Trump reignites trade tensions, impacting global markets; Supreme Court may rule on tariffs.

Market Overview

The ongoing tensions between the US and Europe have led to increased market anxiety, putting pressure on global stock markets. US stock futures have shown a significant decline, while gold and silver prices have reached historical highs.

US Market Performance

On Martin Luther King Jr. Day, US markets were closed, but futures indicated a downward trend:

• Dow Jones futures fell by 0.83%
• S&P 500 futures dropped by 0.88%
• Nasdaq futures decreased by 1.09%

The trade tensions, exacerbated by President Trump's threats of tariffs related to Greenland, have spurred a flight to safety, pushing gold prices up to $4690 per ounce and silver to $94.7 per ounce.

European Market Reaction

European indices also closed lower:

• Euro Stoxx 50 down 1.77%
• FTSE 100 down 0.44%
• CAC 40 down 1.78%
• DAX 30 down 1.22%
• FTSE MIB down 1.32%

Political Developments

Trump's Greenland Controversy

President Trump has refrained from clarifying whether he would use force to acquire Greenland, stating he has "no comment." He criticized European leaders for opposing the acquisition and emphasized that tariffs would be "100%" implemented if no agreement is reached.

EU's Response

The EU is set to hold an emergency summit on January 22 to discuss Trump's tariff threats and potential countermeasures. EU officials are committed to maintaining communication with the US while preparing to protect their interests.

Federal Reserve Updates

Powell's Court Appearance

Federal Reserve Chairman Jerome Powell is scheduled to attend a Supreme Court hearing regarding Trump's attempt to dismiss Fed Governor Lisa Cook. The court's decision on this matter is anticipated to impact the Fed's governance.

Upcoming Supreme Court Decisions

The Supreme Court will announce its next rulings on January 20, including significant cases related to Trump's global tariff policies.

Technological Developments

NYSE's New Trading Platform

The New York Stock Exchange is developing a blockchain-based trading platform for tokenized securities, aiming for a launch later this year, pending regulatory approval.

OpenAI's Hardware Plans

OpenAI plans to release its first hardware device in the second half of 2026, although specific details remain undisclosed.

Economic Insights

China's Economic Outlook

China's State Council is holding discussions on economic policies, with key figures from various sectors providing input on the government's work report and the 14th Five-Year Plan.

Goldman Sachs on AI Investments

Goldman Sachs predicts that 2026 will be pivotal for China's internet giants as they ramp up AI investments. The report highlights Pinduoduo as a core recommendation due to its competitive valuation and growth potential.

Market Movements

Stock Buybacks

• Xiaomi Group repurchased 4 million shares for HKD 146 million.
• Pop Mart repurchased 140,000 shares for HKD 251 million.

Notable Stock Activity

Southbound funds net bought HKD 2.292 billion in Hong Kong stocks, with significant purchases in SMIC and Tencent.

Conclusion

The current geopolitical climate and economic developments are shaping market dynamics, with significant implications for investors and policymakers alike.