Zerohedge

Short seller Nathan Anderson, founder of Hindenburg Research, was one of the first to expose electric vehicle and energy company Nikola Corporation’s deceptive 2020 promotional video, which showed its Nikola One truck rolling down a hill to simulate full functionality. Years later, as the ‘green tech’ bubble continues deflating, Nikola has filed for bankruptcy on Wednesday morning…

Nikola issued a press release stating that it filed for Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the District of Delaware. The company also filed a motion seeking permission to pursue an auction and sale process under Section 363 of the US Bankruptcy Code. 

The defunct startup listed assets between $500 million and $1 billion and liabilities between $1 billion and $10 billion in its petition. It noted that $47 million in cash was on hand to fund activities. 

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations. Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the Board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders,” said Steve Girsky, President and CEO of Nikola.

The filing comes nearly a month after a Bloomberg report showed the startup was exploring options to address dwindling cash reserves, including selling part or all of its business, bringing in partners, or initiating a new funding round. Earlier this month, The Wall Street Journal reported that Nikola was on the brink of bankruptcy. 

We all remember Trevor Milton—the founder and former CEO of Nikola—who was found guilty in 2022 on two counts of securities fraud and one count of wire fraud. Milton’s scheme involved promoting the viability of its hydrogen-powered, zero-emission trucks on social media and podcasts, despite having a functional prototype. 

At one point, Nikola commanded a $30 billion market cap … five years later, it’s now worth zero … Thank you for playing. 

Trading is halted in the premarket. 

Nikola is the prime example of greenwashing during the green energy bubble during the Biden-Harris regime years. 

Authored by Tom Ozimek via The Epoch Times,

Mexico’s President Claudia Sheinbaum threatened to sue Google over its decision to display the name “Gulf of America” across the entire body of water rather than just the portion of the Gulf that lies within U.S. jurisdiction, arguing that the expansive naming violates Mexican sovereignty.

Sheinbaum’s announcement comes after weeks of escalating tensions between the Mexican government and the U.S. tech giant over its labeling of the Gulf on Google Maps. While people using the app in Mexico see “Gulf of Mexico,” those based in the United States now see “Gulf of America,” following a Jan. 20 decree issued by U.S. President Donald Trump to revise certain names of geographical features so that they “honor American greatness.”

At a press conference on Feb. 17, Sheinbaum said Mexico had formally asked Google to fully restore “Gulf of Mexico” as the primary name for the entire body of water, arguing that Trump’s renaming applied only to the U.S. continental shelf.

“We do not agree with this,“ Sheinbaum said of Google’s naming policy for the Gulf, adding that Mexico ”will wait for Google’s response and if not, we will proceed to court.”

The United States directly controls the waters of the Gulf approximately 12 nautical miles from its shores, according to the National Oceanic and Atmospheric Administration. It also maintains what is known as an exclusive economic zone stretching 200 miles offshore, where it can extract natural resources like oil. Mexico is arguing that the mapping policy violates Mexican sovereignty and that the United States only has jurisdiction over roughly half of the Gulf.

Mexican authorities previously asked Google to change its naming policy for the Gulf and, during the press conference, Sheinbaum shared a written response to the request from Cris Turner, Google’s vice president of government affairs and public policy.

Turner wrote in the Feb. 10 letter that Google’s decision to display the name Gulf of America to U.S.-based users is based on an impartial and consistent application of its maps policies across all regions, which involves using names that are prescribed by authoritative sources.

“As we first announced two weeks ago, and consistent with our product policies, we’ve begun rolling out changes in Google Maps. We would like to confirm that people using Maps in Mexico will continue to see ‘Gulf of Mexico,’“ Turner wrote.

”The United States Geographic Names Information System (GNIS) has officially updated ‘Gulf of Mexico’ to ‘Gulf of America.’ To reflect the update made by the GNIS, beginning today, people in the US will see ‘Gulf of America.’ Everyone else will see both names.”

Turner added that Google representatives are willing to meet in person with the Mexican government to engage in “constructive dialogue” on the matter.

Google did not respond to a request for comment from The Epoch Times by publication time.

The renaming has also drawn controversy within the United States, where news outlet The Associated Press (AP) has opted to continue using “Gulf of Mexico,” while acknowledging Trump’s renaming. 

The AP’s editorial stance led to the White House barring its reporters from several events and limiting their access to the Oval Office and Air Force One.

“The Associated Press continues to ignore the lawful geographic name change of the Gulf of America,” White House Deputy Chief of Staff Taylor Budowich said in a Feb. 14 statement on social media.

“This decision is not just divisive, but it also exposes the Associated Press’ commitment to misinformation,“ Budowich continued. ”While their right to irresponsible and dishonest reporting is protected by the First Amendment, it does not ensure their privilege of unfettered access to limited spaces, like the Oval Office and Air Force One.”

The White House moves prompted criticism from the AP and concerns about press freedom from the White House Correspondents’ Association. AP Senior Vice President and Executive Editor Julie Pace condemned the restrictions.

“It is alarming that the Trump administration would punish AP for its independent journalism,” Pace said in a statement. “Limiting our access to the Oval Office based on the content of AP’s speech not only severely impedes the public’s access to independent news, it plainly violates the First Amendment.”

Eugene Daniels, president of the White House Correspondents’ Association, issued a statement accusing the White House of “seeking to curtail the press freedoms enshrined in our Constitution“ and of looking ”to punish a news outlet for not advancing the government’s preferred language.”

The White House has defended its decision to limit Oval Office and Air Force One access to AP reporters, while noting that AP journalists and photographers will continue to enjoy access to the broader White House complex.

After firing thousands of “probationary employees” at various federal departments, the Department of Government Efficiency (DOGE) has arrived at the largest of them all — the Department of Defense — and is expected to unleash a mass termination as early as this week. 

On Tuesday, DOGE staffers were reportedly at the Pentagon and being given lists of probationary employees in compliance with an end-of-business-day deadline. That term generally applies to any federal employee who’s in the first one or two years of their current position, regardless of whether they’ve held other roles before taking their current one. During the probationary period, employees generally can be fired without any privilege of appeal.

Though it’s not clear how many DOD employees are probationary, the Pentagon has about 950,000 civilian employees in all. Along with the lists of probationary employees, officials were also asked to identify any employees they wanted to spare, and provide a justification. However, according to the Washington Post‘s sources, few exceptions are expected to be made. The mass termination may happen by the end of this week. Uniformed service members are exempt.   

Kevin O’Leary just had a fantastic rant calling for DOGE to fire more people.

“I think the issue is they’re not whacking enough. You go in there and you cut 20% more than your initial read. Always cut deeper when there’s fat and waste.”

The CNN panel was left dumfounded. pic.twitter.com/iRQeiy2vOm

— Thomas Hern (@ThomasMHern) February 18, 2025

Defense Secretary Pete Hegseth has embraced the coming cuts. “There are waste, redundancies and headcounts in headquarters that need to be addressed,” he said last week. “There’s just no doubt.”

Given the sheer scale of the DOD, and the enormous variety of roles, DOGE may take a little extra time to parse the layoff candidates. Last week, the DOGE probationary-employee axe accidentally hit hundreds of Department of Energy employees who work with nuclear warheads. The National Nuclear Security Administration (NNSA) raced to reverse the terminations. 

One sensitive function of the DOD is its enormous hospital and health care system. Suddenly terminating doctors, nurses and therapists would obviously be catastrophic. However, when firing probationary employees at the Department of Veterans Affairs — which runs its own vast medical system — DOGE tread very lightly: Only 1,000 of more than 43,000 probationary VA employees were cut. 

Last week, President Trump said he’d like to pursue a summit with Chinese President Xii and Russian President Vladimir Putin, with a goal of agreeing to slash each country’s military budget in half. “We’re spending the money against each other, and we could spend that money for better purpose if we get along,” he said. “And I’ll tell you, I think that something like that will happen.”

DOGE is looking for help from the general public!

Please DM insight for reducing waste, fraud, and abuse, along with any helpful insights or awesome ideas, to the relevant DOGE affiliates (found on the Affiliates tab). For example, @DOGE_USDA, @DOGE_SSA, etc.
We will add…

— Department of Government Efficiency (@DOGE) February 17, 2025

According to the New York Times, here are the approximate numbers of probationary employees already let go at several other federal departments: 

• Agriculture: 4,200
• Interior: 2,300
• Health and Human Services: 1,900
• Energy: 1,000

The DOGE campaign against federal waste got a shot in the arm on Monday, when Obama-appointed US District Court Judge Tanya Chutkan denied an emergency filing to block DOGE’s access to federal records and government layoffs – saying in a 10-page decision that the 14 states who brought the lawsuit have failed to meet the burden of proof to prove “imminent, irreparable harm.

Authored by Ken Silva via Headline USA (March 24, 2024),

Weeks after Federal Reserve Chairman Jerome Powell evaded a sitting congressman’s questions about the central bank’s foreign gold holdings, the Fed has also declined to comply with a Freedom of Information Act request for records about such holdings.

The Federal Reserve’s lack of transparency comes amidst reports that countries are removing their gold and other assets from the U.S. in the wake of the unprecedented Western sanctions imposed on Russia over its invasion of Ukraine. According to a 2023 Invesco survey, a “substantial percentage” of central banks expressed concern about how the U.S. and its allies froze nearly half of Russia’s $650 billion gold and forex reserves.

Rep. Alex Mooney, R-W.Va., asked Powell about the matter in a December letter, only to have the Fed chair respond last month with evasive non-answers, telling him that the Federal Reserve does not own gold but holds it as a custodian for other entities—a fact that the congressman presumably already knew.

Following Powell’s evasive response, Headline USA filed a FOIA request with the Fed for records reflecting how much gold the Federal Reserve Bank of New York currently holds in its vault, as well as records reflecting the ownership stake that each of FRBNY’s central bank/government clients have in that gold. The FOIA request also sought records about the Fed’s gold holdings prior to Russia’s February 2022 invasion of Ukraine.

However, the Federal Reserve denied the FOIA request.

“Board staff consulted with staff at the Federal Reserve Bank of New York (‘Reserve Bank’) and have been advised that such records, if they exist, would be Reserve Bank records, and consequently, not subject to the Board’s Rules Regarding Availability of Information,” the Fed said.

The Federal Reserve said that this publication could take its request to the New York Fed. However, that institution isn’t subject to FOIA.

Headline USA is working on an appeal.

Meanwhile, sound-money advocates are blasting the Fed’s lack of transparency.

“They’re just passing the buck to the New York Fed. The FRB could obtain the data from the New York Fed if it wanted to, and then could share it with you if it wanted to. The Fed chairman has already essentially told Representative Mooney that the Fed doesn’t want to disclose the information,” said Chris Powell, secretary-treasurer of the Gold Anti-Trust Action Committee.

“If only other news organizations dared to ask such relevant questions about the secret operations of the Federal Reserve System,” he said.

Stefan Gleason, CEO of Money Metals Exchange, a large online precious metals dealer and depository based in Idaho, expressed similar sentiments.

“The Fed doesn’t want anyone to know that foreign governments and other central banks are yanking their gold from America’s shores because it would reveal the folly of U.S. monetary and foreign policy,” he said.

President Donald Trump and Elon Musk discussed waste, fraud, abuse, and more in a joint interview with Sean Hannity that aired on Feb. 18.

Here’s the full Trump and Elon Musk interview with Sean Hannity. pic.twitter.com/uxcmLyvSNM

— Ian Miles Cheong (@stillgray) February 19, 2025

The world’s wealthiest man and the president of the United States defended the Department of Government Efficiency (DOGE), now facing political opposition and numerous lawsuits as it slashes government spending – including negative publicity for firing and then seeking to rehire key nuclear weapons workers.

Setting the scene for the entire discussion, Musk described going to a dinner party before the election and how the reaction of other guests to him mentioning Trump’s name was “like they got shot with a dart in the jugular that contained, like, methamphetamine and rabies.”

“You can’t have a normal conversation,” Musk added, saying that people become “completely irrational” when Trump is discussed.

Musk also sought to make it clear he stands with Trump and vice versa.

“I think President Trump is a good man,” the tech entrepreneur said.

Trump reciprocated, saying he “couldn’t find anyone smarter” than Musk to assist his administration.

Below, The Epoch Times’ Nathan Worcester lays out some takeaways from the joint interview on Fox News.

Musk Would Have Endorsed Trump Even Without Assassination Attempt

Musk, best known for his work with SpaceX, Tesla Motors, and other tech firms, publicly backed Trump after an attempt on his life at a rally in Butler, Pennsylvania, in July 2024. But the tech titan’s support was apparently already in the cards.

During the Feb. 18 joint interview, Musk said that he was “going to do it anyway.” The assassination attempt, which claimed the life of Corey Comperatore, simply accelerated Musk’s timeline.

“I sped it up,” Musk said.

The president said he “didn’t know that” about Musk’s endorsement.

Musk went on to stump for the then-candidate. He also donated hundreds of millions to backing Trump.

Musk said his time with Trump deepened his appreciation of the president’s character—a point of contention for Trump’s critics, including some of the Republicans who contested him during the 2024 primary.

“Not once have I seen him do something that was mean or cruel or wrong,” Musk said.

Elon Musk (L) speaks as President Donald Trump looks on in the Oval Office of the White House on Feb. 11, 2025. Jim Watson/AFP via Getty Images

Trump, Musk Say They Are Not at Odds

The two men also talked about the publicity around their joint efforts, accusing the media of trying to fracture their relationship.

As DOGE was taking shape after Election Day, some news outlets reported that Musk’s ascendance was elevating him to a quasi-presidential role, a line of argument advanced by some Democrats.

Trump said Musk phoned him to say, “‘You know, they’re trying to drive us apart.’”

“It’s just so obvious. They’re so bad at it. I used to think they were good at it. They’re actually bad at it, because if they were good at it, I’d never be president,” he added.

Musk also affirmed his commitment to advancing, and not usurping, the elected president. He pointed out that his T-shirt read, “Tech Support.”

“I’m going to provide the president with technology support,” he said. “It’s a very important thing because the president will make these executive orders which are very sensible and good for the country, but then they don’t get implemented.”

Musk on DOGE-Related Conflicts of Interest: ‘I’ll Recuse Myself’

The interview also touched on potential conflicts of interest between Musk’s businesses and DOGE.

Many of the entrepreneur’s firms have benefited from extensive government support, from subsidies for Tesla’s electric vehicles to Pentagon contracts with SpaceX.

Sen. Richard Blumenthal (D-Conn.), a critic of DOGE and Musk, mentioned those possible conflicts in an interview with The Epoch Times earlier on Feb. 18, saying they “ought to deeply trouble progressives.”

Hannity asked Trump about how his administration would handle potential cuts to such areas. Trump said Musk would be kept away from them.

Musk said he would steer clear of those minefields, too.

“I’ll recuse myself,” he said.

Musk, Trump Talk DOGE Workers

The wide-ranging interview repeatedly landed on the topic of DOGE’s employees, which include many engineers.

The president said that Musk “attracts a young, very smart type of person—I call them high-IQ individuals.”

“These guys are smart, and they love the country,” Trump added.

Musk said DOGE’s software engineers “could be earning millions of dollars a year instead of earning a small fraction of that as federal employees.”

Trump described the DOGErs as “very committed people.”

One DOGE aide in the Treasury Department resigned after reporting revealed his history of controversial online posts. Vice President JD Vance and Trump supported his rehiring, after which Musk announced he would be reinstated.

The then-Republican presidential nominee Donald Trump, left, claps as Tesla and SpaceX CEO Elon Musk prepares to depart after speaking at a campaign event at the Butler Farm Show on Oct. 5, 2024, in Butler, Pa. Alex Brandon/AP Photo

Musk, Trump Discuss Bringing Astronauts Home

The trio also discussed a plan to accelerate the rescue of NASA astronauts Sunita Williams and Butch Wilmore.

Initially slated for an eight-day mission, the pair have been stuck on the International Space Station (ISS) since June due to mechanical issues with the Boeing Starliner spacecraft that would have taken them home.

Trump, in January, said he asked SpaceX CEO Musk to expedite their return.

NASA has since moved up a scheduled April return to March. Williams and Wilmore will come back to Earth after the SpaceX Crew-10 mission reaches the ISS.

In the Feb. 18 broadcast, Trump said the two “got left in space,” blaming his predecessor, former President Joe Biden.

Musk said the astronauts’ return “was postponed kind of to a ridiculous degree.”

“We don’t want to be complacent, but we have brought astronauts back from the space station many times before, and always with success,” he said.

On DOGE, $1 Trillion Floated

The pair also talked about just how much waste, fraud, and abuse they expect DOGE to identify.

The president said DOGE was pinpointing “billions—and it will be hundreds of billions—of dollars worth of fraud.”

He predicted Musk would identify $1 trillion in what Hannity called “waste, fraud, abuse, corruption,” adding that he believes that to be “a very small percentage” of that sort of suspect spending.

Musk did not dispute the trillion-dollar figure.

The technologist said that saving money for the American taxpayer “comes down to two things: competence and caring.”

“It stands to reason that if you don’t have competence and you don’t have caring, you’re going to get a terrible deal,” he said.

Trump said that government contracts are not whittled down by the kind of give-and-take common to private-sector negotiations.

“Everybody expects to be cut,” he said.

Authored by Steve Watson via Modernity.news,

Following in the footsteps of pudding brain Biden, massive presidential loser Kamala Harris has signed with a Hollywood ‘talent’ agency.

Harris is cashing in on her experience as the worst Democratic candidate in history by signing a grifting deal with Create Artists Agency.

I’m so glad she landed a gig, I was worried 😆🙌

— Homie Santo (@HomieSanto) February 19, 2025

Kamala is to “focus on speaking gigs and publishing opportunities,” via the same agency that took on Biden a few weeks back.

For those wondering why she would sign with an agency: pic.twitter.com/gLIn96lDSm

— gabby (@copyninjagf) February 19, 2025

Don’t you need talent to sign with a talent agency?

— Doge Daddy (@D0ge_Daddy) February 19, 2025

Clearly not.

their buddy road trip movie is on the way pic.twitter.com/q0ZqhOCeey

— ❆ euan 🌨️ (@blondngone) February 19, 2025

Two bumbling buffoons hit the road and hilarity ensues in Dumb and Dumber 3.

leaked set photo pic.twitter.com/DHp29B4aqv

— 𝐕𝐢𝐤𝐭𝐨𝐫 (@viktrnl) February 19, 2025

Imagine going to a Kamala Harris ‘one man show’.

Speaking engagements? The woman can’t speak. 🤣

— Catherine Calder (@Loricatty) February 19, 2025

Will anyone be able to get through it?

Well she is great with voices and mimicking other cultures.

— WellDarnett (@JustinHittner) February 19, 2025

Many more audiences are about to be unburdened by what has been.

Maybe they’ll teach her how to properly use accents

— Carl saygen (@CSaygen) February 19, 2025

Kamala’s script writers better have material prepared and teleprompters at the ready.

Preparing to star in the new film “Word Salad”

— stormcabbirds (@stormcabbirds) February 19, 2025

There are so many projects and roles she’d be perfect for.

Shes gonna play the drunk aunt well

— IC Light Mango SZN (@H2Pickettsburgh) February 19, 2025

Hangover 4 coming soon?

— MEGA (@ActorPaid) February 19, 2025

She’s trying to get in on Nolan’s Odyssey

— AragornAurelius (@AragornAurelius) February 19, 2025

They should do a remake of Veep or is that too close to reality?

— bobbyscaps.eth👺 (@dropgenius) February 19, 2025

Let the money laundering– I mean passion projects begin!

— I’mma Duck (@imgoingtoduck) February 19, 2025

*  *  *

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After December’s unexpected huge upside surprise (+15.8% MoM), analysts expected housing starts to tumble back to earth in January as the lagged impact of higher rates unsettles homebuilders ‘goldilocks’ reality dream. Sure enough, Starts plunged 9.8% MoM (worse than the 7.3% decline expected), while permits rose a skimpy 0.1% MoM (better than the -1.5% exp)…

Source: Bloomberg

That is the biggest MoM drop in Starts since March 2024 while (forward-looking) permits have flatlined for two months.

Source: Bloomberg

Under the hood, multi-family permits declined for the second month in a row and single-family permits continue to show no real renaissance. Both single-family and multi-family starts were hammered in January with the former more so…

Source: Bloomberg

Going forward things do not look good as rate-cut hopes tumble…

Source: Bloomberg

…and even homebuilders are starting to lose faith…

Source: Bloomberg

While the Starts and Permits data is always lagged, we do note that mortgage applications plunged 6.6% week-over-week, tumbling bacxk to the mult-decade lows after a quick surge to start the year. Not a good sign for the American housing market.

US equity futures are lower ahead of today’s FOMC minutes, with global markets also sinking and bonds extended their slide after President Trump’s latest tariff threats stoked concern about a widening trade war; hawkish UK inflation prints which sent bond yields higher did not help. As of 8:00am S&P futures are -0.3% lower after the index topped its January record on Tuesday, while Nasdaq futures traded steady after Trump raised the specter of 25% tariffs on Autos and Pharma, both coming after April 1. The Trump Admin will also keep Biden-era rules on M&A. A slew of earnings reports also dented sentiment, with Arista Networks, Occidental Petroleum, Celanese and Bumble all dropping in premarket trading after results. Super Micro Computer rallied, however, after issuing an aggressive long-term revenue outlook. Pre-mkt, Mag7 names are mixed with Semis seeing some profit-taking. The yield curve is twisting steeper as the USD appreciates. Commodities are stronger despite the USD move; Brent trades above $76 while gold is at an all time high around $2940. Today’s macro data focus will be on Housing data and the Fed Minutes.

In premarket trading, Nvidia is leading gains among the Magnificent Seven (GOOGL +0.3%, AMZN -0.1%, AAPL -0.1%, MSFT -0.02%, META -0.09%, NVDA +0.4% and TSLA -0.1%). Bumble plunged 17% after the online dating company gave a first-quarter forecast that was weaker than expected on key metrics. Etsy tumbled 7% after reporting gross merchandise sales for the fourth quarter that missed the average analyst estimate. Here are some other notable premarket movers:

• Analog Devices (ADI) gains 5% after posting adjusted earnings per share for the first quarter that beat the average analyst estimate.
• Arista Networks (ANET) falls 4% after the computer networking company posted 4Q results.
• Cadence Design Systems (CDNS) slips 3% after the electronic design automation software company gave an outlook that was seen as disappointing.
• Celanese (CE) drops 13% after the chemical firm said it sees “persistently weak global demand” in end markets including paint and coatings.
• Fiverr (FVRR) rises 4% after forecasting 1Q revenue that beat the average analyst estimate.
• Howard Hughes Holdings (HHH) falls 3% after confirming it received an revised unsolicited proposal from Pershing Square and will evaluate the offer.
• International Flavors (IFF) falls 2% after forecasting disappointing sales for 2025.
• RB Global Inc. (RBA) rises 3% after reporting quarterly revenue that beat the average analyst estimate.
• Shift4 Payments (FOUR) declines 10% after the payments processing firm gave a weaker-than-expected outlook for adjusted Ebitda.
• Global Blue (GB) jumps 18% after Shift4 agreed to acquire the shopping technology company for $7.50 per share in cash.
• Star Bulk (SBLK) slips 5% as Jefferies notes that 4Q results were weak due to lower dry bulk spot rates, which have continued into the current quarter.
• Supernus Pharmaceuticals (SUPN) drops 21% after the drugmaker said a mid-stage study of its experimental therapy for treatment-resistant depression failed to meet its primary endpoint.
• Toll Brothers (TOL) falls 5% after the luxury homebuilder reported first-quarter revenue and total home sales that fell short of consensus estimates.
• Wix.com (WIX) rises 2% after the company’s forecast for 1Q revenue disappointed.

Traders’ attention will focus turn to the latest FOMC Minutes which could offer clues on the monetary policy outlook. While inflation has been slowing, many fear the effect of Trump’s tariff push on prices. Several officials, including Governor Christopher Waller and San Francisco Fed chief Mary Daly, have signaled rates will stay on hold until inflation slows significantly. 

Separately, on Wednesday, the European Central Bank’s Isabel Schnabel said the bank will have to discuss pausing or ending its rate-cut campaign. Her comments pushed the euro 0.2% lower against the dollar, while bond yields rose across Europe, with 10-year German bund yields up about five basis points. Meanwhile, British 10-year gilt yields rose about six basis points after data showed inflation at a 10-month high.

Investors are also pricing increased government spending on defense should the war in Ukraine draw to an end. “When you think about the outcome of any peace treaty between Ukraine and Russia, that will involve a huge uplift in defense spending from European countries,” said Lilian Chovin, head of asset allocation at Coutts & Co.

Europe’s Stoxx 600 Index dropped 0.5% after another record close on Tuesday. Mining, travel, retail and construction stocks underperform. Sentiment was hurt after Trump warned he is weighing tariffs of around 25% on automobile, semiconductor and pharmaceutical imports. His comments added to the a fragile market picture as hopes for an end to the war in Ukraine were tempered by the exclusion of Ukrainian and European officials from US-Russia talks held on Tuesday.  Major markets are all lower ex-Italy as bond yields increase following the UK inflation print. Aero/Def, Energy, Semis among the strongest baskets. Here are some of the biggest movers on Wednesday:

• HSBC shares in London rise 1.1% following a recent strong rally that took the stock to trade at highest since 2001, after the lender reported pretax profit that beat estimates and detailed a $2 billion share buyback.
• Societe BIC shares rise as much as 5.9% to hit their highest level in more than eight months after the French consumer-goods firm posted annual earnings ahead of expectations.
• Glencore shares drop as much as 7.2% to their lowest level in over three years, with analysts pointing to the miner’s disappointing copper production guidance as well as its shareholder returns, which were weighed down by its debt.
• Jet2 shares sink as much as 11%, their biggest drop since July 2023, after the package holiday company’s guidance fell short of analysts’ expectations.
• Philips shares drop 11%, the most since Oct. 28, after the Dutch medical equipment maker said it expects lower demand in China to continue to stymie growth this year.
• Delivery Hero shares fall 5%, the most in a month, after Citigroup downgraded the stock to sell from neutral, citing risk to margins due to mounting competitive pressures in the Middle East.
• Straumann shares fall as much as 4.4% after the Swiss maker of dental equipment posted results with weaker profitability levels.
• Tate & Lyle shares fall as much as 3.5% after Berenberg cut its recommendation on the stock to hold from buy, citing the ingredient maker’s weak FY2026 outlook, and a lack of signs of improvement in pricing conditions.
• BAE Systems shares fall as much as 3.3% after the UK defense firm’s FY25 cash-flow guidance disappointed analysts, who also noted concerns around US and UK budgets and reviews.
• Temenos shares fall as much as 4%, the most since November, as the Swiss banking software company’s guidance was seen dampened by the recently announced sale of Multifonds at a valuation that is deemed too low.

Some investors are also concerned about Germany’s national election on Sunday. While Friedrich Merz of the center-right opposition is expected to become chancellor, polls suggest the far-right Alternative for Germany will become the second-biggest party in parliament.

“I have been selling quite a lot over the last two days as Europe is now pricing the best possible scenario for the next catalysts, which is the Ukraine ceasefire and German elections,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “The situation might get bumpy as both events are going to be more complicated than what the market thinks.”

In FX, the Bloomberg Dollar index rises 0.1%. The kiwi sits atop the G-10 FX leader board, rising 0.3% against the greenback after the RBNZ signaled it would slow the pace of interest-rate cuts after a third straight reduction of 50 bps. The yen rises 0.2%, taking USDJPY down to ~151.80 after BOJ Board Member Takata said it’s important for authorities to continue considering gradual hikes.

In rates, treasuries edged lower, pushing US 10-year yields up 2 basis points to 4.57%; long-end yields are less than 3bp cheaper on the day with 2s10s, 5s30s spreads wider by 2bp-3bp. Gilts led a selloff in European government bonds as traders trim their Bank of England interest-rate cut bets after UK inflation climbed to the highest since March 2024. UK 10-year yields rise 5 bps to 4.61%, although the pound still falls 0.1% to around $1.26. The German 10-year is ~5bp higher as expectations for ECB rate cuts decline; money markets see 72bps of easing by year-end vs about 76bps before Schnabel’s comments. Treasury coupon auctions resume with $16b 20-year sale at 1pm New York time and continue Thursday with $9b 30-year TIPS new issue. WI 20-year yield at around 4.835% is 6.5bp richer than January’s auction, which drew strong demand and stopped through by 1.1bp

In commodities, oil prices advance, with WTI rising 1% to $72.50 a barrel. European natural gas futures are flat having topped €50 a megawatt-hour at one stage. Spot gold rises $8 to around $2,944/oz.

The US event calendar includes January housing starts and building permits and February New York Fed services business activity (8:30am). Fed speaker slate includes Jefferson at 5pm; minutes of January FOMC meeting to be released at 2pm

Market Snapshot

• S&P 500 futures little changed at 6,152.00
• STOXX Europe 600 little changed at 557.19
• MXAP down 0.1% to 189.67
• MXAPJ little changed at 598.35
• Nikkei down 0.3% to 39,164.61
• Topix down 0.3% to 2,767.25
• Hang Seng Index down 0.1% to 22,944.24
• Shanghai Composite up 0.8% to 3,351.54
• Sensex little changed at 75,952.51
• Australia S&P/ASX 200 down 0.7% to 8,419.19
• Kospi up 1.7% to 2,671.52
• German 10Y yield little changed at 2.53%
• Euro little changed at $1.0441
• Brent Futures up 0.8% to $76.41/bbl
• Gold spot up 0.3% to $2,943.81
• US Dollar Index little changed at 107.03

Top Overnight News

• President Donald Trump said he would likely impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25%, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the president’s trade war. BBG
• Trump said the media seeks to sow division between them when asked about the media description of Elon Musk as an ‘unelected president’, while Trump said having someone as smart as Elon Musk to work with him in running the country’s affairs is very important. Furthermore, he thinks Musk’s team will discover a trillion dollars in wasted money: Fox
• Trump posted on Truth that the Department of Justice has been politicised like never before over the past four years and he therefore instructed the termination of all the remaining “Biden Era” US attorneys.
• Intelligence from the United States and close allies shows that Russian President Vladimir Putin still wants to control all of Ukraine. While Putin is sending representatives to Saudi Arabia for negotiations with the US that are aimed at ending the war, officials said that current intelligence shows Putin still believes he can wait out Ukraine and Europe to eventually control all of Ukraine. NBC
• Trump said that Republicans would not touch Medicaid, also repeating his assertion that Medicare and Social security would not be touched: Punchbowl.
• Pharma leaders are to meet with US President Trump in a push to tweak drug policies: BBG
• China’s decline in new-home prices eased for a fifth month in January, offering hope for an end to the slump. Still, Fitch said a solid rebound in sales is needed to put a floor under prices. BBG
• China’s holdings of Treasuries have fallen to their lowest level since 2009, as Beijing holds more of its US government bonds through lower-profile accounts and diversifies into alternative assets such as gold. Analysts add that part of the change is also Beijing seeking to disguise the true extent of its Treasury holdings to accounts not captured in the data. FT
• Japan’s export growth accelerated to 7.2% year on year in January, driven by shipments to the US. Core machine orders unexpectedly fell in December. BBG
• New Zealand’s central bank slashed its policy rate by 50bp to 3.75%, a move that was expected by investors. WSJ
• UK CPI for Jan overshoots the Street on headline at +3% (vs. the Street +2.8% and up from +2.5% in Dec), although core was inline at +3.7% (vs. +3.2% in Dec) and services fell a tiny bit short at +5% (vs. the Street +5.1% and up from +4.4% in Dec). RTRS
• Traders trimmed bets on further rate cuts from the BOE this year in the wake of a surprise jump in UK inflation, and now see fewer than two more reductions through December. CPI accelerated to 3% in January, the highest level in 10 months. Two-year gilt yields gained. BBG
• Iranian oil flows to China jumped to 1.74 million barrels a day this month, the highest since October, according to Kpler, as traders work around tighter US curbs. BBG
• The DeepSeek-led selloff in AI stocks last month provided the first test this year for whether the low correlation environment would persist. Ultimately, the market reaction was discerning rather than indiscriminate, as stocks moved according to their individual exposure to the new information rather than in unison. On Monday, January 27th, as investors digested the DeepSeek news, the tech-heavy Nasdaq 100 fell by 3% while the equal-weight S&P 500 was flat and the broader S&P 500 fell by just 1% (Furthermore, among the mega-cap tech stocks the market discerned winners and losers, with AAPL gaining 3% and NVDA falling by 17%. Goldman

Tariffs

• US President Trump said he will be announcing large companies that are coming back to the US related to chips and cars, while he added car plants are going to be built in the US and the auto tariff rate will be around 25%. Trump said pharmaceutical tariffs will probably be 25% or higher and will see announcements over the next couple of weeks. Trump also stated he was contacted by companies because of tariffs and that the EU has been very unfair to the US.
• China’s ambassador to WTO said US tariffs create tariff shocks that heighten economic uncertainty, disrupt global trade and risk global recession, while the ambassador added that US unilateralism.

A more detailed look at global markets courtesy of Newsuqawk

APAC stocks traded mixed following the somewhat choppy performance stateside as attention centred on US-Russia talks on Ukraine, while US President Trump reiterated threats of tariffs on autos, chips and pharmaceuticals. ASX 200 was dragged lower by underperformance in energy and the top-weighted financial sector after a double-digit percentage drop in Santos’s underlying profit and Big 4 bank NAB also reported a decline in earnings. Nikkei 225 briefly tested the 39,000 level to the downside following disappointing machinery orders and export data. Hang Seng and Shanghai Comp were mixed with sentiment in Hong Kong subdued and the mainland kept afloat in a reversal of recent fortunes, while the US tariff threat lingered and Chinese House Prices continued to contract Y/Y albeit at a less severe pace.

Top Asian News

• RBNZ cut the OCR by 50bps to 3.75%, as expected, while it said rates were reduced further as inflation abates and if economic conditions continue to evolve, there is scope to lower the OCR further in 2025. RBNZ said the committee has the confidence to continue lowering rates and economic activity remains subdued although the economy is expected to recover over 2025. RBNZ lowered its official cash rate forecast to 3.45% for June 2025 (previously 3.83%) and to 3.1% in March 2026 (previously 3.43%), while it sees the OCR at 3.1% in June 2026 (previously 3.32%) and at 3.1% in March 2028.
• RBNZ Governor Orr said the OCR path projects 50bps by mid-year at around July and suggested two 25bp cuts with April and May ‘about right’, while he added the economy has significant spare capacity and 3.75% is the high end of the range of neutral rates. Furthermore, he said it would be a beautiful world if they could get rates to neutral and keep them there and they are seeing a turnaround in the economy.
• BoJ’s Takata said it is necessary for the BoJ to shift gears as appropriate and BoJ’s flexibility has increased, while he added Japan’s real interest rates remain deeply negative, with no change to the accommodative monetary environment. Takata said they must adjust the degree of monetary support further if the economy moves in line with the BoJ’s forecasts and must gradually shift policy, even after January’s rate hike, to avoid upside price risks from materialising. However, he also stated the BoJ needs to take a cautious approach in shifting policy due to uncertainty over the US economic outlook and difficulty in gauging the neutral rate level.
• China issues plan to stabilise foreign investment: Will better utilise foreign investment to strengthen supply chain in the manufacturing sector, promote orderly opening up in the BioPharma field. To encourage financial institutions to provide financing services to foreign-funded enterprises. Foreign invested firms will be allowed to use domestic loans to carry out equity investment. Encourages FDI in livestock breeding, feeding equipment production, feed and veterinary drug production. Will facilitate foreign investors with M&A investment in China.

European bourses (STOXX 600 -0.4%) began the session on either side of the unchanged mark, continuing the indecisive mood seen in APAC trade overnight. As the morning progressed, stocks dipped lower, with a more pronounced sell-off seen in recent trade; indices generally at lows. The dip in sentiment does come amid commentary via Ukrainian President Zelensky who noted that the US demanding return of USD 500bln in minerals is “not a serious conversation”. Seemingly pushing down optimism regarding a near-term Ukraine-Russia peace deal. European sectors are mixed vs initially opening with a slight negative bias; the breadth of the market is fairly narrow. Energy is towards the top of the pile, with upside facilitated by gains in BP, alongside broadly firmer oil prices; BP benefits on reports that it is mulling selling its lubricants unit, worth around USD 10bln. Basic Resources is the slight underperformer today, with the sectors hampered by losses in Glencore after its FY results disappointed (details in the FTSE 100 section below).

Top European News

• ECB’s Schnabel says “we are getting closer to the point where we may have to pause or halt our rate cuts”, according to FT. Does not think R-star can be a reliable guide for monetary policy in real-time. “Restriction has come down significantly, up to a point where we can no longer say with confidence that our monetary policy is still restrictive”. “I’m not saying our monetary policy is no longer restrictive. What I’m saying is I’m no longer sure whether it is still restrictive. But we should not overstate a difference of 25 basis points”. When questioned on “should the ECB drop the reference to restrictiveness in March?”, replied “that is a discussion we should have in the next meeting”. “I firmly believe in the meeting-by-meeting approach”. “…for me, the direction of travel is not so clear anymore”. “Both services inflation and wage growth are still at an uncomfortably high level”. Should start to see services inflation come down in February. Should stop fine-tuning and responding to single data points.
• ECB’s Panetta says signs of weakness in the EZ economy “are more present than we were anticipating”. Expected a recovery driven by consumer spending which didn’t materialise. A weak economy poses a downward risk for inflation, upward risk is primarily from energy prices. Divergence in regulatory approach between US and Europe poses an issue. Need to avoid starting a de-regulation race. Banking regulation could be simplified.
• UK ONS says average private rents rose by 8.7% in the 12 months to January 2025.

FX

• DXY is steady with the USD showing a mixed performance vs. peers after yesterday’s session of gains which some have attributed to a recent pick-up in US yields. Overnight, President Trump stated he will impose 25% tariffs on autos, pharmaceuticals and chips. However, this is a reiteration of recent threats and markets are broadly anticipating a period of “relative calm” ahead of the April 1st deadline. DXY sits towards the top end of yesterday’s 106.80-107.22 range, ahead of the FOMC Minutes. Sentiment has been hit in recent trade amid commentary via Ukrainian President Zelensky who noted that the US demanding return of USD 500bln in minerals is “not a serious conversation”.
• EUR is softer vs. the USD with macro newsflow for the Eurozone on the light side. As such, geopolitics remains in focus with attention on the fallout from US-Russia discussions on the Ukraine war and what that could mean for the region, mainly via the lens of likely increased issuance for Defence spending. ECB dove Panetta stated that signs of weakness in the EZ economy “are more present than we were anticipating”. EUR/USD recently breached the lower end of Tuesday’s 1.0435-86 range.
• USD/JPY has traded on both sides of the 152.00 level (151.56-152.31 range) after disappointing Japanese Machinery Orders and Exports, as well as mixed comments from BoJ’s Takata who stated the BoJ must gradually shift policy even after January’s rate hike to avoid upside price risks from materialising but added that they need to take a cautious approach in shifting policy due to uncertainty.
• GBP is steady vs. the USD following a mixed UK inflation report; CPI Y/Y 3.0% vs. Exp. 2.8% (Prev. 2.5%), Core Y/Y 3.7% vs. Exp. 3.7% (Prev. 3.2%), Services Y/Y 5.0% vs. Market & BoE Exp. 5.20% (Prev. 4.40%). Markets don’t fully price the next 25bps rate cut until June with a total of 52bps of cuts seen by year-end. Cable hit a fresh YTD peak at 1.2640 late yesterday but has since faded gains.
• Antipodeans are both firmer vs. the USD with outperformance in the NZD post-RBNZ. NZD was initially pressured after the RBNZ delivered a third consecutive 50bps rate cut and signalled further cuts ahead, although the currency later rebounded off lows after the dust settled and RBNZ Orr suggested at the press conference for a shift to 25bps cuts in April and May.
• PBoC set USD/CNY mid-point at 7.1705 vs exp. 7.2807 (prev. 7.1697).
• Westpac week ahead orders: Buy AUD/CAD at 0.8990, targeting 0.9180, with a trailing stop initially set at 0.8955; Sell CAD/JPY at 107.80, targeting 105.00, with a trailing stop initially set at 108.50.

Fixed Income

• USTs are marginally in the red but essentially flat when compared to EGBs and in particular Gilts. Docket ahead features 20yr supply, FOMC Minutes and remarks from Jefferson (voter) but with the latest building permit/housing start data first. Thus far, specifics for USTs are a little light and as such the benchmark is steady in a slim five tick overnight band between 108-22+ and 108-27. However, it is worth highlighting that long-end benchmarks, particularly the 20yr, trade a little heavy pre-supply.
• A softer morning for EGBs though not to quite the same magnitude as Gilts. Specifics for the bloc light with the focus still firmly on Ukraine and potential defense-related joint issuance. A well-received Bund auction had little impact on German paper.
• Thereafter, remarks via ECB hawk Schnabel, has sparked some additional downside in Bunds, taking them down to fresh lows at 131.58; her comments held a hawkish tilt. She said that “we can no longer say with confidence that our monetary policy is still restrictive”, adding that the “we are getting closer to the point where we may have to pause or halt our rate cuts”.
• Gilts are underperforming after a noisy set of inflation data from the UK. Metrics which saw the headline come in hotter than expected though much of this was due to potential one-off factors around Transport and Energy. The all-important Services figure printed cooler than both the BoE and market expected. While there are caveats and positives to the release, this does not however change the overall picture from it of increasing price pressures. The 2028 outing sparked some modest pressure in Gilts, taking UK paper to the a fresh session low of 92.08.
• Amid commentary via Ukrainian President Zelensky who noted that the US demanding return of USD 500bln in minerals is “not a serious conversation”, risk-off sentiment crept in. The downside in the complex has subsided and currently traverse worse levels.
• Orders for the new 8yr “BTP Plus” reach EUR 10lbn since start of offer, according to bourse data.
• UK sells GBP 4.25bln 4.375% 2028 Gilt: b/c 3.09x (prev. 3.2x), average yield 4.294% (prev. 4.384%) & tail 0.5bps (prev. 0.2bps)
• Germany sells EUR 3.47bln vs exp. EUR 4.5bln 2.50% 2035 Bund: b/c 2.8x (prev. 2.8x), average yield 2.52% (prev. 2.54%) & retention 22.8% (prev. 23.58%)

Commodities

• Firmer trade across the crude complex amid ongoing geopolitics and with the European Commission this morning targeting Russian aluminium, shadow fleet and tech. Brent Apr resides in a USD 75.80-76.48/bbl parameter. Some modest pressure has been seen in the complex in recent trade amid commentary via Ukrainian President Zelensky, who seemed to pour cold water on the prospects of a near-term solution to the Ukrainian conflict.
• Modest gains were seen across spot gold and silver with the Dollar steady but as spot gold prints fresh record highs, buoyed by the broader geopolitical landscape, with the US-Russia meeting not received well by Ukraine. Spot gold currently resides in a USD 2,942.21-2,947.08/oz range.
• Base metals are mostly firmer following a mostly lower APAC session, with aluminium prices shooting higher after the European Commission unveiled its 16th Russian sanctions package this morning, targeting Russian aluminium, shadow fleet and tech. 3M LME copper resides in a USD 9,407.85-9,494.00/t range.
• US President Trump said he is looking at Venezuela very seriously and may not let Venezuela export oil via Chevron.
• EU envoys have agreed on the 16th sanctions package against Russia, includes primary aluminium import ban and listing of 73 new shadow fleet vessels. European Commission’s 16th sanctions package against Russia expected to be formally imposed on Monday, according to WSJ’s Norman.
• Glencore (GLEN LN) believes initiatives to remove some regulation will be positive for commodity markets; demand for commodities looks good in China, which is seen growing 5% in 2025.
• Exxon (XOM) reports that flare gas recovery equipment froze up resulting in release of sulphur dioxide at the 275k BPD Joliet Illinois refinery.
• Turkish Energy Minister says have not received any information from Iraq on resuming oil flows from Iraq-Turkey pipeline.
• China’s NDRC will cut retail gasoline and diesel prices by CNH 170/ton and CNH 160/ton respectively, starting February 19.

Geopolitics: Ukraine

• Ukrainian President Zelensky says US President Trump is trapped in a disinformation bubble; US demanding return of USD 500bln in minerals is “not a serious conversation”; “I can’t sell our country”. Nobody in Ukraine trusts [Russian President] Putin.
• Russia’s Kremlin says Russian President Putin/US President Trump meeting will take time to prepare, via Tass. Will first need reanimation of Russia-US relations, then restoration, via Tass. Talks in Riyadh is an important step towards Ukraine crisis settlement. Russian and US mainly discussed their own relations yesterday.
• Ukrainian President Zelensky says “he wants to end war with Russia this year”, according to Sky News Arabia
• Kremlin says Russian President Putin and US President Trump meeting may occur before the end of February, according to Interfax. Russia will appoint Ukraine negotiator depending on who the US representative is.
• Russian Foreign Minister Lavrov says he assumes that the US intends to remove obstacles that are in the path of promising projects. Have begun to move away from the edge of the abyss where the Biden admin led the US-Russia relationship.
• European Commission President says “We are committed to keep up the pressure on the Kremlin”.
• US President Trump said talks with Russia were very good and he is more confident, while he added that he does not think they would have to remove all troops from Europe and it is fine if Europeans want peacekeeping troops in Ukraine. Trump criticised Ukraine who he said wants a seat at the table but noted that Ukraine has had a seat and this could have been settled easily, as well as falsely accused Ukraine of starting the war and suggested Ukraine should hold an election. Furthermore, Trump said it was the Ukrainian leadership that allowed the war to continue so far and he is disappointed after Ukraine denounced its exclusion from US-Russia talks, while he also stated that he will probably meet with Russian President Putin before the end of the month.
• German Defence Minister said Russian threat will remain even with the possibility of peace in Ukraine and their experts estimate that in 4 to 7 years Putin will be able to launch an attack on NATO territory, according to Al Jazeera.

Geopolitics: Other

• China’s Foreign Minister Wang Yi met with Bolivia’s Foreign Minister at the UN and said China is willing to work with Bolivia to elevate their strategic partnership, while he added that Latin America belongs to its people and is not any country’s “backyard”, as well as stated that China will always be a trustworthy friend and partner of Latin America.
• N12 reports that the Israeli gov’t has begun working on an initiative to allow Gaza Strip residents to voluntarily leave to receptive third nations, article adds that such countries “have not yet been identified”.

US Event Calendar

• 07:00: Feb. MBA Mortgage Applications -6.6%, prior 2.3%
• 08:30: Jan. Housing Starts, est. 1.39m, prior 1.5m
  • Jan. Housing Starts MoM, est. -7.3%, prior 15.8%
  • Jan. Building Permits, est. 1.46m, prior 1.48m
  • Jan. Building Permits MoM, est. -1.5%, prior -0.7%
• 08:30: Feb. New York Fed Services Business, prior -5.6
• 14:00: Jan. FOMC Meeting Minutes

DB’s Jim Reid concludes the overnight wrap

Markets put in a strong performance yesterday, with both the S&P 500 (+0.24%) and the STOXX 600 (+0.32%) hitting all-time highs. For the S&P 500 that marked a second all-time high of the year. Remarkably, it had already registered 11 all-time highs by this time last year and 57 in 2024 as a whole. Talks over Ukraine were an important catalyst for yesterday’s advance, as hopes for an end to the conflict helped to power the European advance, where equities have seen a clear outperformance against their global counterparts so far this year. Indeed, the STOXX 600 hasn’t seen a weekly decline at all this year, with the index currently on track for a 9th consecutive weekly gain.

US equity futures are edging higher again overnight but Asian equities are more mixed after last night Trump signalled major tariffs on autos, chips and pharmaceuticals. When asked on auto tariffs, he said “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25%”, adding similar comments on the other two sectors. In a report earlier this month (link here), Peter Sidorov highlighted how electronics, autos and pharma are three groups in which the US runs the largest trade deficit so it’s not a surprise to see these being targeted. It remains to be seen which of the floated tariffs will be implemented but there are now many tariff spinning plates in play, with reciprocal tariff investigations also due by early April, steel and aluminium tariffs due on March 12, and the one-month delay to tariffs on Canada and Mexico ending on March 4.

Turning to the latest on Ukraine, yesterday saw the US and Russia commence talks in Saudi Arabia, with US Secretary of State Marco Rubio speaking with Russian Foreign Minister Sergei Lavrov. In a readout from the US State Department, it said they agreed to appoint “high-level teams to begin working on a path to ending the conflict in Ukraine as soon as possible in a way that is enduring, sustainable, and acceptable to all sides.” However, there was no sign yet of a date for a meeting between Presidents Trump and Putin. In the meantime, we had a report from Fox News that the US and Russia were proposing a 3-stage peace plan, according to diplomatic sources close to the talks. That would involve a ceasefire, Ukrainian elections, and signing a final agreement, though Fox reporting later clarified that officials were only “floating” the elections idea at this stage. Trump also referred to the “long time” since Ukraine had an election in his comments later on.

There have been concerns that Europe and Ukraine are being left on the sidelines and yesterday Zelenskiy postponed his own visit to Saudi Arabia, saying “we want no one to decide anything behind our back”. That said, last night Rubio did have a call with major European foreign ministers to brief them on the meeting. And while the direction of travel may be very uncomfortable for Europe politically, markets have been more focused on the prospect of any agreement to end the war rather than the type of agreement. As such European risk assets continued to outperform. In fact, all of the major equity indices posted a fresh advance, which included new records for the STOXX 600 (+0.32%) and the DAX (+0.20%). There was also some positive news from the ZEW survey in Germany, as the expectations component rose to a 7-month high of 26.0 (vs. 20.0 expected). Perhaps the upcoming election is also bringing renewed hope. And even though tech stocks dragged on the main indices, other cyclicals helped to overpower that, with the STOXX Banks Index (+1.96%) up to a 13-year high as well. As a European banker that wasn’t the worst news I’ve had this year.

Elsewhere in Europe, sovereign bonds stabilised after their Monday losses, with yields on 10yr bunds (+0.5bps), OATs (-0.7bps) and OATs (-0.1bps) seeing little movement in either direction. Nevertheless, the broader risk-on tone meant that sovereign bond spreads tightened further, with the Italian-German 10yr spread down to a 3-year low of 105bps. And it was the same story for credit as well, with both Euro IG and HY spreads closing at their tightest in over 3 years, around the time that energy prices began to spike higher and inflation rose meaningfully.

Over in the US, financial markets caught up with the rest of the world as they reopened after Monday’s holiday. The S&P 500 (+0.24%) was little changed for much of the day, but a late rally helped it reach a new all-time high, surpassing its previous record from January 23. The gains were fairly broad with more than 70% of the S&P 500 higher on the day and the Russell 2000 up +0.45%. But the advance was held back by the Magnificent 7 (-0.71%), with Meta (-2.76%) leading on the downside after a remarkable run on 20 consecutive gains that had seen its shares rise +20.5% in the past month. Meanwhile, Intel (+16.06%) was the second-best performer in the S&P 500 following weekend reporting by WSJ and Bloomberg that it could be broken up in a deal involving TSMC and Broadcom.

US Treasuries also struggled by comparison with their European counterparts, with the 10yr yield up +7.4bps on the day to 4.55%. That was in part a catch down to Monday’s sell-off and also followed remarks from Fed officials on Monday, who reiterated the message that they were in no hurry to adjust policy. Yesterday’s sizable $30bn slate of IG corporate bond issuance may have also added upward pressure on yields. And in Canada, the 10yr yield surged by +8.4bps on the day, which came after their latest core CPI print surprised on the upside. For instance, both the core inflation measures preferred by the Bank of Canada moved up to +2.7% (+2.6% expected), which led investors to dial back the likelihood of another rate cut at their next meeting.

Here in the UK, gilts underperformed their European counterparts after the latest labour market data surprised on the upside. That included a rise in average weekly earnings to +6.0% (vs. +5.9% expected), whilst the unemployment rate remained at 4.4% (vs. 4.5% expected). So as with the Canadian inflation numbers, that also saw investors dial back the probability of a rate cut from the Bank of England at their next meeting. Yields on 10yr gilts themselves were up +3.0bps on the day, whilst the 2yr yield was up +3.7bs. Watch out for UK CPI just after we go to press.

Coming back to Asia, the Nikkei (-0.31%), the Hang Seng (-0.51%) and the S&P/ASX 200 (-0.73%) are all losing ground. The KOSPI (+1.72%) is the best performer rallying to a 5-month high buoyed by hopes of improving political conditions in the country. Additionally, mainland Chinese stocks are also advancing with the Shanghai Composite (+0.54%) moving higher after the central government vowed to support private industries.

In monetary policy action, the Reserve Bank of New Zealand (RBNZ) lowered the official cash rate by 50bps to 3.75% as expected in its policy meeting, marking its fourth straight cut, as easing inflation offers the central bank room to boost the economy. Additionally, the central bank indicated that it will likely follow with 25bps cut at its April and May policy meetings.

Early morning data showed that Japanese exports rose +7.2% y/y in January (vs +2.8% in December, +7.7% market consensus). Meanwhile, imports rose a bigger-than-expected +16.7% (vs +1.7% in December, +9.3% market consensus), thus leading to a trade deficit of -2.76 trillion yen in January (v/s -2.10 trillion yen expected) and compared with a revised surplus of +0.133 trillion yen in the previous month as worries continue to grow about looming tariffs from the Trump administration.

Looking at yesterday’s other data, the US Empire State manufacturing survey came in at 5.7 in February (vs. 0.0 expected). But there was more negative news from the NAHB’s housing market index, which fell to a five-month low of 42 in February (vs. 46 expected).

To the day ahead now, and data releases include the UK CPI for January, US housing starts and building permits for January. Otherwise from central banks, we’ll get the minutes of the FOMC’s January meeting, and also hear from Fed Vice Chair Jefferson.

Submitted by QTR’s Fringe Finance

I’ve been pointing out over the last couple of months that I think crypto could wind up being the canary in the coal mine for future market volatility. I think it was Shakespeare who once said: “So goeth fartcoin, so goeth the entire global economy”.

And just a couple of weeks ago, when Google announced the arrival of their Willow quantum computing chip, I raised the critical question of whether or not crypto—and specifically Bitcoin—would still be hacker-proof if quantum computing arrived faster than we expected it to.

Since that article in early December, there have been continuing signs that the American consumer, and by proxy investors in the stock market, are likely getting stretched.

The biggest new sign is that credit card data for that same month, released just days ago and reported on by Bloomberg, confirmed that U.S. consumer debt soared by $40.8 billion in December, marking the largest monthly increase on record. This sharp rise follows a revised $5.4 billion decline in November and surpassed all economist forecasts in a Bloomberg survey.

Source: Bloomberg

The report showed that revolving credit, including credit cards, jumped $22.9 billion, more than offsetting the previous month’s drop. Non-revolving credit, such as auto and student loans, rose $18 billion—the biggest gain in two years—driven by a surge in year-end auto sales, the fastest pace since May 2021.

And even more notably, delinquency rates are climbing, with 3.5% of credit card balances overdue by 30 days or more, and 1.8% of accounts delinquent—both more than double the post-pandemic lows of 2021.

As the American consumer was redlining their credit cards the same month Google’s quantum computing processor was announced, investors didn’t seem to care. Concern about Google’s processor was short lived and quickly swept under the rug, with Bitcoin bulls assuring each other the network would evolve in time for whatever comes next.

I can’t help but think this could be a devastating case of willful ignorance. Even Tether’s CEO was forced to admit this week that quantum computing will eventually hack inactive Bitcoin wallets, bringing lost BTC back into circulation.

“Any Bitcoin in lost wallets, including Satoshi (if not alive), will be hacked and put back in circulation,” Paolo Ardoino said in a Feb. 8 X post.

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While active wallets can adopt quantum-resistant protections as they emerge, lost wallets are more vulnerable since there’s no one to secure or move the funds. Ardoino noted that wallets controlled by living users will be migrated to “quantum-resistant addresses.”

When you have the CEO of one of the key components in the crypto universe urging immediate caution, it’s something that shouldn’t go ignored. After all, it’s widely accepted that if Satoshi Nakamoto’s Bitcoin—estimated at around 1 million BTC—were to move, it would trigger massive market volatility, potentially causing panic selling due to fears of a large-scale dump or speculative buying driven by renewed interest. Such an event could shake investor confidence, raising concerns about Bitcoin’s decentralization and security. It would also spark intense global speculation about Satoshi’s identity, possible legal ramifications, and pressure for protocol upgrades to enhance security.

Ultimately, the movement of these coins would mark a new epoch in the era of bitcoin — one where its unblemished track record of success is anything but a guarantee.

And I’m here to tell you that just because nobody is talking about this doesn’t mean that the risk isn’t growing underneath the surface. After all, this is how almost all financial crises—regardless of the catalyst—develop. As I was explaining on a podcast about black swans last week, one day you go to bed and everything is fine, and the next morning you wake up, and behavioral psychology on the street has changed drastically—so much so that you may already be behind the rest of the world simply by having gone to bed that night.

And with the growing number of exchange-traded funds, leveraged ETFs, zero-days-till-expiration options, and other ways that speculators can simply gamble—becoming the tail that wags the market dog—I’m predicting that future chaos in markets will happen at a sharper pace than we’ve ever seen before in history.

The key lesson here is to stay on guard, if you ask me. It’s a simple, logical line of reasoning. I believe crypto is the tip of the spear as far as risk and speculation in the markets. This not only makes it most susceptible to a pullback but puts the asset class first in the pecking order of assets that would be sold off anytime investors need to raise cash.

It is a brand-new asset class, with barely a decade-long track record to fall back on in a substantial crisis, with one of its biggest CEOs issuing a backhanded warning about a new burgeoning risk.

Between the fact that crypto will be the first to be sold and, in and of itself, could be the fuse that lights the next sell-off, it feels like a great time to remind my readers that just because ugly headlines aren’t splashed across CNBC, and it isn’t obvious that something is breaking, doesn’t mean that it isn’t happening in the background—or that a hole hasn’t already been blown in somebody’s balance sheet.

My goal as an investor and commentator is to always be thinking like a contrarian in a market, monetary system, and global economy that is dominated by herd mentality.

Bill Ackman’s proclamation that “Hell is coming” during the Covid panic wasn’t a cue to sell, it nearly marked the bottom. The lesson? Just remember: by the time you read about it in the news, it will be too late to react, and panic will have already hit the masses.

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This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

X’s financial outlook appears to be steadily improving as recent high-yield fund managers‘ interest in the company’s debt soared. Adding to the momentum, Elon Musk announced earlier this month that the advertiser boycott has unraveled—a major development that could significantly boost the company’s revenue in the coming quarters.

Revenue should improve rapidly this year, as the advertising boycott winds down

— Elon Musk (@elonmusk) February 6, 2025

Now, Bloomberg reports that X is preparing to raise money from investors at a $44 billion valuation—the same as when Musk acquired the company in 2022. This would mark X’s first investment round since Musk took it private that year. Neither X nor Musk has confirmed the report’s legitimacy.

The investment round would mark a significant turnaround for X, which has been battered by collapsing ad revenue after NGOs and corporate media waged war on the ‘free speech’ platform. X’s recovery represents the emergence of new media that will dominate the conversation through President Trump’s second term, hence why investor demand is returning. 

Bloomberg noted that late last year, Fidelity Investments marked down its X stake by more than 70% from the 2022 sale price.

However, in a recent interview with Tucker Carlson, Prince Alwaleed bin Talal, a major X investor, stated: “We never devalued it [X]. Some entities did devalue it by 30, 40, even 50%. But now, after the election, with President Trump and the strong alliance between Musk and Trump, we’ve seen the market revalue X dramatically—at least to its par value of $44 billion.”

Carlson asked the Saudi investor: “What do you think X’s actual value?”

Alwaleed responded: “I think the value is more than double the $44 billion valuation.” 

Meanwhile, xAI is reportedly raising $10 billion in a new funding round, which would value the startup at around $75 billion. 

Musk’s xAI Reportedly In Talks For $10B Raise At $75B Valuation As Grok 3 Launch Nears https://t.co/XfCyaqbF2i

— zerohedge (@zerohedge) February 14, 2025

On Monday evening, XAI released the Grok 3 chatbot, which Musk views as the “smartest AI on Earth.” 

In fact, the chatbot might be… 

The xAI team revealed that Grok3 outperformed Alphabet’s Google Gemini, DeepSeek’s V3 model, Anthropic’s Claude, and OpenAI’s GPT-4o across math, science, and coding benchmarks.

Musk’s xAI Unveils “State Of The Art” Grok 3 AI Bot, Surpassing OpenAI & DeepSeek https://t.co/FnsMyfVy0Y

— zerohedge (@zerohedge) February 18, 2025

Readers should listen to Carlson and Alwaleed’s conversation. The X video should be started around the 11:30-minute mark to understand why Alwaleed sees X’s value more than doubled from par value. 

Prince Alwaleed bin Talal is one of the biggest media investors in the world. Here’s why he thinks X now dominates everything.

(0:00) Prince Alwaleed bin Talal’s Thoughts on Donald Trump
(2:26) Saudi Arabia’s Relationship With Israel and Iran
(6:55) Negotiating With Trump
(7:56)… pic.twitter.com/PwFlDgCper

— Tucker Carlson (@TuckerCarlson) February 5, 2025

. . .