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Friday, January 24

Some of the largest macro moves in the market today: USD/CNH -0.5%. Gold +1.0%. US Dollar Index -0.4%. 

The Bank of Japan (BoJ) raised its key short-term interest rate to 0.5% during its first meeting in 2025, marking a significant shift from years of ultra-low rates and reflecting confidence in the country's economic stability amid rising inflation pressures. This decision has implications for global markets as it may influence investor behavior regarding Japanese assets and impact U.S. Treasury yields due to shifts in capital flows.

In Europe, preliminary PMI data showed mixed results but overall indicated expansion, with Germany's Composite PMI unexpectedly jumping to 50.1 while services activity accelerated significantly, suggesting resilience despite ongoing challenges within manufacturing sectors across various countries including France, which continues facing contractionary conditions. These developments have contributed positively toward European equity indices amidst expectations that the ECB will implement further rate cuts soon.

U.S President Donald Trump's recent comments about potentially easing his tariff stance on China following positive discussions with Chinese leadership have led to a weakening dollar against major currencies like the euro and yen; this sentiment is reflected by declines observed in the US Dollar Index alongside gains seen across precious metals such as gold reaching near record highs driven by lower expected borrowing costs if Trump’s proposals are realized.

SPDR Gold Shares (GLD) [+1.0%]
SPDR Gold Shares (GLD) has experienced a price increase in pre-market trading. Concurrently, gold prices have risen, approaching their all-time peak amid geopolitical uncertainties and fluctuations in currency values. This uptick follows remarks from President Trump advocating for immediate interest rate cuts by the Federal Reserve, which may influence market dynamics. Additionally, the U.S. dollar has weakened, further enhancing the appeal of gold as a safe-haven asset. In related movements, silver prices have also increased significantly, reflecting a strong correlation with gold and suggesting broader trends affecting precious metals.

USD/CNH (USD/CNH) [-0.5%]
The USD/CNH has dropped significantly, influenced by President Trump's recent comments advocating for immediate interest rate cuts and a preference to avoid tariffs on China, resulting in broad dollar selling. Social media discussions have highlighted the People's Bank of China raising the Central Parity Rate for CNY, significantly stronger than market expectations. Trump has also expressed optimism regarding a potential trade deal with Xi Jinping. Additionally, the IMF chief acknowledged progress in controlling inflation while noting ongoing challenges, coinciding with reports of the Federal Reserve pausing rate cuts as inflation and the job market appear stable. The US Dollar Index has declined, reflecting broader market sentiment that may influence USD/CNH.

ERIC | -10.7% | -2.6B
Telefonaktiebolaget LM Ericsson | Communications Equipment
Telefonaktiebolaget LM Ericsson has experienced a significant decline in its stock price, dropping approximately 10.8% in pre-market trading following its latest quarterly results. The company reported an adjusted EBIT of SEK 9.80 billion, falling short of the expected SEK 10.35 billion, with an adjusted operating margin of 13.4% compared to the anticipated 14%. Net sales reached SEK 72.91 billion, slightly exceeding the estimate of SEK 72.38 billion, while the adjusted gross margin was reported at 46.3%. Earnings per share (EPS) of SEK 1.44 also missed the consensus estimate of SEK 1.59. Despite announcing a proposed dividend increase to SEK 2.85 per share, these results have prompted a negative market reaction. Additionally, conversations on social media highlighted that the company’s Q4 2024 earnings did not meet expectations, despite a notable year-over-year growth in North American networks sales.

TWLO | +18.1%| +4.2B
Twilio Inc | Internet Services & Infrastructure
Twilio Inc. has experienced a notable price increase following its recent Investor Day, where it announced an adjusted operating margin forecast of 21% to 22% for 2027, surpassing Wall Street expectations and the previous quarter's margin of 16.1%. The company also revealed a $2 billion share repurchase program, set to expire in 2027. Twilio anticipates approximately 11% year-over-year revenue growth for Q4 2024 and positive GAAP income, with preliminary results exceeding guidance. Analysts responded positively, raising their price targets, with JMP Securities at 165 and Barclays at 120. Additionally, Twilio confirmed expected free cash flow and adjusted operating income between 825 million and 850 million for FY 2024, contributing to the optimistic market sentiment surrounding the stock.

NVO | +12.4%| +37.9B
Novo Nordisk A/S | Pharmaceuticals
Novo Nordisk A/S reported positive results from its phase 1b/2a trial of amycretin, a novel treatment for obesity. In this trial, patients receiving the highest dosage of 20 mg experienced a significant weight loss of 22% over 36 weeks, while those on placebo gained weight. The trial involved 125 participants and primarily recorded mild to moderate gastrointestinal adverse effects. Following this announcement, Novo Nordisk shares surged, reflecting heightened enthusiasm for the drug's potential. Social media discussions corroborated the trial's success, noting an average weight loss of 13.1% after 12 weeks, improving to 22% by the end of the study. Comparisons were made favorably against existing treatments, with some users asserting that amycretin outperformed competitors like Zepbound. This positive reception contributed to an approximate 11% increase in Novo Nordisk's stock price following the news.

TXN | -4.0% | -7.0B
Texas Instruments Inc | Semiconductors
Texas Instruments reported its fourth-quarter earnings on January 23, 2025, achieving earnings per share (EPS) of $1.30, surpassing the consensus estimate of $1.20. Revenue for the quarter was $4.01 billion, exceeding expectations of $3.87 billion but declining from $4.08 billion year-over-year. The company's guidance for the first quarter projected EPS between $0.94 and $1.16, below the consensus estimate of $1.17, with revenue forecasted at $3.74 billion to $4.06 billion against an expectation of $3.85 billion. Management highlighted a significant inventory buildup and challenges in key automotive and industrial markets, contributing to decreased gross margins. Following these announcements, shares experienced a notable decline of approximately 3% in after-hours trading. Social media discussions noted a sequential revenue decline and weak performance in embedded processing revenue, although growth was observed in the company's China business.

CSX | -3.7% | -2.3B
CSX Corp | Rail Transportation
CSX Corp reported its fourth-quarter earnings on January 23, 2025, revealing an adjusted EPS of $0.42, which met analyst expectations but declined from $0.45 in the previous year. Revenue fell to $3.54 billion, missing the consensus estimate of $3.57 billion and down from $3.68 billion year-over-year. Operating income decreased by 16% to $1.11 billion, compared to an estimated $1.24 billion. Total carloads reached 1.58 million, slightly exceeding estimates but reflecting mixed performance overall. Following the earnings report, CSX shares dropped approximately 2.3% in after-hours trading. Concurrently, social media discussions highlighted a spike in call volume, reaching 23.5K, significantly above the 30-day average, alongside details of the company's Q4 performance, which included an EPS of $0.38 and a revenue of $3.54 billion, both below estimates. The company projected low to mid-single-digit volume growth for FY 2025, with capital expenditures expected to remain flat year-over-year, excluding hurricane rebuild spending.

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