllers at the time of Wednesday night’s crash that killed all 67 aboard the two aircraft. Staffing was “not normal for the time of day and volume of traffic,” according to a preliminary FAA document reviewed by the New York Times. 

Under normal staffing, one air traffic controller is responsible for helicopter traffic, while another guides landing and departing planes. However, on Wednesday night, one man was juggling both responsibilities. According to the Times, that’s because a supervisor allowed a different air traffic controller to leave before that individual’s shift had ended. There are several other factors that could have contributed to the accident. Among them: 

• It’s not clear if the Black Hawk pilot was using night vision goggles, which can limit peripheral vision and depth perception, while also being problematic in an urban environment with its abundant lights. 

• Given the angles of the two flight paths, city lights may have camouflaged the lights of the American Airlines jet. “Going beak-to-beak at night, the lights of the [jet] tend to blend in with the city lights behind [it],” notes aviation YouTuber “blancolirio” in a detailed analysis of Wednesday’s scenario. “Another problem when you’re going head to head with each other is — if there’s no lateral movement in the windscreen — that light [of the other aircraft] is very hard to detect.” 

• Potential miscommunication: While the tower asked the Black Hawk (“PAT25”) if it had the American Airlines “CRJ” (Canadair Regional Jet) in sight, some are speculating the Army pilots thought the controller was referring to a jet that was taking off to their right, rather than the doomed jet that was landing from their left. Others think they may have been looking at another jet on approach — behind American 5342.  

Audio between PAT25 and DCA tower asking if they have the CRJ in sight. Affirms and requests visual separation. pic.twitter.com/6VAxx9zmv5

— NOVA Scanner Updates (@NOVAScanner) January 30, 2025

Chinese startup DeepSeek’s latest AI models, V3 and R1, were reportedly trained on just 2,048 Nvidia H800 chips—GPUs that were blacklisted by the US government in 2023 for sale to Chinese firms. Federal investigators are now combing through trade data to determine how DeepSeek acquired the restricted chips. 

Bloomberg spoke with sources close to the US probe focusing on “third parties” in Singapore that procured the H800 chips and sold them to DeepSeek—a move we’ve seen before to circumvent US trade restrictions (read here). 

Here are more details about the probe:

Officials in the White House and Federal Bureau of Investigation are also trying to determine whether DeepSeek used intermediaries in the Southeast Asian nation to purchase Nvidia chips that the US has banned from sale to China, said the people, who requested anonymity to relay private conversations.

At a confirmation hearing on Wednesday, Howard Lutnick, President Donald Trump’s nominee to lead the Commerce Department, said, “Nvidia’s chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model,” adding, “It’s got to end. If they are going to compete with us, let them compete, but stop using our tools to compete with us. So I’m going to be very strong on that.”

Bloomberg has reported that Trump administration officials are focused on whether H20 chips should be restricted as well. This trend of restricting China from advanced AI chips designed and produced by US or Western-aligned companies ramped up in the last four years. 

According to regulatory filings, Singapore accounts for 20% of Nvidia’s revenue. The filings also show that “most shipments associated with Singapore revenue were to locations other than Singapore, and shipments to Singapore were insignificant.” 

Biden officials recently expanded rules that large shipments of high-tech chips to Singapore would require a license. However, shipments under 1,700 chips only require notification. 

Those sources close to the federal investigation did not provide Bloomberg with any other details about the Singapore buyers or if those entities were just shell companies. 

A report from late 2023 via Bloomberg found that a shell company in India was buying high-tech US chips, then turning around and selling them to Russia to circumnavigate sanctions. 

 

 

 

 

White House spokeswoman Karoline Leavitt told reporters on Tuesday that President Donald Trump still plans to slap tariffs of about 25% on imports from Canada and Mexico on Saturday unless the countries halt the illegal alien invasions and fentanyl flows into the US. The president has also warned that China faces 10% tariffs.

Yesterday, right before the close, Trump reiterated his threat about tariffs on Mexico and Canada.

This trade uncertainty has pushed tariff mentions on earnings calls by management teams of S&P 500 and Stoxx Europe 600 companies to their highest level since 2018—when Trump first launched the trade war.

It’s no secret that Trump’s ‘America First’ agenda includes imposing across-the-board tariffs on top trading partners. The story count of “tariff” articles in corporate media began surging in mid-2024. 

When reporters asked Leavitt about Trump’s Saturday deadline for Canada and Mexico, she said the president “still holds” the line.

“The president has also put out specific statements in terms of Canada and Mexico, when it comes to what he expects in terms of border security.” Leavitt added, “We have seen a historic level of cooperation from Mexico. But again, as far as I’m still tracking, and that was last night talking to the president directly, Feb. 1 is still on the books.”

Adding more color on the trade situation, Goldman Sachs Chief Economist Jan Hatzius told clients last week after Trump’s series of executive orders that initial trade policy coming from the Trump-Vance administration was “more benign than expected,” adding, “the president’s comments on China were notably less hawkish than during the presidential campaign or even his more recent comments since the election.” 

Hatzius noted, “And while we viewed a “universal tariff” as a clear risk, the president’s comments suggest that, for now, it is a lower priority than we would have expected.” 

Goldman’s tariff expectations:

Suppose Trump’s tariffs on Canada or Mexico take effect on Saturday. In that case, a sharp increase in tariff and all other trade mentions during future earnings calls between analysts and management teams is expected.

Trump’s stance on tariffs has remained the same since the campaign trail.