Good Morning!
On January 7, the S&P 500 closed at 5,909, down 1.11%, while the NASDAQ slid 1.89% to finish at 19,489. The Dow Jones Industrial Average ended at 42,528, down 0.42%. The Russell 2000 fell 0.74%, closing the day at 2,249.
President Joe Biden has declared this Thursday, January 9, as a national day of mourning to honor the late Jimmy Carter, the 39th U.S. president, who passed away on December 29 at the age of 100. The official state funeral will be held at the Washington National Cathedral in Washington, D.C., following days of tributes in Carter’s home state of Georgia. Biden also ordered flags to be flown at half-staff for 30 days in recognition of Carter's legacy.
The U.S. Postal Service will close all post offices and suspend mail delivery. Federal offices will also be closed, although some essential federal workers may still be required to work. Similarly, the Supreme Court building will close.
The New York Stock Exchange and Nasdaq will suspend trading for the day, while bond markets will operate on reduced hours, closing early at 2 p.m. Eastern Time. However, most banks and private businesses are not mandated to close and are expected to remain operational, with customers advised to check specific branch hours.
Crypto Highlights
Bitcoin (BTC): Currently trading at $95,554, down 5.46% over the past 24 hours.
Ethereum (ETH): Slid 7.74%, now trading at $3,335 per coin.
Solana (SOL): Down 7.31% in the last day, currently at $197.78.
Ripple (XRP): Down 4.67% over the last 24 hours, currently at $2.32 per coin.
Upcoming Earnings
There are no significant earnings announcements scheduled for today.
Headlines
Trump Declines to Rule Out Military Actions on Panama Canal and Greenland
Incoming U.S. President Donald Trump has refused to rule out using military force to take control of the Panama Canal and Greenland, citing economic security as his justification. During a press conference at Mar-a-Lago, Trump claimed the Panama Canal, handed over to Panama in 1999, is “being operated by China” and described the strategic waterway as vital to U.S. interests. Regarding Greenland, an autonomous Danish territory, Trump threatened economic retaliation against Denmark should it resist his territorial ambitions, including imposing high tariffs.
Trump’s remarks have sparked global concerns, drawing strong rebukes from international leaders. Panama’s president, José Raúl Mulino, dismissed Trump’s demands, affirming the canal’s sovereignty, while Denmark’s Prime Minister Mette Frederiksen reiterated that Greenland “is not for sale” and its future rests with its people.
U.S. Job Openings Rise Unexpectedly in November, Indicating Resilient Labor Market
In November, U.S. job openings climbed unexpectedly to 8.1 million, the highest since February, up from 7.8 million in October. Despite the overall cooling of the labor market, openings remain above pre-pandemic levels, reflecting resilience in certain sectors. Professional and business services, along with finance and insurance, saw increased job opportunities, while the information sector experienced declines. Meanwhile, layoffs edged higher, and fewer workers quit their jobs, suggesting diminished confidence in securing better employment elsewhere.
The labor market has cooled from the intense hiring of previous years, with monthly job gains averaging 180,000 in 2024 compared to the record-breaking pace of 2021. Economists anticipate a moderate addition of 157,000 jobs in December, keeping unemployment steady at 4.2%. The Federal Reserve remains attentive to labor market trends as it navigates interest rate adjustments to manage inflation, which has eased from pandemic highs but remains above the 2% target.
Southern California Wildfires Rage, Forcing Thousands to Evacuate
Wildfires in Southern California, driven by fierce winds, have devastated neighborhoods and forced the evacuation of tens of thousands of residents. The Pacific Palisades fire has burned nearly 3,000 acres, destroyed numerous homes, and displaced at least 30,000 people, with officials warning of further losses as the fire remains uncontained. Another blaze near Pasadena in Eaton Canyon created its own firestorm, consuming homes, a nursing facility, and a Jewish temple, prompting additional evacuations.
Austrian Foreign Minister Alexander Schallenberg Named Interim Leader Amid Political Transition
Austrian Foreign Minister Alexander Schallenberg has been appointed as the country’s interim leader following the resignation of Chancellor Karl Nehammer. Schallenberg, 55, will manage the chancellery while the far-right Freedom Party, led by Herbert Kickl, works to form a coalition government. This marks Schallenberg’s second brief stint as Austria’s leader, having served as chancellor for less than two months in 2021. Nehammer announced his resignation after failing to form a coalition without the Freedom Party, with plans to step down on Friday.
U.S. Envoy Accuses Russia of Funding Both Sides in Sudan’s Civil War
U.S. Ambassador to the United Nations Linda Thomas-Greenfield has accused Russia of financing both sides of Sudan's 2023 civil war to advance its political and economic interests. Speaking on January 6, she condemned Russia’s actions, highlighting its involvement in Sudan’s gold trade and suggesting that this cooperation undermines Sudan’s long-term stability. A U.S. mission spokesperson emphasized that such activities, including illicit gold trading and military support, exacerbate the conflict and impede peace efforts. The accusations come amid Russia's veto of a UN resolution in November urging an immediate ceasefire and humanitarian aid access, leaving Sudan further embroiled in chaos.
The Sudanese conflict, which began in April 2023, has caused immense human suffering, with nearly 15,000 lives lost and over 8.2 million displaced. The crisis, now the world’s most severe displacement situation, continues as international efforts to mediate have faltered.
U.S. Sanctions Senior Hungarian Official for Alleged Corruption
The U.S. Department of the Treasury sanctioned Antal Rogán, a top Hungarian government official and close ally of Prime Minister Viktor Orbán, for alleged corruption while in office. Rogán, who oversees government communications and Hungary's secret services, is accused of leveraging his position to broker lucrative deals favoring government-aligned business figures. U.S. Ambassador to Hungary David Pressman described Rogán as a central figure in Hungary’s “kleptocratic ecosystem,” emphasizing that corruption within the Hungarian government has diverted significant public funds into private hands. The sanctions reflect U.S. concerns over Hungary’s drift from democratic principles and alignment with Russia and China.
Volkswagen Management Agrees to €300 Million Pay Cut Amid Union Pressure
Volkswagen’s management will take pay cuts totaling over €300 million by 2030 as part of a cost-saving plan negotiated with unions, the company announced Wednesday. The decision follows a historic agreement reached in December to avoid near-term plant closures while addressing the company’s financial challenges. Board members will face the steepest salary reductions compared to other management levels and the general workforce, according to Gunnar Kilian, VW's human resources board member, though further details were not disclosed.
The broader agreement includes €15 billion in annual savings, with €1.5 billion coming from labor costs. Staffing numbers are set to decrease by 35,000 employees by 2030, alongside a reduction of production capacity by 734,000 units at German factories. Union leaders, who had been in talks with VW since September, hailed the deal as a “Christmas miracle” but urged management to share accountability for the company’s struggles, which include declining sales and competition from cheaper Chinese models.
TSMC Expands Global Production Amid Geopolitical Pressures
Taiwan Semiconductor Manufacturing Co. (TSMC) is expanding globally, with full-scale production underway in Japan and new facilities planned in the U.S. and Germany. Following the December launch of its Kumamoto plant, TSMC will begin 4-nm chip production in Arizona this year and open a Dresden plant by 2027. These moves are part of Taiwan’s “silicon shield” strategy, leveraging its semiconductor dominance to deter Chinese aggression while addressing global supply chain vulnerabilities exposed during the COVID-19 pandemic. Subsidies from Japan, the U.S., and Germany have spurred TSMC’s international growth.
However, challenges loom as incoming U.S. President Donald Trump has criticized Taiwan’s semiconductor dominance, raising fears of tariffs on Taiwan-made chips and pressure to transfer technologies to the U.S. Experts warn such measures could inflate production costs and strain TSMC’s neutral stance amid escalating U.S.-China tensions.
Germany’s Ambition to Become a Chip Superpower Faces Major Setbacks
Chancellor Olaf Scholz’s vision to transform Germany into a semiconductor powerhouse is faltering, with setbacks undermining plans for large-scale projects. Efforts to attract global chipmakers, including Taiwan Semiconductor Manufacturing Company (TSMC), were initially bolstered by significant government subsidies. However, logistical challenges and delays—such as those affecting Intel’s stalled Dresden project—have cast doubt on Germany’s ability to establish itself as a key player in the global chip race.
The semiconductor push was intended to secure Germany’s economic future and reduce Europe’s dependency on Asian suppliers amid intensifying geopolitical tensions. Yet, issues like escalating costs, regulatory hurdles, and fierce competition from the U.S. and Asia threaten to derail these ambitions. While Scholz initially gained momentum by securing high-profile partnerships, Germany’s struggle to deliver on these promises risks leaving Europe’s largest economy on the sidelines in the global chip wars.
ASML CEO to Lead Delegation to TSMC for Strategic Talks on Advanced Chipmaking
ASML CEO Christophe Fouquet will lead a high-level delegation to Taiwan next week for crucial meetings with TSMC executives, including Chairman and CEO C.C. Wei. The discussions, ahead of TSMC’s quarterly earnings release on January 16, are expected to focus on the evolving geopolitical landscape, particularly under incoming U.S. President Donald Trump, and TSMC's roadmap for advanced process technologies. ASML aims to strengthen ties with TSMC, its most critical client, and encourage accelerated orders for its High NA EUV lithography equipment, priced at $380 million per unit.
ASML's dependence on TSMC has grown amid export restrictions to China and slower advancements at competitors like Samsung and Intel. With AI driving demand for cutting-edge lithography tools, ASML projects revenue growth of 8-14% annually over the next five years. The company's delegation seeks to ensure alignment on TSMC’s adoption of High NA EUV technology, potentially starting with the enhanced A14P process.
AWS to Invest $11 Billion in Georgia for Data Center Expansion
Amazon Web Services (AWS) announced plans to invest "at least" $11 billion in Georgia to expand its data center infrastructure, supporting cloud computing and AI technologies. The investment is expected to create approximately 550 jobs and underscores Georgia's growing appeal as a hub for tech infrastructure. AWS praised state and local leaders for fostering an environment conducive to innovation, stating the investment will help keep Georgia "at the leading edge of the digital age."
BMW Unveils Smartphone-Inspired Dashboard Interface for 'Neue Klasse' Vehicles
At CES 2025, BMW introduced its new Panoramic iDrive interface, set to debut in its Neue Klasse vehicles later this year. The interface, powered by BMW’s Operating System X, draws heavily from smartphone design, featuring customizable widgets and a user-friendly layout. It includes three displays: a slightly hexagonal touch screen to the right of the steering wheel, a panoramic dashboard-wide display for status indicators, and a heads-up display projecting essential information onto the windshield.
Meta Ends Fact-Checking Program, Shifts to Community-Driven Moderation System
Meta CEO Mark Zuckerberg announced significant changes to the company’s content moderation policies, including the termination of its fact-checking program in favor of a community-driven "Community Notes" system, similar to that of X (formerly Twitter). The changes, impacting Facebook, Instagram, and Threads, are aimed at simplifying policies, reducing errors, and restoring free speech. Zuckerberg acknowledged mistakes in Meta's previous moderation systems, which he said led to excessive censorship. The company will now focus on moderating high-severity content while relying more on user reports for less critical violations.
