Good Morning!
On Tuesday, January 28, the S&P 500 closed at 6,067.70, up 0.67% from the previous trading session. The NASDAQ rebounded 2.03%, finishing at 19,733.59. The Dow Jones Industrial Average remained relatively flat, rising 0.2% to close at 44,850.35. Meanwhile, the Russell 2000 edged up 0.21%, ending the session at 2,288.86.
The Federal Reserve's Federal Open Market Committee (FOMC) is concluding its first meeting of 2025 today, January 29. The meeting began yesterday and will culminate with a policy statement release at 2 p.m. Eastern Time, followed by a press conference with Chair Jerome Powell at 2:30 p.m.
This meeting marks the first under President Donald Trump's new term. The Federal Reserve is expected to maintain the benchmark interest rate at its current range of 4.25% to 4.50%, focusing on evaluating economic indicators and the potential impacts of the administration's proposed tariffs.
The administration plans to implement a 25% tariff on imports from Mexico and Canada starting February 1, 2025, aiming to address issues related to illegal immigration and the opioid fentanyl trade. Additionally, a 10% tariff on Chinese goods is under consideration due to China's involvement in the fentanyl trade.
The Bank of Canada is considering further rate cuts to mitigate the economic impact of U.S. tariffs on Canadian exports.
These impending tariffs have already impacted the automotive industry. On January 28, General Motors (GM) reported strong fourth-quarter earnings, with a 55% increase in earnings per share to $1.92 and an 11% rise in revenue to $47.7 billion. Despite this, GM's shares fell nearly 9% due to uncertainties surrounding the new administration's trade and tariff policies. In response to potential U.S. tariffs, BMW's CEO has proposed that the European Union reduce its tariff on U.S. vehicle imports from 10% to 2.5%, aligning with current U.S. import tariffs.
Crypto Highlights
Bitcoin (BTC): Currently trading at $101,724, down 0.8% over the past 24 hours.
Ethereum (ETH): Down 2.41%, now trading at $3,097 per coin.
Solana (SOL): Slid 3.97%, currently trading at $226.93.
Ripple (XRP): Down 3.02% in the last 24 hours, now trading at $3.05 per coin.
Headlines
First FOMC Meeting of 2025: Fed Expected to Hold Rates Steady, Defying Trump’s Call for Cuts
The Federal Reserve is expected to keep interest rates unchanged in its decision on Wednesday, despite President Donald Trump’s public demand for immediate cuts. This move would pause three consecutive rate cuts made in late 2024 as inflation concerns persist.
Trump, speaking at the World Economic Forum last week, linked his push for lower interest rates to a potential drop in oil prices, suggesting that OPEC should reduce prices to ease inflation. However, Fed Chair Jerome Powell has repeatedly emphasized the central bank’s independence, stating that interest rate decisions are based on economic data rather than political pressure. The Fed’s current rate remains at 4.25%-4.5%, and Powell has indicated a cautious approach to future cuts, citing inflation uncertainty and potential policy shifts under Trump’s administration.
Trump Administration Stands Firm on Feb. 1 Tariffs for Canada, Mexico, and China
The White House confirmed Tuesday that President Donald Trump remains committed to imposing 25% tariffs on imports from Canada and Mexico starting February 1, unless the two nations take stronger action to curb illegal immigration and fentanyl trafficking. White House spokeswoman Karoline Leavitt also said Trump is still "very much considering" a 10% tariff on Chinese goods over Beijing's alleged role in the fentanyl trade.
The planned tariffs, which could disrupt the highly integrated North American economy, follow Trump’s recent trade pressure on Colombia, which capitulated to U.S. deportation demands after facing similar tariff threats. Analysts warn that levying tariffs on Canada and Mexico—America’s largest trading partners—could significantly impact industries like automotive manufacturing, where supply chains cross borders multiple times.
Bank of Canada Expected to Cut Rates Amid Trump Tariff Threats
The Bank of Canada is set to announce a quarter-point interest rate cut on Wednesday, lowering its key rate to 3% as economic uncertainty looms due to U.S. President Donald Trump’s impending tariffs on Canadian imports. A Bloomberg survey of economists anticipates the move, citing rising unemployment, slowing population growth, and trade tensions as key factors influencing the decision.
Trump has threatened to impose 25% tariffs on Canadian goods starting February 1 unless the country takes stronger action against illegal immigration and fentanyl smuggling. Experts warn that if these tariffs are enacted, Canada’s economy could face a recession, prompting further rate cuts. However, retaliatory tariffs by Canada could also lead to higher consumer prices, potentially complicating future monetary policy decisions.
Sam Altman Promises ‘Next Phase’ of OpenAI-Microsoft Alliance Will Surpass Expectations
OpenAI CEO Sam Altman reaffirmed the strength of his company’s partnership with Microsoft on Tuesday, posting a picture with Microsoft CEO Satya Nadella and stating that the “next phase” of their collaboration will be “much better than anyone is ready for.” Nadella responded enthusiastically, saying he was “looking forward to all that’s ahead.” Despite recent tensions—including Microsoft losing its exclusivity as OpenAI’s cloud provider and being excluded from Trump’s Stargate AI initiative—Altman’s post suggests a renewed commitment between the two tech giants.
Retail Investors Surge Into Nvidia Stock Amid DeepSeek AI Shock
Retail investors purchased a record $562.2 million worth of Nvidia shares on Monday, following a dramatic 17% drop in the stock’s value after concerns over Chinese AI startup DeepSeek’s low-cost model rattled markets. This marks the largest single-day retail buy-in of Nvidia shares since records began in 2014, according to Vanda Research.
Despite the sell-off that wiped $593 billion from Nvidia’s market capitalization, retail investors have remained bullish, having acquired approximately $7.3 billion in shares in the last quarter.
Sean Duffy Sworn In as Transportation Secretary, Moves to Roll Back Fuel Standards
Sean Duffy was sworn in as the 20th U.S. Secretary of Transportation on Tuesday, taking the oath of office from Supreme Court Justice Clarence Thomas. Immediately upon assuming office, Duffy signed a memorandum directing the Department of Transportation to begin the process of rescinding Corporate Average Fuel Economy (CAFE) standards, which he argued have driven up vehicle prices and limited consumer choice.
Duffy's move aligns with President Trump’s executive orders to roll back environmental regulations and boost domestic energy production. The secretary criticized current fuel economy standards, which require cars to meet 50.4 miles per gallon by 2031, for increasing vehicle costs to nearly $48,000 on average. By eliminating these regulations, Duffy aims to lower car prices and strengthen the U.S. auto industry, marking a significant policy shift away from the Biden administration’s push for stricter fuel efficiency and electric vehicle adoption.
Trump Administration Offers Federal Buyouts Amid Workforce Overhaul
The Trump administration has begun offering buyouts to federal employees who do not want to return to in-person work, according to a memo from the Office of Personnel Management (OPM). Employees who accept the offer must resign by February 6 and will receive severance pay through September 30. The initiative, which exempts key roles like postal workers, national security personnel, and immigration officials, is part of a broader effort to streamline the federal workforce, including potential furloughs and reclassifications to at-will status.
BlackRock Increases Bitcoin Holdings to 2.7% of Total Supply
BlackRock has added another $1 billion worth of Bitcoin (BTC) to its holdings, now controlling 2.7% of the total BTC supply, according to blockchain analytics firm Arkham. The asset management giant currently holds 572,616 BTC, valued at approximately $58.43 billion.
The firm’s aggressive accumulation comes as CEO Larry Fink predicts that Bitcoin could reach $700,000 if sovereign wealth funds begin allocating even a small percentage of their portfolios to the cryptocurrency. Speaking at the World Economic Forum in Davos, Fink highlighted Bitcoin’s potential as a hedge against inflation, economic instability, and political uncertainty, fueling speculation about further institutional adoption.
EU Prepares Gradual Ban on Russian Aluminum Imports
The European Union is set to propose a phased ban on Russian aluminum imports as part of a broader sanctions package, pushing aluminum prices higher in London. According to sources, the plan would allow European buyers to import up to 275,000 metric tons of Russian aluminum under a quota system for one year before a full ban takes effect.
The EU purchased approximately 320,000 tons of unwrought aluminum from Russia in the first 11 months of 2024, highlighting its dependence on the metal. The proposed restrictions aim to curb revenue flows to Moscow while giving European industries time to adjust.
Poland and Canada Sign Nuclear Energy Cooperation Agreement
Poland and Canada have signed an agreement to deepen cooperation on nuclear energy, providing a legal framework to support Poland’s nuclear ambitions. Polish Prime Minister Donald Tusk emphasized Canada's key role in the development of Poland’s first nuclear power plant, as Westinghouse Electric—owned by Canadian companies—has been selected for the project. Additionally, Tusk highlighted the importance of collaboration on small modular reactors (SMRs), with Poland planning to deploy 24 SMRs across six sites by 2030.
Starbucks Shakes Up Leadership, Adds Former Taco Bell Executives
Starbucks has announced a major leadership shake-up, bringing in two former Taco Bell executives as part of CEO Brian Niccol’s restructuring strategy. The company is splitting its North American president role into two positions, with Meredith Sandland set to become chief store development officer and Mike Grams taking over as North America chief stores officer. Current North American president Sara Trilling will depart after more than two decades with the company.
The changes come as Starbucks implements its "Back to Starbucks" plan, which focuses on reducing service times, enhancing store ambiance, and streamlining the menu. Niccol, who previously led Taco Bell and Chipotle, has been recruiting former colleagues to drive the turnaround. The company announced the shake-up just ahead of reporting stronger-than-expected fiscal first-quarter earnings, despite declining same-store sales for the fourth consecutive quarter.
BMW CEO Calls for Equal Tariffs on Cars in EU and US
BMW CEO Oliver Zipse has proposed a unified 2.5% tariff for cars traded between the U.S. and the EU, advocating for fairer trade policies amid escalating tensions. Speaking at the WELT-Wirtschaftsgipfe conference in Berlin, Zipse criticized the current disparity, where U.S.-made cars face a 10% tariff in Europe while European cars imported to the U.S. incur only a 2.5% duty. He argued that reducing trade barriers would benefit consumers by lowering costs and fostering innovation.
This comes as BMW challenges EU tariffs on Chinese-made electric vehicles, which have significantly impacted its iX3 and new MINI models. The automaker, hit with a 20.7% tariff, has filed a lawsuit with the European Court of Justice, joining Chinese manufacturers in pushing back against what Zipse calls "shadowy protective functions that harm ourselves."
Ubisoft Closes Leamington Studio, Lays Off 185 Employees
Ubisoft has announced the permanent closure of its Leamington studio in the UK and job cuts affecting 185 employees as part of a wider restructuring effort. The layoffs will also impact teams in Düsseldorf, Stockholm, and Newcastle-based Ubisoft Reflections, though a small number of Leamington staff will transition to remote contracts.
The restructuring comes amid financial struggles following disappointing releases like Star Wars Outlaws and XDefiant, along with delays to Assassin’s Creed Shadows. Ubisoft, which has been reducing its workforce since 2022, is now reportedly exploring investment options, including potential privatization with backing from Tencent.
Yesterday's Earnings
RTX Corp (RTX): Actual EPS: $1.54 (Beat by 11.59%), Expected EPS: $1.38, Actual Revenue: $21.62B (Beat by 5.31%), Expected Revenue: $20.53B, Market Cap: $170.84B
Stryker (SYK): Actual EPS: $4.01 (Beat by 3.62%), Expected EPS: $3.87, Actual Revenue: $6.40B (Beat by 0.63%), Expected Revenue: $6.36B, Market Cap: $150.64B
Boeing (BA): Actual EPS: -$5.90 (Miss by 239.08%), Expected EPS: -$1.74, Actual Revenue: $15.24B (Miss by 10.58%), Expected Revenue: $17.04B, Market Cap: $133.01B
Starbucks (SBUX): Actual EPS: $0.69 (Beat by 1.47%), Expected EPS: $0.68, Actual Revenue: $9.40B (Beat by 0.53%), Expected Revenue: $9.35B, Market Cap: $114.06B
Chubb (CB): Actual EPS: $6.02 (Beat by 12.73%), Expected EPS: $5.34, Actual Revenue: $12.60B (Beat by 2.77%), Expected Revenue: $12.26B, Market Cap: $109.75B
Lockheed Martin (LMT): Actual EPS: $7.67 (Beat by 16.57%), Expected EPS: $6.58, Actual Revenue: $18.60B (Miss by 1.27%), Expected Revenue: $18.84B, Market Cap: $108.43B
Royal Caribbean Cruises (RCL): Actual EPS: $1.63 (Beat by 9.40%), Expected EPS: $1.49, Actual Revenue: $3.76B (Met Expectations), Expected Revenue: $3.76B, Market Cap: $71.33B
PACCAR (PCAR): Actual EPS: $1.66 (Miss by 2.35%), Expected EPS: $1.70, Actual Revenue: $7.91B (Beat by 4.49%), Expected Revenue: $7.57B, Market Cap: $56.23B
General Motors (GM): Actual EPS: $1.92 (Beat by 11.63%), Expected EPS: $1.72, Actual Revenue: $47.70B (Beat by 11.64%), Expected Revenue: $42.73B, Market Cap: $55.02B
Kimberly-Clark (KMB): Actual EPS: $1.50 (Miss by 0.66%), Expected EPS: $1.51, Actual Revenue: $4.93B (Beat by 1.44%), Expected Revenue: $4.86B, Market Cap: $43.17B
Sysco (SYY): Actual EPS: $0.93 (Beat by 1.09%), Expected EPS: $0.92, Actual Revenue: $20.20B (Beat by 0.45%), Expected Revenue: $20.11B, Market Cap: $35.51B
Synchrony Financial (SYF): Actual EPS: $1.91 (Beat by 1.06%), Expected EPS: $1.89, Actual Revenue: $3.80B (Miss by 1.04%), Expected Revenue: $3.84B, Market Cap: $25.95B
NVR (NVR): Actual EPS: $139.93 (Beat by 7.07%), Expected EPS: $130.69, Actual Revenue: $2.85B (Beat by 1.06%), Expected Revenue: $2.82B, Market Cap: $24.51B
Packaging Corporation of America (PKG): Actual EPS: $2.47 (Miss by 1.59%), Expected EPS: $2.51, Actual Revenue: $2.15B (Beat by 1.42%), Expected Revenue: $2.12B, Market Cap: $21.26B
F5 Networks (FFIV): Actual EPS: $3.84 (Beat by 14.29%), Expected EPS: $3.36, Actual Revenue: $766M (Beat by 7.07%), Expected Revenue: $715.45M, Market Cap: $15.65B
Boston Properties (BXP): Actual EPS: -$1.45 (Miss by 402.29%), Expected EPS: $0.48, Actual Revenue: $858.60M (Beat by 2.60%), Expected Revenue: $836.85M, Market Cap: $11.57B
Invesco (IVZ): Actual EPS: $0.52 (Beat by 8.33%), Expected EPS: $0.48, Actual Revenue: $1.16B (Met Expectations), Expected Revenue: $1.16B, Market Cap: $8.69B
Qorvo Inc (QRVO): Actual EPS: $1.61 (Beat by 33.06%), Expected EPS: $1.21, Actual Revenue: $916.30M (Beat by 1.51%), Expected Revenue: $902.60M, Market Cap: $8.11B
Earnings Today
Microsoft (MSFT): Actual EPS: --, Expected EPS: $3.13, Actual Revenue: --, Expected Revenue: $68.92B, Market Cap: $3.32T
Meta Platforms (META): Actual EPS: --, Expected EPS: $6.73, Actual Revenue: --, Expected Revenue: $47.03B, Market Cap: $1.7T
Tesla (TSLA): Actual EPS: --, Expected EPS: $0.7614, Actual Revenue: --, Expected Revenue: $27.23B, Market Cap: $1.28T
ASML ADR (ASML): Actual EPS: $6.85 (Beat by 1.78%), Expected EPS: $6.73, Actual Revenue: $9.26B (Beat by 2.21%), Expected Revenue: $9.06B, Market Cap: $284.10B
T-Mobile US (TMUS): Actual EPS: $2.57 (Beat by 12.72%), Expected EPS: $2.28, Actual Revenue: $21.87B (Beat by 2.34%), Expected Revenue: $21.37B, Market Cap: $256.63B
ServiceNow Inc (NOW): Actual EPS: --, Expected EPS: $3.65, Actual Revenue: --, Expected Revenue: $2.96B, Market Cap: $241.47B
IBM (IBM): Actual EPS: --, Expected EPS: $3.80, Actual Revenue: --, Expected Revenue: $17.62B, Market Cap: $208.66B
Danaher (DHR): Actual EPS: $2.14 (Miss by 0.47%), Expected EPS: $2.15, Actual Revenue: $6.54B (Beat by 2.34%), Expected Revenue: $6.39B, Market Cap: $179.01B
Progressive (PGR): Actual EPS: $4.01 (Beat by 13.59%), Expected EPS: $3.53, Actual Revenue: $19.14B (Beat by 5.52%), Expected Revenue: $18.14B, Market Cap: $143.55B
ADP (ADP): Actual EPS: $2.35 (Beat by 2.17%), Expected EPS: $2.30, Actual Revenue: $5.05B (Beat by 1.61%), Expected Revenue: $4.97B, Market Cap: $121.55B
Lam Research (LRCX): Actual EPS: --, Expected EPS: $0.8769, Actual Revenue: --, Expected Revenue: $4.31B, Market Cap: $95.87B
Waste Management (WM): Actual EPS: --, Expected EPS: $1.82, Actual Revenue: --, Expected Revenue: $5.67B, Market Cap: $85.75B
General Dynamics (GD): Actual EPS: $4.15 (Miss by 3.49%), Expected EPS: $4.30, Actual Revenue: $13.34B (Beat by 0.91%), Expected Revenue: $13.22B, Market Cap: $72.08B
Ameriprise Financial (AMP): Actual EPS: --, Expected EPS: $9.17, Actual Revenue: --, Expected Revenue: $4.50B, Market Cap: $55.48B
United Rentals (URI): Actual EPS: --, Expected EPS: $11.75, Actual Revenue: --, Expected Revenue: $3.93B, Market Cap: $50.33B
MSCI (MSCI): Actual EPS: $4.18 (Beat by 5.56%), Expected EPS: $3.96, Actual Revenue: $743.51M (Miss by 0.41%), Expected Revenue: $746.56M, Market Cap: $49.24B
Nasdaq Inc (NDAQ): Actual EPS: $0.76 (Beat by 2.70%), Expected EPS: $0.74, Actual Revenue: $1.23B (Beat by 0.82%), Expected Revenue: $1.22B, Market Cap: $46.66B
Hess (HES): Actual EPS: $1.63 (Beat by 9.40%), Expected EPS: $1.49, Actual Revenue: $3.23B (Beat by 9.12%), Expected Revenue: $2.96B, Market Cap: $44.54B
Corning (GLW): Actual EPS: $0.57 (Beat by 1.79%), Expected EPS: $0.56, Actual Revenue: $3.50B (Miss by 6.67%), Expected Revenue: $3.75B, Market Cap: $43.86B
Otis Worldwide (OTIS): Actual EPS: $0.93 (Miss by 2.11%), Expected EPS: $0.95, Actual Revenue: $3.68B (Beat by 0.27%), Expected Revenue: $3.67B, Market Cap: $38.3B
Raymond James Financial (RJF): Actual EPS: --, Expected EPS: $2.62, Actual Revenue: --, Expected Revenue: $3.46B, Market Cap: $36.89B
Rockwell Automation (ROK): Actual EPS: --, Expected EPS: $1.57, Actual Revenue: --, Expected Revenue: $1.89B, Market Cap: $31.9B
Las Vegas Sands (LVS): Actual EPS: --, Expected EPS: $0.5828, Actual Revenue: --, Expected Revenue: $2.91B, Market Cap: $31.34B
Western Digital (WDC): Actual EPS: --, Expected EPS: $1.88, Actual Revenue: --, Expected Revenue: $4.28B, Market Cap: $21.73B
Teradyne (TER): Actual EPS: --, Expected EPS: $0.91, Actual Revenue: --, Expected Revenue: $740.47M, Market Cap: $19.86B
CH Robinson (CHRW): Actual EPS: --, Expected EPS: $1.11, Actual Revenue: --, Expected Revenue: $4.43B, Market Cap: $12.98B
