Anti-Clickbait News Summaries for January 18, 2025
Big Tech faces hefty fines with Apple, Google, and Microsoft among the top payers
Hi, it’s Jack and The Signals.Doctor team with your daily news summaries 😇
The Markets:
Futures Highlights
Mixed movement in energy as equities show notable strength. Natural Gas plunges, but major indexes like the Nasdaq and S&P 500 are firmly in the green.
🔴 Crude Oil: 77.37 (−0.48 | −0.62%)
🔴 Natural Gas: 3.9160 (−0.3420 | −8.03%)
🔴 Gold: 2740.00 (−10.90 | −0.40%)
🟢 Dow: 43681.00 (+309.00 | +0.71%)
🟢 S&P 500: 6032.50 (+57.00 | +0.95%)
🟢 Nasdaq 100: 21589.00 (+339.25 | +1.60%)
🟢 Russell 2000: 2288.00 (+8.80 | +0.39%)
Forex & Bonds
USD gains against several key currencies, while bond yields inch upward across the board. Bitcoin sees a slight dip despite remaining above the 100k mark.
🔴 EUR/USD: 1.0267 (−0.0029 | −0.28%)
🟢 USD/JPY: 156.26 (+1.15 | +0.74%)
🔴 GBP/USD: 1.2167 (−0.0068 | −0.55%)
🔴 BTC/USD: 103436.80 (−105.20 | −0.10%)
🟢 5-Year Treasury: 4.414 (+0.018 | +0.41%)
🟢 10-Year Treasury: 4.609 (+0.003 | +0.07%)
🟢 30-Year Treasury: 4.845 (+0.001 | +0.02%)
Major News (Biggest Winners → Biggest Losers)
Semiconductors surge on improved earnings outlook, with Intel leading the charge. Novo Nordisk slides on regulatory news, while the rest of Big Tech posts moderate gains.
🟢 INTC: +9.25%
🟢 SLB: +6.06%
🟢 COIN: +4.92%
🟢 HOOD: +4.49%
🟢 NVDA: +3.10%
🟢 TSLA: +3.06%
🟢 JPM: +1.92%
🟢 NFLX: +1.87%
🟢 GOOG: +1.62%
🟢 GOOGL: +1.60%
🟢 SCHW: +1.19%
🟢 MRNA: +0.89%
🟢 AAPL: +0.75%
🟢 WMT: +0.70%
🟢 META: +0.24%
🔴 NVO: −5.27%
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The Daily News Podcast
The News Summaries
Specific Events That Affect The Markets Happening Today
Podcast:
Read:
Today:
As of Saturday, January 18, 2025, several developments are influencing the U.S. stock market:
Key Developments
Market Rally Ahead of Presidential Inauguration:
The U.S. stock market experienced a robust rally leading up to President Donald Trump's inauguration. Major indices, including the Nasdaq, S&P 500, and Dow Jones Industrial Average, posted significant gains, with many moving above their 50-day moving averages. This positive momentum was supported by falling Treasury yields and strong earnings reports.
Sector Performances:
All S&P 500 sectors saw gains, with financials, energy, and materials leading the performance. Major Wall Street banks, such as Citigroup, Goldman Sachs, and Morgan Stanley, surged approximately 12%, benefiting from strong Q4 earnings and expectations of potential deregulation under the incoming administration.
Corporate Earnings Outlook:
Investors hold high expectations for U.S. corporate profits as prominent companies prepare to report earnings in the coming weeks. Analysts predict the best quarterly results in three years, with S&P 500 companies' net profits expected to have increased by 11.4% year-on-year. Technology companies remain a significant driving force, with earnings growth for leading tech stocks expected to moderate to 21% from 33% in 2024.
Inflation Concerns:
Despite the market's strong performance, inflation remains a concern. Recent data show core inflation stalling around 3.2-3.3%. Federal Reserve Governor Christopher Waller indicated potential future rate cuts if inflation progresses towards the 2% target. However, sustained higher inflation could push long-term Treasury rates over 5%.
Investor Sentiment:
As President Donald Trump's inauguration approaches, investors face significant uncertainty and are advised to adopt a "wait and see" approach before making major portfolio changes. Key issues to monitor include tariffs, tax policy, government spending, deficits, immigration policy, and deregulation. Investment professionals recommend maintaining a balanced asset mix and preparing for potential market volatility.
Investor Considerations
Economic Indicators: Positive housing data and anticipated industrial production figures suggest economic resilience, which may influence investment strategies.
Corporate Earnings: Strong performances in the energy and financial sectors highlight areas of potential growth.
The News Summaries:
Trump seeks to reshape federal government by targeting deep state employees
President-elect Donald Trump plans to take significant control of the federal government when he assumes office on Monday. He aims to dismantle what he calls the "deep state" by stripping job protections from around 50,000 federal employees, allowing for the appointment of loyalists.
Trump's administration will prioritize filling thousands of political positions quickly. His team has already requested resignations from senior diplomats at the State Department, signaling a push to replace career officials with those aligned with his agenda.
Critics argue that Trump's actions are based on a conspiracy theory and could create a culture of fear among federal employees. They contend that the proposed changes could undermine the integrity of the federal workforce.
Trump appoints loyalists to cabinet as billionaires gather for inauguration
Donald Trump is appointing new cabinet members, including Pete Hegseth as Secretary of Defense and Pam Bondi as Attorney General. These appointments are seen as reflecting Trump's focus on personal loyalty.
Billionaires from various industries will gather for Trump's inauguration, raising concerns about the influence of wealth in politics. President Biden previously warned about the emergence of an oligarchy in the U.S.
The confirmation hearings for Hegseth and Bondi are part of a broader discussion on Trump's second term and potential policy changes.
Source: https://www.newyorker.com/podcast/political-scene/big-money-and-trumps-new-cabinet
US Supreme Court issues major rulings against Biden administration
President Joe Biden faced significant setbacks at the U.S. Supreme Court during his term, with a conservative majority overturning key rulings. Notable defeats included the reversal of Roe v. Wade and the rejection of race-conscious college admissions.
The court also blocked Biden's student loan relief plan and limited the Environmental Protection Agency's authority. These rulings reflect a broader trend of curtailing federal regulatory power, impacting Biden's ability to advance his agenda.
Despite these losses, Biden achieved some victories, including upholding laws related to TikTok and gun restrictions for domestic violence offenders. However, many issues remain unresolved, leaving the potential for future challenges.
Source: https://www.reuters.com/world/us/us-supreme-court-dealt-biden-historic-series-defeats-2025-01-18/
IBM and L'Oréal team up to develop AI for sustainable cosmetics
IBM and L'Oréal are working together on an AI model to create sustainable cosmetics. This collaboration aims to enhance product formulation using artificial intelligence.
Synthesia, a U.K.-based AI video platform, raised $180 million in a Series D funding round, increasing its valuation to $2.1 billion. This funding will support growth in markets like Japan, Australia, Europe, and North America.
The new investment will help Synthesia develop interactive and personalized AI video experiences. The company previously launched Synthesia 2.0, featuring personal avatars and an AI video assistant.
Source: https://qz.com/openai-chatgpt-tasks-nvidia-healthcare-ai-synthesia-1851742376
Trump's potential NATO withdrawal could spark legal battle over congressional approval
President-elect Trump has indicated he may attempt to withdraw the U.S. from NATO, which would conflict with Congress. A 2020 law requires congressional approval for such a move, creating a potential legal dispute.
The Constitution does not clarify whether the president can unilaterally withdraw from treaties. Previous cases suggest courts may favor Congress, especially since Section 1250A explicitly prohibits unilateral withdrawal from NATO.
Legal experts note that the situation is unprecedented, and it remains unclear how courts would interpret the constitutional powers regarding treaty withdrawal. The outcome could significantly impact U.S. foreign policy and NATO's future.
Source: https://www.businessinsider.com/what-would-happen-us-leaves-nato-trump-2025-1
Trump's return may reshape tech policies but raises encryption concerns
President-elect Donald Trump is set to return to the White House, which may benefit major tech companies. Elon Musk and Jeff Bezos are expected to play significant roles in the new administration, potentially influencing tech policies.
During his first term, Trump opposed end-to-end encryption, a system that protects data privacy. This issue may resurface, as both Trump and the Biden administration have discussed creating backdoors for encryption, raising concerns about security and privacy.
Musk's recent criticisms of the secure messaging app Signal could impact Trump's stance on encryption standards. Experts warn that weakening encryption could lead to greater risks for data security, as both political parties have previously compromised citizens' privacy rights.
Big Tech faces hefty fines in 2024 with Apple, Google, and Microsoft among the top payers
In 2024, major tech companies faced significant fines for regulatory violations. Google’s parent company, Alphabet, paid $2.9 billion, including a $2.5 billion penalty from the European Union for market abuse.
Apple incurred $2 billion in EU fines for streaming rule violations, along with $89 million in the U.S. for customer dispute issues and $14.4 million in South Korea for in-app payment noncompliance.
Microsoft paid $1.4 billion in the EU for antitrust violations, while Meta and Amazon faced fines of $1.6 billion and $1.4 billion, respectively, for data mismanagement and privacy violations. Despite these costs, the companies' earnings remained strong.
Trump prepares for second presidential inauguration as global relations face uncertainty
Donald Trump is set to be inaugurated as U.S. president for a second time on January 20, 2025. This event is expected to significantly alter international relations, moving away from post-World War II norms and institutions like the UN and WTO.
Trump's administration may prioritize protectionist policies, impacting both allies and adversaries. His recent statements suggest a focus on border security and tax cuts, while also hinting at potential sanctions against Russia and a ceasefire in Gaza.
Markets are uncertain about Trump's economic impact, with investors questioning his commitment to them. Analysts anticipate unpredictable changes in business, immigration, and tariffs under his leadership.
New superconductor boosts UK efforts in fusion energy research
A new superconductor, rare-earth barium copper oxide (REBCO), operates at higher temperatures than previous materials, making it more practical for energy applications. It becomes superconducting at minus 200 Celsius, allowing for advancements in nuclear fusion technology.
Tokamak Energy, a UK-based company, is developing a compact fusion reactor called the Spherical Tokamak for Electricity Production (STEP). This project aims to demonstrate practical fusion energy generation, which has been elusive since the 1950s.
The UK government has announced £410 million for fusion research, a slight increase from previous funding. This investment supports efforts to keep the UK competitive in the global race for fusion energy, as private investment in the sector grows.
AI-driven search tools cut organic website traffic by up to 64% in 2025
AI-driven search tools are significantly reducing organic website traffic, with some businesses seeing drops of up to 64%. This shift is challenging traditional SEO methods.
To adapt, businesses are encouraged to optimize content for AI platforms like ChatGPT Search and Perplexity AI. A strong opt-in strategy is recommended for maintaining audience engagement.
A free 'AI Success Kit' is available, which includes a chapter from a new book on navigating the AI-driven landscape.
US set to reach $36 trillion debt ceiling on Tuesday
The U.S. will reach its $36 trillion debt ceiling on Tuesday, prompting the Treasury to implement extraordinary measures to manage government payments. These measures will last until March 14, according to outgoing Treasury Secretary Janet Yellen.
Congress faces pressure to address the debt ceiling, with Republicans divided on how to proceed. House Speaker Mike Johnson may need Democratic support to pass any increase, as some conservative members oppose raising the limit.
Previously, the debt ceiling was suspended until January 2, 2025, as part of the Fiscal Responsibility Act. The cap was set at $31.4 trillion before the suspension, which followed contentious negotiations between Republicans and Democrats.
Source: https://www.cnn.com/2025/01/17/business/debt-ceiling-limit-congress/index.html
OpenAI supports new AI initiative focused on U.S. competition with China
OpenAI, led by CEO Sam Altman, is supporting a new AI initiative called AI 2030. This initiative is organized by the American Security Project, co-founded by John Kerry, and aims to address U.S. competition with China in AI.
The American Security Project has a history of promoting liberal causes and includes board members with Democratic ties. Recent reports indicate that OpenAI is also seeking defense contracts and engaging with military applications for its AI technology.
Altman has made significant donations to Democratic causes but has also contributed to Republican efforts. The initiative seeks bipartisan support to ensure the U.S. maintains its lead in AI development against China.
OpenAI prepares to launch new o3 mini reasoning AI model in coming weeks
OpenAI has completed its new reasoning AI model, o3 mini, and plans to launch it in a few weeks, according to CEO Sam Altman. The release will include both an application programming interface (API) and ChatGPT.
This development follows OpenAI's testing of reasoning models, o3 and o3 mini, which aim to compete with Google's advanced AI. The new models are expected to be more powerful than the previously released o1 models.
Earlier this week, OpenAI also introduced a beta feature called Tasks for ChatGPT, expanding its capabilities in the virtual assistant market. This comes after significant investments in AI following the launch of ChatGPT in late 2022.
Trump team seeks to transform U.S. development agency into sovereign wealth fund
President-elect Donald Trump's team plans to transform the U.S. International Development Finance Corp (DFC) into a sovereign wealth fund. This change aims to enhance U.S. economic influence, particularly in Panama and Greenland.
Trump previously announced intentions to create a sovereign wealth fund for national projects, funded by tariffs. Discussions about the DFC's new role involve notable figures like Elon Musk and Stephen Feinberg.
The push for a revamped DFC has sparked competition for leadership positions, with candidates including a former executive from Bridgewater Associates and a former Republican congressman. Interviews for these roles have occurred at Trump's estate.
Source: https://finance.yahoo.com/news/trump-team-plans-wealth-fund-223800403.html
Waymo confirms partnership with Zeekr remains on track despite US restrictions
Waymo's partnership with Chinese automaker Zeekr is still on track, despite new U.S. rules banning vehicle tech from China and Russia. The rules, finalized this week, will restrict software in 2027 and hardware in 2029.
Waymo argues its vehicles are exempt because they use American technology. The company receives stripped-down vehicles from Geely, which are then fitted with its self-driving tech in the U.S.
Waymo currently operates a ride-hail service with modified Jaguar I-Pace vehicles and plans to add Hyundai Ioniq 5s later this year. The impact of potential tariffs on Chinese electric vehicles remains uncertain.
Source: https://www.wired.com/story/waymo-finds-a-way-around-us-restrictions-on-chinese-evs/
ChatGPT product head to testify in US antitrust case against Google
Nick Turley, head of product at ChatGPT, will testify in the U.S. government's antitrust case against Google. The government aims to show that Google creates significant barriers for competitors in the search market.
A court previously ruled that Google holds a monopoly in search, and the Department of Justice is seeking penalties, including potential spin-offs of products like Chrome. Turley’s testimony will focus on generative AI's impact on search access and competition.
Google has subpoenaed OpenAI for documents related to the case, but both companies are in a dispute over the extent of evidence OpenAI should provide. OpenAI has agreed to share some documents but argues that older documents are not relevant to the current AI landscape.
FTC raises antitrust concerns over Microsoft and OpenAI partnership
The U.S. Federal Trade Commission (FTC) has raised antitrust concerns about Microsoft's $13 billion investment in OpenAI. The agency worries this partnership could strengthen Microsoft's dominance in cloud computing and limit competition in the AI market.
The FTC's report highlights risks of large tech firms acquiring AI startups and gaining exclusive access to sensitive data. It notes that investments often require AI companies to use the cloud services of their investors, creating a cycle that benefits the tech giants.
The FTC is investigating the impact of these partnerships on the AI talent market and competition. The agency has the authority to conduct market studies and issue subpoenas to gather more information on these trends.
Source: https://financialpost.com/news/microsoft-openai-partnership-antitrust-concerns
Biden administration proposes new rules to limit duty-free imports under $800 threshold
The Biden administration has proposed new rules to limit duty-free imports under the $800 threshold. This change will deny exemptions for low-value shipments that are subject to existing U.S. tariffs, impacting e-commerce companies like Shein and Temu.
Previously, these companies benefited from the de minimis threshold to send millions of small packages to U.S. customers. The new rules aim to address concerns about illicit goods, including fentanyl precursors, entering the country without proper inspection.
Under the proposed regulations, shippers must provide detailed tariff classifications for their packages. This will help customs officials better identify and stop illegal shipments.
Source: https://finance.yahoo.com/news/biden-administration-posts-last-minute-182301390.html