Portfolio Update – January 2025

General news

• On 02/01/2025, Singapore’s economy grew by 4.0% in 2024, a significant acceleration from the 1.1% growth in 2023, according to preliminary government data. Fourth-quarter GDP increased by 4.3% year-on-year, surpassing the median forecast of 3.3% from a Reuters poll, while quarter-on-quarter growth was 0.1%. With annual inflation at 1.9% in November—its lowest in nearly three years—the Monetary Authority of Singapore may have room to ease monetary policy in January, though analysts suggest it could wait until later in 2025 to gauge the impact of policies from incoming U.S. President Donald Trump.
• On 04/01/2024, Tesla reported fourth-quarter 2024 deliveries of 495,570 vehicles and annual deliveries of 1,789,226, marking the first year-over-year decline in its delivery numbers after 1.81 million in 2023. Production figures for Q4 were 459,445, with 1,773,443 vehicles produced for the year. Despite exceeding 2023’s Q4 deliveries of 484,507, Tesla fell short of analyst expectations, which ranged between 501,000 and 506,763 deliveries. The underperformance led to a 7% drop in Tesla shares before rebounding. The year saw Tesla’s stock rally 63%, reaching record highs in December after a turbulent first quarter. CEO Elon Musk balanced his Tesla role with high-profile involvement in President-elect Donald Trump’s campaign, contributing $277 million to Republican efforts.
• On 07/01/2025, Japan’s Nippon Steel CEO Eiji Hashimoto reaffirmed the company’s determination to pursue its $14.9 billion acquisition of U.S. Steel despite opposition from both the Biden administration and incoming President Donald Trump. This follows lawsuits filed by Nippon Steel and U.S. Steel, contesting Biden’s decision to block the merger, which they argue violated their right to an impartial review by the Committee on Foreign Investment in the U.S. (CFIUS). Hashimoto rejected alternative strategies, emphasizing the deal’s potential to bolster U.S. Steel and the broader U.S. industry. Both companies are seeking a federal court reversal of the block.
• On 07/01/2025, Canadian Prime Minister Justin Trudeau has announced his intention to resign once his Liberal Party selects a new leader, following growing internal pressure fueled by declining poll numbers amid voter dissatisfaction with high costs and a housing crisis. Speaking in Ottawa, Trudeau cited parliamentary gridlock and internal party tensions, particularly after the resignation of Deputy Prime Minister Chrystia Freeland in December, as key factors in his decision. Freeland’s departure reportedly stemmed from disagreements over handling President-elect Donald Trump’s threats of steep tariffs on Canadian imports. Trudeau also prorogued parliament until March 24, delaying any election until at least May and leaving him temporarily responsible for addressing the looming U.S. tariff crisis.
• On 08/01/2025, U.S. Treasury yields rose on Tuesday as data indicated persistent inflationary pressures in the services sector. The 10-year yield climbed over seven basis points to 4.693%, briefly reaching a high of 4.699%, while the 2-year yield rose more than two basis points to 4.299%. The December ISM services price index surged to 64.4 from November’s 58.2, and the JOLTS report revealed higher-than-expected job openings. These factors may temper expectations for Federal Reserve rate cuts in 2025. Investors are now focused on upcoming economic reports, including ADP private payrolls and the December jobs report, which could shape monetary policy outlooks ahead of the Fed’s January meeting, where rates are widely expected to remain unchanged. Minutes from the Fed’s December meeting, set for release Wednesday, are anticipated to offer further insights into policymakers’ views.
• On 09/01/2025, China’s consumer prices increased by 0.1% year-on-year in December, consistent with expectations but slower than November’s 0.2%, heightening deflation concerns as domestic demand remains weak despite stimulus efforts. Producer price inflation declined 2.3% in December, marking 27 consecutive months of contraction, slightly better than expected. Although measures like interest rate cuts, property market support, and increased bank lending have been introduced, consumer spending remains subdued. Factory activity has expanded for three months, albeit at a slower pace in December. Economists cite challenges like property sector headwinds and trade tensions with the U.S., forecasting a slow recovery. The yuan fell to a 16-month low against the dollar amid rising U.S. Treasury yields and a stronger dollar.
• Mortgage rates rose for the fourth consecutive week, pushing already weak demand even lower. Total mortgage application volume dropped 3.7% last week, with purchase applications falling 7% from the prior week and 15% year-over-year, according to the Mortgage Bankers Association. The average 30-year fixed mortgage rate climbed to 6.99%, the highest since July 2024, while rates reached 7.14% earlier this week per Mortgage News Daily. Refinancing applications edged up 2% weekly but remain 6% lower than a year ago, with VA refinances driving the increase. Elevated rates and high home prices are sidelining buyers, despite increased home inventory compared to last January. Market direction now hinges on upcoming economic data, including Federal Reserve meeting minutes and the U.S. jobs report.
• On 10/11/2025, Job growth in December significantly exceeded expectations, with nonfarm payrolls rising by 256,000, well above the forecast of 155,000 and up from November’s 212,000, according to the Bureau of Labor Statistics. The unemployment rate edged down to 4.1%, slightly better than anticipated, while a broader measure of unemployment fell to 7.5%, its lowest since June 2024. Despite strong job gains, wage growth remained moderate, with hourly earnings up 0.3% for the month and 3.9% year-over-year, suggesting limited pressure from wage inflation. The robust labor market data reduces the likelihood of Federal Reserve rate cuts in 2025, prompting a market reaction with stocks falling and Treasury yields rising. Economists view the report as evidence of a resilient labor market, potentially easing recession fears while aligning with the Fed’s monetary policy goals.
• On 13/01/2025, China’s central bank announced a suspension of treasury bond purchases on Friday, citing a bond shortage but sparking speculation that the move aims to defend the weakening yuan. The decision coincides with global bond selloffs and appears to be a signal to prevent further declines in domestic yields, which have hit record lows amid prolonged bearish economic sentiment. Following the announcement, yields on China’s 30-year and 10-year treasuries rose, while the yuan slightly strengthened. Analysts suggest the People’s Bank of China (PBOC) is addressing the widening yield gap between China and the U.S., a key factor in yuan depreciation. The PBOC plans to resume bond buying when market conditions permit and has cautioned against excessive reliance on monetary easing. The bond market’s decade-long rally, exacerbated by a sluggish property sector and weak stock performance, has created an “asset famine,” pressuring yields and the currency.
• On 14/01/2025, The producer price index (PPI) rose by 0.2% in December, below the expected 0.4% increase, signaling easing inflationary pressures in wholesale prices, according to the Bureau of Labor Statistics. Core PPI, excluding food, energy, and trade services, was flat for the month, with annual headline PPI rising 3.3% in 2024, up from 1.1% in 2023. Goods prices increased by 0.6%, driven by a 9.7% surge in gasoline prices, offset by a 14.7% drop in fresh and dry vegetable prices. Service prices were flat, with gains in transportation negated by declines in traveler accommodation. The report, along with the upcoming consumer price index data, is likely to influence the Federal Reserve’s interest rate decision later this month, though markets currently anticipate no rate change. Policymakers may use the meeting to outline expectations, with futures pricing in minimal rate cuts for the remainder of the year.
• On 15/01/2025, Consumer prices rose modestly in December, closing 2024 with encouraging signs of easing inflation, particularly in housing. The consumer price index (CPI) increased 0.4% for the month, with annual inflation at 2.9%, meeting expectations, while core CPI rose 0.2% monthly and 3.2% annually, slightly below forecasts. Energy prices, driven by a 4.4% gasoline surge, accounted for 40% of the monthly CPI increase, while food prices edged up 0.3%. Shelter costs rose 0.3% monthly and 4.6% annually, marking the smallest yearly gain since January 2022. Despite positive trends, inflation remains above the Federal Reserve’s 2% target, signaling more work ahead. Stock futures rose, and Treasury yields fell after the report.
• U.K. inflation fell to 2.5% in December, below forecasts, with core inflation easing to 3.2% from 3.5%, according to the ONS. The decline, driven by slower services inflation, strengthens the case for a Bank of England rate cut from 4.75% to 4.5% at its February meeting, despite resilient wage growth. Economists predict inflation may rebound slightly in January but expect it to drop below the 2% target in 2025, easing pressures on households and economic growth.
• On 20/01/2025, Donald Trump plans to sign over 50 executive orders on his first day back in office, with the potential to exceed 100, following his inauguration at the Capitol. These actions, set to be highlighted at an event at Capital One Arena, will include declaring a national emergency at the U.S.-Mexico border to tackle illegal immigration, reversing Biden-era policies, cutting climate-related funding from the Inflation Reduction Act, and reinstating the “Schedule F” policy to streamline federal workforce appointments. The orders aim to swiftly fulfill campaign promises and assert executive authority in reshaping key policies.
• On 21/01/2025, Stocks rallied on Tuesday as Wall Street interpreted President Donald Trump’s first-day trade actions and comments as less aggressive than anticipated. The Dow rose 537.98 points (1.24%) to 44,025.81, the S&P 500 gained 0.88% to 6,049.24, and the Nasdaq advanced 0.64% to 19,756.78. Notable gainers included 3M, up over 4% after strong earnings, and small-cap stocks, with the Russell 2000 climbing 1.9%. Tech giants Amazon and Nvidia rose by more than 2%, though a 3% drop in Apple, following Wall Street downgrades, limited Nasdaq’s gains. While Trump hinted at tariffs on Mexico, Canada, and potentially China, he stopped short of immediate action, issuing a memorandum to review trade practices instead. This softer-than-expected stance eased concerns about broad tariffs reigniting inflation. Wall Street remains focused on Trump’s pro-business promises, including deregulation, which previously boosted banking stocks and other sectors tied to the so-called “Trump trade.”
• On 22/01/2025, Stocks surged on Wednesday, with the S&P 500 hitting a record intraday high of 6,100.81, driven by strong tech sector performance and optimism surrounding President Donald Trump’s new term. The Nasdaq Composite rose 1.28% to close above 20,000 for the first time, while the Dow Jones gained 130.92 points, boosted by Procter & Gamble’s strong earnings. Tech giants Oracle and Nvidia advanced over 6% and 4%, respectively, following Trump’s announcement of a $500 billion AI infrastructure initiative called “Stargate” in collaboration with OpenAI, Oracle, and Softbank. The rally also reflected easing inflation, stable interest rates, and a strong start to earnings season.
• On 23/01/2025, U.S. President Donald Trump delivered a keynote address covering key global issues, including the Ukraine-Russia war, U.S.-EU relations, and interest rates. Trump called for an immediate drop in interest rates worldwide, criticized the EU for treating the U.S. unfairly, and claimed the Ukraine-Russia war would not have occurred under his leadership. He also expressed interest in meeting Russian President Vladimir Putin. NATO Secretary-General Mark Rutte praised Trump’s stance on increasing sanctions against Russia, emphasizing their impact on the struggling Russian economy. Meanwhile, Germany’s finance minister, Jörg Kukies, highlighted the need for targeted reforms to address economic challenges and the country’s strict debt rules.
• On 27/01/2025, The Nasdaq Composite and S&P 500 saw significant losses on Monday amid concerns over a potential artificial intelligence stock bubble triggered by Chinese startup DeepSeek’s competitive advancements. The Nasdaq dropped 3.07% to 19,341.83, while the S&P 500 fell 1.46% to 6,012.28. DeepSeek’s release of R1, a low-cost reasoning model outperforming major competitors, raised fears about the sustainability of Silicon Valley’s heavy AI investments. AI-related stocks like Nvidia, Broadcom, and AMD plunged, along with derivative plays like energy providers. However, the Dow Jones Industrial Average gained 0.65%, supported by defensive rotations into sectors like consumer staples and healthcare. Traders remain on edge, awaiting key quarterly results from major tech companies and the Federal Reserve’s interest rate decision later this week.
• On 28/01/2025, Nvidia rebounded on Tuesday, gaining 8.8% after Monday’s record-breaking $595 billion market value loss caused by fears of an AI stock bubble sparked by Chinese startup DeepSeek’s cheaper, open-source AI model. Retail investors seized the opportunity to buy the dip, helping restore some confidence in the broader tech sector. Despite the rally, Nvidia shares remain down 9% for the week, reflecting lingering concerns about competition in the AI market. DeepSeek’s advancements, which reportedly outperformed OpenAI at a fraction of the cost, have raised questions about the sustainability of high investment levels in AI. However, Nvidia welcomed DeepSeek’s innovation as a positive step for AI development, while analysts maintained their confidence in Nvidia’s leadership, viewing the developments as a potential catalyst for faster AI adoption across industries.
• Australia’s inflation slowed to its lowest rate in nearly four years in the December quarter, with a drop in housing costs helping core inflation ease and increasing the likelihood of an interest rate cut by the Reserve Bank of Australia (RBA) as early as February. Markets now see an 80% chance of a 0.25% cut to the current 4.35% cash rate, which would be the first easing since the pandemic. The Australian dollar dipped 0.3% following the news, while bond markets rallied. Consumer prices rose just 0.2% in Q4, bringing annual inflation down to 2.4%, within the RBA’s 2-3% target. Core inflation also cooled, with the trimmed mean CPI rising only 0.5% in the quarter, the slowest since mid-2021. Some economists now expect the RBA to start cutting rates in February rather than May. While services inflation remains at 4.3%, goods inflation fell to its lowest since 2016. However, the strong labor market, with unemployment around 4.0% and wage growth slowing to 3.5%, may delay rate cuts.
• On 30/01/2025, The U.S. economy grew at an annualized rate of 2.3% in Q4 2024, slightly below expectations of 2.5% and down from 3.1% in Q3, according to the Commerce Department. For the full year, GDP rose 2.8%, driven largely by strong consumer spending, which grew 4.2% and accounted for about two-thirds of economic activity. Government spending also contributed, increasing 3.2%. However, trade and private investment weighed on growth, with imports and exports both falling 0.8%, and private domestic investment declining 5.6%. Initial unemployment claims dropped sharply to 207,000, indicating continued labor market strength. Despite lower inflation, the Federal Reserve remains cautious about further rate cuts, having already reduced its key rate by a full percentage point in late 2024. Meanwhile, the personal saving rate fell to 4.1%, the lowest in two years, as consumers relied more on savings to maintain spending.