Punch, counterpunch
- Trump initially placed duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Energy imported from Canada would be taxed at 10%
- But on Monday, Trump and the leaders of Mexico and Canada announced deals to forestall a potential trade war for 30 days as both neighbors agreed to placate the American president by boosting efforts to boost border security and combat drug trafficking
- As a countermeasure, China imposed a 15% levy on less than $5 billion of US energy imports and a 10% fee on American oil and agricultural equipment, and will also investigate Google for antitrust violations
- President Xi Jinping’s response appeared carefully calibrated to avoid major blowback on China’s economy
Banking Sector on the Move
European banks have frequently appeared on the news recently, for both negative but also encouraging reasons:
- Raiffeisen Bank International has been accused of making money from firms that have been supplying Russian military – Unichim & EP provided aid to sanctioned companies and paid 62 million RUB for Raiffeisen’s services
- Julius Baer shares fell after 2024 earnings, cutting measures and governance announcements disappointed investors
- On the positive side – recent attempt in consolidating the Italian banking sector with the takeover bid for Mediobanca by Banca Monte dei Paschi – the bid, supported by Italian government, has been rejected by Mediobanca’s board
Seasonality - as the universe, so the market
Seasonality in financial markets is a fascinating aspect, closely tied to the idea that the universe moves in cycles. Of course, all of this should be taken with a grain of salt, but it is interesting to note that…
- There is an old Wall Street saying that “as January goes, so goes the year“. This refers to the historical pattern where a positive January close for the S&P 500 has been followed by a positive year almost 80% of the time
- Less encouraging is the Year of the Snake, according to the Chinese zodiac calendar. Historically, these years have been among the least favorable for the world’s leading market
- As we enter February, it’s worth noting that seasonally we are now in one of the more challenging months for equity markets – alongside August and September
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