News & Insight • Weekly Newsletters

24 January 2025 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

President Trump was sworn in as the 47^th President of the United States. In his inauguration address, Trump stated that “the golden age of America begins right now” and that “America’s decline is over” with a series of executive orders to start a “revolution of common sense.” Among many things, Trump also stated that he would declare a state of emergency on the southern border, reinstate his Mexico policy and that cartels would be deemed terrorist organisations. Trump also commented that he would declare a national energy emergency and that there would be a return to “drill baby drill” while he would establish an “external revenue service” to collect new tariffs on imported goods

The World Economic Forum Annual Meeting held at Davos was overshowed by the video call by President Trump, however the FT reported about the “peak pessimism” from Europe, with Christine Lagarde, president of the European Central Bank warning about an “existential crisis”

Japan's central bank has increased the cost of borrowing to its highest level in 17 years after consumer prices accelerated in December. The move by the Bank of Japan (BOJ) to raise its short-term policy rate to "around 0.5%" comes after the latest data showed prices rose at the fastest pace in 16 months

After TikTok briefly went offline over the weekend, service on the app was restored after President Trump pledged to delay enforcement of the ban. Trump stated he would “not let TikTok stay dark” and that he would sign an executive order granting another 90 days for TikTok to find a US backer

COMPANY NEWS

Novo Nordisk shares rose sharply after a trial showed that people taking its new weight loss drug Amycretin could lose up to 22% of their body weight after just 36 weeks, similar to the weight loss by Zepbound (Eli Lilly)

Rumours are circulating that Diageo might sell or spin-off Guinness for “north of £8bn”, Bloomberg said. Also in the consumer sector, WH Smith, are looking to try and dispose of their high street stores whilst keeping their more profitable travel business

Freeport McMoran, one of the world’s largest copper and gold miners, reported fourth quarter revenue below consensus. Copper production declined 4.9% year-on-year, gold production declined 25% and capex of $1.24bn was higher than expected

American Express shares, which have been on a tear thanks to their exposure to younger, affluent consumers and business travellers, fell slightly as – despite producing record revenues – they were very slightly short of analysts’ lofty expectations

Johnson & Johnson reported fourth quarter sales up 5.3% year-on-year, better than expected; however, the shares headed lower as guidance was a little weak

Adidas and Puma both reported results. Adidas showed a beat on revenue and profits and a bullish statement forecasting doubler-digit – this marks an important turnaround for new CEO Bjorn Gulden following a very public break-up with the rapper Ye (formerly known as Kanye West) whose Yeezy brand of shoes had made millions for Adidas. Puma, meanwhile, fell sharply after reporting lower than expected sales and a drop in profit

Electronic Arts closed lower by 16.7% after cutting guidance as third quarter earnings per share was $1.11 vs $1.15 expected with total net revenue ($1.88bn) and net bookings ($2.22bn) were lower than forecast

Shares in Netflix finished sharply higher after reporting results that beat expectations, with subscriber growth of 19m. The company also noted that they were able to raise prices in markets such as the US and Canada. This led to them also raising their margin target aided by sales growth target of 12-14% and expense growth of just 9%

The shares of Danish offshore wind experts, Orsted, fell again as increased costs and questionable demand, particularly in a Trump’s America, worried investors

Burberry shares rallied higher as sales declines were better than feared, most notably in the US and China

PROJECT STARGATE

President Trump is back, and he is in a hurry. The Department of Government Efficiency (DOGE) announced its second departure – very efficient! – as Bill McGinley, a Republican lawyer and DOGE's legal counsel has left the agency. This resignation comes after Vivek Ramaswamy who was co-lead with Elon Musk, stepped down

However, the President did unveil Project Stargate, which was described as the largest AI infrastructure project in the world and has Japan’s Softbank and Open AI as the other key initial investors. The project will cost an initial $100bn, rising to $500bn over 4 years and create 100,000 jobs.

Softbank shares rallied 5%, despite questions by Elon Musk about the company’s ability to fund the project. Softbank owns a large stake in Arm Holdings, which was earmarked as a beneficiary. Elsewhere, Oracle shares rose over 6%, while Nvidia were up over 4% and Microsoft also rallied over 4%. Microsoft is the 49% owner of Open AI, one of the major partners in the Stargate project

‘MAG 7’ PREVIEW

All eyes on big tech this week as 6 of the ‘Magnificent 7’ report quarterly results:

Alphabet: Having been late to the party, AI-powered overviews in Google search are starting to show their value. The market will be laser-focused on ad revenue, still the core growth driver, and a 9.5% uplift is expected

Amazon: Amazon set an upbeat tone at its last quarterly results. Any growth in its cloud-division, AWS (which makes up around two thirds of group profits), materially above 19% should get a warm reception. The market will also be looking for AWS’s AI initiatives and the eye-popping investment Amazon plans to spend in the space

Apple: a slowdown in China and concerns that its in-house generative AI is behind industry leaders has led the shares to lag. Company guidance suggests low-to-mid single-digit revenue growth, but reaching the higher end of that range could prove challenging, with analysts forecasting growth of around 4%

Microsoft: Microsoft has said it plans to spend $80bn this year on AI and the market will be looking for signs of some positive return on their mammoth investment.  A key metric to watch is Azure growth, expected at 32%.  Beyond Azure, the rollout of Copilot will also be under scrutiny

Meta Platforms: CEO Mark Zuckerburg has already said that he plans to spend $65bn this year on AI investment including a 2-gigawatt data centre that will be “large enough to cover a significant part of Manhattan”

Tesla: a huge beneficiary of the recent Trump-bounce, EV sales are falling, the market wants to see tangible progress in full self-driving technology

THE WEEK IN HISTORY

1788: The British First Fleet, led by Captain Arthur Phillip RN, sailed into Port Jackson (now Sydney Harbour) to establish the first permanent European settlement in Australia. 26^th January is commemorated as Australia Day

1984: Steve Jobs introduced Apple’s revolutionary computer Macintosh, two days after the advert “1984” aired before a US TV audience heralding the product’s release