Big Week Ahead: Fed, ECB, Meta, and Tesla Take Centre Stage
Get ready for an action-packed week in the markets! With the Fed meeting, earnings from tech giants like Meta and Tesla, and central bank updates, here’s what you need to know.
Key Market Themes
Federal Reserve: Markets widely expect the Fed to hold rates steady at 4.25%-4.5%, based on the CME Group's FedWatch Tool. Investors will scrutinise the Fed's messaging, with Friday’s PCE inflation report and the first Q4 2024 U.S. GDP reading due this week.
European Central Bank and Bank of Canada: Both are expected to lean towards looser policies as economic pressures persist, adding to the week’s central bank-driven action.
Tech Earnings: Apple, Meta, Tesla, and Boeing headline earnings, with Meta already in focus for its ambitious AI investments and record share price performance.
Market Movers
3D Systems (DDD): Jumped 26.64% to $3.85 after a strong outlook on its healthcare 3D printing division.
Telefonaktiebolaget LM Ericsson (ERIC): Fell 14.38% to $7.62 following disappointing Q4 results and tariff concerns affecting supply chains.
Twilio (TWLO): Soared 20.13% to $136.23 on upbeat Q4 guidance and improved profit margin targets for 2027.
Gold: Slipped 0.50% to $2,757.25, but remains a cautious signal for investors amid economic uncertainty.
News Highlights
Trump’s Policy Ripple Effects
In a whirlwind start to his second term, President Trump enacted executive orders impacting energy prices, tariffs, and digital assets. While U.S. indices rallied for the second consecutive week, gold hit a three-month high, underscoring persistent investor caution.
Alphabet Hits a High Note
Alphabet’s shares closed at $200, marking their highest level since the 2022 stock split. Optimism surrounding Alphabet’s generative AI tools and its strong positioning in the tech sector were key growth drivers.
China’s AI Advancements
Chinese companies like Baidu and ByteDance are rapidly expanding AI applications. Baidu’s Wenku platform now integrates generative AI, and over 10% of Chinese firms are adopting AI in business operations—up from 8% six months ago.
Corporate Highlights
Novo Nordisk (NVO): Shares surged 8.47% to $87.97 after positive trial results for its weight-loss drug, amycretin, which showed 22% weight loss in 36 weeks. Analysts called it "best in class," though a commercial launch is years away.
Texas Instruments (TXN): Despite beating Q4 revenue expectations, shares dropped 7.52% to $185.52 after underwhelming Q1 guidance.
Twilio (TWLO): Continued its rally, climbing 20.13% on strong Q4 sales growth and improved long-term profit margin forecasts.
What to Watch
German IFO Index (January): Expected at 84.5 (previous: 84.7). Release: 10:00 AM GMT. Impact: EUR crosses.
US Chicago Fed National Activity Index (December): Forecast: 0.1 (previous: -0.12). Release: 2:30 PM GMT. Impact: USD crosses.
Earnings Spotlight:
AT&T: Analysts project a 6% EPS decline Y/Y, with revenue estimates at $31.94B. Despite strong past performance, concerns about future growth linger.
Meta: CEO Mark Zuckerberg unveiled a $60–65 billion capex plan for 2025, focused on AI development. Shares reached an all-time high of $647.49 following the announcement.
Tariffs on Colombian Imports: President Trump announced 25% tariffs on Colombian imports, potentially rising to 50% in a week. The move may escalate prices for coffee, oil, and flowers in the U.S., adding to trade tensions.
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