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  • 📈 Powell's Dance With The Donald 2.0

📈 Powell's Dance With The Donald 2.0

Elon's X partners with Visa on payment service, Starbucks earnings top estimates, Zimmer Biomet to buy Paragon for $1B, Lantheus to buy Evergreen Theragnostics for over $1B, Fed looks to hold rates steady

Good morning.

⚡ The Fast Five → Elon's X partners with Visa on payment service, Starbucks earnings top estimates, Zimmer Biomet to buy Paragon for $1B, Lantheus to buy Evergreen Theragnostics for over $1B, Fed looks to hold rates steady

🔎 Market Trends → Nasdaq leads Wall St higher, tech shares recover from Monday's sell-off; US Futures Ease Ahead of Fed Decision

And now…

⏱️ Your 5-minute briefing for Wednesday, January 29, 2025:

MARKET BRIEF
Before the Open

As of market close 01/28/2025.

Pre-Market

  • Royal Caribbean Group shares jumped 12%, the best performer on the S&P 500.

  • JetBlue Airways' shares sank nearly 26%.

Fear & Greed

 

Markets in Review

Tech Roars Back as Fed Eyes Rate Pause

The Nasdaq rebounded 2% to 19,733.6 and the S&P 500 added 0.9% to 6,067.7 Tuesday, regaining ground after Monday's AI-related selloff. The Dow edged up 0.3% to 44,850.4 as tech and communication services led the gains.

The Big Picture:

Investors found reasons to cheer as tech stocks rebounded sharply, calming nerves after the AI competition scare that rocked markets Monday. Nvidia (NVDA) and other semiconductor giants led the charge, recouping significant losses.

As the Federal Reserve’s meeting began, markets widely anticipated a pause in interest rate changes. This optimism helped fuel confidence in growth sectors like tech, even as mixed economic data underscored a cautious outlook.

West Texas Intermediate crude oil rose 1% to $73.89 a barrel, signaling some resilience in energy demand. Gold climbed 1.2% to $2,772.30/oz, while silver gained 1.7% to $30.92/oz.

Market Movers:

  • Nvidia (NVDA): Surged 8.9%, bouncing back after Monday’s selloff, as investors re-emphasized its AI leadership.

  • Royal Caribbean (RCL): Shares soared 12% after issuing a robust full-year earnings forecast and beating Q4 expectations.

  • General Motors (GM): Dropped 8.9% despite a strong Q4 beat, as cautious guidance on operating costs dampened sentiment.

  • JetBlue Airways (JBLU): Plummeted 26% after flagging rising expenses despite better-than-expected Q4 results.

What They’re Saying:

"The Fed’s current stance signals patience. The path to clarity on inflation and fiscal policy will dictate their next move," Stifel wrote in a note.

WHAT WE’RE WATCHING
Events

  • Today: Federal Reserve - Interest Rates - 2:00pm

  • Why You Should Care: Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.

  • Today: Federal Reserve - Interest Rate Statement - 2:00pm

  • Why You Should Care: It's the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.

  • Today: Federal Reserve - Chair's Press Briefing - 2:30pm

  • Why You Should Care: It's among the primary methods the Fed uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, along with commentary about economic conditions such as the future growth outlook and inflation. Most importantly, it provides clues regarding future monetary policy.

Earnings Reports

  • Today: Microsoft, Meta, Tesla, T-Mobile, Progressive, Waste Management, IBM, Nasdaq

  • Tomorrow: Apple, Visa, Mastercard, Shell, Caterpillar, Comcast, UPS, Sherwin-Williams, Intel, The Cigna Group

MARKET BRIEF
Leading News

Insiders Predict the Fed Holds Steady as Trump 2.0 Demands Rate Cuts: Here's Your Smart Money Playbook

Why it matters:

The Fed's first meeting of Trump's second term sets up a high-stakes showdown between monetary independence and political pressure, with $4.5 trillion in rate-sensitive assets hanging in the balance.

Zoom Out:

Round two of the Powell-Trump monetary policy match has begun, but this time the economic arena looks markedly different. With markets pricing in a 99%+ probability of rates staying put at 4.25%-4.50%, we're witnessing a more nuanced game of economic chess.

The plot thickens as Trump's "drill baby drill" energy policy and proposed regulatory rollbacks could actually help the Fed's inflation fight. Yet his hawkish trade stance and immigration crackdown might push prices the other way.

Key Insights:

  • Policy paradox: Former Dallas Fed chief Robert Kaplan (now at Goldman) spots three potential deflationary forces: government spending cuts, regulatory streamlining, and energy sector efficiency gains. Yet labor market tightening could lead to wage inflation.

  • Market psychology: Traders are betting on a June rate cut – a timeline that gives Powell's team breathing room to assess Trump's policy impact. Remember how markets initially overreacted to Trump 1.0? $(SPY) veterans might want to dust off their 2017 playbooks.

Market Pulse:

"The Fed must follow its legislative mandate... rather than be swayed by outside commentary and political pressure" - Former KC Fed President Esther George, throwing subtle shade at political interference.

Bull’s Take:

Smart money is betting on the Fed holding firm while Trump's business-friendly policies potentially grease the wheels for a soft landing. For long-term investors, this policy tension might create buying opportunities in rate-sensitive sectors (think $XLF and $XLRE) as markets digest the noise. Keep your powder dry until June, but stay ready to pounce on quality names if political drama creates unwarranted selloffs.

Headlines

  • Elon Musk's X partners with Visa on payment service in an effort to become an 'everything app,' (link)

  • Starbucks earnings top estimates, but same-store sales decline for fourth straight quarter (link)

  • Zimmer Biomet to buy Paragon 28 for $1.1 billion (link)

  • FDA approves Novo Nordisk’s Ozempic to treat chronic kidney disease in those with diabetes, expanding its use (link)

  • Lantheus To Buy Evergreen Theragnostics For Over $1 Billion To Bolster Its Cancer Radiopharmaceutical Portfolio (link)

  • Chevron to build gas plants to power data centers amid AI boom (link)

CRYPTO
Fear & Greed

 

Headlines

  • Bitcoin Rebounds as DeepSeek Concerns Wane, AI Tokens Regroup (link)

  • Trump-backed World Liberty Financial purchases $2 million in MOVE tokens as protocol unveils a developer mainnet (link)

  • Bitwise Files To Launch Dogecoin ETF (link)

DAILY SHARE
On the Socials

*Hat-tip to alifarhat79