Market Highlights π‘ - 4 February 2025
Global markets closed lower, weighed down by trade war uncertainty.
πΊπΈ S&P 500 Index: -0.75% π
πΊπΈ Nasdaq Index: -1.20% π
πͺπΊ STOXX 600 Index: -0.87% π
π―π΅ Nikkei 225 Index: -2.66% π
ππ° Hang Seng Index: -0.04% π
π¨π³ CSI 300 Index: Market closed
πΈπ¬ Straits Times Index: -0.75% π
US markets declined, with the S&P 500 falling by -0.8% and the Nasdaq down -1.2%, as non-essential consumer goods and tech stocks were hit by concerns over Trump's tariffs and supply chain disruptions, negatively affecting investor sentiment.
January ISM Manufacturing PMI rose to 50.9, its first increase in over two years, beating expectations of 49.3. This positive data boosted the US dollar, reflecting investor confidence in the economy.
Eurozone inflation for January was estimated at 2.5% year-on-year, higher than December's 2.4%, driven by rising energy prices, while price growth in services, food, alcohol, tobacco, and non-energy industrial goods slowed.
Asian markets mostly declined, with the Hang Seng Index dropping slightly by less than -0.1% amid concerns over Trump's tariff increases, although tech stocks rebounded due to optimism surrounding China's AI development. The Nikkei 225 plummeted -2.7% as broad sell-offs were triggered by fears of an escalating trade war.
China's Caixin Manufacturing PMI for January fell to 50.1, down from 50.5 in December and below the expected 50.6, due to rising unemployment, weak external demand, and growing tariff concerns causing price declines.
π‘ Upcoming Events π‘
Tuesday: US data will be released, including JOLTS Job Openings.
Wednesday: Focus will be on China's Caixin Services PMI, US ADP Non-Farm Employment Change, and ISM Services PMI.
Thursday: US will release Jobless Claims data.
At the end of the week, the US Unemployment Rate will be announced on Friday.
π‘ Things to Know Today π‘
1. President Donald Trump delayed threats of high tariffs on Mexico and Canada, excluding China, agreeing to a 30-day pause in exchange for concessions from these two neighboring countries on border and law enforcement.
Trump tariff
2. President Trump signed an executive order establishing a US sovereign wealth fund to invest in various assets and generate returns for the government, including a proposal to acquire TikTok, with close collaboration with the Treasury and Commerce departments to advance the plan.
How will be TikTok future in US?
3. Google $Alphabet(GOOGL)$ is appealing a US court ruling that requires changes to its app store following a lawsuit from Epic Games accusing it of anti-competitive behavior. Google believes the judge made legal errors, and the appellate court will make a final ruling later this year.
Google VS Epic Games
4. Alibaba Cloud $Alibaba(09988)$ $Alibaba(BABA)$ has added DeepSeek-V3 and DeepSeek-R1 to its PAI model library, allowing users to easily develop AI applications without writing code. This move follows Microsoft $Microsoft(MSFT)$ , Amazon $Amazon.com(AMZN)$ , and Huawei, reflecting the trend of major tech companies adopting DeepSeek's open-source models to better serve customers.
Deepseek
5. The Malaysian government has proposed a mandatory 2% provident fund contribution for foreign workers, significantly lower than the initial 12% proposal. Prime Minister Anwar Ibrahim stated that this rate will remain unchanged, with further discussions to be held at the cabinet level for final confirmation.
Malaysia Provident Fund
β Key Takeaways:
An escalating trade war could intensify the threat of stagflation, with investors closely watching key employment data today.
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Based on the market highlights on 4 February 2025:
Global markets closed lower: The S&P 500 Index in the US fell by 0.75%, and the Nasdaq Index declined by 1.20%. The European STOXX 600 Index dropped by 0.87%, the Japanese Nikkei 225 Index fell by 2.66%, and the Hong Kong Hang Seng Index decreased by 0.04%. The Chinese CSI 300 Index was closed for the day, and the Singapore Straits Times Index declined by 0.75%.
Trade war uncertainty weighed on the markets: Concerns over Trump's tariffs and supply chain disruptions in the non-essential consumer goods and tech sectors negatively affected investor sentiment.
ISM Manufacturing PMI in the US showed positive growth: The January PMI rose to 50.9, the first increase in over two years and beating expectations of 49.3. This data reflects improving conditions in the US manufacturing sector and boosted investor confidence in the economy.
Eurozone inflation increased in January: The estimated year-on-year inflation rate for January was 2.5%, higher than December's 2.4%. Rising energy prices drove the increase, while price growth in services, food, alcohol, tobacco, and non-energy industrial goods slowed.
Asian markets mostly declined: The Hang Seng Index in Hong Kong dropped slightly by less than 0.1% amid concerns over Trump's tariff increases. However, there was a rebound in tech stocks due to optimism surrounding technology advancements.
Google is appealing a court ruling: Google is appealing a US court ruling that requires changes to its app store following a lawsuit from Epic Games alleging anti-competitive behavior. The appellate court will make a final ruling later this year.
Alibaba Cloud adds new models to its library: Alibaba Cloud has added DeepSeek-V3 and DeepSeek-R1 to its PAI model library, allowing users to develop AI applications without writing code. This move follows similar actions by Microsoft, Amazon, and Huawei, indicating a trend of major tech companies adopting open-source models like DeepSeek to enhance their services.
Malaysia proposes a mandatory provident fund contribution for foreign workers: The Malaysian government has proposed a 2% mandatory provident fund contribution for foreign workers, which is lower than the initial 12% proposal. The rate is subject to further discussions at the cabinet level for final confirmation.
Key takeaways:
The threat of stagflation could escalate with an intensification of the trade war.
Investors are closely monitoring key employment data.
Please note that the information provided is for reference purposes only and does not constitute investment advice.