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The major stock indices are moving higher as the clock ticks toward the close.

• Dow Industrial average is up 231.10 points or 0.60% at 44985.90
• S&P is up 37 points or 0.62% at 6077.11
• Nasdaq is up 78 points or 0.40% at 19711.
• Russell 2000 is up 34.78 points or 1.52% at 2317.91

Apple will announce their earnings after the close:

• Earnings Expectations:

  • Apple is expected to report EPS of $2.35 (up from $2.18 YoY). Up 7.79%
  • Revenue of $124.26 billion (up from $119.5 billion YoY). Up 3.9%

• Revenue Breakdown:

  • iPhone Segment: Projected revenue of $71 billion (up from $69 billion YoY).
  • Services Segment: Expected revenue of $26 billion (up from $23.1 billion YoY).
  • Greater China Revenue: Estimated at $21.5 billion (up from $20.8 billion YoY).

• China Market Challenges:

  • China revenue dropped 8% in 2024 and 2% in 2023, with Apple citing currency weakness and lower iPhone/iPad sales.

• Upcoming Product Launches:

  • New entry-level iPhone SE, iPads, and MacBook Airs set to launch, expected to drive revenue growth.

• Stock Performance:

  • Apple’s shares are up 24% YoY, comparable to Google’s 27% rise.
  • Nvidia’s stock is up 102% YoY, despite recent concerns about China’s DeepSeek AI platform potentially reducing demand for AI chips.

Shares of Microsoft are still down sharply after earnings after the close yesterday. Shares are down -6.01%.

Meta-, on the other hand is up 2.02% after the earnings announcement last night, while Tesla shares are up 3.98%.

Broadcom has rebounded after falling sharply on the Nvidia meltdown. It’s shares are up 5.27% today.

Buyers of Nvidia are less enthusiastic. It’s shares are down $-1.13 or -0.93% at $122.50

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

US GDP numbers today showed an expansion of 2.3% q/q annualized in Q4, below
consensus expectations of 2.6% and last quarter’s 3.1% increase. That puts annual growth at 2.5%, which is solid and matches the Fed’s expectations but it’s not blockbuster.

The real takeaway is the consumer with spending up 4.2% q/q annualized, beating expectations (never underestimate the US consumer).

“American consumer just can’t get enough of durable goods spending, which rose by 12.1% in the quarter and is miles
above its pre-pandemic trend,” write CIBC after the report.

They caution that the rest of the economy isn’t nearly as strong with business investment soft and the government doing far too much heavy lifting.

Still, the numbers are better than expected because inventories subtracted 0.9 pp in part due to weather events and strikes. Those skews will likely continue into Q1 as businesses stockpile ahead of potential tariffs.

“Stripping out inventories and
net trade, final sales to domestic purchasers growth came in at a still very strong pace 3.1%, about the average over
the last two years,” CIBC writes.

Looking ahead, they see downside risks around slower population and trade tensions but expect it will be overcome.

“The floor for consumption growth is still likely high, driven by the surging asset income and spend-happy
and tech-savvy Millennials,” they write, noting that tariffs could eventually cut 1% from growth. ” The wild ride on tariffs
could be continue for sometime.”

Overall, here is how they summarize it:

The bottom line here is that GDP could slow a bit more under the Trump administration but likely not enough to worry
the Fed. Powell will be more concerned about the price level increases and how that feeds into price and wage
expectations in an economy that is still strong and given inflation is not fully there. Today’s data reinforces the Fed’s
wait and see attitude. The underlying pace of growth is still about 3% and the consumer is showing no signs of letting
up, a possible indication that they will be able to weather some modest price rises

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

MUFG sees more upside for the JPY as the BoJ continues to deliver hawkish policy signals. Deputy Governor Himino’s speech reinforced expectations of two more rate hikes this year, pushing USD/JPY lower toward 154.00.

Key Points:

1. BoJ Hawkish Signals:

   • Himino stated that policy rates need to rise further if the BoJ’s economic outlook is realized.
   • Emphasized that real rates remain significantly negative, even after the recent rate hike.
   • Noted that it is “not normal” for real interest rates to stay clearly negative if deflationary shocks are resolved.

2. Market Reaction:

   • JPY strengthened, leading to USD/JPY falling closer to 154.00.
   • Reinforces growing expectations that the BoJ could hike rates twice more in 2025, bringing the policy rate to 1.00%.

Conclusion:

With the BoJ maintaining a hawkish stance, JPY outperformance is expected to continue, putting further downside pressure on USD/JPY as markets price in additional rate hikes.

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

I find this thinking tough to square given ultra-low ECB rates for years ahead of the pandemic and no inflation.

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

The major European stock indices are closing higher once again. The German DAX has made another record as did the UK FTSE 100.

The final numbers are showing:

• German DAX, up 0.41%. A new intraday high was made at 21,732.05. The closing level was at 21,727.21.
• France’s CAC +0.88%.
• UK’s FTSE 100 rose 1.04% to a new record close. A new record high was made at 8655.19. The closing level came in at 8646.89.
• Spain’s Ibex rose 1.08%. The close is at the highest since June 2008
• Italy’s FTSE MIB rose 0.16%, closing at the highest level since December 2007

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

Pres. Trump speaks to the crash where a Blackhawk helicopter ran into a commercial airline. Playing the blame game on DEI.

HMMM.

The video shows a Blackhawk helicopter running into the commercial aircraft.

Why did the Army helicopter run into the plane? Why was it crossing a landing path?

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

Geopolitical uncertainty is fuelling a fresh record high in gold. It’s up $34 today to $2791, breaking the November high by $1.

At the start of December I touted the seasonal trend of strength in gold in Dec-Jan (as I always do). Once again this year it delivered:

I have written about gold seasonal strength in December-January for 15
years and it’s rarely let me down. It’s one of the best seasonal trends
in any market, anywhere.

Technically, it’s just psychological levels here with $2800 offering some resistance but $3000 as the big target.

I suspect we could get a rapid move higher on a trade war but I don’t see that happening. Another possible catalyst is a sign from congress about fiscal excess. I just don’t see how the math works on lowering corporate taxes to 15% from 21% as there is no level of tariffs that will raise that kind of money and the US is already running deficits at 7% of GDP.

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

There is some angst about natural gas everywhere at the moment. Germany is floating the idea of the resumption of Russian natural gas flows as part of a peace settlement.

In the US, a cold January has led to a series of very large natural gas inventory drawdowns. Today’s announcement was a 321 BCF draw compared to 314 BCF expected at 223 BCF last week.

It’s the fourth-largest draw ever.

Despite that, the March Henry Hub contract has tumbled this week as the market looks forward to a warmer February. It last traded at $3.14 after trading above $4 last week.

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

• Prior was +2.2%
• Index 74.2 vs 79.0 prior

The index is at the lowest since August. Some housing numbers have been surprisingly strong lately but this is a sign that high mortgage rates are problematic.

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

Bloomberg was out a bit earlier (6 am ET) with a report that flew under the radar but it cites people familiar with negotiations. There are some interesting developments:

• Trump team is “not close at all to making a decision” on China tariffs
• The Trump team is still debating the fundamentals of tariff policy
• Along with a lack of consensus among the administration’s economic team, they’re also short key staff.
• “experts anticipate” he will announce Mexico-Canada tariffs on Feb 1 but they’re “unlikely” to take effect for two weeks, which would allow time for negotiations

The report is here. I think it raises the risk of a dicey two weeks of trading for MXN and CAD to start February.

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

Live feed here:

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

• Prior week
• initial jobless claims 207K vs 220K estimate
• 4 week moving average 212.50K vs 213.5K last week
• Continuing claims 1.858K vs 1.890M estimate
• 4- week moving average 1.872Mvs 1.866M last week

The initial claims is for the survey week for BLS jobs report to be released the first week of February. The survey week for initial claims was also a holiday week which can skew the data.

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