Market Analysis

Last week’s Friday session ended with a weaker dollar and slight profit-taking on Wall Street. The yield on 10-year U.S. Treasury bonds fell below 4.6%, while the Nasdaq 100 retreated by nearly 0.6%. Over the weekend, however, the situation shifted, and the U.S. stock market may open on a very weak note today.

Anna
January 27, 2025

Last week’s Friday session ended with a weaker dollar and slight profit-taking on Wall Street. The yield on 10-year U.S. Treasury bonds fell below 4.6%, while the Nasdaq 100 retreated by nearly 0.6%. Over the weekend, however, the situation shifted, and the U.S. stock market may open on a very weak note today.
Investors have grown concerned that China’s artificial intelligence model, DeepSeek V3, could threaten the technological advantage of the United States. As a result, bearish tendencies have returned to Wall Street, with Nasdaq 100 futures down 2.4%, and VIX volatility index futures climbing nearly 8%. The US500 is also losing over 1.4%, while the US30 has dropped by 0.9%.
Today, China had a very strong session, with optimism flourishing in the country despite weaker-than-expected PMI data from the services and manufacturing sectors. According to the CFLP agency, manufacturing PMI preliminarily fell to 49.1 in January from 50.1 previously, while the services PMI barely remained in expansion territory, disappointing market expectations. It stood at 50.2, compared to the forecast of 52.2 and the December reading of 52.2. Japan’s Nikkei lost nearly 0.9%, while South Korea’s KOSPI gained over 0.8%.
The highly-publicized debut of China’s DeepSeek AI model, which challenged “Western” models like ChatGPT, Anthropic, and Llama, sparked optimism among Chinese tech companies due to its high performance achieved at a much lower cost. Notably, shares of PDD Holdings (Pinduoduo) surged over 7%, as the company is reportedly developing its own AI model.
Bitcoin has slipped below $100,000, reflecting the bearish sentiment on the U.S. stock market, with most cryptocurrencies losing ground. The EUR/USD pair is trading 0.2% lower, while gold is down nearly 0.7%. Commodity futures, particularly in agriculture, are mostly declining, with corn and soybeans retreating by nearly 1%.
NATGAS is now trading nearly 10% below its last roll price and continues to plunge today, losing another 4% to $3.28 per MMBtu.
Donald Trump has threatened to impose 50% tariffs on Colombia after the country refused to “accept” a transport of deported Colombian convicts. In response, Colombia announced 25% tariffs on American goods.

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