But before we get there, all eyes are on the economic data set to drop at 10 am ET. The manufacturing and services Purchasing Managers’ Index (PMI) and existing home sales figures are on the docket. Meanwhile, whispers of potential trade policy shifts under President Donald Trump are causing a stir. The President has hinted at slapping tariffs on nations such as Mexico, Canada, China, and the European Union, with announcements possibly as soon as February 1. The prospect of a global trade war looms large, with fears it could stoke inflation and sway the Federal Reserve’s interest rate decisions. For now, the Fed is expected to hold rates steady at its upcoming policy meeting.

The markets are buzzing with every statement Trump makes. Just like in 2017, investors are hanging on his every word as the new President of the United States skillfully uses both incentives and threats. It’s like déjà vu from eight years ago, at the beginning of Trump’s first term. Ignoring him is not an option. For journalists like me, Trump is a goldmine of content, always ready with bold remarks and dramatic stances. Donald Trump has mastered the art of the one-liner that sends shockwaves through the media landscape. His words demand attention, a testament to a kind of influence that feels almost nostalgic in its potency. Brace yourselves, because it seems we’ll be hearing—and saying—Trump’s name quite a bit in the coming days and weeks.

Yesterday, President Trump delivered a speech from Davos, USA, where he revisited some familiar themes. He urged OPEC to lower oil prices and called on the Federal Reserve to cut interest rates. His economic reasoning was straightforward: lower energy prices lead to lower inflation, which should, in turn, lead to lower interest rates. Of course, this comes with the usual caveats like “all things being equal” and “assuming inflation behaves.” Oil prices did dip slightly, but the effect on U.S. bond yields was negligible. This suggests that the market remains skeptical about the White House’s ability to sway Fed policy directly. Instead, investors were more intrigued by Trump’s comments on trade with China. He expressed optimism about reaching an agreement with his “friend Xi” without resorting to additional tariffs, though he acknowledged tariffs as a potent tool. The market interpreted this as a hint that there might be no new tariffs on China, which gave a boost to U.S. stocks last night and Chinese stocks this morning. We’re witnessing a familiar pattern with Trump: markets reacting sharply to his every word, whether positively or negatively.

In the world of macroeconomics, the Bank of Japan’s latest move was as predictable as a sunrise: a modest interest rate hike. The central bank nudged its key rate from 0.25% to 0.50%. This decision wasn’t a jab at Donald Trump, but rather a reflection of Japan’s unique economic landscape. While this rate is still a far cry from the figures seen in Western economies, it aligns with Japan’s current needs. The immediate impact? A typical strengthening of the yen, with no major disruptions in sight. Meanwhile, across the globe in France, the Senate has given the green light to the first reading of the 2025 Finance Bill. However, the real challenge lies ahead in the National Assembly, where the bill’s fate will be decided.

As we wrap up the week, the stock market is basking in the glow of optimism, courtesy of Trump’s sweeping promises of economic prosperity. After a sluggish start, January is now looking quite rosy. The STOXX Europe 600 has climbed 4.5% since the beginning of the year, while the S&P 500 isn’t far behind with a 4% gain. This upward trend provides a nice buffer as we brace for next week’s flurry of corporate earnings reports from heavyweights like LVMH, SAP SE, Microsoft, Meta, and Tesla. In the meantime, today’s headlines feature a robust set of quarterly results and a fresh takeover bid in the Italian banking sector. Banca Monte Dei Paschi has made an offer to merge with Mediobanca.

In Asia, the Nikkei 225 stagnated. Hong Kong gained almost 2%, South Korea, India and Taiwan between 0.5% and 1%, and Australia 0.4%. Europe is mixed, while Wall Street’s futures are slightly down.

Today’s economic highlights:

The major economies’ PMI activity indicators for January will be announced throughout the day. The United States will also be treated to the University of Michigan’s confidence index and housing market figures. See the full calendar here.

In corporate news:

• Allurion Technologies saw a significant surge of 380% following its announcement of a new clinical study aimed at enhancing muscle mass and body composition.
• Evaxion Biotech shares increased by 128%, building on a 53% gain from the previous day. Starbox Group also experienced an 81% rise, recovering from an 18% loss in the prior session. 
• Boeing‘s stock declined by 1.6% in premarket trading after the company projected a fourth-quarter loss of approximately $4 billion.
• Texas Instruments saw a 3.7% drop following a profit forecast that fell short of analysts’ expectations.
• American Express reported a 12% increase in fourth-quarter profit, yet its shares fell by 2.6%.
• Verizon Communications also dipped 0.3% after issuing a profit forecast below estimates.
• U.S.-listed shares of Chinese companies like JD.Com, Xpeng, and Alibaba rose following Trump’s suggestion that tariffs against China might be avoided.
• CSX Corp lost 4% after its quarterly results.
• Intuitive Surgical loses 2% after its quarterly results.
• Trump accuses Bank of America and JPMorgan Chase of not doing business with conservatives.
• Tesla launched a new, more expensive variant of the Model Y in the United States, Canada and Europe.
• Air Products continues to appoint Seifi Ghasemi as interim CEO.
• Electric vehicle manufacturer Nikola is considering a sale or partnerships as its liquidity dwindles, according to Bloomberg.

Today’s main earnings reports: American Express, Verizon Communications, Nextera Energy, HCA Healthcare…

Analysts recommendations:

• Air Products & Chemicals, Inc.: Barclays upgrades to overweight from equalweight with a target price raised from USD 315 to USD 365.
  
• Avalonbay Communities, Inc.: Morgan Stanley downgrades to equal weight from overweight with a target price reduced from USD 236 to USD 223.
  
• Cbre Group, Inc.: Raymond James downgrades to outperform from strong buy with a price target reduced from USD 155 to USD 152.
  
• Cf Industries Holdings, Inc.: JP Morgan downgrades to underweight from neutral with a target price reduced from USD 82 to USD 75.
  
• Exelixis, Inc.: Oppenheimer downgrades to market perform from outperform with a target price reduced from USD 41 to USD 33.
  
• Freeport-Mcmoran Inc.: Jefferies downgrades to hold from buy with a target price reduced from USD 48 to USD 40.
  
• Mid-America Apartment Community, Inc.: Morgan Stanley upgrades to overweight from equal weight with a target price raised from USD 159.50 to USD 168.
  
• Netflix, Inc.: Bernstein upgrades to outperform from market perform with a price target raised from USD 975 to USD 1200.
  
• Oshkosh Corporation: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 113.
  
• Pvh Corp.: JP Morgan downgrades to neutral from overweight with a target price reduced from USD 149 to USD 113.
  
• Steel Dynamics, Inc.: Jefferies upgrades to buy from hold with a price target raised from USD 125 to USD 145.
  
• The Interpublic Group Of Companies, Inc.: Barclays upgrades to overweight from equalweight with a price target raised from USD 32 to USD 36.
  
• The Sherwin-Williams Company: Berenberg upgrades to buy from hold with a target price raised from USD 321 to USD 420.
  
• The Travelers Companies, Inc.: Piper Sandler & Co upgrades to overweight from neutral with a price target raised from USD 259 to USD 310.
  
• Twilio Inc.: Baird upgrades to outperform from neutral with a price target raised from USD 115 to USD 160.
  
• Atlassian Corporation: TD Cowen maintains its hold recommendation with a price target raised from 220 to USD 280.
  
• Block, Inc.: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 83 to USD 101.
  
• Intuitive Surgical, Inc.: Raymond James maintains its outperform rating and raises the target price from USD 560 to USD 688.
  
• Polaris Inc.: Roth Capital Partners maintains a neutral recommendation with a price target reduced from USD 76 to USD 57.
  
• Anglo American Plc: Citi downgrades to neutral from buy with a target price reduced from GBP 30 to GBP 28.
  
• Astrazeneca Plc: Carnegie Group upgrades to buy from hold with a target price raised from SEK 1700 to SEK 1770.
  
• Greggs Plc: HSBC upgrades to buy from hold with a target price reduced from GBP 33.50 to GBP 25.
  
• International Consolidated Airlines Group, S.a.: Stifel upgrades to buy from hold with a price target raised from EUR 2.50 to EUR 5.
  
• Wpp Plc: Kepler Cheuvreux upgrades to buy from hold with a target price raised from GBX 845 to GBX 935.