The U.S. market is experiencing a noticeable sluggishness, struggling to shake off the New Year's Eve hangover. The first trading day of the year opened with a glimmer of optimism, quickly followed by a reality check, and ended with a gentle drift downward. The three major indices each slipped between 0.2% and 0.3%. The Nasdaq nearly closed in positive territory, buoyed by Nvidia's impressive performance. However, Tesla's 6% drop, driven by global sales falling short of expectations for the first time in a decade, weighed heavily. This decline raises questions about Tesla's lofty 2025 price-to-earnings ratio of 125, which is about 23 times that of General Motors. But let's not forget, the new U.S. President's closest ally isn't the GM chief. Elsewhere, American investors showed a predictable preference for oil stocks and energy producers like Vistra and Constellation Energy. They even took a gamble on solar companies such as First Solar and Enphase, despite their lack of alignment with Trump-era policies. This initial dip marks Wall Street's fifth consecutive session in the red, a streak noteworthy enough to catch our attention.

As the week wrapped up, oil prices took a leap, while the euro continued its downward dance against the dollar, reaching a two-year low. Forex enthusiasts are buzzing about the possibility of the euro and dollar meeting at parity once again. Meanwhile, all eyes are on the upcoming release of the ISM manufacturing index for December in the United States, expected later today. Across the globe, China is making waves with potential shifts in its central bank strategy, possibly aligning more with Western central banks, according to a scoop from the Financial Times. In a strategic counter-move, Beijing has announced new export restrictions on technologies crucial for battery components and the processing of two rare metals. This comes as a response to U.S. actions in the semiconductor arena, with China choosing to make its stand on the battery battleground.

European stock markets are currently giving Wall Street a run for its money. But let's not get too carried away. What did the average European investor toss into their 2025 shopping cart? Think of it as a mix of petrol, batteries, an A320 model, and a slimming drug. In more professional terms, investors are snapping up shares in companies linked to oil and energy. This buying spree follows a renewed surge in the prices of oil and gas, driven by the anticipated end of Russian gas transit through Ukraine and the looming cold snap in the USA. The price of a barrel of WTI American light crude has jumped from $70 to $73 in under a week. Naturally, energy companies are basking in this glow. Oil and gas firms like Equinor, Aker BP, and GTT have seen strong rebounds. Companies involved in power generation are also enjoying the spotlight, with renewables players like Vestas, Orsted, and Verbund, as well as conventional energy giants like Centrica and Engie, all seeing gains. Meanwhile, Airbus has been flying high, with a 3.5% increase that helped lift the CAC40 index in Paris. The aerospace titan has become the index's fifth most influential stock, thanks to a glowing review from Bank of America. The bank included Airbus in its list of 25 must-own stocks for 2025, impressed by the company's ability to ramp up production rates by year-end, nearly hitting its target of 760 aircraft delivered out of 770 planned—a remarkable feat given the industry's bottlenecks. Lastly, Novo Nordisk has been a bright spot, rebounding by 2.3% as investors engaged in "bargain buybacks." This comes after the stock took a 17.6% tumble in December, making it an attractive option for those looking to capitalize on its dip.

In the Asia-Pacific region this morning, Hong Kong is recovering a little after a difficult first session yesterday. The recovery of the US semiconductor sector woke up South Korea, which gained 1.8%. A positive session in Australia too, with a more modest gain of 0.6%. Finally, India lost 0.7%. Japan is still closed, contrary to what I said yesterday. Tokyo resumes on Monday. European indices are slightly bearish, while futures on Wall Street are in the green.

Today's economic highlights:

German monthly unemployment and US ISM manufacturing are the two major indicators of the day. The full agenda is here.

  • Dollar: EUR 0.9713  GBP 0.8060
  • Ounce of gold: USD 2655
  • Brent crude: USD 75.75 WTI: USD 72.77
  • 10-year US bond: 4.54
  • Bitcoin: USD 96,610

In corporate news:

  • In 2024, Tesla's sales in China hit a record high of over 657,000 vehicles, despite a global sales decline and a mixed impact on technology stocks, alongside issues like a Cybertruck explosion and a legal challenge regarding Elon Musk's compensation.
  • President Joe Biden has blocked Nippon Steel's $14.9 billion bid to acquire United States Steel, citing national security concerns.
  • Apple's difficulties in China continue with a significant drop in iPhone shipments and multiple settlements over Siri privacy lawsuits, including a $95 million payout for allegations of unauthorized recording and sharing of user conversations.
  • Consumer stocks fell in late afternoon trading amid various corporate developments, including Amazon's partial defeat in an antitrust lawsuit, an upgrade for Topgolf Callaway Brands, a drop in Tesla's vehicle deliveries, and allegations of accounting fraud against Carvana.
  • The US FAA will maintain enhanced oversight of Boeing following a recent safety incident with a 737 MAX 9 door panel, while GE Aerospace and South Korean authorities inspect all 737-800 jets after a fatal crash, prompting Boeing to introduce new safety measures.
  • Verizon Communications, Inc. A US appeals court has ruled that the Federal Communications Commission (FCC) does not have the legal authority to reinstate net neutrality rules.
  • Alphabet Inc. Synaptics and Google have partnered to enhance AI-powered IoT technologies, amidst mixed performances of tech stocks and varying corporate news.
  • Hindenburg Research accused Carvana of accounting manipulation.
  • The CFPB has sued Walmart and Branch Messenger for allegedly coercing delivery drivers into using expensive deposit accounts, amidst broader market concerns over a potential decline in consumer spending.

Analyst recommendations:

  • Bank Of New York Mellon Corporation (The): Wolfe Research downgrades to peerperform from outperform.
  • Block, Inc.: Raymond James upgrades to outperform from market perform with a target price of USD 115.
  • Boyd Gaming Corporation: Jefferies upgrades to buy from hold with a price target raised from USD 73 to USD 92.
  • Chewy, Inc.: Wolfe Research upgrades to outperform from peerperform with a target price of USD 42.
  • Commercial Metals Company: BNP Paribas Exane downgrades to neutral from outperform with a target price reduced from USD 60 to USD 53.
  • Fidelity National Financial, Inc.: Deutsche Bank upgrades to buy from hold with a target price raised from USD 76 to USD 77.
  • Jpmorgan Chase & Co.: Wolfe Research upgrades to outperform from peerperform with a target price of USD 269.
  • Las Vegas Sands Corp.: Jefferies upgrades to buy from hold with a price target raised from USD 60 to USD 69.
  • Phillips 66: Wolfe Research upgrades to outperform from peerperform with a target price of USD 143.
  • Polaris Inc.: Baptista Research upgrades to buy from hold with a price target reduced from USD 91 to USD 75.20.
  • Ringcentral, Inc.: Raymond James downgrades to outperform from strong buy with a price target reduced from USD 50 to USD 45.
  • Robert Half Inc.: Barclays upgrades to equalweight from underweight with a price target raised from USD 60 to USD 80.
  • Sonoco Products Company: Baptista Research downgrades to outperform from hold with a price target reduced from USD 60.40 to USD 57.90.
  • Steel Dynamics, Inc.: BNP Paribas Exane upgrades to outperform from neutral with a target price raised from USD 125 to USD 135.
  • Ally Financial Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 42 to USD 53.
  • Capital One Financial Corporation: Deutsche Bank maintains its hold recommendation with a price target raised from 174 to USD 215.
  • Cloudflare, Inc.: RBC Capital maintains its outperform rating and raises the target price from USD 99 to USD 123.
  • Insulet Corporation: TD Cowen maintains its buy recommendation and raises the target price from USD 264 to USD 324.
  • Manpowergroup Inc.: Barclays maintains its underweight recommendation and reduces the target price from 70 to USD 55.
  • Palo Alto Networks, Inc.: Scotiabank maintains its sector outperform recommendation and reduces the target price from 400 to USD 200.
  • Pegasystems Inc.: RBC Capital maintains its outperform recommendation and raises the target price from USD 90 to USD 115.
  • Sofi Technologies, Inc.: Deutsche Bank maintains its hold recommendation with a price target raised from 11 to USD 14.
  • Tesla, Inc.: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 298 to USD 404.
  • Shell Plc: Wolfe Research upgrades to outperform from peerperform with a target price of USD 80.
  • Indivior Plc: Jefferies maintains its buy recommendation and reduces the target price from 1800 to GBX 1220.