Market Update

Good morning and Happy Friday,
 
The bump on Wednesday afternoon from Trump’s “Greenland framework” continued yesterday as US equities closed higher and small caps led once again. The Dollar fell and rates were mixed across the curve. This morning S&P futures are trading lower, back near their worst levels.  Tech names are weighing on the index, trading down in sympathy with Intel’s post-earnings slide. US, Ukrainian and Russian negotiators are meeting today in the first tri-lateral meeting since Russia invaded Ukraine in February 2022. Flash PMIs will headline the economic calendar after the open.
 
 

 
In corporate news, Intel is down over 10% in the pre-market followings earnings last night despite top and bottom beats. A lower than expected Q1 guide due to lack of CPU supply to meet demand is one reason for the selling, along with no 14A (their new manufacturing process) customer announcements. Banks are mixed. Rail operator CSX is up ~2% while noting lingering weakness in Industrial demand. Clorox is buying Gojo, maker of Purell hand sanitizer, for ~$2B. China is close to approving H200 orders from large domestic tech companies according to reports.
 
US treasury yields are flat lower across the curve. The US Dollar Index is down slightly again and continues to test 98.  The yen is slightly stronger following the BOJs rate decision (hold).  
 
Government Yields

• US 2yr +0bps to 3.62%, 5yr +1bps to 3.85%, 10yr +0bps to 4.25%, 30yr -0bps to 4.84%
• USD index: -$0.06 to $98.12

Commodities are trading higher. Crude is up ~2% as is natural gas, having climbed >60% this week as the winter storm barrels towards us. Gold is slightly higher while silver is adding another 3% as it closes in on $100. Bitcoin is flat, with resistance at the 50-day ma (~$90.1k) just overhead. Ag is mostly higher. Goldman Sachs raised its 2026 YE gold price from $4900 to $5400/oz and UBS bumped palladium up from $1500 to $1800/oz, while seeing silver reach $100-$105 near term before fading to $85 and limited supply growth in both copper and aluminums supporting prices.  
 

 
European equities are modestly higher though France is lagging. After pausing the process to ratify the US trade deal on the rising tensions around Greenland, the EU is now expected to resume that work. Flash Manufacturing PMIs rose from last month and were better than expected, while Services declined and missed. German manufacturing was better than expected. France Services missed estimates and declined sequentially. UK rose and beat consensus. Chinese indexes ended higher and ended the week mixed (Hang Seng -ve, Shanghai +ve). An investigation into Meta’s purchase of Chinese software firm Manus is expanding. Japan was modestly higher and the BOJ held rates unchanged at its policy meeting, as expected. Japan’s lower parliament house was dissolved, also as expected, ahead of snap elections on February 8. Both Manufacturing and Services PMIs rose from last month. Nintendo’s Switch 2 sales were strong in December according to reports, and I’m happy to be a small part of that. It’s a great console.
 

 
 
Earnings:
After-Market (Thrs): AA, ALK, AMTB, ASB, BY, COF, CNS, CSX, CUBI, GBCI, INTC, ISRG, SLM
Pre-Market: BAH, SLB, WBS
 
Economic Data:
US:

• 9:45am Manufacturing and Services PMIs
• 10:00am Univ Michigan final Sentiment
• 1:00pm Rig Count

 
Global:

• Flash PMIs
  • Australia Manufacturing: 52.4 vs prior 51.6
  • Australia Services: 56.0 vs prior 51.1
  • Japan Manufacturing: 51.5 vs 50.0 cons., prior 50.0
  • Japan Services: 53.4 vs prior 51.6
  • India Manufacturing: 56.8 vs prior 55.0
  • India Services: 59.3 vs 58.0
  • France Manufacturing: 51.0 vs 50.5 cons., prior 50.7
  • France Services: 47.9 vs 50.5 cons., prior 50.1
  • Germany Manufacturing: 48.7 vs 47.8 cons., prior 47.0
  • Germany Services: 53.3 vs 52.5 cons., prior 52.7
  • UK Manufacturing: 51.6 vs 50.6 cons., prior 50.6
  • UK Services: 54.3 vs 51.7 cons., prior 51.4
  • Europe Manufacturing: 49.4 vs 49.1 cons., prior 48.8
  • Europe Services: 51.9 vs 52.6 cons., prior 52.4
• Taiwan Industrial Production y.y: 21.57% vs prior 15.82%
• BOJ Rate Decision: Unchanged at 0.75% as expected
• Japan CPI y.y: 2.1% vs prior 2.9%
  • Core: 2.4% vs 2.4% cons., prior 3.0%