January 21st Market Overview

Happy Monday.

Market’s are partying today as Trump's first moves as president weren't the tariff tsunami many feared. Instead of swinging the trade war hammer, he called for a policy issued a broad memo directing federal agencies to study trade policies - though he noted potential 25% tariffs on Mexico and Canada could come by February 1st.

$NVDA just dethroned $AAPL as the world's most valuable company (by market cap), and a massive $500B AI infrastructure plan got announced.

Let's dig in...

P.S. Bill.com is giving away Ray Bans for anyone willing to watch their demo. I got a Blackstone grill from them last year by doing a demo with their sales guy.

Executive Summary

• Market sentiment shifts positive as Trump’s first day initiatives avoid immediate tariffs
  

• $NVDA overtakes $AAPL as world’s most valuable company at $3.39T
  

• US Dollar sees largest one-day drop in a year on trade policy outlook
  

• Chinese Vice Premier Ding Xuexiang warns "trade wars have no winners" at Davos forum, responding to Trump's first-day trade policy discussions and potential China tariffs over TikTok deal

Market Overview

Key Market Drivers

1. Trump directs comprehensive trade policy review rather than implementing immediate tariffs, though signals potential 25% duties on Mexico and Canada by February
   

2. Landmark $500B AI infrastructure partnership announced between $ORCL, OpenAI, and SoftBank for new “Stargate” initiative
   

3. Better-than-expected earnings from $MMM, $SCHW, and $DHI demonstrate corporate resilience
   

4. Defense sector leads gains on anticipated military spending increase, with $NOC, $RTX, and $LMT all up over 3%

Stock Spotlight

• $NVDA ▲ 2.70%: Overtakes $AAPL as world’s most valuable company at $3.39T market cap

• $ORCL ▲ 7.00%: Selected for massive AI infrastructure project called Stargate

• $MMM ▲ 4.00%: Beats Q4 expectations driven by strong industrial adhesives and electronics sales

• $FTAI ▼ 33.00%: Board launches review of Muddy Waters accounting allegations

• $WBA ▼ 12.70%: DOJ files nationwide lawsuit over opioid prescriptions

Big Name Updates

• $AAPL ▼ 3.80%: Dual downgrades from Jefferies and Loop Capital cite weak iPhone demand

• $BTC.X ▲ 3.19%: Trades above $106,000 as Coinbase CEO advocates for strategic reserve

• $TSLA ▼ 1.82%: Pressured by Trump’s revocation of EV mandate

• $DHI ▼ 1.44%: Mixed Q1 results with weak orders but maintains full-year guidance

Other Notable Company News

• Defense contractors surge: $NOC ▲ 5.10%, $RTX ▲ 3.40%, $LMT ▲ 3.30%

• Solar stocks retreat: $TAN ETF ▼ 2.30%, $FSLR ▼ 5.00%

• $SCHW ▲ 3.00%: Trading activity drives 50% earnings growth

• $LCID ▼ 6.36%, $RIVN ▼ 5.00%: EV stocks decline on policy shift

Sector Watch

Bond Market

Treasury yields declined across the curve, with the benchmark 10-year dropping 4 basis points to 4.57%.

Trump's softer stance on immediate tariff implementation took market by surprise. Goldman Sachs Chief U.S. Political Economist Alec Phillips noted the admin’s trade announcements were "more benign than expected," leading to reduced concerns about immediate inflationary pressures from universal tariffs.

Policy Watch

Trump’s first executive actions signal significant policy shifts:

• Directs federal agencies to evaluate trade policies, particularly with China, Mexico, and Canada

• Declares national energy emergency to boost fossil fuel production

• Revokes 78 Biden-era executive orders including EV mandate

• Considers 25% tariffs on Mexico and Canada starting February 1

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What to Watch

1. Netflix Earnings After the Bell: Market anticipates strong results amid streaming wars

2. Trade Policy Development: Timeline for potential tariff implementation on Mexico and Canada

3. Defense Sector Momentum: Military spending expectations driving sector rally

4. Cryptocurrency Regulation: Potential executive orders following Trump’s crypto-friendly stance

5. AI Infrastructure Details: More companies expected to join $500B Stargate project

Thanks for reading 🙂

- John