To The Moon

Due to Escalating Tariff Concerns and Market Weakness, Wall Street Closes Higher While Global Stocks Decline

🇺🇸 S&P 500 Index: +1.60% 📈

🇺🇸 Nasdaq: +1.64% 📈

🇪🇺 Stoxx 600 Index: +0.01% 📈

🇯🇵 Nikkei 225 Index: -2.88% 📉

🇭🇰 Hang Seng Index: -3.28% 📉

🇨🇳 CSI 300 Index: -1.97% 📉

🇸🇬 Straits Times Index: -0.65% 📉

Market Overview

U.S. stocks rose, with the S&P 500 and Nasdaq gaining 1.6%, primarily driven by financial and consumer discretionary stocks.

Despite renewed tariff threats from the White House and intensified global trade tensions causing market volatility, investors remained optimistic, weighing slowing inflation against ongoing geopolitical risks.

Economic Data

In January, the U.S. core PCE price index rose 0.3% month-over-month, exceeding December's 0.2% and matching expectations. This increase was driven by higher goods prices, particularly motor vehicles and gasoline, while declining medical costs partially offset the rise.

Year-over-year core PCE inflation eased to 2.6%, down from 2.9% in December.

Asia-Pacific Market Decline

Asian markets fell sharply, with the Hang Seng Index plunging 3.3%, its biggest single-day drop in over three months, while the CSI 300 Index lost 2%.

The drop followed President Donald Trump's announcement of plans to double tariffs on Chinese imports, escalating the trade war with Beijing and increasing uncertainty over global economic growth.

Japan's Economic Indicators

January retail sales in Japan surged 3.9% year-over-year, marking the fastest growth in 11 months, driven by higher commercial and wholesale sales.

However, industrial production fell -1.1% month-over-month, weighed down by declines in machinery, electronic components, and motor production, despite gains in automobiles, chemicals, and steel output.

Upcoming Events

💡 Key Economic Reports This Week 💡

Monday: U.S. ISM Manufacturing PMI, Eurozone CPI Flash Estimate, Japan Manufacturing PMI Final, China Caixin Manufacturing PMI, Malaysia S&P Global Manufacturing PMI

Tuesday: Speech by BOJ Governor Ueda, closely watched by investors

Wednesday: China & U.S. Economic Data, including China Caixin Services PMI, U.S. ADP Nonfarm Employment Change, and ISM Services PMI

Thursday: U.S. Jobless Claims, ECB Press Conference & Monetary Policy Statement

Friday: U.S. Unemployment Rate and Nonfarm Payrolls Report

Key Highlights Today

1️⃣ Trump launches tariff probe on lumber imports, citing national security concerns and unfair competition for U.S. loggers. This could lead to higher tariffs, particularly on Canadian imports, raising concerns over construction costs and housing affordability.

Lumber import

2️⃣ Tensions rise between Trump and Ukrainian President Zelensky, fueling market uncertainty over a Russia-Ukraine peace agreement. Weak economic data and trade policy concerns further boost demand for safe-haven U.S. Treasury bonds, leading to volatile trading on Wall Street.

Trump VS Zelensky

3️⃣ Chinese AI startup DeepSeek concluded its week-long product launch, unveiling details on its V3 and R1 models, claiming a theoretical cost-benefit ratio of 545%. However, the firm admitted that monetization remains a challenge due to limited revenue channels and Nvidia $NVIDIA Corp(NVDA)$  H800 chips being inferior to those used by U.S. competitors like OpenAI.

Deepseek

4️⃣ Chery Automobile, China's second-largest car manufacturer after BYD $BYD COMPANY(01211)$ , filed for a Hong Kong IPO to fund new vehicle development, global expansion, and domestic production upgrades. In the first nine months of 2024, Chery reported a 59% rise in net profit to ¥11.3 billion and a 68% increase in revenue to ¥182.2 billion.

Chery Omoda Car

5️⃣ Malaysia's Employees Provident Fund (EPF) announced a 6.3% dividend rate for 2024, the highest since 2017, surpassing last year's 5.5% and 5.4%. The strong return was driven by outperforming overseas investments, delivering significant gains.

Malaysia EPF

✅ Key Takeaway

Cooling inflation data has strengthened market expectations for a Fed rate cut in June. The CME FedWatch tool shows a 93.4% probability that the Fed will resume rate cuts, following its January pause to assess the economic impact of government policies.

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