A daily market update from FS Insight — what you need to know ahead of opening bell.
“Reading good books implants good ideas in the mind, develops good aspirations, and leads to the cultivation of good friends.” ~ Mas Oyama
Overnight
Davos watches Trump call as US politics overshadows annual forum SEM
Bank of Japan raises rates to highest in 17 years BBC
Trump 2.0 softens on China AX
Micheál Martin elected taoiseach of Ireland after chaos subsides BBC
Judge temporarily blocks Trump’s ‘blatantly unconstitutional’ executive order that aims to end birthright citizenship CNN
Moderna testing norovirus vaccine as cases rise CNBC
Novo Nordisk stock soars on new weight-loss drug results BAR
Monte dei Paschi shares fall 8% after lender launches surprise 13-billion-euro bid for Mediobanca CNBC
Purdue and Sackler family agree $7.4bn opioid settlement BBC
OpenAI introduces Operator to automate tasks such as vacation planning, restaurant reservations CNBC
Costco shareholders reject call for review of diversity programs REU
Boeing lost $3.5 billion due to labor strikes and layoffs in the fourth quarter YF
UnitedHealth’s Medicare chief to fill slain executive’s job BBG
Substack is spending $20 million to court TikTokers VRG
Cats may have gotten bird flu from raw pet food NYT
Elon Musk’s DOGE is coming for the penny CNN
Trump executive order declassifies JFK, RFK, Martin Luther King Jr. assassination files CNBC
Chart of the Day
| Overnight |
| S&P Futures -12
point(s) (-0.2%
) Overnight range: -12 to +4 point(s) |
| APAC |
| Nikkei -0.07%
Topix -0.03% China SHCOMP +0.7% Hang Seng +1.86% Korea +0.85% Singapore -0.06% Australia +0.36% India -0.49% Taiwan flat |
| Europe |
| Stoxx 50 +0.68%
Stoxx 600 +0.36% FTSE 100 -0.33% DAX +0.4% CAC 40 +0.92% Italy +0.82% IBEX -0.18% |
| FX |
| Dollar Index (DXY) -0.47%
to 107.54 EUR/USD +0.71% to 1.0489 GBP/USD +0.62% to 1.2429 USD/JPY -0.07% to 155.94 USD/CNY -0.59% to 7.243 USD/CNH -0.57% to 7.2462 USD/CHF -0.2% to 0.9056 USD/CAD -0.4% to 1.4325 AUD/USD +0.57% to 0.6321 |
| Crypto |
| BTC +1.95%
to 105139.01 ETH +4.68% to 3401.16 XRP +3.57% to 3.1903 Cardano +3.18% to 1.0001 Solana +7.15% to 263.63 Avalanche +1.6% to 36.13 Dogecoin +4.72% to 0.3616 Chainlink +4.78% to 26.3 |
| Commodities and Others |
| VIX +0.27%
to 15.06 WTI Crude +0.47% to 74.97 Brent Crude +0.46% to 78.65 Nat Gas -2.61% to 3.84 RBOB Gas -0.05% to 2.064 Heating Oil +0.35% to 2.48 Gold +0.71% to 2774.42 Silver +1.42% to 30.89 Copper +0.98% to 4.371 |
| US Treasuries |
| 1M +1.0bps
to 4.3187% 3M -1.4bps to 4.2994% 6M -1.7bps to 4.2773% 12M -2.5bps to 4.1491% 2Y -2.3bps to 4.2655% 5Y -1.8bps to 4.4331% 7Y -1.6bps to 4.534% 10Y -1.2bps to 4.6316% 20Y -1.1bps to 4.9244% 30Y -0.8bps to 4.8588% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 2.2bps to -5.5
bps 10Y-2 Y Spread widened 1.4bps to 36.4 bps 30Y-10 Y Spread widened 0.4bps to 22.5 bps |
| Yesterday's Recap |
| SPX +0.53%
SPX Eq Wt +0.47% NASDAQ 100 +0.22% NASDAQ Comp +0.22% Russell Midcap +0.2% R2k +0.47% R1k Value +0.64% R1k Growth +0.39% R2k Value +0.28% R2k Growth +0.65% FANG+ +0.6% Semis -0.12% Software +0.17% Biotech +1.94% Regional Banks -0.36% SPX GICS1 Sorted: Healthcare +1.35% Indu +0.96% REITs +0.82% Comm Srvcs +0.81% Fin +0.6% SPX +0.53% Materials +0.51% Utes +0.47% Energy +0.45% Cons Staples +0.41% Cons Disc +0.4% Tech +0.12% |
| USD HY OaS |
| All Sectors +1.6bp
to 296bp All Sectors ex-Energy +1.9bp to 281bp Cons Disc +1.8bp to 242bp Indu +1.8bp to 222bp Tech +3.4bp to 302bp Comm Srvcs -0.7bp to 477bp Materials +1.6bp to 270bp Energy +1.0bp to 276bp Fin Snr +2.1bp to 260bp Fin Sub +0.2bp to 190bp Cons Staples +1.7bp to 262bp Healthcare +3.6bp to 367bp Utes +3.3bp to 214bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/24 | 9:45AM | Jan P S&P Manu PMI | 49.8 | 49.4 |
| 1/24 | 9:45AM | Jan P S&P Srvcs PMI | 56.5 | 56.8 |
| 1/24 | 10AM | Jan F UMich 1yr Inf Exp | 3.2 | 3.3 |
| 1/24 | 10AM | Jan F UMich Sentiment | 73.2 | 73.2 |
| 1/24 | 10AM | Dec Existing Home Sales | 4.2 | 4.15 |
| 1/24 | 10AM | Dec Existing Home Sales m/m | 1.2 | 4.8 |
| 1/27 | 10AM | Dec New Home Sales | 670.0 | 664.0 |
| 1/27 | 10AM | Dec New Home Sales m/m | 6.6 | 5.9 |
| 1/28 | 8:30AM | Dec P Durable Gds Orders | 0.8 | -1.2 |
| 1/28 | 10AM | Jan Conf Board Sentiment | 105.6 | 104.7 |
| 1/29 | 2PM | Jan 29 FOMC Decision | 4.5 | 4.5 |
| 1/30 | 8:30AM | 4Q A GDP QoQ | 2.6 | 3.1 |
MORNING INSIGHT
Good morning!
Thus far, 2025 is tracking better than our original expectations made in early December, and in our view, there are five primary reasons driving this.
Click HERE for more.
TECHNICAL
- SPX’s breakout is bullish, but short-term patterns indicate possible consolidation.
- Industrials strength is encouraging given GE, DE breakouts and strength from UNP.
- Bitcoin’s cycle seems to indicate a downdraft might be possible in February.
Click HERE for more.
CRYPTO
Recent developments since the inauguration suggest that the new administration is prioritizing an industry-friendly regulatory environment. We believe there is still significant upside headline risk in the early days of Trump’s term.
Click HERE for more.
First News
Although drones have been getting a lot of attention from military and geopolitical security experts of late, another major source of risk is on the ocean floor, and much of it remains unguarded and hard to map out. Yesterday, the UK made it very publicly known that it had once again discovered the purported Russian spy ship Yantar breaching British territorial waters, just as it had in November. British authorities asserted that the most likely reason for this purported incursion was to map undersea cables and pipelines around the British isles. (Predictably, Russia denied any wrongdoing.)
British authorities have reason to suspect the Yantar. Russia describes the ship as a deep-sea research vessel, equipped with an array of advanced underwater sensors. However, the frequency with which it has been spotted doing “research” over important undersea cables has led the West to conclude that any research being done is not quite scientific or academic in nature. The Yantar has been spotted over cables near Guantanamo Bay, off the East Coast of the U.S., in the Persian Gulf, and near critical cables in Norwegian and Irish territorial waters.
NATO estimates that an estimated $10 trillion worth of financial transactions are transmitted at least partly via undersea data cables every day. That’s before accounting for the massive volumes of other types of important data traveling through those cables.
Data cables aren’t the only type at risk, however. Late last year, three undersea power-transmission cables in the Baltic Sea were seriously damaged after cargo ships dragged their anchors along the sea floor. Russia was implicated in each instance, and Finnish Foreign Minister Elina Valtonen told the Financial Times that there was “close to zero” chance that all three were accidental.
To be fair, that’s not to point the finger solely at Russia. Authorities have tied the May 2022 attack on Russia’s Nord Stream 2 pipeline to Ukraine-linked operatives (though Vladimir Putin blamed the U.S.). Meanwhile, Taiwan suggested that China was responsible for recent damage to a communications cable off its northern coast. It was unclear whether the damage was deliberate, but an examination of Chinese patent filings suggests that at the very least, Chinese researchers are deliberately looking for ever-more efficient ways of severing such lines of communication.
Nevertheless, in the wake of recent undersea cable-related incidents linked to Russia, NATO member states deployed a range of ships, submarines, and aircraft to help guard against further incidents involving Baltic Sea cables.
The likelihood of Russia or any other entity successfully disconnecting the majority of the world’s undersea data cables is currently judged to be unlikely, but attacks on a few cleverly chosen cables could provide a perpetrator with a strategic advantage – and they are all but undeniably vulnerable.