Weekly Recap: 1/20/25-1/24/25
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Market Summary:
MAJOR INDICES:
SPX increased +2.76% ($6,101.24), DJI increased +2.95% ($44,424.25), and IXIC increased +3.19% ($19,954.30). RUT added +1.81% ($2,307.74). The VIX decreased to 14.85.
SECTORS & STOCKS:
Communications (XLC) added +3.10% while Energy (XLE) fell -2.82%. Rocket Lab USA (RKLB) increased +23.21% ($30.36), and Electronic Arts Inc. (EA) fell -17.57% ($116.56).
INTERNATIONAL EQUITIES:
The MSCI EAFE ETF rose +3.61% ($79.23), and the MSCI Emerging Markets ETF (EEM) added +2.85% ($42.95). The MSCI China ETF (MCHI) added +4.66% ($47.39), and the MSCI India ETF (INDA) fell -0.72% ($50.68).
US MACRO:
DXY was flat for the week ($107.47), and the US 10-year Treasury Note yield increased +0.37% (4.6260%).
COMMODITIES:
Gold increased +1.21% ($2,777.40), WTI crude oil fell -4.21% ($74.60/barrel), and BTC added +2.25% ($104,311.59).
(as of 1:06AM, 1/25/25)
Sources:
https://www.tradingview.com/markets/
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Context:
All three major indices had a second consecutive week of gains following Trump’s inauguration. Despite warnings on the campaign trail, Trump didn’t impose any tariffs immediately, which markets viewed favorably. NFLX reported strong earnings as XLC rose more than its peers, while Trump’s calls for OPEC to lower oil prices, his efforts to open LNG exports, and the retraction of renewable energy funding started reshuffling the energy landscape. Rocket Lab USA (RKLB) shares increased after Trump discussed going to Mars and exploring space in his inauguration speech, in addition to the company announcing a new mission that will launch satellites as part of its contract with Kinéis. Trump also mentioned a less confrontational trade approach to China, which resulted in a rise in Chinese stocks.
Sources:
https://www.cnbc.com/2025/01/23/stock-market-today-live-updates.html
https://finance.yahoo.com/video/netflix-upgraded-outperform-bernstein-strong-170526719.html
https://www.investopedia.com/dow-jones-today-01242025-8779647
https://finance.yahoo.com/news/rocket-lab-schedules-next-electron-213000400.html
https://www.fool.com/investing/2025/01/21/why-rocket-lab-stock-is-skyrocketing-today/
Story of The Week: Banks to continue offloading X (Twitter) debt they underwrote in 2022
Banks like Morgan Stanley and Bank of America are continuing to offload the debt they’ve held since Elon Musk’s buyout of Twitter, now X. Totaling about $13 billion, the banks could sell “as much as $3 billion of senior debt” to investors who have shown interest in the company’s financials, believing they could improve. The price range is expected to be discounted “between 90 and 95 cents on the dollar.” As stated by the WSJ, banks typically don’t hold onto debt that long, but when they can’t find interested investors in times of volatility, they would rather hold it to avoid losing money. This report comes after $1 billion of the debt held by seven banks, including Barclays Plc and Mitsubishi UFJ Financial Group Inc., had already been sold to private investors. Due to this debt being underwritten in 2022, banks locked in low rates and have since been stuck with it due to the Fed hiking aggressively. At the time, the bank had specifically written $6.5 billion of senior-secured leveraged loans and “two $3 billion tranches to be replaced by secured and unsecured junk bonds.” Lenders like Société Générale and Mizuho have been on the other end of the deal, earning substantial amounts of interest.
Sources:
https://finance.yahoo.com/news/banks-prepare-offload-much-3-210232618.html
https://techcrunch.com/2025/01/24/wall-street-banks-plan-sale-of-x-debt-at-a-discount/
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