Silver and Gold Take Off as Davos Highlights Geopolitical Tensions
US stocks were mixed on Friday, as Wall Street capped a turbulent week stoked by President Trump's heated pursuit of Greenland, while chipmaker Intel (INTC) sank after its earnings disappointment.
The Dow Jones Industrial Average (^DJI) retreated roughly 0.6%. The S&P 500 (^GSPC) rose slightly, and the Nasdaq Composite (^IXIC) gained 0.2%.
All three major indexes posted back-to-back weekly losses.
Intel posted worse-than-expected first quarter guidance late Thursday, raising concerns about its turnaround. The chip giant swung to a quarterly loss as it struggled to meet demand for its server chips used in AI data centers. Shares sank over 16% Friday.t
Stocks recorded weekly losses for the second week in a row as the relief that lifted stocks for two straight days of gains wore off. After a rough start to a holiday-shortened trading week, investors took heart from Trump cooling his Greenland rhetoric and backtracking on proposed tariffs on NATO allies. Trump argued that his moves worked out, as the market was "just about even" for the week.
That said, a shift out of US assets is gaining traction as US-EU tensions weigh on the dollar (DX-Y.NYB). And gold (GC=F) headed toward its best week since 2020, while silver (SI=F) topped $100 per ounce.
Elsewhere, there were signs of progress on the China-US front, as TikTok and ByteDance finally closed a deal with Oracle (ORCL) and others to let it operate in the US. Meanwhile, Beijing has reportedly told China's big techs they can start preparations to order Nvidia's (NVDA) H200 chips, whose imports are currently curbed.
Investors are bracing for a blockbuster earnings week next week, along with the Federal Reserve's meeting and interest rate decision. Trump said Thursday he has a pick for the next Fed chair in mind after wrapping up interviews, and he will name the replacement for Jerome Powell "soon."
Sean Conlon and Pia Singh of CNBC also report the S&P 500 ends Friday little changed, but posts second straight losing week amid wild trading:
U.S. equities were mixed on Friday, as the Nasdaq Composite extended its gains amid easing geopolitical fears and the Dow Jones Industrial Average underperformed.
The tech-heavy Nasdaq advanced 0.28% and settled at 23,501.24, while the blue-chip Dow lost 285.30 points, or 0.58%, closing at 49,098.71. A nearly 4% slide in Goldman Sachs weighed on the 30-stock index. The broad market S&P 500 eked out a marginal gain of 0.03% to end at 6,915.61.
Nvidia and Advanced Micro Devices were among those supporting the Nasdaq and the S&P 500, climbing 1.5% and more than 2%, respectively. The moves come as people familiar with the matter told CNBC that Nvidia CEO Jensen Huang is planning to visit China in the coming days. Other tech names like Microsoft saw a boost as well.
Intel shares, in contrast, tumbled around 17% after the chipmaker reported a disappointing first-quarter outlook.
The three major averages rallied for a second session on Thursday as investors were appeased by news of easing trade tensions and geopolitical risk.
The indexes began their rebound on Wednesday after President Donald Trump called off his threatened tariffs on the imports of eight European nations — which were set to start Feb.1 — and announced that he and NATO Secretary General Mark Rutte reached a “framework of a future deal with respect to Greenland.” The tariff threat briefly spurred a flight from U.S. assets as investors turned to the “sell America” trade at the start of the holiday-shortened trading week.
Trump had also told CNBC Wednesday that “we have a concept of a deal” with the Arctic island.
“Investors this week welcomed a term that kind of started around Liberation Day or shortly thereafter — the ‘TACO’ trade,’” said Scott Ellis, managing director, corporate credit at Penn Mutual Asset Management. “Maybe investors will look to that in the future as Trump kind of walks back and this administration walks back some of the rhetoric in order to get deals done.”
To be sure, Greenland Prime Minister Jens-Frederik Nielsen said on Thursday he doesn’t know what’s in the “framework” deal that Trump announced, stressing that any such deal must respect Greenland’s sovereignty and territorial integrity.
While the combined gains on Wednesday and Thursday had erased the Dow’s losses from earlier in the week, Friday’s move put it back in the red. The 30-stock Dow fell 0.5% on the week. The S&P 500 lost about 0.4%, while the Nasdaq slipped less than 0.1% in the period — both posted back-to-back losing weeks.
It was another volatile week on Wall Street dominated by President Trump's remarks prior, during and following his visit to the World Economic Forum at Davos.
The only good news is NATO Secretary General Mark Rutte who seems to have Trump's attention managed to strike some sort of deal with respect to Greenland but all sides have yet to formally approve and details remain vague.
Looking at S&P sectors, Energy and Materials benefited from the geopolitical tensions, gaining 3.3% and 2.1% respectively this week:
Worth noting the iShares Silver Trust (SLV) and SPDR Gold Shares (GLD) had another exceptional week, hitting fresh new record levels on geopolitical turmoil:
If you ever needed proof that parabolic charts can get more overbought, there it is, short sellers are getting steamrolled trying to short silver and gold.
Still, there will be a pullback back to the 10-week exponential moving average, that I guarantee you.
Here are the best performing large, mid and small cap US stocks this week (full list for each is here, you need to change exchange):
Once again, micro cap stocks took off the most:
Next week is a big earnings week as the tech powerhouses report, keep an eye on post-earnings reaction because that tells you a lot.
And be careful with stocks that run up too much, too fast headed into earnings, Intel being the perfect example today as it got clobbered 17% following weak earnings:
It will likely pull back some more but the weekly chart remains bullish so don't be surprised if it heads back up at some point and resumes an uptrend.
Alright, let me wrap it up there, been a long week.
Below, Tom Lee, Fundstrat, joins 'Closing Bell' to discuss the week for stock markets, the earnings reports next week and much more.
Next, Jeff deGraaf, Renaissance Macro, joins 'Closing Bell' to discuss the recent breakout in regional banks, how small caps can perform going forward and much more.
Third, Dan Niles, Niles Investment Management, joins 'Fast Money' to talk whats ahead for big tech earnings next week including Apple and Microsoft.
Fourth, 'Fast Money' traders talk precious metal prices continuing to climb.
Lastly, CBC's Power & Politics' Political Pulse Panel breaks down duelling speeches at the World Economic Forum in Davos, Switzerland, this week.
Comments
Post a Comment