Money Talks Report 22/Jan/2025.

?? Market Report.

???? President Trump has announced a $500 billion private sector investment in artificial intelligence infrastructure through a joint venture called Stargate, involving OpenAI, SoftBank, and Oracle. The project aims to outpace rival nations in AI technology, with plans to build data centers and create over 100,000 jobs in the US. The announcement sent shares of SoftBank and Oracle higher.

???? The European Union (EU) is raising concerns with the US over a decision to restrict the export of artificial intelligence chips to some EU member states. The Biden administration introduced a three-tier system to curb AI chip sales, placing Poland and other Eastern European EU members in the second-tier category. The EU sees this as going against the bloc's single market, hindering innovation in Eastern Europe, and unfairly favoring Western European companies.

???? China and Hong Kong experienced the worst performance in the region, with the Hang Seng dropping 1.6% and the blue-chip index in Hong Kong dropping 1%. Trump's announcement of a 10% tax on Chinese goods contributed to this, but it's still less than the 60% promised. As Trump needs to negotiate with Beijing to sell TikTok to Oracle or Tesla, the implementation of the 10% tariff remains uncertain. Trump also threatened to impose new tariffs on the EU.

?? Today Lagarde and Villeroy de Galhau of the ECB will speak at the Davos forum. We will be watching for any comments that give us a clue about monetary policy in Europe. The bank is expected to cut its policy interest rate by 25 basis points next week, according to traders. However, inflation is still higher than the ECB's target, and the economic headwind is getting stronger as a result of Trump's America-first policy.

?? The European Union is working on a proposal to introduce bloc-wide purchase premiums for electric vehicles (EVs) to support the struggling European automobile industry. German Chancellor Olaf Scholz announced this plan at the World Economic Forum in Davos, a day after the inauguration of U.S. President Donald Trump. This could increase spending and fiscal pressure on European states.

?? The EU is also rectifying its climate regulations. The European Union is likely to scale back its highly contested ESG (environmental, social, and governance) reporting requirements under the Corporate Sustainability Reporting Directive (CSRD). Frech goverment has suggested reducing CSRD requirements for companies with fewer than 1,000 employees. France is preparing to unveil a formal proposal seeking to limit the scope of the CSRD regulatory framework, as both France and Germany push the European Commission to make cuts to the directive. The retreat from the EU's ESG ambitions coincides with a new political reality in the U.S. under President Donald Trump, who has committed to unwinding Biden-era climate policies and boosting fossil fuel production.

?? The French government intends to get the deficit below the EU's target of 3% of economic activity by 2029, according to French Finance Minister Eric Lombard, who said he has gained agreement from European allies for his deficit-reduction strategy. However, this would happen more slowly than in previous proposals.

?? Marke Review:

?? US stock markets are in a state of euphoria.

??? New plans for artificial intelligence innovation announced by Donald Trump have boosted some Wall Street companies. Mini S&P 500 futures are currently trading at 6,100 points. Resistance has been seen at these levels in the past; since late last year, we have seen these areas create obstacles, but we are very close to all-time highs, and optimism is palpable.

?? The Nasdaq 100 is also advancing and facing resistance, but is currently trading near 21,860 points.

?? On the other hand, the dollar retreated again, with the dollar index finding support at 108 points, currently trading at 108.15. The EUR/USD is settling above 1.04, trading at 1.0415. This could be indicative of a trend reversal in this pair.

?? US bonds, meanwhile, continue to cool, with yields on the 10-year bond falling below 4.60%.

???? In Europe, this optimism also adds up. DAX 40 futures are back to their highs, rising above 21,250 points and currently trading at 21,260 points.

??? Crude oil continues to fall in response to Donald Trump's statement on reviving production to combat inflation. Brent crude is currently trading below 79 dollars a barrel.

?? Gold, in contrast, strengthens and reached 2,770 dollars an ounce a few hours ago.

?? Finally, Bitcoin is rising again and surpassed $107,000 a few hours ago; however, it has fallen back to $105,500 again.

?? Geopolitics:

?? Yesterday Trump signed an executive order withdrawing the U.S. from the World Health Organization (WHO). This comes on top of the order decreeing the US exit from the Paris climate agreement.

????? President Trump has banned the usage of LGBT and BLM flags on Government buildings, Embassies, and Military Bases across the world. Trump declares that the United States government officially recognizes only two genders: male and female.

???? Donald Trump removed all weapon shipment restrictions on Israel that were imposed by Biden. US President Trump says I’m not confident the Gaza ceasefire will last. That’s not our war, it’s their war.

??? Kremlin Secretary Masha Zakharova suggested to Scholz that before talking about free speech, they should reconsider admitting Russian journalists and media expelled from their country."If anyone should teach the world about freedom of speech, it certainly shouldn't be the German".

?? Donald Trump officially signed executive orders to change the name of the Gulf of Mexico to the Gulf of America. He also suspends foreign aid to all countries for 90 days.