Morning Roundup

By Mark Masterson on January 21, 2025

Good morning,

Below are the news items moving markets today:

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Executive Summary

Well – we are off an running. 

As mentioned last week – it’s going to be a very busy week with a flurry of activity. 

The flurry has begun – and I’ll try to summarize it below…..

First – the Key Events This Week:

• Inauguration of President Trump – Monday
• initial Jobless Claims data – Thursday
• S&P Global Manufacturing/Services PMI data – Friday
• December Existing Home Sales data – Friday
• ~10% of S&P 500 companies report earnings this week

Here are the companies reporting this week.  Some big tech names on tap as you can see….

Earnings Whispers 1 21 25

On to the Trump flurry of activity…..

President Trump signed numerous executive orders yesterday – with more to come today.  Here is a summary:

– Declare emergency at the border

– Designate cartels as foreign terrorist organizations

– Military will be directed to construct new phase of border wall

– Prevent trans from joining in military

– National energy emergency

– Terminate Biden orders on energy drilling restrictions

– Return federal workers to in-person work

– Pause all offshore wind leases

– End DEI hiring practices in the federal government, merit only

– Withdraw from the Paris Climate Accord

– Order every agency to remove all federal actions increasing costs for Americans via deregulation

 – Establish a DOGE “hiring freeze”

– Leave the WHO

-Donald Trump has officially signed executive orders to change the Gulf of Mexico to ‘Gulf of America.’

• President-elect Trump will be inaugurated at 47th US president at 12:00 ET Monday, after which he will sign flurry of executive orders (Washington Post, NY Times, Politico).
• Among his higher profile executive orders, Trump expected to declare national emergency at southern border that will unlock resources to restrict entry into US and crack down on illegal immigration.
• On energy, Trump expected to reverse Biden orders that promoted EVs and renewable energy and restricted oil and gas drilling.
• Trump expected to make changes to federal hiring and workplace rules and intends to sign order extending TikTok sale or ban deadline.
• Still lot of uncertainty around Trump’s tariffs though CNN sources recently noted Trump considering declaring national emergency under International Economic Emergency Powers Act (IEEPA), which could pave way for universal tariffs.
• Trump also eyeing sections of trade laws allowing him to impose tariffs on national security grounds or on countries deemed to be engaging in discriminatory trade practices.
• Since winning election Trump has threatened 25% tariffs on Mexico and Canada, and 10% tariffs on China, citing drugs and illegal immigration. However, no follow-up yet to his pre-election threats to impose tariffs of at least 60% tariffs on China and universal tariffs of 10-20%.

Trump orders sweeping changes to US energy policy:

• US energy policy changes have been receiving focus amid a slew of day-one executive orders from the new administration.
• President Trump declared a national energy emergency yesterday providing him with authority to reduce environmental restrictions and boost US drilling.
• Also withdrew the US from the Paris climate deal, killed the EV mandate, and suspended new federal offshore wind leasing. Additionally, Trump repealed Biden’s block on oil drilling in the Arctic and Alaska’s Arctic National Wildlife Refuge.
• Said he intends to fill the strategic petroleum reserves “right to the top” and noted the US will “probably” stop buying oil from Venezuela.
• Despite Trump’s calls to boost US drilling, analysts note US O&G companies are unlikely to manifest them anytime soon.
• General sentiment on oil prices in the short-term still seem skewed to the upside as market expects Trump to continue with Russian sanctions and possibly ramp up pressure on Iran and Venezuela over the coming weeks. Goldman Sachs still sees Brent between $70-$85 in 2025 with high OPEC+ spare capacity limiting further price upside.

Trump trade policy update:  

• Trump outlined broad trade-policy priorities in a memo yesterday, including calling for multiple cabinet departments to study trade deficits and recommend “appropriate measures” by 1-Apr.
• Will include review of antidumping and countervailing duty laws.
• Followed pre-inauguration media reports Trump could be more measured in trade-policy rollout as well as recent Bloomberg reporting the administration might consider 2-5%/month tariff hikes to build negotiating leverage.
• While investors seemed to welcome a more deliberative approach, in Oval Office comments last night Trump said he was considering imposing 25% tariffs on Canada and Mexico as of 1-Feb, citing flow of illegal immigration and fentanyl from those countries, which together accounted for roughly a third of US imports and exports last year (FT, Bloomberg, CNN).
• At that time, added China actions could be contingent on whether TikTok owner ByteDance is able to divest in the next 75 days (FT). Commentators noted trade policy likely to remain dynamic in the weeks to come (Bloomberg).

Headline this morning…..

• TRUMP TO HAVE BIG INFRASTRUCTURE ANNOUNCEMENT ON TUESDAY – WHITE HOUSE SPOKESPERSON.

Here are the full Trump headlines….

• Trump’s Day One:
  • Trump inaugurated as US president, moves quickly on executive action (Bloomberg, NY Times, FT)
  • Trump avoids big tariff actions on day one but leaves open possibility of universal tariff (Axios, Reuters, Yahoo Finance)
  • Trump flags 25% tariffs on Mexico and Canada from 1-Feb (Bloomberg, Reuters, FT)
  • Trump calls for China trade investigation instead of immediate tariffs (FT, Reuters, Bloomberg, Bloomberg)
  • Trump threatens tariffs on Europe unless it buys more American oil (Bloomberg)
  • Trump effectively pulls out of global corporate tax deal, saying it has ‘no force or effect’ in US (Reuters)
  • Trump starts immigration crackdown with moves to end birthright citizenship, deploy military at border (NY Times, CBS News)
  • Trump rescinds AI regulations by halting implementation of safety and transparency requirements for AI developers (Bloomberg)
  • Trump gives 75 day reprieve for TikTok (Bloomberg), China signals openness to deal that would keep TikTok in US (Reuters)
  • Trump to pull out of Paris Climate Accord again (FT, Reuters); orders US to exit from the WHO (Reuters, Bloomberg )
  • Trump revokes Biden’s 50% EV target, freezes unspent charging funds (Bloomberg)
  • Trump declares national energy emergency to ramp up oil output (Reuters); says US may stop buying Venezuelan oil (Bloomberg)
  • Trump administration says it will prioritize the development of Alaska’s LNG potential (Reuters, Reuters)
  • Senate confirms Rubio as Secretary of State (Bloomberg), Hegseth on track on Defense Secretary confirmation (Politico)
  • Ramaswamy to exit DOGE, run for Ohio governor (NY Times, Bloomberg)
• Washington:
  • Republicans’ legislative plans highly unsettled and timeline could get extended as fights over federal spending and debt limit trigger further complications (Politico)

I’m finding that many did not see the Trump “meme-coin” launch that took place late Friday night. 

Prior to taking office, Trump launched a crypto “meme-coin” – swiftly minting billions of dollars in net worth for his family.  Here are the headlines…..

• Trump Unveils “Official” MemeCoin Late Friday; 12 Hours Later It Is Up 16,000% To $30 Billion
• Donald Trump’s memecoin, $TRUMP, surges to new all time high as he reposts a post stating that it is “the hottest digital meme on earth.”It is now up over +12,500% since launching just 15 hours ago.
• In less than 24 hours, Trump‘s coin has created more unrealized gains than over a year of trading in the Spot Bitcoin ETFs
• It’s also outperformed the SPX back to 1980 h/t @Geiger_Capital
• 80% share of the virtual asset $TRUMP is owned by a Trump Organization affiliate called CIC Digital LLC, and a related entity called Fight Fight Fight LLC.

Not to be outdone, Melania also launched a “meme-coin” on Saturday night.  (Prior to the inauguration)

• Melania Trump, the First Lady of the US, just launched her own memecoin, $MELANIA.
• Less than 48 hours ago, Donald Trump launched $TRUMP which just erased $7.5 BILLION in market cap in 10 MINUTES.BREAKING: Donald Trump’s crypto platform, World Liberty Financial, buys 3 new domain names in the last 24 hours:
• Donald Trump’s memecoin, $TRUMP, crashes over -40% as Melania Trump launches her own memecoin.

Looks like Trump has changed his tune on crypto.

Here was President Trump’s tweet on Bitcoin back in 2019…..

Donald Trump/ Twitter 7 11 19

President Trump needs to get Treasury Secretary Bessent in place asap considering the little present Janet Yellen left him as she left her post……

• US TREASURY SECRETARY YELLEN: THE TREASURY WILL BEGIN USING EXTRAORDINARY MEASURES ON JANUARY 21.
• Treasury Secretary Yellen announces that the US will hit the debt limit on Tuesday, January 21st.
• Yellen has advised the US Treasury to start “extraordinary measures.”
• “The period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the US government months into the future,” she wrote.
• The Treasury currently has $680 billion in cash in the Treasury General Account which will now be drained at an accelerated pace, and potentially hit $0 by the summer, until a new debt ceiling deal is reached (it will be, it’s just a matter of when).

Some interesting comments overnight from Stan Druckenmiller – one of the best asset managers of the past 30 years…..

• Druckenmiller: “I’ve been doing this for 49 years, and we’re probably going from the most anti-business administration to the opposite. We do a lot of talking to CEOs and companies on the ground. And I’d say CEOs are somewhere between relieved and giddy. So we’re a believer in animal spirits”
• Druckenmiller: “We are still short Treasuries, but we’re certainly not pressing the size of that position now.”
• Druckemiller: “In my business, every change creates changes in security prices. Having this kind of radical change from one administration to the other, in addition to what’s going on in the private sector with innovation—then you’ve got deregulation from the government and disruption..I think there will be a lot of change..I wouldn’t worry about the market, I would focus on individual stocks”
• Druckenmiller on tariffs: “To me, tariffs are simply a consumption tax that foreigners pay for some of it. Now the risk is retaliation, but as long as we stay in the 10% range, …I think the risks are overblown relative to the rewards, the rewards on high.”
• Druckenmiller on Scott Bessent: “Scott’s extremely capable—big brain, very thoughtful. He’s in the unique position that I don’t think any other Treasury Secretary has been in, having been an active participant in markets. I’m hearing he’s been to 40 countries, and I know he’s been involved in markets in at least 40 countries. So, he’s extremely capable. He understands his fiscal situation, and I think he understands that the biggest risk to this administration is both fiscal and inflation. Having said that, he’s not in charge.”
• Druckenmiller: “The economy looks very, very strong—at least for the next six months, which is about as far out as one can see with any degree of confidence”

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Articles of Interest:

• Geopolitics:
  • Trump says Putin destroying Russia by refusing Ukraine deal; tells of plan to meet Russian leader (Politico)
  • EU leaders express cautious optimism as Trump returns to White House (FT, Reuters, Bloomberg)
  • Panama to begin audit of China-linked port operator, reiterates canal will remain under its control (Bloomberg)
  • Trump says not confident ceasefire in Gaza will be kept (AFP, Times of Israel)
  • Trump’s revival of maximum pressure campaign against Tehran to focus on Iran’s oil industry (Bloomberg)
  • Macron signals France may exceed NATO’s 2% defense spending target amid Trump’s return (Politico)
• Markets:
  • Markets jolted by Trump’s 25% tariff warning to Canada and Mexico (FT)
  • Investors and corporate leaders parse White House priorities; tariffs warning for US companies (Bloomberg)
  • BofA survey suggests equity laggards may rally on benign Trump trade policies if he softens tone (Bloomberg, Reuters)
  • Trump meme coin soars in value on his first day in office, lifts other tokens (Reuters)
• Economy:
  • China President Xi reiterates call for more proactive policies to sustain growth momentum into 2025 (Bloomberg)
• Corporate:
  • Apple iPhones dived 18.2% in China during the December quarter, with Huawei taking top spot (Bloomberg)
  • TikTok content creators get Instagram knocking on the door with big cash bonuses offer (The Information)

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Charts of the day:

Markets still have a little juice based on the historical path post election.

However, it would be normal to see a bit of a pause soon as the new policies are put into place……

Bloomberg 1 21 25

Still a very narrow market.

The S&P 500 relative to the Equal-Weighted S&P 500 has dropped to near the lowest since 2009, Financial Crisis.

To put this differently, the S&P 500 has outperformed an average stock by the most in 15 years.

Global Markets Investor 1 21 25

It’s still the US as the dominant force in capital markets as Trump takes office….

US stocks now make up 65% of the global equity market, their highest weighting in history. This is more than 11x bigger than the second largest country by market cap (Japan at 5.6%).

Charlie Bilello 1 21 25

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Quote of the day:

“I will tell you how to become rich. Be fearful when others are greedy. Be greedy when others are fearful.”

— Warren Buffett