Key Stories from the past week: All-out action-packed week

Key Stories from the past week: All-out action-packed week

Macro
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Markets were frazzled early in the week on the DeepSeek story. Saxo saw a surge of trading activity in Nvidia as the company lost $465b of market cap in one day - a strong skew to long positions as clients looked to “buy the dip”. Activity also spiked in US tech names midweek as Microsoft, Meta, Tesla & Apple all reported earnings. Meanwhile, markets saw multiple central bank meetings, gold & silver prices soaring, a cracking January for European indices, and ongoing tariff action from US President Trump. More below on this week’s key stories.


China’s open-source AI model makes its impact
The story of the effectiveness and efficiency of Chinese AI model Deepseek caused a significant volatility event in equity markets. Monday saw the S&P 500 -1.5% and Nasdaq -3%, driven by AI-sector turmoil. Nvidia collapsed 17%, while later assessment turned more bullish on the development.
The Deepseek winners emerge

Major corporate earnings
There was a deluge of earnings updates from many of the world’s largest companies. Microsoft, Tesla, Meta, Apple all reported while in Europe ASML jumped 5.8% after beating estimates, Schneider, Siemens, and SAP led tech gains. LVMH sank 5% on weak H2 results.
Tech titans’ earnings - A mixed bag for investors

Central bank policy
The US Federal Reserve kept the policy rate unchanged at the 4.25-4.50% range as expected and indicated it was in no rush to make further rate cuts. The Bank of Canada sliced a further 25bps from its policy rate dropping it to 3.00% with Governor Macklem concerned over tariffs. The ECB cut by 25bps as expected, taking the deposit rate to 2.75%. The market has fully priced 75bps of further cuts by December.
Central banks are a sideshow when on Tariff watch

Will we see the first major US Tariffs?
Trump is steaming towards implementation of tariffs in Mexico, Canada and China citing his 1st Feb deadline while aides aim to limit the potential damage of 25% tariffs on $900bn of goods. USD firmer heading into the weekend.
Trump aides hunt for 11th-hour deal to dial back Canada-Mexico Tariffs


Next week we move into February and important earnings continue with the likes of Alphabet on Tuesday, Novo Nordisk on Wednesday, Amazon on Thursday, and many more throughout the week. For data releases, the US labour market will in focus with both JOLTS (Tues) and NFP (Fri). And the key economic event to watch in the UK will be the BoE policy decision on Thursday.

Quarterly Outlook

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  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Chief Macro Strategist

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Chief Macro Strategist

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
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