Ten Stories Moving the Market

South Korean media reported that Samsung Electronics is negotiating a price for its latest artificial intelligence memory chip that’s up to 30% higher than the previous generation; Samsung is looking to price its HBM4 at around $700 per unit, according to Chosun Ilbo newspaper – Bloomberg. (Why you should care – the price increase speaks to the volume of demand the company is seeing for its High Bandwidth Memory chips, used by companies like Nvidia)

Prime Minister Sanae Takaichi faces a key decision on whom to tap for spots opening on the Bank of Japan’s board, nominations that will give economists and investors an indication of how aggressively she hopes to influence central bank policy – Bloomberg. (Why you should care – Takaichi is expected to nominate governors who favor easy money policies to fuel spending and economic growth, likely supporting a continued stock market rally)

Federal Reserve officials signaled little appetite for reducing interest rates at their meeting last month, with most indicating they wanted to see further progress on inflation before considering any more cuts – WSJ. (Why you should care – the minutes showed policymakers are less concerned about a further erosion of the job market)

Retail traders spent a record amount snapping up software shares on Citadel Securities’ platform, according to Scott Rubner, head of equity and equity derivatives strategy at the firm, which began tracking the data in 2017 – Bloomberg. (Why you should care – rotation into the share of more domestically-focused company has helped close the forward P/E gap between tech stock and the broader S&P 500 Index)

Iran’s leaders want to reach a nuclear deal with the U.S., but they are also rushing to prepare for war in case talks between the countries fail; Tehran is deploying its forces, dispersing decision-making authority, fortifying its nuclear sites and expanding its crackdown on domestic dissent – WSJ. (Why you should care – a regime change in Iran would likely lead to an increased supply of energy commodities on the global market, weighing on prices)

OpenAI is close to finalizing the first phase of a new funding round that is likely to bring in more than $100 billion, a record-breaking financing deal that would give the startup additional capital to build out its artificial intelligence tools – Bloomberg. (Why you should care – the companies involved in the capital raise will include Amazon, Softbank, Nvidia, and Microsoft)

Prices of two key rare earths, crucial for making super-strong magnets used in EVs and defense equipment, have rallied on firm demand and bottlenecks in supply; prices have nearly doubled in the last seven months, rising above a ground-breaking price floor provided by the U.S. last year to miner MP Materials – Reuters. (Why you should care – the surge should spare the U.S. government from having to subsidize MP’s output of neodymium and praseodymium, potentially leading to profit sharing under the agreement)

New orders for key U.S.-manufactured capital goods increased more than expected in December and shipments of these products surged, pointing to solid business spending on equipment and economic growth in the fourth quarter – Reuters. (Why you should care – demand for AI related products is helping to drive the spending increase)

The International Monetary Fund faulted China’s economic policies for causing waste at home and damage abroad and called for a reorientation by Beijing to embrace a model based on domestic consumer spending – Bloomberg. (Why you should care – the organization said China’s government should focus more on domestic policies to support economic growth, rather than depreciating its currency to boost exports)

The former governors of the Spanish and Dutch central banks are seen as the front-runners to replace Christine Lagarde at the helm of the European Central Bank, likely in a broader political deal that could see both of them end up with a major job – Reuters. (Why you should care – the Dutch choice would lean in the direction of tighter monetary policy while the Spanish selection would favor lower interest rates)

Economic Calendar:

Markets are closed in China

Earnings: AKAM, BABA, CC, CNP, DE, ED, ETSY, MELI, NEM, RIG, SO, W, WMT

ECB Economic Bulletin (4 a.m.)

Fed’s Bostic (Atlanta, Non-Voter) Speaks (8:20 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

U.S. – Exports, Imports for December (8:30 a.m.)

Fed’s Bowman (Board Member, Voter) Speaks (8:30 a.m.)

U.S. – Philly Fed Manufacturing Index for February (8:30 a.m.)

U.S. – Wholesale Inventories for December (8:30 a.m.)

Canada – Exports, Imports for December (8:30 a.m.)

Fed’s Kashkari (Minneapolis, Voter) Speaks (9 a.m.)

U.S. – Pending Home Sales for January (10 a.m.)

Fed’s Goolsbee (Chicago, Non-Voter) Speaks (10:30 a.m.)

U.S. - Energy Information Administration Crude Oil Inventory Data (12 p.m.)

Treasury Auctions $9 Billion in 30-Year TIPS (1 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)