Money Talks Report 17/Feb/2025.
?? Market Report.
?? US retail sales on Friday came in weaker than expected. At -0.9% contraction versus -0.2% forecast and 0.7% expansion in the prior period. A favourable data for the continuation of the rate cut.
?? OpenAI Chairman Bret Taylor stated in a statement on Friday that the business "is not for sale," demonstrating that some things are beyond the reach of money. Based on Elon Musk's offer from a few days ago. William Savitt, the counsel for OpenAI, informed Musk's attorney Marc Toberoff on Friday that the board had determined the billionaire's "much-publicized 'bid' is in fact not a bid at all."
?? The Wall Street Journal said on Saturday that Taiwan Semiconductor Manufacturing Company and Broadcom are evaluating bids for Intel that would divide the chipmaker in two, according to people familiar with the situation. According to the Journal, Broadcom is interested in Intel's chip design and marketing division, while TSMC is examining the American company's chip manufacturing facilities. Both businesses are not collaborating, and the discussions are still in their infancy.
?? Japan's economy grew faster than expected in the fourth quarter of 2023, with a 2.8% annualized expansion, beating the median market estimate of 1.0%. The upbeat data was driven by improved business spending and a surprise increase in consumption, which helped shore up the case for the Bank of Japan to continue raising interest rates. However, analysts noted that the headline figure was flattered by a fall in imports, which improved net trade, as well as year-end bonuses boosting consumption.
???? In UK, Many British employers plan to raise prices and cut headcount due to the government's tax increases on businesses, according to surveys. The Chartered Institute of Personnel Development (CIPD) found that 9 out of 10 employers believe the payroll tax hikes from April will increase employment costs. Of these, 42% intend to raise prices and 32% plan to reduce headcount. The surveys echo other indicators that have shown a sharp decline in business confidence since the government's October 30 budget, which included the tax increases. The UK economy unexpectedly grew by 0.1% in the final quarter of last year, but the Bank of England has halved its forecast for economic growth in 2025 to 0.75%.
?? Market View:
?? US futures remain positive, albeit with some caution. Mini S&P 500 futures are trading at 6,145 points, but have failed to break above this level since Thursday. Nasdaq 100 futures have shown a little more upside from Thursday's levels at 22,265 points.
?? The dollar continued to weaken on Friday, influenced by weaker than expected US retail sales. The dollar index DXY is currently at 106.70 points. Meanwhile, the EUR/USD is approaching the highs reached at the end of January, momentarily breaking above 1.05 on Friday. At the moment, it is trading at 1.0495.
?? Friday also saw a cooling in US bond yields, with the 10-year bond falling below a yield of 4.50%.
??? The crude oil market appears to be forming a base. Brent crude approached the $74 level on Friday and rebounded slightly to $74.65 currently. The $74 area seems to have acted as support in recent weeks.
?? Gold futures approached $2,965 on Friday, but pulled back sharply, possibly due to announcements about negotiations to end the war in Ukraine. This pullback took gold futures momentarily below $2,900; they are currently trading at $2,910.
?? Bitcoin attempted an upward move on Friday, approaching $99,000, but over the weekend it has gradually lost strength, settling back around $96,175.
?? Geopolitics:
?? Last Friday, US Vice President JD Vance delivered a scathing critique of Europe, accusing the EU of imposing censorship laws, undermining democracy through election annulments like in Romania, and ignoring the voices of voters while suppressing political parties. He emphasized that the true threat to Europe lies within, not from Russia or China, and called out the mishandling of the migration crisis and political opposition.
?? Vance stressed that democracy thrives on freedom of speech, respect for public opinion, and the ability to engage in open debate, warning that silencing dissent is the fastest way to destroy democratic systems. Under Trump’s leadership, he vowed the U.S. would defend free expression globally, regardless of disagreements.
?? U.S. Secretary of State Marco Rubio stated that Ukraine and Europe will be part of any "real negotiations" to end the war in Ukraine, signaling that the upcoming U.S. talks with Russia are a chance to gauge how serious Russia is about peace. Rubio played down European concerns about being cut out of the initial talks between the U.S. and Russia, set to take place in Saudi Arabia. He said that if talks advance, the Ukrainians and other Europeans will be brought into the fold. The planned talks in Saudi Arabia coincide with a U.S. bid to cut a deal with Ukraine to open up its natural resources wealth to U.S. investment.
???? The four main candidates for the German chancellorship - Olaf Scholz (SPD), Friedrich Merz (CDU/CSU), Alice Weidel (AfD), and Robert Habeck (Greens) - clashed in a live TV debate, the first of its kind in the run-up to a German national election. The debate highlighted the dilution of the traditional dominance of the conservatives and Social Democrats in German politics, with the far-right AfD now a major force forcing itself into the public discourse. Polls show the CDU/CSU bloc maintaining a robust lead of around 30%, with the AfD in second place at around 20%, the SPD in third at 15%, and the Greens fourth at 13%. Scholz is facing the prospect of leading the SPD to their worst election performance since WWII.
? The general media avoid echoing the murder of a 14-year-old boy in Austria by a Syrian refugee. This news could be provoking a reaction in voting intentions in favour of nationalist parties such as AfD.