Global Economic Daily - 1/29/2025
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Quote of the Day: Man is a creature who lives not upon bread alone, but primarily by catchwords. – Robert Louis Stevenson
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Equities: Stocks climbed Tuesday, recovering some ground from a sell-off sparked by the emergence of Chinese?artificial intelligence?startup DeepSeek that sent tech shares reeling. The?S&P 500?advanced 55.42 points to 6,067.70, with technology shares seeing the biggest gains among sectors. The?Nasdaq 100?surged 335.76 points to 21,463.04, following a 3.1% decline a day ago. The?Dow Jones Industrial Average?added 136.77 points to 44,850.35. All eyes were on?Nvidia?in Tuesday’s trading with the major averages moving in step with the AI bull market leader’s intraday fluctuations. The stock?picked up momentum?to close around its highs of the day after rising nearly 9%. It briefly saw losses earlier in the session. In the prior session, Nvidia lost 17%, or almost $600 billion in market value, the?biggest ever one-day drop?in value for a U.S. company. The DeepSeek AI threat came to a head on Monday following social media buzz over the weekend. The Chinese startup last month unveiled a free open-source large language model that it says took less than $6 million to build. The development spurred worries around Big Tech’s investment into AI that has been fueling the run in chipmakers, primarily Nvidia. DeepSeek, which is open-sourced and supposedly powered by a chip setup that costs a fraction of other leading AI models,?surpassed rival OpenAI?on Monday to become the most-downloaded free app in the U.S. on Apple’s App Store. The Federal Reserve will also make its latest decision on interest rates Wednesday. Wall Street believes it is a near certainty that the central bank will halt its rate-cutting campaign and keep rates steady this week. What is not known is how many rate cuts Fed Chair Jerome Powell will signal?are in the cards for this year. TECHNICAL OUTLOOK – The Dow and S&P are both above the 14, 21 day moving average.
Metals: Gold and silver prices are solidly higher in midday U.S. trading Tuesday, on safe-haven demand amid wobbly U.S. equities after the steep U.S. stock market sell off Monday. Uncertainty regarding U.S. President Trump’s policy actions in the coming days/weeks is also prompting risk aversion in the marketplace that is benefiting the precious metals. Gold is scoring gains today despite a higher U.S. dollar index and a rise in U.S. Treasury yields on this day. U.S. stock indexes are higher near midday, following Monday’s rout that was led by a slump in the technology sector. Still, many traders/investors question if the stock market tumble was only a one-day event or the start of something more problematic. In other news, President Trump proposed universal tariffs that are “much bigger” than 2.5%, which is a global starting point reportedly favored by U.S. Treasury Secretary Bessent. The tariffs are meant to reshape U.S. supply chains and “protect our country,” said Trump. The U.S. dollar strengthened on Trump’s latest proclamations. The U.S. data point of the week sees the Federal Reserve widely expected to hold U.S. interest rates steady at the FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. No change in U.S. interest rates is the marketplace consensus. However, the wording and tone of the FOMC statement and Powell presser will be closely parsed by the marketplace. The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil futures prices are near steady and trading around $73.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.577%. Technically, February gold futures bulls have the solid overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,826.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,700.00. March silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at the December low of $29.145. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
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