Mexican Peso Gains Ground Amid Speculation on Tariffs

Posted on January 6, 2025 by Ignacio Teson

The Mexican peso appreciated sharply on Monday, bolstered by a weakened dollar and speculation that the incoming U.S. administration’s tariff plans may be narrower in scope than initially expected.

The [[USD/MXN]] closed the day at 20.3096 per dollar, compared to 20.6724 on Friday, according to official data from Banco de México (Banxico). This marks a gain of 36.28 cents, or 1.76%.

[[USD/MXN-graph]]

During the session, the exchange rate ranged between a high of 20.6669 and a low of 20.2437 pesos per dollar.

The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, fell 0.62% to 108.27 units, further supporting the peso’s rally.

Markets reacted to a report by The Washington Post suggesting that the incoming Trump administration might limit new tariffs to imports deemed critical to U.S. national and economic security. Although Trump later denied the report, the peso maintained its gains throughout the day, aligning with a broader regional trend of currency strength.A Shift in

Tariff Expectations

If confirmed, this approach would significantly differ from Trump’s earlier rhetoric, which included threats of imposing broad tariffs on imports from Canada, Mexico, and China. The dollar’s weakness reflected market anticipation of this potential shift in policy.

The peso has regained more than 3% from its late-2024 peak of 20.91 pesos per dollar. While Monday’s appreciation was partly driven by speculation surrounding tariff policies, broader optimism regarding normalized capital flows also played a role.

Key Economic Data Ahead

The week ahead is packed with critical economic catalysts, including U.S. labor data, speeches by Federal Reserve officials, and inflation figures from Mexico. Banxico’s minutes from its recent monetary policy meeting will also be closely watched for insights into the central bank’s outlook.

Despite uncertainty surrounding U.S. trade policy, the peso’s performance reflects optimism about a more stable economic environment as markets await further clarity on the new administration’s plans.

Nvidia Stocks Surge, Boosting Semiconductor Sector

Posted on January 6, 2025 by Ignacio Teson

Chipmaker Nvidia Benefited from Microsoft’s $80 Billion AI Data Center Investment Plan in 2025.

Nvidia’s stocks surged on Monday, boosting chip manufacturers following Microsoft’s announcement to invest $80 billion in AI-enabled data centers by 2025. This news fueled optimism that semiconductor demand would continue to rise.

Nvidia’s shares climbed 4.6% to $151.13 after closing a remarkable 2024 with a nearly 190% gain and a $3.7 trillion market capitalization.

[[NVDA/USD-graph]]

Micron was the biggest winner among semiconductor stocks, rising 12%, followed by Taiwan Semiconductor Manufacturing (+5.8%), Applied Materials (+5.3%), and KLA Corp (+5.2%).

The Philadelphia Semiconductor Index rose 3.4%, reaching its highest level since mid-October.

Citigroup noted that Microsoft’s spending plan, although in line with analysts’ expectations, was a “modestly positive” update, removing the risk of a capital expenditure decline.

AI data centers are hungry for chips, that’s why people are rushing into the chip sector right now.

Foxconn’s record-breaking revenues in the fourth quarter, driven by strong AI server demand, also contributed to the overall enthusiasm in the chip sector.

General Market Outlook

Trump will take office on January 20, and in the meantime, investors will be closely watching the release of key economic catalysts this week, including labor data and speeches from Federal Reserve officials that could provide further clarity to the market.

By sector, gains in technology and communications stand out, while within the Dow Jones, Nvidia, Boeing (up 1.49%), and Microsoft led the way. Boeing’s shares rose after a brokerage upgraded its recommendation.

Bitcoin Soars, Surpassing $101,800 Once Again

Posted on January 6, 2025 by Ignacio Teson

Bitcoin (BTC) surges past $100,000 again, climbing 4% to $101,800 in the last 24 hours, while the cryptocurrency market sees gains of up to 7%, led by Avalanche (AVAX) on Monday, January 6.

Cryptocurrencies are starting the month with a strong bullish momentum, following a December that saw BTC reach an all-time high of $108,388.

[[BTC/USD-graph]]

Meanwhile, Ethereum rises by 1.3%, reaching $3,688. The market shows signs of optimism, driven by renewed interest in digital assets.

While most analysts expected a correction, the long-term outlook remains optimistic, with projections suggesting that [[BTC/USD]] could range between $150,000 and $80,000.

Disappointment regarding the proposed cryptocurrency policies by Trump and doubts about their implementation could trigger a significant market correction.

However, Bitcoin’s price remains buoyed by sustained demand for Bitcoin ETFs, a favorable macroeconomic environment, and an increase in global liquidity.

This projection highlights the importance of the Federal Reserve’s decisions and their impact on interest rates and inflation, which will be key factors influencing Bitcoin’s behavior in 2025.

Meme Currency Boom

Meme cryptocurrencies, initially seen as a joke circulating online, have become some of the main players in the 2024-2025 bull run, profoundly transforming valuation and trading criteria for digital assets. According to a report, the market capitalization of these coins grew from $20 billion in January to over $120 billion by the end of 2024, representing an astounding 500% increase in just one year.

U.S Government warns Tencent Poses Security Risk

Posted on January 6, 2025 by Olumide Adesina

The U. S Defense Department announced it had expanded its list of companies it claims to collaborate with China’s military, which includes Chinese tech behemoths Tencent Holdings, a leader in gaming and social media, and CATL, a manufacturer of batteries.

According to a document released on Monday, the list featured new additions Tencent, CATL, Changxin Memory Technologies Inc. (CXMT), Quectel Wireless, drone manufacturer Autel Robotics, and WeChat parent company Tencent.

Although the designation does not result in immediate bans, it serves as a clear warning to U.S. businesses that harm the reputations of impacted companies, Additionally, it might increase pressure on the Treasury Department to impose sanctions on the businesses

The list of Chinese military companies is updated yearly as required by U.S. law. 134 companies were named on what is known as the “Section 1260H list” in a notice published in the Federal Register.

The company “does not work with the military in any country and will ask the Pentagon to reconsider its designation, which has been made in error,” according to a Quectel representative.

The updated list is just one of many steps Washington has taken in recent years to identify and restrict Chinese companies it claims pose security risks, amid tense relations between the two largest economies in the world. U. S. Throughout 2024, lawmakers urged the Pentagon to include a few of the businesses on the list.

U.S. Dollar Sinks Like Titanic Ship

Posted on January 6, 2025 by Olumide Adesina

The dollar fell following contradictory reports regarding the severity of President-elect Donald Trump’s proposed tariffs upon taking office.

Washington Post report revealed Trump’s aides were considering plans, to impose tariffs on all nations, but only on industries deemed essential to national or economic security, allaying fears of more severe and broader levies. The dollar index fell as much as 100 basis points during Monday’s trading session.

Markets project Trump’s bark will be worse than his bite and any news that supports this idea will encourage riskier assets to rise and the dollar and Treasury yields to fall.

However, the reality is that there is still no clear endpoint for the downside risks. The euro was up by 65 basis points at $1.0379, while the dollar index, which compares the US dollar to a basket of currencies, dropped by 70 basis points to trade at 108.32 index points.

the dollar index hit a two-year high of 109.54 index points last week, supported by the strong economy, the possibility of higher inflation from tariffs, and the Federal Reserve’s slower rate cuts.

Fed Governor Lisa Cook remarks that the Fed can afford to be cautious with any further rate cuts given an economy that is on solid footing and inflation that has been stickier than expected also contributed to the dollar’s declines.

Some Fed policymakers are expected to restate recent remarks made by their peers about the need to fight inflation. The euro fell to its lowest point since November.

Wall Street Rises After Five-Day Losing Streak

Posted on January 4, 2025 by Ignacio Teson

Wall Street closed Friday with gains, snapping a five-session losing streak, as investors assessed manufacturing data.

Investors are getting prepared for the incoming administration of Donald Trump, set to take office on January 20 with Republican control of Congress.

The [[SPX]] 500 rose 1.26% to 5,942.60 points, and the Nasdaq Composite gained 1.77% to 19,621.17, both breaking their five-day losing streaks. The Dow Jones Industrial Average climbed 0.80% to 42,732.13, ending a four-session decline.

[[SPX-graph]]

Despite Friday’s rebound, all three indexes posted weekly losses: the Dow fell 0.61%, the S&P 500 dropped 0.47%, and the Nasdaq Composite declined 0.52%. Global equity markets saw mixed movements amid low trading volumes in the year’s first week.

In December, U.S. manufacturing edged closer to recovery, with increased production and new orders. However, rising input costs challenged factories as the year ended.

Corporate and Commodity News

In corporate news, United States Steel Corporation shares fell 6.53% after President Joe Biden blocked its sale to Japan’s Nippon Steel, concluding a prolonged political dispute over the acquisition.

Meanwhile, oil prices rose on Friday, breaking out of a months-long range. Optimism surrounding U.S.-China relations contributed to the gains.

West Texas Intermediate (WTI) crude for February delivery increased 1.13% to $73.96 per barrel, while Brent crude for March delivery rose 0.76% to $76.51 per barrel in London.

Mexican Peso Weakens Against the Dollar

Posted on January 3, 2025 by Ignacio Teson

The Mexican peso ended Friday’s session weaker against the U.S. dollar, erasing early-session gains after the release of local unemployment data.

Market participants also remain focused on the upcoming start of Donald Trump’s administration.

The peso depreciated by 0.26% during the session, closing at 20.6724 pesos per dollar, based on data from Banco de México (Banxico). The exchange rate ranged from a low of 20.6220 to a high of 20.7070 pesos per dollar.

[[USD/MXN-graph]]

On a weekly basis, the peso posted a 1.74% decline against the dollar, marking its second consecutive weekly loss.

Despite this, the [[USD/MXN]] had its best start to the year since 2010 on Thursday, January 2, appreciating 1.27% to 20.6185 pesos per dollar. This strong performance came after the peso ended 2024 at its weakest level since the summer of 2022.

Mexican Peso Outlook

The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.29% to 108.93 points.

Investors remain cautious about the upcoming inauguration of Donald Trump on January 20 and the potential impact of his policies on the Mexican economy.

Local unemployment data pressured the peso further. The unemployment rate in November rose slightly to 2.6%, up from 2.5% in October, though it remained below market expectations of 2.7%. This reinforces expectations of a continued cycle of rate cuts by Banxico in 2025, contrasting with the Federal Reserve’s restrictive stance.

European Stocks End Lower in Shortened Week

Posted on January 3, 2025 by Ignacio Teson

European stocks ended lower on Friday in a shortened trading week, weighed down by luxury goods firms and alcohol producers.

Attention turned to economic data for clues on interest rate paths and policies under President Trump.

Sectors exposed to China, including mining, luxury goods, and automotive stocks, were under pressure, despite China’s pledge to increase long-term Treasury bond financing to stimulate business and consumer investment.

Investors are concerned about China’s economic outlook and a potential trade war with the U.S. ahead of Trump’s inauguration on January 20.

The French stock market, home to many top luxury brands, fell 1.5%, its largest single-day drop in over seven weeks. Stellantis shares dropped 3.5% following reports of a 37% decline in vehicle production last year.

Alcohol manufacturers also saw sharp declines after the U.S. Surgeon General called for cancer warnings on alcoholic beverages. Campari dropped 5.2%, and Anheuser-Busch InBev fell 2.8%.

2024 Stock Market Recap

U.S. stock markets performed well in 2024, driven by optimism around AI and Fed rate cuts, while European gains were more modest.

Despite reaching historical highs, the STOXX 600 remained subdued due to concerns about economic slowdown, political uncertainty, and the threat of U.S. tariffs under Trump.

[[DAX-graph]]

ECB policymaker Yannis Stournaras projected a 2% interest rate by fall, indicating further easing aligned with market expectations.

Apple to Pay $95 Million to Settle Siri Privacy Lawsuit

Posted on January 3, 2025 by Ignacio Teson

Apple has agreed to a $95 million cash settlement to resolve a class-action lawsuit alleging that its Siri voice assistant violated user privacy.

The preliminary settlement was filed Tuesday in federal court in Oakland, California.

Following the announcement, Apple’s shares dropped 2.62% on Nasdaq, closing at $243.85 on Thursday.

[[AAPL/USD-graph]]

The lawsuit originated from complaints by mobile device owners that Siri recorded private conversations after being unintentionally activated and disclosed those conversations to third parties, including advertisers.

The class-action period covers incidents between September 17 and December 31, 2024, stemming from Siri’s introduction of the “Hey Siri” feature, which allegedly led to unauthorized recordings.

Apple Products in China

Apple’s stock also faced pressure due to price cuts for iPhones in China, aimed at competing with domestic rivals like Huawei.

The company announced discounts of up to 500 yuan (approximately $68.50) on current iPhone models in China.

Huawei’s Mate 70 smartphone has gained market share thanks to its AI features, which the iPhone currently lacks in China. To address this, Apple is exploring partnerships with local internet service giants such as Tencent and ByteDance to integrate AI functionalities into its offerings in the region.

China remains Apple’s second-largest market, and weakening sales there could pose significant financial challenges.

Since reaching a record high of $260.10 on December 26, Apple’s shares have declined over the past four sessions.

Tesla Stock Melts Like Ice Under Sun

Posted on January 3, 2025 by Olumide Adesina

Tesla posted fewer vehicle sales than the year before, the first in the manufacturer’s history. The EV manufacturer reported a drop in yearly shipments from its Shanghai factory, the first since the facility started mass production in 2020, which caused Tesla stock to drop more than 6% at premarket trade.

This outcome is specifically explained by a 3–9% decrease in production impacted by temporary site closures. Sites in Texas and China were temporarily closed for modernization work, while the manufacturer’s massive factory in Germany was the target of an arson attack followed by a strike.

The increased level of competition has also hurt the company. The American automaker set a record in the three months leading up to December 31 by delivering 495,570 vehicles. LSEG polled 15 analysts, which stated that 503,269 units were needed.

The total amount of deliveries for 2024 was 1.79 million, which is 1.1 percent less than the previous year. The 19 analysts that LSEG polled had an average estimate of 1,806 million units.

However, the electric vehicle manufacturer, announced on Friday that its sales in China increased by 8.8 percent to a record high of over 657,000 cars in 2024. This is a strong performance in a competitive market during a year in which its yearly global deliveries fell for the first time.

According to Tesla China, Tesla vehicles in the biggest auto market in the world climbed 12 percent in December compared to the same month the previous year, reaching a record high of 83,000 units.

China is Tesla’s second-largest market, and according to sales data, 36.7 percent of its vehicles were delivered to Chinese consumers in 2024. Elon Musk earlier predicted a slight increase, but worldwide deliveries fell 11%—reduced subsidies from Europe.

The move to more affordable hybrid cars and increased competition worldwide, particularly from BYD in China, hurt sales.

Tesla was still ahead of BYD, whose EV sales increased 12.1 percent to 170 million worldwide The EV giant reduced the size of its China sales team and its global workforce due to weak demand and increased competition from Chinese EV manufacturers.