On Tuesday (January 7th Beijing time), spot gold traded around 2635.89, and US Treasury yields rose. The Federal Reserve recently hinted at slowing down its interest rate cuts in 2025, which has investors eagerly awaiting a series of economic data to be released this week for more clues about this view; US crude oil traded around $73.33 per barrel, but oil prices fell on Monday amid volatile trading as some negative economic news from the US and Germany offset the positive support from the weakening of the US dollar and predictions of increased demand for heating energy due to winter storms.

The Dow Jones Industrial Average closed down 0.06% on Monday at 42706.56 points; The S&P 500 index rose 0.55% to 5975.38 points; The Nasdaq index rose 1.24% to 19864.98 points.

equity market

The S&P 500 and Nasdaq indexes rose to their highest levels in over a week on Monday, aided by a surge in semiconductor stocks and reports suggesting that the incoming Trump administration may adopt a more moderate tariff stance than expected.

Seven out of the 11 sectors in the S&P 500 index closed down, but the communication services and technology sectors climbed 2.13% and 1.44% respectively. Michael Green, portfolio manager at Simplify Asset Management, said, "What we're seeing more is the situation from last year, where the big gains were concentrated in the largest stocks." He also mentioned that funds from 401 (k) retirement plans are also helping to drive the stock market up. Microsoft plans to invest $80 billion in developing artificial intelligence data centers, while Foxconn's fourth quarter revenue exceeded expectations, boosting chip manufacturers.

Nvidia rose 3.43%; AMD rose 3.33%; Micron surged 10.45%. The Philadelphia Semiconductor Index surged 2.84%. Despite the 10-year US Treasury yield hitting its highest level since May, technology stocks still rose. Last Friday, the US stock market rebounded sharply, following consecutive declines in December and the first few trading days of January, when the market was worried

Overvaluation, rising US Treasury yields, and scarce liquidity.

Automakers' stock prices rose, with Ford Motor up 0.40% and General Motors up 3.40%. A previous newspaper report stated that US President elect Trump has focused on imposing tariffs on all countries, but only on certain industries deemed crucial to national or economic security. Trump subsequently refuted the report.

Anne Wealth Management Chief Economist Brian Jacobsen said, "He did come forward and say he wouldn't shrink his tariff plan, but the seeds have been planted that the Trump administration's tariff policies won't be as shocking as people had originally feared

Automakers are considered the most vulnerable to tariffs imposed by US trading partners due to their large supply chains. Prior to Trump's inauguration on January 20th, investors were seeking a deeper understanding of his policies, which were widely believed to be beneficial for American businesses and the US economy.

Citigroup rose 2.45% after Barclays Bank issued a bullish rating. The index tracking bank stocks rose by 0.22%. The Vice Chairman of the Federal Reserve responsible for regulation, Barr, stated that he will resign. Barr sought to implement a series of strict regulations on large banks in the United States.

In a week of intensive economic data and speeches by Federal Reserve officials, investors will search for clues about the pace of monetary policy easing this year. The market will focus on the monthly employment report to be released later this week.

Although Trump's suggestions may increase corporate profits and inject vitality into the economy, they may also push up inflation. Federal Reserve Governor Cook is the latest policy maker to warn of inflation risks in the new year.

gold market

Gold prices fell on Monday, while US Treasury yields rose. The Federal Reserve recently hinted at slowing down interest rate cuts in 2025, prompting investors to eagerly await a series of economic data to be released this week for more clues about this view.

Spot gold fell 0.2% to $2634.52 per ounce. US futures closed 0.3% lower, settling at $2647.40. Nitesh Shah, a commodity strategist at WisdomTree, said, "Bond yields have rebounded again, putting pressure on gold." The 10-year US Treasury yield has risen to its highest level in over eight months, making non yielding gold less attractive.

Shah said, "Based on the 'consensus' economic viewpoint of the depreciation of the US dollar and the decline in government bond yields, we expect the gold price to reach $3050 per ounce by the end of the year. Further escalation of tensions in the Middle East may pose an upward risk to our forecast“

The latest forecast from the Federal Reserve in December suggests that the pace of interest rate cuts this year will shift towards greater caution, with most policymakers expressing concerns about the possibility of inflation reigniting.

US President elect Trump took office on January 20th, and his proposed tariffs and protectionist policies are expected to further stimulate inflation. The US dollar index fell 1% from its highest level in over two years hit on Thursday, but gold prices still fell.

Market participants are now waiting for Friday's US employment report, which may help provide more information for the Federal Reserve's future policy path. Investors are still waiting for Tuesday's job vacancy data, ADP employment report, and the minutes of Wednesday's latest Federal Reserve policy meeting.

Spot silver rose 1.1% to $29.93 per ounce; Platinum fell 0.8% to $930.41; Palladium fell 0.4% to $918.25.

Crude oil market

Oil prices fell slightly in volatile trading on Monday, as some negative economic news from the United States and Germany offset the positive support brought by the weakening of the US dollar and the forecast of increased demand for heating energy due to winter storms.

After five consecutive days of gains, Brent oil prices fell 0.3% to close at $76.30 per barrel; US crude oil fell 0.5% to close at $73.56 per barrel. Despite the decline, these two major indicators of crude oil contracts have remained in the technical overbought zone for the third consecutive day.

With increasing interest in energy trade in recent weeks, the open interest in US futures on the New York Mercantile Exchange surged to 1.933 million contracts on Friday, the highest since June 2023. Analysts from Eurasia Group said in a report, "After entering 2025, the supply and demand fundamentals of the oil market will tend to balance, but geopolitical tensions will still support oil prices

According to data from the US Bureau of Statistics, in the world's largest economy, the United States, new orders for manufactured goods decreased in November due to weak demand for commercial aircraft, and equipment spending by businesses seemed to slow down in the fourth quarter. In Germany, the largest economy in Europe, the annual inflation rate in December exceeded expectations due to a smaller decrease in food prices and energy prices compared to previous months.

Earlier that day, crude oil prices rose as a winter storm swept across the United States, causing heating fuel natural gas prices to soar 10% on Monday, while diesel closed at its highest level since October 7th. Earlier on Monday, crude oil prices also rose due to a sharp 1.1% drop in the US dollar against a basket of other currencies. Previously, there were newspaper reports that US President elect Trump was considering imposing tariffs only on key imported goods, which could give relief to countries that expected broader tariffs. However, after Trump denied the newspaper reports, the US dollar recovered most of its losses.

foreign exchange market

The US dollar index fell 0.64% to 108.26 on Monday, while the euro rose 0.76% to 1.0386 US dollars against the US dollar. The US dollar experienced its largest daily decline since November 27th, while the euro recorded its largest daily increase since August 2nd. The US dollar index hit a two-year high of 109.54 last week and has been rising for five consecutive weeks, supported by factors such as economic resilience, the possibility of rising inflation due to tariffs, and the Federal Reserve slowing down its interest rate cuts.

Previously, there were conflicting reports about how radical the tariff plan of US President elect Trump would be after he takes office. The US dollar fell 1.07% against a basket of currencies earlier, after The Washington Post reported that Trump's aides were studying some tariff plans that would apply to all countries but only cover key imported goods. This alleviates people's concerns about stricter and broader tariffs. Subsequently, Trump denied the report in a post on his Truth Social platform, significantly narrowing the decline of the US dollar.

Karl Schamotta, Chief Market Strategist at Corpay, said, "The reality is that Trump's views on Truth Social will drive currency market volatility for some time, and the reaction on Monday morning indicates potential dynamics

Schamotta added, "The consensus in the market is that Trump will talk louder than louder, and any news confirming this view will boost the rise of risky assets and the decline of US dollar and Treasury yields. However, the reality is that downside risks still exist and there is no clear endpoint

The speech by Federal Reserve Governor Cook also helped to curb the decline of the US dollar, stating that given the solid economic foundation and more sticky inflation than expected, the Fed can be cautious about further interest rate cuts. Several Federal Reserve decision-makers will give speeches this week, and their statements may be similar to recent statements from other officials, suggesting that it is still necessary to address stubborn inflation.

The euro hit its lowest level since November 2022 last week. After preliminary data on Monday showed that Germany's December annual inflation rate was higher than expected, the euro strengthened. Shaun Osborne, Chief Foreign Exchange Strategist at Scotiabank, said, "The US dollar index may see a correction of 2%, 3%, or 4% in the near future, but we need a stronger feeling to push it forward, either because the European economy is performing better, so we see European interest rates further rising, or tariff expectations further easing

The data released by the US government on Monday showed that due to weak demand for commercial aircraft, new orders for US made goods decreased in November, and corporate equipment spending seemed to slow down in the fourth quarter.

The US dollar rose 0.17% to 157.53 against the Japanese yen; The pound rose 0.72% against the US dollar, to $1.251. Investors will measure a series of data related to the US labor market this week, with Friday's key government employment report being the most important.

international news 

Canadian Prime Minister Resigns

On the morning of January 6th local time, early this morning (January 7th) Beijing time, Canadian Prime Minister and leader of the ruling Liberal Party, Trudeau, held a press conference in the capital Ottawa, announcing his resignation as the leader and prime minister of the Liberal Party. However, he will remain in office temporarily until the Liberal Party elects a new leader.

Trump proposes Canada to join the United States as the 51st state

After Trudeau announced his intention to resign, Trump proposed that Canada join the United States as the 51st state. Trump posted on social media, saying, "Many Canadians like to be the 51st state of the United States. The United States can no longer tolerate the huge trade deficit and subsidies Canada needs to sustain its survival. Justin Trudeau knew this and resigned. If Canada were to merge with the United States, there would be no taxes, taxes would decrease significantly, and they would be completely free from the threat of Russian ships constantly surrounding them. Together, what a great country this would be

US eases partial sanctions on Syria

On January 6th local time, the Office of Foreign Assets Control (OFAC) of the US Treasury Department relaxed some sanctions on Syria. The Office of Foreign Assets Control has announced a new general license that allows certain transactions with Syria under specific circumstances to ensure that US sanctions do not impede necessary public services or humanitarian aid, but still retains some strict sanctions. This new regulation will come into effect from today until July 7, 2025. (CCTV)

The decline in factory orders in the United States in November was greater than expected, and equipment spending by businesses in the fourth quarter seems to have slowed down

The data released by the US government on Monday showed a decrease in new orders for US made goods in November, while corporate equipment spending seemed to slow down in the fourth quarter. The US Bureau of Statistics reported that factory orders decreased by 0.4%, while in October they were revised upwards to increase by 0.5%. Economists surveyed by Reuters previously predicted that factory orders would decline by 0.3% in November, while previous reports showed a growth of 0.2% in October. Factory orders increased by 0.1% year-on-year in November. The manufacturing industry accounts for 10.3% of the total US economy, and has been struggling after the Federal Reserve actively tightened monetary policy to curb inflation in 2022 and 2023.

Biden bans offshore oil drilling in the Atlantic and Pacific Oceans of the United States

US President Joe Biden has indefinitely banned the development of oil and gas in over 625 million acres of waters along the US coast, warning that drilling there to meet the country's energy needs is simply not worth it and unnecessary. Biden's move was included in two presidential memoranda released on Monday, just two weeks before Donald Trump took office, promoting Biden's contributions to environmental protection and addressing climate change. However, unlike other actions taken by Biden to restrict fossil fuel development, it may be more difficult for Trump to revoke Biden's move, as it is based on a 72 year old federal law provision that authorizes the president to reclaim oil and gas leasing rights in US waters without explicitly revoking the authorization.

Federal Reserve Governor Cook: Fed cuts could be more cautious

Federal Reserve Governor Cook stated on Monday that policymakers can be more cautious in further interest rate cuts, citing a strong job market and recent unstable inflation data. Cook said, "Since September last year, the elasticity of the labor market has increased, and the stickiness of inflation is greater than I imagined at the time. Therefore, I believe we can be more cautious in cutting interest rates." She said, "I have always envisioned taking faster action in the early stages of loose policy, and then gradually relaxing as policy rates approach neutrality... Over time, I still believe that adjusting policy rates towards a more neutral stance may be appropriate." Cook said that the US economy is "in good shape" at the beginning of this year. Given the relatively low unemployment rate and the average wage growth rate exceeding inflation, the employment situation is stable. She does not believe that the labor market is an important source of inflationary pressure. When commenting on the significant cooling of price growth in recent years, she said, "There is still a long way to go to achieve the 2% inflation target

Long term borrowing costs in the UK are approaching their highest level in over 25 years

The long-term borrowing costs in the UK have reached their highest level in over 25 years, increasing the pressure on Chancellor of the Exchequer Rachel Reeves. This week, the UK is about to issue a large number of bonds. The yield of UK 30-year treasury bond rose as much as 4 basis points on Monday to 5.19%, approaching the 5.21% high set in 2023, and also close to the level of the late 1990s, but then fell back. The planned borrowing scale announced by the Labor Party government in the budget released in October is close to a record high, which once again triggered concerns about the debt burden of the UK. Since then, the UK has been the focus of investors' attention. Reeves' spending plan led to a sell-off of British treasury bond, and the yield of benchmark 10-year treasury bond has risen about 40 basis points since the end of October.

Domestic news

The Ministry of Finance and four other departments issued a notice requiring strict implementation of enterprise accounting standards and solid completion of the 2024 annual report work

The Ministry of Finance and four other departments have issued a notice requiring strict implementation of enterprise accounting standards and solid completion of the 2024 annual report work. It is mentioned that enterprises shall not arbitrarily adjust their revenue recognition methods to advance, postpone or smooth out revenue recognition.

Riding on the fast train of national data infrastructure construction, enterprises in these fields will go online

The National Data Administration stated that in the next two years, it will continue to support the pilot testing of new technologies such as trusted data space, and create a number of representative and demonstrative data infrastructure construction plans; At the same time, we will increase the support of central fiscal funds, such as investment in the central budget and extra long term special treasury bond funds, to attract social capital forces to participate in the construction of national data infrastructure. (CCTV)