Ten Stories Moving the Market

Ten Stories Moving the Market:

Beijing has been urging Chinese banks to scale back their private U.S. Treasury holdings in an effort to reduce the country’s reliance on America; the government is worried about lingering tensions over trade relations, technology, and Taiwan – Bloomberg. (Why you should care – a strengthening yuan could further damage trade with the U.S. as goods manufactured in China would become increasingly expensive)

The Federal Reserve is on track to continue forward with sizable Treasury bill buying into the spring but it is unclear what happens after the annual tax filing date has passed, according to New York Fed Deputy System Open Market Account Manager Julie Remache – Reuters. (Why you should care – the $40 billion in monthly bond purchases were put in place to boost banking system liquidity and are likely to remain in place until the Fed feels reserves are ample)

Japanese Trade Minister Ryosei Akazawa said the U.S. and Japan remain far apart over which projects should be funded first under the framework of a $550 billion investment vehicle even as the two sides made progress in their latest round of talks – Bloomberg. (Why you should care – Akazawa said Japan will continue to advance efforts to strengthen economic relations with the U.S.)

The U.S. signed a final reciprocal trade agreement that confirmed a 15% U.S. tariff rate for imports from Taiwan, while committing Taiwan to a schedule for eliminating or lowering tariffs on nearly all U.S. goods – Reuters. (Why you should care – the deal includes a pledge by Taiwan that its companies will invest $250 billion to boost production of semiconductors, energy, and artificial intelligence in the U.S.)

The National Foundation for Credit Counseling said it’s seeing more people who earn higher incomes walking through the doors of credit-counseling agencies; clients have rising debt-to-income levels, and more are falling behind on payment plans – WSJ. (Why you should care – rising stress due to elevated borrowing costs could increase pressure on the Federal Reserve to cut interest rates and bring down refinancing costs)

Federal Reserve Governor Stephen Miran said the central bank’s current monetary-policy setting is too tight and threatens U.S. economic growth; Miran said easing shelter price growth should act as an anchor for the rest of the inflation index components – Reuters. (Why you should care – Miran, a voter, is the central bank’s biggest policy dove)

Algorhythm Holdings, a former karaoke company, published a news release shortly before stock trading opened touting AI technology capable of increasing trucking efficiencies; Algorhythm, which has a stock market value of less than $3 million, hasn’t landed any software clients in the U.S. yet, but its announcement nonetheless rattled the market – WSJ. (Why you should a care – the sharp drop in the transportation sector, despite Algorhythm’s lack of customers, shows the current overreaction to AI related claims)

U.S. President Donald Trump said that the U.S. could make a deal with Iran over the next month; Trump said he made it clear during a recent meeting with Israeli Prime Minister Benjamin Netanyahu that he prefers to keep negotiating with Iran rather than turn to military options right now - Reuters. (Why you should care – a deal would help to ease concerns around rising geopolitical tensions in addition to weighing on oil prices and inflation growth)

ConocoPhillips and other energy companies that lost billions of dollars after Venezuela nationalized its oil industry decades ago are in talks with acting Venezuela President Delcy Rodríguez over recouping some ground, according to U.S. Energy Secretary Chris Wright; ConocoPhillips Chief Executive Officer Ryan Lance has said his top priority in Venezuela is recouping the billions his company is owed – Bloomberg. (Why you should care – recovering the lost money could encourage oil companies to reinvest in Venezuela sooner than later)

Home sales fell 8.4% in January, the biggest monthly decline since February 2022, after snowstorms and low consumer confidence slowed a housing market that was showing signs of recovery – WSJ. (Why you should care – the average sales price contracted over 2% on a month-over-month basis, pointing to downward pressure on inflation growth)

Economic Calendar:

Earnings – AAP, AXL, ENB, MGA, MRNA, WEN

BoJ’s Tamura (Board Member) Speaks

Eurozone – GDP for Q4 (5:00 a.m.)

Eurozone – Exports, Imports for December (5:00 a.m.)

U.K. – BoE’s Pill (Chief Economist) Speaks (7:00 a.m.)

U.S. – CPI for January (8:30 a.m.)

U.S. – Real Earnings for January (8:30 a.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - CFTC’s Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)