Good Morning!
On the first trading day of 2025, the S&P 500 closed at 5,868, up 0.58%, while the NASDAQ recorded a decline of 0.63% to 19,280. The Dow Jones Industrial Average retreated to 42,392, down 0.61%. The Russell 2000 was down 0.43%, closing the day at 2,230.
Crypto Highlights
Bitcoin (BTC): Currently trading at $97,178, up 0.7% over the past 24 hours.
Ethereum (ETH): Rose to $3,552 per coin, up 1.14%.
Solana (SOL): Gained 2.11% in the last day, currently at $217.
Ripple (XRP): Rose 2.44% in the last 24 hours at $2.44 per coin.
XRP overtook Tether (USDT) making it the third-largest cryptocurrency by market cap.
Upcoming Earnings
There are no significant earnings announcements scheduled for today.
Headlines
Wholesale Gas Prices Hit 14-Month High as Russian Supplies Halt
The wholesale price of gas surged to its highest level since October 2023 after Russian gas flows to Europe via Ukraine ceased on New Year’s Day. The end of a longstanding transit agreement between the two nations has left traders bracing for accelerated withdrawals from European storage facilities, which are already depleting at their fastest rate since 2021. Benchmark prices for February delivery in the Netherlands rose by as much as 4.3% before settling 1.9% higher at €49.83 per megawatt-hour.
Russian Gas Shutdown Forces Industry Closures in Transnistria
The cessation of Russian gas supplies to Transnistria, a breakaway region of Moldova, has led to the shutdown of nearly all industrial activity, with only food producers remaining operational. This crisis follows Ukraine’s decision to end a transit agreement that had allowed Russian gas to flow through its territory, leaving Transnistria without alternatives. The region's leadership warned of potentially irreversible damage to its economy, while residents face energy shortages, resorting to coal power and makeshift heating measures.
Moldova, seeking to reduce reliance on Russian energy, has offered to assist Transnistria with market-priced gas purchases, but the region has historically received free supplies from Gazprom. Ukrainian President Volodymyr Zelenskyy hailed the move as a defeat for Moscow, while Russian officials blamed the U.S. and European governments for economic fallout.
Stellantis Italy Output Falls 37% in 2024, Car Production Hits 68-Year Low
Vehicle production by Stellantis in Italy dropped 37% in 2024, with total output falling to 475,090 vehicles, the lowest since 1956. Car manufacturing saw the steepest decline, plummeting 46%, while commercial vehicle production dropped 17%, according to union figures. The decline reflects weak demand, regulatory uncertainty, and growing competition from China, particularly in the electric vehicle market.
To address overcapacity, Stellantis has relied heavily on state-funded temporary layoffs and announced plans in December to boost production starting in 2026 with the introduction of new models. The company also pledged to invest €2 billion in 2025 to revitalize its Italian plants, including the Mirafiori facility in Turin, where production fell 70% last year. However, unions remain concerned, particularly about the future of Maserati, whose production dropped by 79%. Labor organizations plan to protest in Brussels next month, urging the European Union to reconsider 2025 carbon emissions reduction targets to support the struggling auto industry.
Mortgage Rates Near 7% to Close Out 2024, Challenging Prospective Homebuyers
Mortgage rates rose again in the final week of 2024, with the 30-year fixed-rate mortgage averaging 6.91%, according to Freddie Mac. This marks the highest rate in nearly six months and a significant increase from 6.85% the previous week and 6.62% a year ago. The rise comes despite three Federal Reserve interest rate cuts in 2024, as mortgage rates are more closely tied to 10-year U.S. Treasury yields, which have been climbing due to the Fed’s cautious outlook and concerns over the growing government debt burden.
Elevated mortgage rates and rising home prices have kept many buyers sidelined. Mortgage applications dropped 21.9% in the last week of December, according to the Mortgage Bankers Association, reflecting persistent affordability challenges. The median existing-home sales price reached $406,100 in November, up from $274,000 pre-pandemic. While older, wealthier Americans have dominated the market, younger and less affluent buyers remain largely excluded, leaving the housing market virtually unchanged from a year ago.
U.S. Unemployment Claims Drop to 211,000, Lowest Since March
The number of Americans filing for unemployment benefits fell to 211,000 last week, marking the lowest level since March, according to the Labor Department. The four-week average, which smooths out fluctuations, also declined to 223,250. Continuing claims dropped by 52,000 to 1.84 million, the lowest since September, suggesting that job security remains robust despite a cooling labor market.
While job growth has slowed from the rapid pace of 2021-2023, employers still added an average of 180,000 jobs per month in 2024. The unemployment rate stands at 4.2%, up from its historic low of 3.4% in 2023.
Tesla Stock Drops After Q4 Delivery Miss and First Yearly Sales Decline
Tesla stock slid over 6% on Thursday following a disappointing Q4 delivery report and the company’s first annual sales decline. Tesla delivered 495,930 vehicles in the fourth quarter, falling short of analysts’ expectations of 510,400. For 2024, total deliveries reached 1.78 million, slightly below the 1.8 million achieved in 2023, marking a year-over-year decline. The miss reflects increasing competition, and shifting demand.
Court Strikes Down US Net Neutrality Rules
A U.S. court has rejected the Biden administration's attempt to reinstate net neutrality rules, ruling that the federal government lacks the authority to regulate internet providers as utilities. This decision marks a significant setback for advocates of an open internet, who have long supported protections requiring providers like AT&T to treat all legal content equally.
The net neutrality rules, initially implemented under President Barack Obama, were repealed during Donald Trump’s first term. The court's decision comes as Trump prepares for a second term, likely ending years of legal battles over the issue. The judges cited a recent Supreme Court ruling limiting federal agencies' authority, stating this precedent justified rejecting the Federal Communications Commission's (FCC) interpretation of its regulatory powers.
TSMC Commences Small-Scale 2nm Production at Baoshan Plant and Launches Advanced N2P Variant
TSMC has begun a small-scale production run of 5,000 wafers per month on its 2nm process at the Baoshan facility, following a successful trial that achieved a 60% yield. With two 2nm production bases, Baoshan and Kaohsiung, the company plans to gradually scale up to meet demand from major clients like Apple, Qualcomm, and MediaTek. Additionally, TSMC has introduced the N2P variant, an advanced iteration of the 2nm node, which is expected to enter mass production in 2026 after the first-generation 2nm process ramps up in 2025.
Though current production is limited, TSMC aims to reach a capacity of 80,000 wafers per month by 2026. Rising costs, including a projected wafer price of $30,000, remain a concern for clients. To address this, TSMC will launch a cost-saving service called CyberShuttle in April, allowing companies to test chips on shared wafers.
NVIDIA Is Reportedly Focused Towards “Custom Chip” Manufacturing, Recruiting Top Taiwanese Talent
NVIDIA is reportedly focusing on custom chip manufacturing, with plans to develop ASIC (Application-Specific Integrated Circuit) solutions at a proposed Taiwan R&D center. This move comes as major tech firms like Google, Amazon, and Apple increasingly invest in tailor-made AI chips to reduce reliance on external providers. NVIDIA has ramped up efforts to recruit top Taiwanese engineering talent, competing with companies like MediaTek to secure a skilled workforce and strengthen its position in the custom chip market.
Beyond AI, NVIDIA’s custom chip ambitions may extend to the AI PC segment through rumored collaborations with MediaTek, building on its experience with the Tegra SoC in devices like the Nintendo Switch. By diversifying its offerings and fostering local talent, NVIDIA aims to maintain its market dominance and counter the growing trend of in-house chip development by competitors.
China Achieves Breakthrough in Satellite-to-Ground Laser Communication, Surpassing Starlink
China has claimed a significant advancement in satellite-to-ground laser communication technology, achieving data transmission speeds of 100Gbps—1,000 times faster than the average 5G download speed. This milestone, reached by Chang Guang Satellite Technology’s Jilin-1 satellite constellation, positions China ahead of Elon Musk's Starlink, which has yet to deploy laser satellite-to-ground communication on a large scale. The compact laser communication terminals, capable of transmitting high-speed data between satellites and to Earth, were integrated into satellites launched in 2023 and are part of a broader plan to network 300 satellites by 2027.
XRP Officially Decouples From Bitcoin, Top Trader Highlights 1,000% Potential
XRP has started the year with remarkable price action, decoupling from Bitcoin (BTC) and surging over 10% against the leading cryptocurrency. This follows an impressive 320% growth against BTC in November, with recent corrections now appearing to be part of a sustained upward trend.
