The American stock markets traded higher yesterday after several major companies reported earnings both after Wednesday’s close and throughout Thursday. This week, the spotlight has been on tech companies after Chinese startup DeepSeek launched its AI model at the beginning of the week, causing significant movements in the market. Nvidia, in particular, experienced a historic drop on Wall Street with the largest market cap decline ever recorded. Additionally, the Federal Reserve announced its decision to keep interest rates unchanged, with Chairman Jerome Powell stating that inflation is moving towards their 2 percent target and hinting at possible future rate cuts later in the year. President Donald Trump also made headlines by promising a 25 percent tariff on neighboring countries Mexico and Canada, set to take effect on February 1. The specifics of the tariffs are still unclear, but Trump suggests that oil may remain unaffected. The broad S&P 500 index rose 0.5 percent, while the Nasdaq composite index increased by 0.3 percent, and the Dow Jones Industrial Average climbed 0.4 percent.
Commodities saw a widespread increase on Thursday. Oil traded slightly higher yesterday as Trump’s tariff decisions regarding neighboring countries influenced its performance. The tariffs are a key factor in the current price of WTI oil, along with rising crude oil inventories in the country. Investors are now turning their attention to the upcoming OPEC meeting of oil-exporting countries next week. WTI oil rose by 0.1 dollar to $72.8 per barrel, while Brent oil increased by 0.3 dollars to $76.9 per barrel.
Base metals had a mixed performance yesterday, with tin being the day’s top performer, rising by 0.6 percent, followed by copper and lead, which both increased by 0.4 and 0.3 percent, respectively. Nickel and zinc declined by 0.1 and 0.2 percent, while aluminum was the day’s biggest loser, falling by 0.4 percent. Gold surged due to Trump’s new tariff threats, increasing demand for the metal as a safe investment in uncertain times. The impact of the tariffs on US trade relations remains uncertain, contributing to gold trading at record levels. Investors now see a potential for gold to reach $3,000 per ounce this year, depending on future inflation and interest rate changes. Gold rose by $33.3 to $2,792.0 per ounce.
Several prominent US-listed companies, known as the “magnificent seven,” reported earnings during the week. Meta exceeded expectations with its results, leading to a 1.6 percent increase in its stock price on Thursday. Tesla rose by 2.9 percent, while Microsoft fell by 6.2 percent after surpassing expectations in its report but facing subdued future forecasts. Nvidia increased by 1.0 percent. Caterpillar dropped by 4.7 percent, while IBM surged by 13.0 percent. Apple, which declined by 0.7 percent, reported reduced sales in China but still outperformed expectations.
The US ten-year treasury bond decreased by 3 basis points to 4.53 percent.
Asian markets opened the last trading day of January with mixed results. Chinese markets remained closed after the Chinese New Year, while the Seoul stock exchange fell by around 1 percent on its first trading day of the week. Investors have yet to react to news about DeepSeek’s AI model, leading to the tech sector’s decline, with companies like SK Hynix, a supplier to Nvidia, falling by 9.5 percent. Samsung also experienced losses in the morning. In Japan, new data showed that consumer prices in the Tokyo area increased by 3.4 percent in January, following a 3.0 percent increase the previous month. The Japanese Nikkei 225 index rose by 0.4 percent at 07:45.
On the Stockholm stock exchange, several companies reported in the morning. Medcap, which issued a profit warning last week, reported a net revenue of 474 million SEK and an EBITDA result of 70.7 million SEK, with revenue growing by 14 percent and an adjusted EBITDA margin of 17 percent. SKF reported a decreased revenue of 24,725 million SEK but still exceeded expectations. The adjusted operating profit amounted to 2,735 million SEK, and the dividend was raised to 7.75 SEK (from 7.50). Holmen also surpassed expectations in its report, with an operating profit of 716 million SEK and revenue of 5,513 million SEK, compared to expected figures of 713 and 5,713 million SEK, respectively. Furthermore, Byggmax reduced its losses and increased its dividend due to raising the EBITDA margin to minus 4.8 percent (from minus 7.7) with an EBIT result of minus 66 million SEK (from minus 91). Net revenue stood at 1,073 million SEK, and the dividend was raised to 0.75 SEK (from 0.5). Later in the day, Atrium Ljungberg, Hemnet, Hexagon, JM, SCA, and Autoliv were scheduled to report their earnings.
In terms of new recommendations, SEB downgraded Nordea from buy to hold with a target price of 145 SEK (from 150), while Jefferies and Goldman Sachs raised their target prices to 153 (from 142) and 165 SEK (from 160), respectively. H&M received a reduced target price from Pareto Securities to 185 SEK (from 190) and DNB to 180 SEK (from 190), with both maintaining their buy recommendations, while Goldman Sachs lowered its target price to 130 SEK (from 145) and reiterated a sell rating. Evolution’s target price was lowered by Morgan Stanley to 980 SEK (from 1,070) while maintaining an equal weight recommendation, and Pareto raised ABB’s target price to 700 SEK (from 690) and reiterated a buy recommendation. JP Morgan downgraded Electrolux to 105 SEK (from 116) and reiterated a neutral rating, while Barclays and SEB raised theirs to 82 (from 80) and 110 SEK (from 100), both maintaining hold ratings. Additionally, Carnegie lowered its target price for Boliden to 380 SEK (from 392) and reiterated a buy recommendation, while Barclays downgraded SSAB to 55 SEK (from 59) and maintained a neutral rating.
On the macroeconomic front, Friday is a relatively quiet day starting in Japan at 00:30 with industrial production in December increasing by 0.3 percent, while the consumer price index for January remained unchanged. In the UK, the house price index decreased to 4.1 percent in January, and German retail sales figures for December reported a decline of 1.6 percent. The French CPI for January was reported at 08:45, followed by the German unemployment figures at 09:55 and CPI for January at 14:00. In the US, PCE figures will be released at 14:30, along with Canada’s GDP for December. Chicago’s purchasing managers’ index will be announced at 15:45, followed by Baker Hughes’ total rig count at 19:00, marking the day’s final event.