- Major U.S. indices erased some of the day's gains after the White House switched details on tariff policy.
- During the official White House press conference, Secretary Levitt confirmed that the US will impose trade tariffs on Canada and Mexico of 25% and China 10% tariff from 1st February, tomorrow. Trump has not made up his mind on the tariff timeline for the European Union. The US dollar gained after this statement and reversed previous losses from RTRS news. Oil gained more than 1% after the announcement was made.
- The Federal Reserve's preferred inflation gauge showed prices still running hot, with the PCE price index rising 0.3% month-over-month in December, accelerating from November's 0.1% increase. The annual rate climbed to 2.6% from 2.4%, while core PCE held steady at 2.8%, all matching economists' expectations.
- Consumer spending demonstrated unexpected strength, rising 0.7% month-over-month in December, surpassing forecasts of 0.5% and November's revised 0.6% increase. The robust spending data suggests US consumers remain resilient, supported by a strong labor market and sustained wage growth.
- Gold prices reached a historic milestone, hitting $2,800 per ounce and registering a 6.70% year-to-date increase. The precious metal's price rise has been fueled by rising geopolitical tensions, uncertainty over the new tariff policy and dollar weakness, increasing its appeal as a safe haven. After the tariff announcement, however, bullion erased some of its gains.
- Bank of America's Michael Hartnett warned that US big tech stocks could become the "Lagnificent 7" this year, suggesting investors should pivot to cheaper international stocks instead of chasing expensive US shares. The strategist noted that US equities have become "exceptionally expensive" and "exceptionally well-owned" following record January inflows.
- A Bloomberg Markets Live Pulse survey revealed limited concern about DeepSeek's impact on major tech stocks, with 88% of 260 respondents indicating the Chinese AI startup's emergence will have little to no effect on the Magnificent Seven shares in coming weeks. The survey suggests investors view the initial market reaction as overdone.
- Retail traders demonstrated strong conviction in US equities, pouring $8.1 billion into stocks in the week through Wednesday - the highest level in two years according to JPMorgan analysis. ETF flows accounted for $4.6 billion of the total, while single stock purchases made up $3.5 billion.
- Corporate earnings painted a mixed picture, with Intel disappointing on revenue guidance while Exxon Mobil beat estimates despite lower oil prices. Chevron raised its dividend by 5% despite weaker-than-expected profits, while Walgreens made headlines by suspending its 92-year dividend streak to conserve cash.
- Treasury yields remained relatively stable, with the 10-year yield holding at 4.51% as investors digested the inflation data and awaited further clarity on the Fed's rate cut timeline. Markets are currently pricing in the first full reduction for June, suggesting a cautious approach to monetary policy easing.
- Cryptocurrency markets showed mixed performance, with Bitcoin down 2% and Ethereum gaining 1.6%.
- UBS Global Wealth Management maintained an optimistic outlook for US equities, projecting the S&P 500 to reach 6,600 by year-end. The firm cited potential productivity gains from AI advancement, solid economic activity, and healthy earnings growth as key drivers for their bullish forecast.
Morning wrap (16.10.2025)
Fed's Miran signals two more rate cuts this year and disinflationary process🗽
BREAKING: NY Empire better than expected; EURUSD muted 📌
Precious metals at record highs: Gold and Silver shine as the Fed ends its Tightening Cycle
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