Global markets were apprehensive this week over President Trump’s reiteration of tariffs being levied on Canada, Mexico and China. The technology sector lagged due to semiconductor restrictions. The continued talks between US and Russia in Istanbul indicated the Trump administration’s resolve to achieve peace in the Russia Ukraine region. The US also agreed to a mineral deal with Ukraine. President Zelenskyy expressed his willingness to resign if peace is achieved and Ukraine is permitted to join NATO. The German Conservatives won the country’s general elections, while the European Union and United Kingdom announced fresh sanctions on Russia.

Global Updates
  • The MSCI All Country World Index trended lower this week weighed down by underperformance in US, UK and Asian equities. Potential tariffs triggered risk off sentiments in investors. President Trump’s plans to increase restrictions on Semiconductor supplies to China led to a worldwide selloff of technology stocks.
  • The Bank of Canada estimated that a trade war would lead to a permanent decline in output of 2.5%.
  • Defense related stocks rose in the U.K. following Prime Minister Sir Keir Starmer’s announcement of plans to increase defense spending to 2.5% of GDP by 2027.
  • Stellantis posted a 70% drop in its lower-than-expected net profits of €5.5 billion for 2024. Revenues also declined by 17% to € 156.9 billion but were higher than expected.   
  • Aston Martin Lagonda stock lagged this week after the company announced layoffs and delay int the launch of its EV.
  • The Alibaba group announced its plans to invest $52 billion to develop AI and cloud infrastructure over the next three years. 
  • FMCG giant Unilever is replacing current CEO Hein Schumacher with company CEO Fernando Fernandez.
  • Asian equity markets dragged this week due to the possibility of a 20% tariff on Chinese products. The Trump administration has also proposed levies amounting to $1.5 million on cargos transported on China made ships docking in US ports.
  • The Chinese President reiterated his government’s commitment to support businesses, in a meeting with entrepreneurs this week. China also announced plans to inject funds worth $55 billion in three banks to encourage higher lending.
U.S. Equity
  • The S&P 500, Nasdaq and Dow Jones ended the week lower, weighed down by mixed earnings, unfavorable economic data and potential tariff shifts. Investors displayed risk off sentiment triggering a broad selloff in the markets early in the week. The S&P Global Market Intelligence suggested, the growth in economic activity has plummeted to a 17-month low due to domestic spending cuts and potentially higher tariffs. The Bureau of Economic Analysis’s (BEA) GDP growth data also indicated a sluggish US economy.
  • Weekly jobless claims jumped by 21, 000 claims to 242,000 in the previous week. 
  • Existing home sales fell by 4.9% in January despite rising inventory in the market. The drop in sales is being attributed to elevated mortgage rates and home prices. 
  • AI stocks trended lower this week due to Nvidia’s lesser-than-expected first quarter outlook. Nvidia reported 78% growth in fourth quarter revenue of $39.33 billion yielding a net income of $22.07 billion. Nvidia projected the first quarter revenue to come in at $43 billion+2%
  • Cloud software company Salesforce’s EPS of $1.75 and revenue of $9.99 billion, came in below expectations. The company projected a lower-than-expected adjusted EPS of $11.09 to $11.17 and revenue of $40.5 billion to $40.9 billion for the fiscal year 2026.
  • Dell Technologies is close to signing a $5 billion deal with xAI for the sale of Nvidia’s GB2000 chip powered servers.
  • Apple has committed to investing $500 billion in the US over the next four years and generate 20,000 research and development jobs. Apple will also be collaborating with Foxconn in opening an AI server factory in Texas.
  • Microsoft has started canceling its leases for AI data centers with hundreds of megawatts capacity, in the US
  • The Department of Justice has initiated an investigation in the Medicare billing practices of UnitedHealth Group in its Medicare Advantage Plans.
Fixed Income
  • The Bloomberg US Aggregate Bond Index edged higher this week.
  • The US 10-year Treasury yield was lower at 4.229% and the yield on the 2-year note fell to 4.03% over the week. 
  • The US Dollar Index appreciated to 107.37 this week, due to the possibility of tariffs on Canada and Mexico next week.

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