U.S. Indices were predominantly green on Monday with the upside led by the NASDAQ 100. Large caps performed well while semis were bid, supported by commentary from Microsoft (MSFT) which is to spend USD 80 billion on AI data centres; attention now turns to CES this week with NVDA CEO speaking overnight. Equity futures were bid early on supported by reports in the Washington Post that US President-elect Trump’s trade policies are going to focus on certain sectors, essentially a watered-down tariff proposal from what Trump was gunning for during the election. However, Trump ultimately refuted the Post’s claims, saying the story that he will pare back his tariff policy is wrong. Initially, stocks, bonds, gold and oil were bought on the reports but had pared from peaks as Trump denied the story. The Dollar saw huge selling initially to see DXY fall from a peak of 109.06 to a low of 107.74, before ultimately paring back above 108. The Dollar was a laggard in G10 FX but the Japanese Yen was the worst performer with Sterling, Canadian Dollar and EUR outperforming alongside the CAD helped by the resignation of PM Trudeau and the Euro supported by hot German inflation. T-notes peaked on the WaPo reports but pared on Trump’s denial and ahead of supply this week with USD 50 billion of corporate issuance expected while there were c. 20 IG deals announced on Monday. The 3 Year note auction ultimately came in soft overall, tailing by 1.2bps ahead of the 10 and 30 Year supply on Tuesday and Wednesday. Elsewhere, the focus turns to the ISM Services PMI on Tuesday and NFP on Friday. There were mixed updates on upcoming Tariffs from the Trump Presidency. Initially, the Washington Post, citing sources, said that Trump aides are looking at universal import duties, but only on certain sectors – where tariffs would be applied to every country, but only cover critical imports, a shift from his promises during the Presidential Campaign which was more aggressive on tariffs. The imports or industries that would face tariffs was not immediately clear, but preliminary discussions focused largely on several key sectors that Trump wants to bring back to the US, including the defence industrial supply chain (through tariffs on steel, iron, aluminium and copper); critical medical supplies (syringes, needles, vials and pharmaceutical materials), and energy production (batteries, rare earth minerals and even solar panels). However, Trump later posted on Truth Social denying that he is going to pare back his tariff policy. The Final S&P global services PMI was revised lower to 56.8 in December from 58.5 but reached a 33-month high following November’s reading of 56.1. Within the report, employment increased for the first time in five months as a renewed rise came as output growth strengthened. In addition, it was the sharpest growth of output and new orders since March 2022 while business confidence was at an 18-month high. There were further signs of cost pressures moderating as the pace of inflation eased for the third consecutive month to the weakest since last February. Within the release, it noted that expectations of faster growth in the new year are based on the anticipation of more business-friendly policies from the incoming Trump administration. Further on the new admin, Cos. suggested that client demand had improved, with customers more willing to commit to new projects following the outcome of the Election. It adds, “survey data point to another robust expansion of the economy in Q4 after the 3.1% GDP growth seen in Q3″, and that “with growth as strong as this, it’s understandable that policymakers are taking a more cautious approach to lowering interest rates”. Fed Governor Cook said the Fed can proceed more cautiously in cutting rates given labour market resilience and stickier inflation, noting that risks to inflation and employment are roughly in balance. She stated it will be appropriate to cut towards neutral over time, noting the labour market has cooled in the past year but it remains solid. She also expects inflation to move down gradually, but unevenly, to the 2% goal. Elsewhere, Oil closed 0.66% lower while Gold was flat.
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For anyone following my Platinum Service it made 184 points yesterday and is now down 189 points for January after closing December with a gain of 1997 points after closing November with a gain of 3049 points having finished October with a gain of 2179 points. September saw a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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