Authored by Steve Watson via Modernity.news,

Joe Rogan unloaded on California governor Gavin Newsom during an episode of his podcast, calling him “disgusting” for smiling, dancing, and acting excited to talk with speculators about developing on the land where people’s homes are burning down.

Rogan played the now viral clip of Newsom bobbing his shoulders around while standing in front of destroyed houses and yapping on about property speculators getting involved.

“The governor gave this creepy speech where he was talking about speculators coming in, and talking about what to do with the land of all these homes that have been burnt down,” Rogan explained.

“It’s still only 6% contained,” he continued, referring to the devastating fires.

“He did this little dance like I’ve been talking with these, you know, with the governor of Hawaii about what to do. We got some ideas,” Rogan further urged.

He also criticised Newsom for failing to adequately prepare for the fires, noting “The fire insurance pulled out of California like, I think, like 69% of fire insurance pulled out of California because they’re, like, this is too crazy. Like you guys aren’t doing jack to manage this. You’re not clearing the brush.”

“The amount of money they could have saved by just clearing brush. By filling the reservoir, that 11-million-gallon reservoir was completely empty during the time of full fire season. Like, why didn’t you fix that?” Rogan asserted.

Watch:

Joe Rogan on Newsom’s Viral Dance Clip

“It’s all insanely mismanaged and then this guy is on television doing a dance in front of the burned down home that people used to sleep in, where their children would sleep. This is so disgusting.” pic.twitter.com/FoQiGvauPE

— Chief Nerd (@TheChiefNerd) January 17, 2025

Nero fiddled while Rome burned. Here’s Gavin Newsom literally dancing while LA burns. Smiling and chuckling about how all these speculators will land grab while standing in front of the piled ashes of people’s homes. Is this guy a psychopath?

— MichaelG (@Michael888G) January 17, 2025

He couldn’t contain his excitement smh

— Chief Nerd (@TheChiefNerd) January 17, 2025

for those new on @X, here is the @GavinNewsom‘s viral dance clip. Fire him ASAP California! pic.twitter.com/mEq4dJna5W

— Chansoo Byeon (@ByeonChansoo) January 17, 2025

The Mayor of Los Angeles has also been blasted for smiling throughout a PR video as the city burns to the ground.

The pair have overseen disastrous DEI policies that have completely hampered the ability of the LA fire department to prepare for or respond to the devastation.

*  *  *

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By Stefan Koopman, Senior Macro Strategist at Rabobank

An Input, Not An Output

China just hit its 2024 growth target, as it always does. According to Bloomberg, an “11th-hour stimulus blitz” and “some export boom turbocharged activity” were required to get it over the line, but here we are. Gross domestic product rose 5.0%, exceeding forecasts of 4.9% growth. The December data showed a rapid rise in industrial production, up 6.2%, with some tentative signs that domestic demand is picking up as well. Retail sales rose 3.8% in the last quarter, its fastest pace in 2024. That said, its trade surplus surged to nearly $1 trillion last year – roughly the size of Poland’s entire economy. That means China needs the rest of the world for its growth; not the other way around.

Growth for 2025 is targeted at 5% again. Of course, we all pretend to forecast it as if it may not happen, but in China, GDP is an input, not an output. The global consensus among policymakers and analysts is that China will have to pivot from its export-dependent, investment-heavy growth model toward one centered on domestic consumption. Yet, this structural shift remains constrained by the ideological preferences of Chinese leadership, which continues to prioritize state-driven economic strategies. Even so, there are some indications of rebalancing. Money supply growth appears to be stabilizing, and after three consecutive years of contraction, the real estate sector may have bottomed. However, policy efforts to bolster consumer spending tend to underwhelm, contributing to uncertainty on how that 5% target will actually be achieved.

Meanwhile, in the U.S., economic data was mixed. Jobless claims edged slightly above expectations, while retail sales underwhelmed. However, control-group sales – the metric feeding directly into GDP – rose faster than forecast, contributing to a modest uptick in the Atlanta Fed’s Nowcast for Q4 GDP, which now projects a 3.0% annualized growth rate. Despite this, the data lacked the heft to prompt a significant market reaction, especially compared to Wednesday’s exuberance when both stocks and bonds rallied after a small beat in core inflation.

More notably, the Philly Fed survey surprised with a headline reading of 44.3, its highest since April 2021 and the largest positive surprise since 1998. This could reflect tariff-related front-loading activity, as such a surprise is otherwise hard to rationalize, but it may be mirrored in the January Manufacturing ISM.

Treasury yields eventually did fell another 2-4 basis points across the curve. This followed comments from the Fed’s Waller, who said the FOMC could lower rates more and sooner should inflation data continue to be favorable in the months ahead. His remarks threw a bit of cold water on the narrative that the Fed may be done cutting rates.

And then there was Trump’s Treasury pick, Scott Bessent, who had his hearing. He stated that the FOMC should remain independent, vowed to protect the USD’s status as the world’s reserve currency, loathed for China’s export-dependent growth model, advocated for ramping up sanctions on Russia, and pledged to work across the aisle to remove the debt ceiling if that’s what Trump wants. Additionally, he said he wants to prioritize extending the Tax Cuts and Jobs Act, while cutting the deficit by slashing discretionary spending.

President-elect Donald Trump has ordered Monday’s inauguration to be moved indoors.

In a post to Truth Social, Trump said that the weather forecast, including “the windchill factor, could take temperatures into severe record lows.”

“There is an Arctic blast sweeping the Country. I don’t want to see people hurt, or injured, in any way,” Trump’s post continued, adding “Therefore, I have ordered the Inauguration Address, in addition to prayers and other speeches, to be delivered in the United States Capitol Rotunda, as was used by Ronald Reagan in 1985.”

So basically this:

Of course, it may be the weather, or it may be something else. As Rep. Marjorie Taylor Greene opined on X, “I have personally attended countless rallies where President Trump spoke in extreme weather conditions from cold to rain to heat,” adding “Is there a security threat other than extreme cold temperatures?”

I have personally attended countless rallies where President Trump spoke in extreme weather conditions from cold to rain to heat.

Is there a security threat other than extreme cold temperatures?

Not only for him but for the people? https://t.co/YQ2pfn6IYh

— Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) January 17, 2025

In one last masterstroke of incompetence on her way out the door, Treasury Secretary Janet Yellen has had her computer hacked by China. We don’t really care about the integrity of the U.S. economy, we just hope to God there’s no nudes to leak.

Chinese hackers who breached the Treasury Department were focused on “sanctions, international affairs and intelligence”, according to a new report from Bloomberg that detailed the breach. 

The breach reached “more than 400 laptop and desktop computers”, the report says. 

Hackers accessed employee credentials and over 3,000 files from unclassified personal computers, including policy documents, travel records, organizational charts, and sensitive law enforcement data, the report revealed. While they likely stole some material, classified and email systems were not breached.

The Bloomberg report said the hackers also accessed files related to investigations by the Committee on Foreign Investment in the U.S., which assesses national security risks of certain real estate and foreign investments.

A report to Congress reveals that Chinese state-sponsored hackers, identified as Silk Typhoon or UNC5221, breached the Treasury Department through a contractor’s network, prioritizing document theft and operating stealthily.

While no malware or long-term intelligence gathering was detected, sensitive systems remained uncompromised. Treasury reported the breach promptly and sought assistance from federal agencies. Treasury and FBI representatives declined to comment.

China has denied allegations of state-sponsored cyberattacks, dismissing claims of involvement in the Treasury hack as “groundless.”

Hackers accessed 419 computers between late September and mid-November, targeting offices dealing with foreign assets, international affairs, and intelligence, as well as senior officials and personal financial records.

A damage assessment is ongoing, and Treasury staff are set to brief the Senate Banking Committee. Treasury disconnected BeyondTrust, the compromised contractor, and is considering alternatives, though no immediate failures have been identified.

Reuters reported the hackers even breached U.S. Treasury Secretary Janet Yellen’s computer and computers of two of Yellen’s lieutenants, Deputy Secretary Wally Adeyemo and Acting Under Secretary Brad Smith. 

“The hackers accessed fewer than 50 files on Yellen’s machine,” Reuters concluded. 

Authored by Nathan Worcester via The Epoch Times,

One day after delivering his farewell address, President Joe Biden sat down for the last interview of his term.

The Oval Office interview, which was recorded earlier in the evening on Jan. 16, saw the outgoing president in a friendly exchange with MSNBC host Lawrence O’Donnell. Biden is famously attuned to one of MSNBC’s morning hosts, ex-Republican Joe Scarborough.

The two discussed Biden’s economic record, his confrontation with Russian leader Vladimir Putin, and the new ceasefire between Israel and Hamas.

Biden Warns of Concentration of Wealth

Echoing yesterday’s farewell address, Biden warned of an “enormous concentration of wealth and power,” saying that it threatened democracy.

“I have no problem with people making millions of dollars. For God’s sake, pay your fair share in taxes and participation,” he said.

He said the world was approaching an inflection point, chalking it up to changes in communications made possible by technology.

The ultra-wealthy, he said, were gaining leverage over the media as well as the economy.

The theme follows an election upended by SpaceX founder Elon Musk, who endorsed Trump after the attempt on his life in Butler, Pennsylvania.

Along with a growing number of Silicon Valley venture capitalists and entrepreneurs, Musk donated heavily in support of the candidate. He also campaigned for him in Pennsylvania ahead of Election Day.

While Trump enjoyed more public backing from the ultra-wealthy this time than in previous contests, an October 2024 analysis from Forbes found that Kamala Harris, Biden’s vice president and the loser against Trump, received significantly more support from prominent billionaires.

Biden Says He Changed ‘Basic Formula’ For the Economy

Biden told O’Donnell his administration had a transformational impact on America’s economy, criticizing supply-side, or “trickle-down,” economics.

“We changed the basic formula of how to make an economy work,” he said, saying he and his team had empowered labor unions.

He said former President Barack Obama, whom he served as vice president, did not go far enough. One of Obama’s signature bills, the 2009 Recovery Act, included $831 billion in spending amid the Great Recession.

“We were doing the old basic, old economics from the 50s, 60s and 70s,” Biden said.

President Joe Biden addresses union workers at Sheet Metal Workers Local 19 in Philadelphia, Pa., on Sept. 4, 2023. Mark Makela/Getty Images

Supply-side economist Arthur Laffer has argued that Biden and his party have embraced modern monetary theory (MMT), which holds that the United States’ dominant position in the world economy means long-running deficits are acceptable.

Stephanie Kelton, a progressive economic advisor to Sen. Bernie Sanders (I-Vt.) presidential campaigns and author of a unity report with the Biden 2020 campaign, wrote in 2021 that the president “has adopted MMT.”

As an example of his own economic legacy, Biden cited the 2022 CHIPS and Science Act, bipartisan legislation intended to bolster the domestic semiconductor industry through the authorization of $280 billion in funding for research and semiconductor production. Taiwan currently dominates the manufacturing of that technology.

Biden said that sector originally left the United States because corporations wanted cheaper workers. The COVID-19 pandemic, he said, revealed the importance of local supply chains.

He also took credit for linking American prosperity to its posture in the world in a new way.

“There’s no way to implement our foreign policy unless, in terms of our economic policy, we’re in a strong position to do it,” Biden said.

No Mention of Trump Envoy as Biden Talks Ceasefire

The outgoing president also discussed a new ceasefire and hostage release agreement between Israel and Hamas. The deal was signed in Doha, Qatar, on Jan. 17.

Biden said he had not spoken to Trump about the ceasefire negotiations in the previous two weeks.

Pressed by O’Donnell, he said he had discussed it “very, very briefly” with Trump after the election.

“I did really put together—if it doesn’t work, I’ve got to take the blame for it—a plan with my national security team,” Biden said.

The president said he did not believe Israel’s prime minister, Bibi Netanyahu, had delayed a ceasefire to help Trump. He also voiced sympathy for the embattled leader.

“He’s got a tough coalition too, man. He’s got the most conservative cabinet of any Israeli prime minister ever,” Biden said.

President Joe Biden (R) meets with Israeli Prime Minister Benjamin Netanyahu in the Oval Office at the White House in Washington on July 25, 2024. Elizabeth Frantz/Reuters

He did not mention real estate investor Steve Witkoff, Trump’s envoy to the successful Doha talks.

Israeli and other Middle Eastern media sources have credited Witkoff with swaying Netanyahu.

The Council on American-Islamic Relations credited the president-elect with “putting pressure on all parties, including Netanyahu, to reach a deal.”

The Union for Reform Judaism thanked both Biden and Trump, the latter for helping to “make this elusive agreement a reality.”

Biden Talks NATO and Putin

Biden and O’Donnell also discussed the Russia-Ukraine war and the North Atlantic Treaty Organization (NATO), which grew under Biden. Against the backdrop of that conflict in Eastern Europe, NATO admitted both Finland and Sweden.

“We tightened NATO—made it stronger,” Biden said.

The president said the larger alliance has weakened Russia’s position in Ukraine, which it initially invaded in February 2022, a little more than a year after he took office.

He said Ukraine would not be able to join NATO, a major concern for Russia, “until they change their system significantly.”

“We’re going to continue to help them grow, if we can,” Biden added.

In the days before Putin’s invasion, the Biden administration went public with U.S. intelligence suggesting the Russian leader planned to attack Ukraine.

Biden spoke about why his administration took that approach.

“I wanted people to believe me,” he said. “I knew more what I was talking about at that point because the position I was in than anybody else did.”

Biden Says He Didn’t Want to Sacrifice Employment to Curb Inflation

O’Donnell asked the president about criticism he had taken from economist Lawrence Summers.

In early 2021, Summers warned that the administration’s stimulus policies, pursued during the COVID-19 pandemic, would unleash significant inflation.

Biden-era inflation peaked at 9.1 percent in June 2022. It has since fallen to 2.9 percent as of December 2024, higher than it was through most of the Trump era. After reaching a low of 2.4 percent in September, inflation has increased slightly in recent months.

Biden told O’Donnell he was unwilling to tackle inflation in a way that cost jobs. Low inflation typically comes alongside higher unemployment.

“If you conclude the only way to deal with inflation is to create unemployment and another recession, because you had to make sure that we lost jobs, that’s another way to keep the inflation down. But guess what? I was absolutely convinced—give the American people half a shot,” he said.

The broad decline in the rate of inflation, Biden said, showed that the economy had executed a “soft landing.”

Los Angeles Police Department Chief Jim McDonnell said this week that an arson suspect who was arrested Tuesday in Pacoima told police he had started small fires because he “liked the smell of burning leaves.”

Police detained a suspect around 5:15 p.m. Wednesday after a citizen extinguished a fire and held him near Glenoaks and Van Nuys boulevards, according to ABC7.

The man, whose name was not released, was booked on suspicion of arson. Later, around 9:30 p.m., firefighters responded to reports of multiple trash fires near Vermont Avenue and Santa Monica Boulevard in East Hollywood.

“The suspect admitted to setting multiple fires that day and stated that she enjoyed causing chaos and destruction,” McDonnell said. 

“As we continue to manage this historic, catastrophic event, we want to express our gratitude to everyone who has provided tips and remained vigilant in keeping the city safe,” he continued. 

The ABC7 report said that firefighters quickly extinguished the blaze, and officers arrested the suspect, unrelated to the Eaton and Palisades fires. Authorities have also arrested dozens for looting, burglary, curfew violations, and one person for impersonating a firefighter.

Los Angeles DA Nathan Hochman pledged swift consequences for lawbreakers and is investigating price gouging, calling it “despicable” for exploiting vulnerable people.

Reports of charity and insurance scams have also surfaced, prompting warnings to verify charities and avoid cash or bitcoin donations.

From a downwardly revised 3.7% MoM drop in November, Housing Starts exploded 15.8% higher MoM in December while Building Permits (more forward looking) fell 0.7% MoM (a smaller decline than expected)…

Source: Bloomberg

That is the biggest MoM jump in Starts since March 2021, dragging the total Starts SAAR to its highest since Feb 2024…

Source: Bloomberg

The dramatic surge in starts was driven by a ridiculous 58.9% MoM jump in multi-family units (while multi-family permits fell 5.8%).

Source: Bloomberg

This is the biggest MoM jump in multi-family starts since 2016, and the highest SAAR for ‘renter nation’ since Dec 2023…

Source: Bloomberg

The question is – with sales expectatins falling, will homebuilders keep building at this pace…

Source: Bloomberg

Despite the robust monthly advance, new home construction for all of 2024 was the slowest since 2019.

With mortgage rates now back above 7.00%, perhaps the homebuilders are betting on a return of inflation and growth meaning home-buying affordability will remain out of reach for most Americans.

However, we do note that the more forward-looking ‘permits’ headline data actually declined MoM.

Furthermore, as builders respond to more tepid demand, the number of homes under construction has been trending down in the past year and eased to the lowest since August 2021. 

Completions also slowed further, hitting the slowest pace since March.

President Joe Biden said on Jan. 17 that he is commuting the sentences of nearly 2,500 individuals, marking the largest single-day act of clemency in modern history.

The latest pardons are being granted to people who were convicted of non-violent drug offenses and who are serving “disproportionately long” sentences compared to those they would receive today under current law, policy, and practice, Biden said in a statement published by the White House.

As Katabella Roberts reports for The Epoch Times, Biden pointed to two pieces of legislation: the Fair Sentencing Act of 2010, which reduced the disparity in sentences for crack cocaine and powder cocaine offenses from a weight ratio of 100 to 1 to 18 to 1, and the First Step Act of 2018, aimed at reducing the size of the federal prison population while promoting rehabilitation.

The previous weight ratio of 100 to 1 meant that 5 grams of crack cocaine, for example, was treated as equivalent to 500 grams of powder cocaine for sentencing purposes.

“Today’s clemency action provides relief for individuals who received lengthy sentences based on discredited distinctions between crack and powder cocaine, as well as outdated sentencing enhancements for drug crimes,” Biden said.

“As Congress recognized through the Fair Sentencing Act and the First Step Act, it is time that we equalize these sentencing disparities,” Biden said.

With this latest action, Biden has now issued more individual pardons and commutations than any president in U.S. history.

“This action is an important step toward righting historic wrongs, correcting sentencing disparities, and providing deserving individuals the opportunity to return to their families and communities after spending far too much time behind bars,” Biden said.

“I am proud of my record on clemency and will continue to review additional commutations and pardons.”

The White House did not immediately release the names of those receiving commutations.

Biden Pardons Hunter, Death Row Inmates

In December 2024, Biden said he was pardoning 39 people and commuting the sentences of nearly 1,500 others who had been convicted of nonviolent crimes such as drug offenses. The president said at the time that these commutation recipients were placed in home confinement during the COVID-19 pandemic and “have successfully reintegrated into their families and communities and have shown that they deserve a second chance.”

In a separate statement, the White House said many of those impacted by December’s pardons and commutation were parents, veterans, health care professionals, teachers, advocates, and engaged members of their communities who had “used their experiences in the criminal justice system to inspire and encourage others.”

Also in December, Biden announced he was commuting the sentences of 37 of the 40 individuals on death row, reclassifying their penalty to life in prison without the possibility of parole.

Biden has advocated for an end to the death penalty at the federal level in the United States except for limited cases of terrorism and hate-motivated mass murder.

When he first took office, he imposed a moratorium on federal executions while the Justice Department reviewed policies and procedures surrounding the practice.

He commuted 37 sentences, leaving three federal inmates facing execution: 2013 Boston Marathon bomber Dzhokhar Tsarnaev; Dylann Roof, who shot and killed nine people at a church in South Carolina in 2015; and Robert Bowers, who fatally shot 11 congregants at Pittsburgh’s Tree of Life Synagogue in 2018.

Earlier in December, Biden pardoned his son, Hunter Biden, who had been criminally convicted and was facing sentencing in two separate cases involving tax evasion and illegal possession of a firearm.

Biden is set to leave office on Jan. 20. His successor, President-elect Donald Trump, has vowed to expand executions for federal inmates in order to “protect American families and children from violent rapists, murderers, and monsters” and restore law and order.

China’s Q4 GDP and December industrial production reports beat market expectations meaningfully, with the 2024 full-year GDP growth target officially reached (what an amazing coincidence).

Real GDP growth rose notably to +5.4% yoy in Q4 from +4.6% yoy in Q3, driven by the acceleration of sequential growth on the back of more coordinated and forceful policy easing and export frontloading due to concerns about potential US tariff hikes.

“The biggest bright spot in the economy last year was exports, which was very strong especially if price factor was excluded,” Jacqueline Rong, chief China economist at BNP Paribas SA.

“That means the biggest problem this year will be US tariffs.”

Year-on-year industrial production growth rose meaningfully in December, led by faster output growth in the automobile and electric machinery industries.

Retail sales growth also accelerated, thanks mainly to the rebound in online goods sales growth as the distortions from an earlier-than-usual start of the Singles’ Day Shopping Festival last year subsided.

The ongoing consumer goods trade-in program continued to boost some durable goods sales, as evidenced by strong home appliance growth in December.

In comparison, fixed asset investment growth remained subdued despite strong local government bond net financing in recent months, as a large proportion of proceeds have been used for debt resolution, and it may take time for fiscal expansion and new project launches to follow suit.

Property-related activity continued to present wide divergence between sales and construction amid the ongoing efforts to support the housing market. 

Goldman Sachs continues to expect real GDP growth to slow to 4.5% yoy in 2025 from 5.0% in 2024, as the growth drag from likely higher US tariffs may more than offset the ongoing policy easing amid the prolonged property downturn and still-weak consumer sentiment.

“Better data has likely reduced Beijing’s sense of urgency and policy may continue to undershoot on the housing and social welfare front,” Morgan Stanley economists including Robin Xing wrote in a note.

However, amid all this glorious economic strength, Chinese bond yields are at record lows…

…does the bond market know something about the impact of Trump’s tariffs that Beijing would rather ignore for now?

“The recovery is tentatively sustained in a still fragile mode,” Societe Generale SA economists Wei Yao and Michelle Lam wrote in a note.

“Policymakers need to make a stronger fiscal boost in 2025 to ensure growth stability.”

The danger now is President Xi Jinping eases up on stimulus just as tariffs loom.

US equity futures are higher modestly, rebounding from yesterday’s just as modest loss. As of 8:00am, S&P futures rise 0.4%, with the underlying index poised for its biggest weekly gain since November’s election, while Nasdaq 100 futures advanced 0.5% thanks to Mag 7 stocks mostly higher (NVDA +1.3%, TSLA +0.9% and GOOG/L +0.6%) as the latest data and comments from Fed officials suggest the central bank will have room to cut interest rates this year. 10Y Treasury yields edged lower, slipping more than 15 basis points below recent multi-month highs, while the USD is higher. Base metals are mostly higher amid upside surprise on China Q4 and December macro data: Q4 GDP prints 5.4% vs. 5.0% survey vs. 4.6% prior; Retail Sales and IP both surprised to the upside. However, reactions from local Asian markets remain muted. Today, macro focus will be on housing data (Housing Starts and Building Permits).

In premarket trading, all members of the Magnificent Seven are higher: Alphabet (GOOGL) +0.4%, Amazon (AMZN) +0.5%, Apple (AAPL) +0.7%, Microsoft (MSFT) +0.3% , Meta Platforms (META) +0.3%, Nvidia (NVDA) +0.9%, and Tesla (TSLA) +0.7%. JetBlue and Southwest Airlines shares fall about 2% after BofA downgraded the carriers to underperform from neutral, citing their lower exposure to corporate, premium and international routes. Here are some other notable premarket movers:

• Bank OZK (OZK) ticks 1% higher after the bank posted 4Q net interest income that topped estimates.
• Fastenal (FAST) falls 6% after the construction supplies company reported 4Q sales that slightly missed as a “slow rate of growth reflects continuation of the soft manufacturing environment that has been sustained throughout 2024.”
• JB Hunt (JBHT) shares drop 9% after the transportation and logistics company reported fourth-quarter earnings per share that trailed consensus expectations.
• Lumentum (LITE) gains 6% after Barclays turned bullish on the photonics products maker, saying it’s an “underappreciated share gain story.”
• Truist Financial (TFC) gains 2% after Charlotte-based lender reported net interest income that was broadly in line with analyst estimates.

A big reason for this week’s stock market outperformance is that swap markets now expect some 40 basis points worth of rate cuts from the Fed this year, following a weaker than expected core CPI print, moving from not even pricing a single quarter-point move earlier this week.

“Even equity managers were more concerned over rates than earnings,” said Kevin Thozet, a member of the investment committee at Carmignac. “What we have had is reassuring data on this front — whether retail sales or inflation — hinting that the US economy may not be overheating. This has allowed for fixed income markets to take a bit of a breather.”

With Q4 earnings just starting, investor focus is also turning to President-elect Donald Trump’s inauguration on Monday and his plans for tariff hikes, tax cuts and mass deportation of undocumented migrants. “Key things to be aware of are whether Trump goes big from the very first day, coming up with executive orders and being very vocal,” Carmignac’s Thozet said. “He has been saying a multitude of things and we will see if he is more talking than acting.”

Europe’s Stoxx 600 index also gained, rising 0.6%, and on course for its strongest week since September. Basic resources shares led the way after Bloomberg reported that Glencore and Rio Tinto held early-stage talks about combining their businesses. The news, alongside a weaker pound, helped London’s FTSE 100 hit a record high. China-focused European sectors such as retail and auto also climbed after data suggested Beijing’s stimulus blitz is succeeding in shoring up economic growth. Here are some of the biggest movers on Friday:

• European miner stocks rise after Bloomberg reported that Rio Tinto and Glencore have recently held early-stage talks about a combination; Rio Tinto +1.3%, Glencore +2.3%
• SUSS MicroTec shares rise as much as 36%, the most on record, after the German semiconductor equipment manufacturer reported preliminary results that Stifel said topped expectations due to sales and Ebit beats
• Avolta shares rise as much as 9.6%, the steepest gain since July 2022, after the world’s largest duty-free operator announced a share buyback of as much as CHF200 million
• Smiths Group shares rise as much as 4.7%, briefly hitting a record high, after one of its shareholders called on the company to explore a breakup, arguing in a letter that a sale of the entire business or its units could improve its valuation
• Evoke shares jump as much as 12%, hitting their highest level since July, after the gambling company said its annual adjusted Ebitda will be the high end of its guidance range for 2024, prompting analysts to lift their earnings estimates
• Sanofi shares rise as much as 1.8% to the highest level since Oct. 29 after Berenberg analysts said the drugmaker’s valuation is “highly attractive.”
• Schroders shares rise as much as 1.8% after it said it plans to cut as much as 3% of its workforce
• Maire shares rise as much as 8.8% after Kepler Cheuvreux analyst Kevin Roger raised the recommendation on the Italian company to buy from hold, mentioning potential growth prospects
• Medcap shares fall as much as 30% after the Swedish life science investment firm’s preliminary 4Q figures showed “significantly lower earnings in business area Specialty Pharma” due to increased competition in the British market for melatonin
• Tenaris shares fall 0.5% before erasing the decline after Kepler Cheuvreux cuts to hold from buy, saying it sees limited upside for the Luxembourg-based oil-pipe maker

Earlier, Asian stocks snapped a three-day winning streak, led by losses in Japan after the yen strengthened on an outlook for higher interest rates while largely shrugging off news that China’s economy had expanded at its fastest pace in six quarters to hit the government’s growth goal last year. Analysts say the growth report for 2024 is overshadowed by looming US tariffs on Chinese exports. The MSCI Asia Pacific Index declined as much as 0.7% before erasing most of the loss. Korean companies Hyundai and Samsung were among the worst performers on the regional gauge. Shares in Hong Kong and mainland China advanced after data showed the world’s second-largest economy hit the government growth target last year. Market weakness is expected to continue into next week’s meeting as the BOJ maintains cautiousness, said Kieran Calder, head of Asia equity research at Union Bancaire Privee in Singapore. “If we get only talk and no rate hike from the BOJ, then expect a sharp reversal” toward a weaker yen. Despite Friday’s drop, the key Asian stock gauge is still on track to eke out its first weekly gain of the year.

In currency markets, Bloomberg’s dollar index rose 0.1%, as data continue to highlight the strength of the US economy relative to developed-market peers. The pound slipped as much as 0.6% to near the weakest level since November 2023, after a surprise drop in retail sales added to evidence of a struggling British economy. The yen briefly strengthened through 155 against the dollar early Friday as expectations ramp up for an interest rate hike by the BOJ; it has since retreated and was the weakest of the G-10 currencies, falling 0.4% against the dollar even as traders boost bets on the BOJ raising rates next week. Despite the drop, the Japanese currency is still up more than 1% versus the dollar for the week. Tightening in Japan comes amid uncertain prospects for cuts by the Federal Reserve amid recent US economic data.

In rates, treasury futures hold small gains as US session gets under way, with yields at or near weekly lows. Long-end tenors lead, richer by more than 3bp, flattening the curve. UK gilts pace gains for government bonds globally for a second straight day, with yields lower by 5bp-7bp, after weaker-than-expected UK retail sales figures boosted wagers on BOE easing. Fed’s self-imposed quiet period ahead of Jan. 29 rate decision begins Saturday. With US front-end yields little changed, 2s10s spread is nearly 3bp flatter on the day; US 10-year around 3bp richer at 4.59%, trails UK counterpart by 3bp in the sector while keeping pace with Germany’s. Bunds stayed higher as euro area CPI was confirmed at 2.4% year-on-year in December. IG credit new-issue slate is dormant after GSIBs dominated an eight-deal, $27.6b calendar Thursday, taking weekly supply to nearly $47b, beyond the $40b projected

In commodities, WTI rises 0.6% to $79.20 a barrel. Spot gold drops $10 to $2,705/oz. Bitcoin rises 2% above $102,000.

The US economic data calendar includes December housing starts/building permits (8:30am), December industrial production (9:15am) and November TIC flows 4pm. Fed speaker slate is blank

Market Snapshot

• S&P 500 futures up 0.4% to 5,997.00
• STOXX Europe 600 up 0.7% to 523.45
• MXAP down 0.1% to 178.81
• MXAPJ little changed at 564.48
• Nikkei down 0.3% to 38,451.46
• Topix down 0.3% to 2,679.42
• Hang Seng Index up 0.3% to 19,584.06
• Shanghai Composite up 0.2% to 3,241.82
• Sensex down 0.5% to 76,635.61
• Australia S&P/ASX 200 down 0.2% to 8,310.38
• Kospi down 0.2% to 2,523.55
• German 10Y yield down 2 bps at 2.53%
• Euro little changed at $1.0298
• Brent Futures little changed at $81.33/bbl
• Gold spot down 0.2% to $2,708.07
• US Dollar Index up 0.11% to 109.08

Top Overnight News

• Fed’s Hammack (2026 voter; dissenter) says Fed can be patient on rate cuts; inflation remains an issue; adds that monpol is only moderately restrictive: WSJ
• BofA weekly total card spending: -0.8% Y/Y, “LA wildfire impact seems to be more localised since total card spending in California has only slowed modestly so far”.
• US President Trump reportedly planning an aggressive immigration in the first hours of his administration: “The package of actions amounts to a dramatic shift in immigration policy that will affect immigrants already residing in the United States and migrants seeking asylum at the US-Mexico border.” – CNN
• China’s economic data comes in ahead of expectations, including Q4 GDP (+5.4% vs. the Street +5%), industrial production (+6.2% vs. the Street +5.4%), and retail sales (+3.7% vs. the Street +3.6%). RTRS
• A rally in Chinese government debt has sent yields to record lows and they may have further downside as the US trade tensions compound existing economic woes. That risks weighing even more on the yuan. BBG
• Swap market traders raised their bets to near certainty of a BOJ interest-rate hike next week, climbing from 71% on Wednesday. Almost three quarters of economists surveyed by Bloomberg also predict a hike. BBG
• Israel said it finalized an agreement with Hamas to pause the war in Gaza, suggesting a ceasefire is on track to begin on Sunday. The cabinet started a meeting to ratify the deal. BBG
• The Yemen-based Houthis signaled a pause in their attacks on commercial ships in the Red Sea following the Israel-Hamas ceasefire deal. BBG
• UK retail sales were quite soft in Dec, falling 0.6% M/M (vs. the Street consensus of +0.3%) while Nov was revised lower (from +0.3% to +0.1%). RTRS
• Trump has already prepared about 100 executive orders in a bid to take action quickly after his inauguration. The president-elect told Senate Republicans that he won’t wait on them to start implementing immigration and trade reforms. BBG
• President-elect Donald Trump is planning to release an executive order elevating crypto as a policy priority and giving industry insiders a voice within his administration. BBG
• Canada’s Central Bank will soon announce the end of its quantitative tightening program, deputy governor Toni Gravelle said on Thursday, making it one of the first central banks globally to stop unwinding pandemic-era asset purchases. RTRS

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed in mostly rangebound trade after the uninspiring handover from Wall St and despite encouraging Chinese GDP and activity data. ASX 200 traded indecisively as weakness in the top-weighted financials sector and telecoms clouded over the marginal gains in most sectors, while the index also failed to benefit from the mostly better-than-expected data in Australia’s largest trading partner. Nikkei 225 continued to underperform amid recent currency strength and the potential for a BoJ rate hike next week. Hang Seng and Shanghai Comp were choppy with only mild support seen after GDP, Industrial Production & Retail Sales beat expectations with China’s economy growing 5.4% Y/Y (exp. 5.0%) in Q4 and by 5.0% (exp. 4.9%) for 2024. Nonetheless, the data only briefly supported Chinese stocks which were ultimately rangebound after the mixed commentary from the stats bureau which noted the impact of external environment changes is deepening, domestic demand is not sufficient, and economic operations still face many difficulties and challenges but also stated that positive factors will outweigh negative factors for China’s economy in 2025. In addition, US-China trade frictions continued to linger after the USTR found China shipbuilding to be actionable under Section 301.

Top Asian News

• Majority of BoJ board members poised to approve a rate hike next week, according to Nikkei sources; some of the board hold cautious view; the final decision will come after Trump’s inauguration.
• China’s stats bureau said China’s economic operations were generally steady in 2024, but the impact from external environment changes is deepening and domestic demand is not sufficient, while it added that economic operations still face many difficulties and challenges. China stats bureau head said China’s economic achievements in 2024 were hard won but China policy stimulus was timely and boosted confidence and growth, as well as noted they will continue to promote economic recovery and implement more pro-active economic policies. The stats bureau head said positive factors will outweigh negative factors for China’s economy in 2025 and he is fully confident about China’s economic development in 2025, while he added that facing external changes, China will prioritise boosting domestic demand especially consumption.
• US Trade Representative said China’s dominance of maritime, logistics and shipbuilding sectors is actionable under Section 301 statute but did not make specific recommendations. USTR said China’s targeting of maritime sectors is enabled by forced labour, lack of labour rights, and excess capacity in steel and other areas, while it displaces foreign firms, lessens competition and creates dependence on China.
• China’s Commerce Ministry said China is strongly dissatisfied and firmly opposed to the US report about China’s shipbuilding and logistics sectors, while it will closely monitor US actions and take necessary measures to safeguard its legitimate rights and interests. MOFCOM also said the relevant investigation is marked by ‘unilateralism and protectionism’, while it added the ‘decline’ of the US shipbuilding industry has nothing to do with China and it urged the US to stop shifting problems in its domestic industrial development onto China.
• China’s Commerce Ministry requested the WTO to set up an expert group on Turkey’s restrictions on electric vehicles imported from China and said the next step will be to start a litigation process in accordance with WTO rules.
• BoJ is reportedly likely to hike in January barring any major Trump-driven market shocks, via Reuters citing sources; will make no major change to guidance that they will keep increasing rates. BoJ is unlikely to offer explicit guidance on the pace of future tightening or how far rates could eventually go, while source added “the market seems to have gotten the BoJ’s message”.

European bourses (Stoxx 600 +0.7%) opened modestly firmer across the board and have continued to climb since the cash open; as it stands, indices reside near best levels. European sectors hold a strong positive bias, with Autos & Parts leading the gains whilst Tech is the marginal laggard, as it trades on either side of the unchanged mark, paring the TSMC-induced upside seen in the prior day. US equity futures are modestly in positive territory, attempting to make up for the lacklustre performance in the prior session and garnering optimism via a strong European session thus far.

Top European News

• ECB’s Stournaras says easing should continue with a series of cuts, via Bloomberg.
• ECB’s Nagel says there is no doubt that the German economy is experiencing a pronounced growth weakness

FX

• DXY is marginally higher with the dollar gaining some strength at the hands of a softer GBP and JPY. DXY remains within yesterday’s 108.82-109.38 trading band. Docket ahead is light.
• EUR is flat vs. the USD in quiet EZ-specific newsflow other than comments from dovish GC member Stournaras noting that easing should continue with a series of cuts and news that French PM Bayrou survived a no-confidence motion against the government. EUR/USD is currently contained within yesterday’s 1.0259-1.0314. EZ HICP Finals saw modest downward revisions to some components, but had little impact on price action.
• JPY is softer vs. the USD after two hefty sessions of gains. Source reporting surrounding the BoJ continues to indicate that a 25bps hike is likely on the horizon. The Nikkei reports that a majority of BoJ board members are poised to approve a rate hike next week with the final decision set to come after Trump’s inauguration. USD/JPY just about briefly dipped below 155 with a 154.99 low.
• GBP is on the backfoot in what has been an indecisive week for Cable with the pair broadly pivoting around the 1.22 mark. Today’s selling pressure has been triggered by a soft outturn for UK retail sales which unexpectedly contracted on a M/M basis. Cable briefly broke below yesterday’s low at 1.2174 before trimming downside.
• Antipodeans are both slightly softer vs. the USD and unable to benefit from a better-than-expected outturn for Chinese GDP, retail sales and industrial production.

Fixed Income

• USTs are modestly firmer, but yet to deviate significantly from the unchanged mark. Derived a modest bid from action across the pond as Gilts lifted on the back of soft Retail Sales metrics for December. At a 108-22+ peak but with ranges narrow and the low at just 108-16+.
• JGBs are once again the modest underperformer on the account of more sources pointing to a BoJ hike in January.
• Bunds lifted off their 131.50 base (following UK Retail Sales) to a 131.88 session high over the course of the morning. EZ HICP (Finals) saw modest downward revisions; ahead, a few ECB speakers are due.
• Gilts gapped higher at the open by 27 ticks and then extended further to a 91.89 peak. A move which was driven by soft Retail Sales for December, metrics which complete the week’s set of dovish UK data and cement the view that February is a live meeting with a strengthening market bias towards a cut occurring. The 91.89 peak marks a WTD high and has Gilts on track to close the week out with gains of c. 250 ticks from the 89.00 open and 88.96 WTD low just below that.

Commodities

• A firm Friday session in the crude complex as risk appetite grinds higher in early European hours, with the crude benchmarks also supported by constructive Chinese GDP and activity data. WTI Feb resides in a current 78.65-79.44/bbl range and Brent Mar trades within 81.37-81.93/bbl.
• Subdued price action in the metal complex as the Dollar continues to grind higher, and with the Middle Eastern geopolitical landscape more constructive after yesterday’s blip surrounding last-minute tweaks to the Israel-Hamas deal. Spot gold resides in a USD 2,705.81-2,717.43/oz range.
• Mixed trade in the base metal complex despite the constructive Chinese data overnight and the risk appetite in the European morning. 3M LME copper ekes mild gains and resides in a current narrow USD 9,239.00-9,295.50.t range.
• Colonial Pipeline now estimates an earlier-than-expected restart of Line 1 on Friday after it made progress with on-site work to identify the source of a leak on Line 1 and began repairs.

Geopolitics: Middle East

• Hamas says issues regarding ceasefire deal resolved on Friday, according to a statement.
• “Israel’s security cabinet ratifies Gaza agreement”, according to Al Jazeera.
• Israel security cabinet begins meeting to vote on Gaza ceasefire, hostage release deal, according AFP.
• Israel agreed to the Gaza hostage deal and the cabinet is to meet on Friday, according to Israeli media.
• Reports suggest that the demand by Israel’s Finance Minister Smotrich were met, following him stating to PM Netanyahu that he would resign if not.

Geopolitics: Other

• French Defence Minister says French maritime patrol aircraft was the target of Russian intimidation measured in Baltics; France calls the measures unacceptable.
• Chinese hackers reportedly accessed Treasury Secretary Yellen’s computer in the US Treasury breach, according to Bloomberg.
• North Korean Foreign Ministry said it will exercise its thorough right to self-defence, according to KCNA.

US Event Calendar

• 08:30: Dec. Building Permits, est. 1.46m, prior 1.49m
  • Dec. Building Permits MoM, est. -2.2%, prior 5.2%
  • Dec. Housing Starts, est. 1.33m, prior 1.29m
  • Dec. Housing Starts MoM, est. 3.0%, prior -1.8%
• 09:15: Dec. Industrial Production MoM, est. 0.3%, prior -0.1%
  • Dec. Manufacturing (SIC) Production, est. 0.2%, prior 0.2%
• 09:15: Dec. Capacity Utilization, est. 77.0%, prior 76.8%
• 16:00: Nov. Total Net TIC Flows, prior $203.6b

DB’s Jim Reid concludes the overnight wrap

Markets put in a decent performance over the last 24 hours, with bonds and most equities posting a fresh advance, despite a slump for the Magnificent 7 (-1.92%) pushing down the S&P 500 (-0.21%). The big focus for investors was on Scott Bessent’s nomination hearing to become US Treasury Secretary, but the largest moves of the day were actually driven by comments from Fed Governor Waller. He sounded open to a rate cut as soon as March, and also said that 3 or 4 cuts were possible this year if the data cooperated. So those comments pushed back against the more hawkish narrative that developed because of strong data like the jobs report last week. And if we did end up with 3 or 4 cuts, that would be a faster pace than the Fed’s dot plot showed only last month, when the median dot pencilled in just 2 cuts this year.

After Waller’s comments, investors swiftly dialled up their expectations for Fed rate cuts this year. For instance, the likelihood of a cut by the May meeting moved up to 56%, and the total number of cuts by the December meeting moved up +3.3bps to 42.5bps. Those moves kept up the momentum from the CPI report on Wednesday, which helped to revive investors’ hopes that the Fed were still on a path to cut rates. So that meant it was a strong day for US Treasuries, with the 10yr yield (-4.0bps) down to 4.61%, whilst the 2yr yield (-3.5bps) fell to 4.23%.

In the meantime, when it came to Scott Bessent’s hearing to become US Treasury Secretary, the most notable comment was regarding new Russian sanctions, with Bessent saying he would support sanctions on Russian oil majors. But otherwise, his remarks were broadly in line with our understanding of existing policy. For example, Bessent called for an extension of tax cuts, saying that they would face “an economic calamity” if they didn’t renew them. Separately, he said that “we must ensure that the US dollar remains the world’s reserve currency”. And on fiscal policy, he said that the US “must work to get our fiscal house in order”. By the close, the dollar index had weakened -0.12%, but the main move lower came earlier in response to Waller’s comments, rather than anything Bessent said.

Ahead of all that, we had a reasonably positive set of US data yesterday. The strongest was the Philadelphia Fed’s manufacturing business outlook survey, which surged to 44.3 in January (vs. -5.0 expected). That’s the highest reading for the index since April 2021, as well as the biggest monthly jump in the index since June 2020. Otherwise, some of the hard data was more mixed, with retail sales ex autos up by +0.4% in December (vs. +0.5% expected), but the retail control group up by a stronger +0.7% (vs +0.4% expected). Meanwhile, initial jobless claims moved up to 217k in the week ending January 11 (vs. 210k expected). So with that pretty good set of data, the Atlanta Fed’s GDPNow estimate for Q4 ticked up to an annualised pace of +3.0%.

Despite the solid backdrop, the S&P 500 (-0.21%) declined for the first time this week, but this was primarily due to drag from the big tech firms as all of the Magnificent 7 (-1.92%) lost ground. By contrast, around three-quarters of the S&P 500’s constituents advanced on the day, led by rate-sensitive sectors. In fact, the equal-weighted S&P 500 was up +0.81% yesterday, bringing its gains for the week up to +3.42% so far. So even if the equal-weighted index is unchanged today, that would make it the second-best weekly performance in the last year, only behind the week of the US election in November.
Over in Europe, equities put in a much stronger performance, with the STOXX 600 (+0.98%) up to a one-month high, with France’s CAC 40 (+2.14%) posting the largest advance of the major indices amid strong gains for luxury stocks. That advance came just before French Prime Minister Bayrou survived a confidence vote in the National Assembly, thanks to abstentions from Marine Le Pen’s National Rally, as well as the Socialists. And in Germany, the DAX (+0.39%) hit an all-time high with just over 5 weeks until the federal election.

Meanwhile in the UK, gilts outperformed for a second day running after the latest growth data was weaker than expected. It showed the UK economy only grew by +0.1% in November, (vs. +0.2% expected), and if you look at the full three months to November, the economy was stagnant compared to the previous three months. So after the downside inflation surprise on Wednesday, that led investors to expect more rate cuts from the Bank of England this year, with 65bps now priced in by the December meeting. In turn, that led gilt yields to fall across the curve, with the 2yr yield down -8.1bps, and the 10yr yield own -5.1bps.

Elsewhere in Europe, yields on 10yr bunds (-1.5bps) and OATs (-1.8bps) posted a modest decline following the US rates move lower. We did get the account from the ECB’s December meeting as well, which confirmed the prevailing view that further cuts were still likely. And notably, there was some discussion of a larger 50bp cut, with the account saying that some members “would have favoured more consideration being given to the possibility of such a larger cut.” But ultimately, they only cut by 25bps, and the account said “it was remarked that a 50 basis point cut could be perceived as the ECB having a more negative view of the state of the economy than was actually the case.”

Overnight in Asia, the main story has been China’s GDP data, which showed the economy grew by +5.0% in 2024 as a whole. Moreover, the Q4 number was stronger than expected, with GDP up +5.4% on a year-on-year basis (vs. +5.0% expected). And some of the monthly data for December also surprised on the upside, with industrial production up +6.2% y/y (vs. +5.4% expected), whilst retail sales were up +3.7% y/y (vs. +3.6% expected).

Against that backdrop, Chinese equities have advanced this morning, with solid gains for the CSI 300 (+0.77%) and the Shanghai Comp (+0.55%). But elsewhere in Asia there’ve been losses this morning, with Japan’s Nikkei (-0.38%) and South Korea’s KOSPI (-0.28%) both losing ground. Looking forward however, US and European equity futures are all positive, with those on the S&P 500 (+0.22%) and the DAX (+0.15%) pointing higher.

To the day ahead now, and data releases from the US include industrial production, capacity utilisation, housing starts and building permits for December, and in the UK there’s also retail sales for December. From central banks, we’ll hear from the ECB’s Nagel, Escriva and Centeno.