Global markets recovered this week due to the possibility of a Russia-Ukraine peace deal. U.S markets recovered after an initial slump due to the delayed implementation of reciprocal tariffs by the U.S. The steel and aluminum tariffs proposed by President Trump were net positive for the U.S. metal industry. Positive corporate returns also continued to raise investor optimism. The Federal Reserve’s hawkish stance is likely to persist considering sticky inflation. President Trump initiated negotiations with President Putin in a preliminary phone call. The two leaders will likely meet in Saudi Arabia to continue negotiations. The U.S. confirmed Robert F. Kennedy Jr’s and Tulsi Gabbards’ appointments this week. India and the U.S. have agreed to resolve trade barriers following talks between President Trump and Prime Minister Modi.

Global Updates
  • The MSCI All Country World Index gained this week driven by the possibility of Ukraine-Russia peace and a strong tech rally in China. U.S. equities also ended higher this week. Japan’s equity market also registered broad gains. 
  • The S&P Global Market Intelligence reported a 55.6% jump in equity issuance globally to $116.35 billion in the fourth quarter of 2024. Merger and Acquisition transactions declined in the same period by 13.6% globally due to a slowdown in the U.S.  amid the presidential elections.
  • European equity markets were bolstered by corporate gains and the possibility of the Russia-Ukraine conflict ending soon. Goldman Sachs raised the one-year price estimates for the Stoxx 600 from 540 to 580 citing the positive feedback from a Russia-Ukraine peace deal.
  • French tire manufacturer Michelin posted better-than-expected full-year sales registering a 5.1% decline. The company’s CFO clarified that their planned U.S. investment would not impact manufacturing units in Europe. 
  • BP Plc stock gained this week following the acquisition of a stake by Elliott Management in the company.
  • French President Emmanuel Macron announced plans by private corporations to invest 109 billion euros in the development of AI infrastructure in France over the coming years
  • German manufacturing behemoth Siemens posted a 2% increase in revenues to 18.35 billion euros for the first fiscal quarter. The company’s higher-than-expected revenues generated a better-than-expected profit of 2.52 billion euros. Siemens is viewed as the bellwether for Europe’s broader manufacturing sector. 
  • The Hang Seng Index jumped this week driven by the AI rally in China equities. The news of a possible collaboration between Apple and Alibaba on AI drove the rally, continuing the DeepSeek wave. Morgan Stanley and UBS Group suggested that the AI rally has some way to go due to a positive feedback loop in China equities.
U.S. Equity
  • The S&P 500 and Nasdaq ended this week higher after President Trump delayed the implementation of reciprocal tariffs on all U.S. trade partners. The stock markets dragged early in the week due to a cooler-than-expected job market report for January. The steel and aluminum tariffs proposed by President Trump bolstered U.S. metal stocks in the week. China implemented retaliatory tariffs on imports worth $14 billion on imports from the U.S.
  • The Bureau of Labor Statistics registered a 3% year-over-year inflation in the Consumer Price Index for January, due to higher fuel costs and sticky food inflation. The Federal Reserve is expected to maintain its hawkish stance due to the hotter-than-expected inflation. Inflation in January’s Producer Price Index was also higher than expected, at 3.5%. 
  • McDonald’s stock price rose, driven by the company’s higher-than-expected 0.4% growth in global sales in the fourth quarter, reversing the declining trend of the last two quarters.
  • Business management software maker Monday.com fourth-quarter profits and sales beat estimates driven by its AI products. The company generated a revenue of $268 million.
  • CVS Health stock gained after the company reported higher-than-expected profits in the fourth quarter, with an EPS of $1.19 and revenue of $97.71 billion. 
  • Robinhood Markets Inc. stock gained after the company posted a higher-than-expected EPS of $1.01 and revenue of $1.01 billion. The company’s revenue grew by 115%.
  • GE Healthcare Technologies stock gained after the company reported higher-than-expected profits of $1.45 per share and sales of $5.32 billion in the fourth quarter due to strong demand for its diagnostic devices and despite a 15% decline in its China sales. 
  • Intel Stock gained due to the speculation of a collaboration with TSMC in the U.S.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose this week.
  • The U.S. 10-year Treasury yield rose to 4.53% and the yield on the 2-year note rose slightly to 4.29% over the week.
  • The U.S. Dollar Index depreciated to 107.14 this week, following the cooling risk aversion of investors due to peace talks between President Trump and President Putin.

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