Macrosynthesis
TLDR
Trump Executive Orders: Sweeping policy shifts reshape federal priorities.
Crypto Push: Trump boosts U.S. blockchain leadership.
Fed Under Pressure: Trump demands immediate interest rate cuts.
Project Stargate: $500B AI initiative to dominate innovation.
Airline Earnings: United soars; American stumbles on guidance.
Trump Inauguration: A Vision for "America First"
President Donald Trump’s inauguration marked the beginning of a second term with promises of national revival under his “America First” agenda. The address highlighted his focus on border security, economic protectionism, and energy independence. Symbolic measures like renaming Denali back to Mount McKinley and renaming the Gulf of Mexico to the Gulf of America (which cracked up Hillary Clinton) set the tone for a combative, unilateral approach to governance, aiming to reassert American strength globally and domestically.
Trump’s Early Executive Orders: Reshaping Policy Directions
President Trump wasted no time leveraging executive power to implement expected, sweeping changes across immigration, trade, and federal governance. Key directives included declaring a national emergency at the southern border and reinstating the "Remain in Mexico" policy. Military resources were reallocated to border enforcement, and birthright citizenship underwent redefinition, triggering legal challenges.
On trade, Trump ordered reviews of the U.S.-Mexico-Canada Agreement (USMCA) and proposed 25% tariffs on Canadian and Mexican imports. He also initiated plans for an “External Revenue Service” to centralize tariff collection and halted U.S. participation in the Global Tax Deal.
In federal governance, Trump launched the Department of Government Efficiency, led by Elon Musk, to identify spending cuts. Federal hiring freezes and reviews of civil service protections underscored his intent to consolidate executive power. Meanwhile, diversity, equity, and inclusion programs were dismantled, along with several Biden-era initiatives on energy and climate change.
Oil Prices Fall on Trump's Requests to Lower Oil Prices, Despite Supply Constraints
WTI crude oil prices were down over 3%, marking their steepest weekly decline since November. The drop came after President Trump spoke at the Davos forum, where he announced a plan to pressure Saudi Arabia and OPEC to lower crude prices. He also expressed intentions to ramp up U.S. oil production. At the same time, Trump raised concerns about global economic growth and oil demand by threatening tariffs on China, Canada, and Mexico.
On the supply front, the EIA reported that U.S. crude inventories fell by 1 million barrels, marking their ninth consecutive weekly decline and dropping below the five-year seasonal average. Distillate fuel stocks saw a notable reduction, while gasoline inventories continued to increase.
Trump’s Crypto Executive Order: Boosting Blockchain Leadership
President Trump signed an executive order to establish a federal working group, including key agencies like the Treasury, SEC, and CFTC, tasked with drafting a comprehensive regulatory framework for digital assets. The group will provide recommendation on creating a national digital asset stockpile and propose legislative actions to secure the U.S.’s dominance in the global crypto market.
The announcement set off speculation that other countries would follow suit on creating stockpiles. If executed, the country demand would drive crypto prices significantly higher. Blackrock's CEO said the actions could push Bitcoin to $700,000 per coin - a 700% increase.
The U.S. gold stockpile, for benchmarking, sits at a value of about $500 Billion.
Crypto advocates, such as Coinbase executives, praised the administration for recognizing the industry's potential, though some Bitcoin enthusiasts expressed disappointment over the lack of immediate government investment in major cryptocurrencies. Additionally, Trump’s directive includes plans to promote private sector partnerships and solidify the U.S. as a global hub for digital innovation.
Trump Halts Payments Under Inflation Reduction Act
President Donald Trump signed an executive order halting federal spending under the Inflation Reduction Act (IRA), calling for an immediate review of grants, loans, and subsidies tied to clean energy initiatives. Labeling the IRA as the “Green New Scam,” Trump directed agencies to reassess funds allocated to projects like electric vehicles, renewable energy, and hydrogen infrastructure.
The move aligns with Trump’s campaign promise to rescind unspent IRA funds and redirect them toward offsetting planned tax cuts. However, clawing back committed funds may prove challenging, as agencies like the Energy Department and EPA have already disbursed significant portions of the allocated $170 billion.
Trump’s order also terminated Biden’s American Climate Corps program and instructed the EPA to consider eliminating the "social cost of carbon" metric, signaling a pivot away from climate-focused policies toward prioritizing fossil fuel energy.
Project Stargate: Driving U.S. AI Innovation
The $500 billion Stargate Project, led by OpenAI and SoftBank, announced last week is set to revolutionize AI infrastructure in the United States. Backed by key partners like Oracle, NVIDIA, Microsoft, and Arm, the initiative will build 20 advanced data centers, with construction already underway in Texas. Arm’s involvement centers on its cutting-edge chip architecture, which will be integrated into the project to optimize AI workloads, enabling more efficient and scalable computational power.
Elon Musk was quick to criticize the deal, stating on X that the group doesn't have to money to make the project happen. This marks the first time Musk has taken a public stance opposite of Trump in many months.
Slowing GDP, Decline in Leading Indicators
Interest rates may not be the only headwinds for Trump. Just this week, the U.S. economy showed signs of slowing as the Conference Board's Leading Economic Index (LEI) fell 0.1% in December, reversing a 0.4% gain in November. Weakness in consumer confidence, building permits, and new business orders contributed to the decline, signaling potential economic headwinds.
GDP growth also decelerated, with the S&P Global Flash Composite PMI easing to 52.4 in January, its lowest in nine months. While manufacturing returned to slight expansion, the service sector slowed significantly. Inflationary pressures surged, with input costs rising across sectors. Despite these challenges, optimism around new policies boosted hiring to its fastest pace in over two years.
BOJ Hikes Rates to 17-Year High
The Bank of Japan raised its short-term interest rate to 0.5%, the highest since 2008, signaling confidence in stable inflation and rising wages. Governor Kazuo Ueda indicated further hikes may follow, though timing remains data-dependent. The yen strengthened after the announcement, while markets priced in another rate increase this year.
This policy shift comes with risks. A similar hike last summer led to a collapse in the carry trade—where investors borrow yen to fund higher-yield investments—triggering a global market correction. The BOJ was forced to reverse course, highlighting the precarious balance between tightening policy and financial market stability.
As external uncertainties, including trade tensions and global economic headwinds, persist, the BOJ faces a challenging path to normalize rates without destabilizing markets. For now, the bank aims to cautiously navigate its exit from decades of deflation.
Energy Stocks Drop, Healthcare Stocks Show Promise
The S&P 500 sectors displayed a mix of gains and losses last week, with most sectors finishing higher. Leading the way, Telecom surged 4%, Healthcare rose 2.9%, and Industrials gained 2.4%. Information Technology and Financials also posted strong gains, up 1.9% and 1.2% respectively. Consumer Staples, Utilities, Consumer Discretionary, Materials, and Real Estate saw more modest increases, ranging from 0.7% to 1%. The notable exception was Energy, which dropped 2.9%, making it the only sector to decline.
Upcoming Week
Traders anticipate major events next week, including policy updates from President Trump and central bank decisions. The Federal Reserve's interest rate decision on Wednesday takes center stage, with expectations of holding rates steady, while the ECB and BoC may implement 25bps cuts. Key economic releases this week include GDP data for the US and Eurozone, as well as inflation figures.
But the big focus is about earnings and whether companies are truly growing at the pace they need to support the lofty valuations in the market.
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Natural Gas
+4.45% (1M Chg)
+82.22% (YoY Chg)
Gold
+2.6% (1W Chg)
+5.26% (1M Chg)
Coffee
+6.66% (1W Chg)
+87% (YoY Chg)
Potatoes
+6.03% (1W Chg)
-7.22% (YoY Chg)
Company News
LevelFields AI Stock Alerts Last Week
VIGL reported positive Phase 1 results for their Alzheimer’s trial, resulting in a one-day return of over 15%. ARWR surged 9% after announcing its addition to the S&P Small Cap 600. DNOW rose over 8% after unveiling a $160M stock buyback. NBBK climbed over 4% following a buyback announcement. WPRT surged 7.5% after appointing a new CEO.
GE Earnings Propel Stock to 18-Year High
GE Aerospace reported Q4 earnings that exceeded expectations, driven by 14.3% revenue growth to $10.81 billion and a 103% increase in adjusted EPS to $1.32. Strong demand in commercial engines boosted orders by 46%, while defense revenue grew 4.4%. The company announced a 30% dividend hike, a $7 billion stock buyback plan for 2025, and a promising 2025 outlook with projected double-digit revenue and EPS growth. Free cash flow is expected to reach $6.3–$6.8 billion. Shares surged 6.6%, reaching their highest level since 2007, signaling strong investor confidence in the company’s strategic momentum.
United Airlines Soars While American Airlines Stumbles
United Airlines reported a strong Q4, with adjusted EPS of $3.26 beating expectations of $3.00 and revenue rising 8% year-over-year to $14.7 billion. Growth was fueled by premium and international travel demand, with Q1 2025 EPS guidance of $0.75–$1.25 surpassing the $0.54 consensus. United also forecast full-year EPS of $11.50–$13.50, driven by robust loyalty programs and operational improvements, sending its stock up 180% over the past year.
In contrast, American Airlines delivered better-than-expected Q4 adjusted EPS of $0.86 and $13.66 billion in revenue but issued a disappointing Q1 2025 outlook, forecasting an adjusted loss of $0.20–$0.40 per share. Rising costs, lower capacity, and labor agreements weighed on the airline, overshadowing 4.6% revenue growth. Shares dropped nearly 9% as investors reacted to the weaker forecast despite trans-Pacific travel gains and loyalty program growth.
Paul Pelosi’s Tempus AI Investment Sparks Controversy
Paul Pelosi, husband of former House Speaker Nancy Pelosi, recently acquired $100,000 in Tempus AI (TEM) call options. This Chicago-based healthcare AI company, specializing in molecular and clinical data analysis, has seen its stock surge 60% since its IPO, climbing from $32 to $50.50. After reports of the trade this week, the stock surged over 45%.
The investment has drawn scrutiny given Pelosi's significant returns on past trades and the ongoing debate over lawmakers' financial dealings. Critics argue this underscores the need for stricter regulations on congressional stock trading to address potential conflicts of interest. A bipartisan bill to end trading of stocks by Congress was introduced two weeks ago. It will be interesting to see if it gets to the floor for a vote and who votes against it.
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MONDAY
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WEDNESDAY
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