Following his second-term inauguration, President Donald Trump has announced multiple executive orders aimed at addressing inflation, energy, and immigration issues. Nonetheless, he has postponed any decisions regarding tariffs until next month. Trump suggested the possibility of enacting a 25% tariff on Mexico and Canada beginning on February 1.
Additionally, he has granted the Chinese-operated social media platform TikTok a 75-day period to secure a U.S. owner, failing which a potential ban in the U.S. may follow.
U.S. stock futures are trending upwards as market participants react to Trump’s policies and get ready for forthcoming corporate earnings. Futures on major indexes are experiencing an approximate increase of 0.4%. Meanwhile, 10-year Treasury yields have decreased, trading under 4.6%, with the U.S. dollar softening against multiple currencies.
Oil futures have fallen by over 2%, and gold futures have seen a 0.5% decline. Netflix shares are up about 1% in premarket trading in anticipation of its quarterly earnings announcement. Analysts forecast Netflix will achieve a 15% year-over-year revenue growth, reaching $10.13 billion, with earnings estimated at $1.84 billion, or $4.23 per share.
The stock has appreciated by more than 75% in the past year. After a spike in value prior to Trump’s inauguration, bitcoin has slightly receded, trading above $104,000 with a 2% increase early Tuesday. Bitcoin’s price fluctuations have been significant, with shares of MicroStrategy, a bitcoin buyer, dipping less than 1% in premarket trading.
Impact of Trump’s executive orders on markets
Concurrently, shares of cryptocurrency exchange Coinbase, bitcoin mining company Mara Holdings, and Riot Platforms are on the rise. However, Apple shares have fallen nearly 2% in premarket trading after analysts at Jefferies reduced the stock’s rating from “hold” to “underperform,” citing worries about weak demand for new features.
Jefferies established a price target of $200.75, down from around $230 at Apple’s Friday close. Research firm Canalys reported that Apple has surrendered its place as the top smartphone vendor in China. Greg Valliere, Chief U.S. Policy Strategist at AGF Investments, observed that “the presence of tech executives from Silicon Valley signifies a major shift in influence, suggesting a likely continuation of a favorable regulatory environment for tech firms in the next four years.”
In spite of a generally optimistic market atmosphere, Longview Economics has released a prudent trading suggestion.
They point to their assessments of risk appetite indicators and put-to-call ratios for signs of market complacency, urging care as the S&P 500 nears crucial resistance points. Investor focus is intensifying on the upcoming earnings announcements from several key firms. Before market opening, both Charles Schwab and D.R. Horton will reveal their financial figures.
Following market closure, important earnings are anticipated from United Airlines, Interactive Brokers, Seagate Technology, and Capital One Financial. Richard Hunter, head of markets at Interactive Investor, stated, “The subdued market reaction to the President’s executive actions indicates investor relief. However, the genuine evaluations lie ahead as the ramifications of tax reductions and regulatory shifts become apparent.”
As the broader market sentiment appears optimistic, attention will remain fixed on the earnings season and any subsequent policy proclamations from the White House.
Investors are hopeful for the rally to maintain its pace as Wall Street resumes trading after the long weekend.
