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Quantum computing stocks are taking a beating today after Nvidia CEO Jensen Huang delivered a sobering assessment of the technology’s timeline, saying practical quantum computing applications remain “many years away” from commercial viability.

Individual quantum names are seeing declines, with several suffering their worst single-day losses on record:

Rigetti Computing plunged 41.5%
IonQ tumbled 28.5%
Quantum Computing crashed 34%
D-Wave Quantum plummeted 35%
Quantum Corp dropped 26.6%.

The selloff highlights the speculative nature of quantum computing investments, with many firms yet to generate meaningful revenue. Huang’s comments carry particular weight given Nvidia’s dominant position in the AI chip market and deep expertise in advanced computing technologies.

The quantum computing sector has turned into sometime of a meme in recent months amid growing excitement around quantum’s potential applications in cryptography, drug discovery, and financial modeling. However, today’s reality check is a warning for meme stocks.

This article was written by Adam Button at www.forexlive.com.

• Prior was -0.2%
• Sales +0.6% vs +0.0% expected
• Prior wholesale sales -0.1%

This article was written by Adam Button at www.forexlive.com.

The pound was a surprisingly-strong performer in 2024 but I think there will be a catch-down trade in 2025.

The strength last year was driven by a more-hawkish central bank but the stick inflation last year wasn’t due to a stronger economy (like the US) but structural factors. Now the growth outlook is deteriorating and the central bank continues to hold off on rate cuts.

Meanwhile, the new Labour government is off to a rough start with approval ratings for Starmer low and some real pessimism setting in.

The most-important voter for markets is fixed income and gilts are in a bad spot. With the 11 bps rise today, US 10-year yields are at the highest since 2008.

The fear is that Labour will reach to more revenue-raising avenues to improve the budget, creating more headwinds.

As for the pound, it’s at the lowest since April with today’s 132 pip decline and just 40 pips from the April low.

This article was written by Adam Button at www.forexlive.com.

• Long-term yields may have more of an inflation premium but Fed will fix that
• US deficits may also be driving long-term yields higher
• Some of ongoing services price inflation may represent lagged wage increases, which should ease
• Tremendous uncertainty around what will happen with tariffs
• Do not think ‘draconian’ tariffs will be implemented
• In the near-term do not think there will be a huge impact on inflation from tariffs

This article was written by Adam Button at www.forexlive.com.

The weekly US initial and continuing jobless claims data has been released:

• Prior week initial jobless claims 211K
• Initial jobless claims 201K vs 218K estimate.
• 4-week moving average of initial jobless claims 213K vs 223.25K last week
• Prior week of continuing claims 1.844M revised to 1.834M
• Continuing claims 1.867M vs estimate of 1.867M
• 4-week MA 1.866M vs 1.869M last week

The US stocks have moved higher now as implied by the futures in what is volatile trading in the pre-market trading.

Waller comments were not hawkish. The market is applauding the strong jobs market. Yields are continuing to steepen with the 2-10 year spread is up to around 43 basis points which is the highest since May.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior was +146K
• Annual pay growth for job-stayers 4.6% vs 4.8% prior
• Job-changers’ pay gains 7.1% vs 7.2% prior
• Services +112K vs +140K prior
• Goods +10K vs +6K prior

This is a more-benign jobs report and should help to cool some of the inflation angst in the market.

“The labor market downshifted to a more modest pace of growth in the
final month of 2024, with a slowdown in both hiring and pay gains.
Health care stood out in the second half of the year, creating more jobs
than any other sector,” said Nela Richardson, chief economist at ADP.

This article was written by Adam Button at www.forexlive.com.

• Will support further cuts in 2025 but pace will depend on inflation progress.
• Inflation will continue to make progress towards 2%.
• Base effects will improve inflation in 2025.
• Recent monthly and short-term data indicates improvement to come.
• Although the recent inflation progress has been slow, much of that is due to imputed prices for housing and non-market services that are less reliable guide to underlying price pressures.
• Geopolitical conflicts and tariffs could be a source of renewed price pressure.
• The economy is overall on a solid footing, nothing suggests labour market will weaken dramatically in coming months.
• Central bankers have a broad set of challanges ahead, from aging populations to geopolitical conflicts and challanges to globalization.
• Do not expect tariffs to produce persistent inflation and thus are not likely to influence views on appropriate monetary policy.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• US MBA mortgage applications w.e. 3 January -3.7% vs -12.6% prior
• Trump mulls a national emergency declaration to allow for new tariff program – report
• Cable turns lower on the week as dollar catches a bid
• The bond market stays in focus with US jobs report eyed
• Eurozone December final consumer confidence -14.5 vs -14.5 prelim
• Eurozone November PPI +1.6% vs +1.5% m/m expected
• European indices seen more tepid at the open today
• France November trade balance -€7.09 billion vs -€7.67 billion prior
• Eurostoxx futures -0.4% in early European trading
• Germany November retail sales -0.6% vs +0.5% m/m expected
• Germany November industrial orders -5.4% vs 0.0% m/m expected
• A couple of light releases to move things along in the session ahead
• Chinese yuan slide continues on the week
• FX option expiries for 8 January 10am New York cut
• Japan December consumer confidence 36.2 vs 36.4 prior

It’s been a pretty quiet session in terms of the newsflow but in the final part of it, we got a report from CNN saying that Trump mulled a national emergency declaration to allow for the new tariff program.

This sent the US Dollar higher and had a negative impact on risk assets with stocks paring gains and commodities falling. Will Trump deny this news as well later in the day? Keep an eye on that.

In the American session, we have Fed’s Waller speaking and we get some US labour market data as we get the US ADP and the latest US Jobless Claims figures. We will conclude the day with the FOMC Meeting Minutes although as it usually the case, the release shouldn’t change much for the markets.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -12.6%
• Market index 168.4 vs 174.9 prior
• Purchase index 127.7 vs 136.7 prior
• Refinance index 401.1 vs 395.1 prior
• 30-year mortgage rate 6.99% vs 6.97% prior

After a big plunge in the week before, mortgage applications are falling further again to start the new year with purchase activity weighing this time. That is partially offset by slight rise in refinancing activity, after the sharp plunge in the week prior here. With rates continuing to hold higher, the outlook isn’t a bright one to start the year for the mortgage market.

This article was written by Justin Low at www.forexlive.com.

This is the story that looks to have accelerated the dollar gains in the past 5 minutes. More to come..

This article was written by Justin Low at www.forexlive.com.

The biggest loser today is sterling as cable is now down 0.8% to 1.2374. On the week itself, the pair is now down 0.3% as it erases the Monday gains and threatens back below the low last week.

The April 2024 low near 1.2300 remains the critical support point at this juncture and it look like we might be headed towards that next.

The move we’re seeing is not just tied to GBP/USD though. It’s a broad-based bid in the dollar as bond yields continue to rise, as noted here.

EUR/USD is now down 0.4% to near 1.0300 while USD/JPY is up 0.2% to 158.40 on the day. Elsewhere, AUD/USD is down 0.4% to 0.6210 and NZD/USD down 0.5% to 0.5613 currently.

This article was written by Justin Low at www.forexlive.com.

In the past week, Treasuries have picked up from where they left off in the late stages of last year. 10-year yields in the US are still on the rise and we’re now closing in on the highs seen in 2024 near 4.70%. The actual high last year was around 4.74% but that may not offer too much of an obstacle if sellers continue to pile in and take out the 4.70% mark this week. Are we on war path back towards 5%?

I wouldn’t rule it out, in all honesty. At some point last year, it would be unthinkable considering the Fed’s rate outlook. But all it takes is one election result and how the tables have turned.

As Adam pointed out here, addressing the deficit doesn’t seem to be a priority for Trump. And understandably so, as it is an issue that no president has a handle on dealing with it. Ultimately, it will just be a case of kicking the can down the road as always.

If yields are headed back to 5%, that’s a major risk that broader markets really need to consider.

The dollar is already in a strong position to start the new year and could gather more of a tailwind as such. Right now, the narrative is largely driven by Trump’s strong policy hand. So, therein lies the risk for markets as we await his inauguration later this month.

But if yields are to take flight again from hereon, I fear that it’s going to be a painful start to the year for risk trades. US indices are already looking a little shaky after yesterday’s data. Now, the focus turns towards the US jobs report on Friday instead.

If labour market conditions are still hot and reaffirms more cause for the Fed to pause, it could be the trigger that gets the ball rolling in the bond market for yields to surge again. So, remember to keep a watchful eye on the Friday data.

This article was written by Justin Low at www.forexlive.com.