Wednesday's Markets Update (February 5, 2025)

05 Feb 2025 by rate3

On Wednesday, equities increased, supported by falling business optimism and slowing services growth, despite business employment exceeding forecasts. Nvidia and Amgen surged, while Alphabet and AMD dropped due to weak earnings. Imports hit a record high amid expectations of tariffs. EU private businesses showed growth for the first time in six months. Gold reached a new ATH, again. China's services activity slowed. BTC, SOL, and ETH remain in limbo following the crash caused by Trump's tariffs.

Details

Private businesses added 183K jobs in January, surpassing December's 176K and forecasts of 150K. Services led with 190K hires, while goods-producing sectors lost 6K jobs. Pay growth was 4.7% for job-stayers and 6.8% for job-changers. 1Y trend: "Up" (ADP)
The trade deficit widened to $98.4B in December, the highest since March 2022, as imports surged 3.5% to $364.9B and exports fell 2.6% to $266.5B. The 2024 deficit rose 17% to $918.4B, with the largest gaps recorded with China ($-295.4B), the EU ($-235.6B), Mexico ($-171.8B), Vietnam ($-123.5B) and Canada ($63.34B). 1Y trend: "Down, Increasing"
The ISM Services PMI fell to 52.8 in January, below forecasts of 54.3, signaling slower growth. Business activity and new orders rose less, while employment and exports improved. Poor weather and tariff concerns were cited, but current impacts were minimal. 1Y trend: "Up" (ISM)
The Economic Optimism Index rose slightly to 52 in February, below expectations of 53. Confidence in Federal Economic Policies improved to 48.8, but remained pessimistic for the 42nd month. The Six-Month Economic Outlook fell to 51.1, while the Personal Financial Outlook dropped by 6.8% to 56.0. 1Y trend: "Up" (Tech)

Crypto

Trump signed an executive order to create a sovereign wealth fund, potentially enabling government investment in BCT. Treasury and Commerce will lead the effort, with BTC advocates like Senator Lummis and Wayne Vaughan highlighting its significance for crypto markets. (source)

World Markets

The Eurozone Composite PMI rose to 50.2 in January, marking the first private sector expansion since August 2024. Services grew (51.3), while manufacturing contracted more slowly (46.6). Input costs hit a 21-month high, raising output charges, but firms remained optimistic. 1Y trend: "Down" (PMI)
China’s Caixin Services PMI fell unexpectedly to 51.0 in January, the slowest expansion since September, as new business growth eased, employment dropped, and price inflation slowed. Input costs rose, but selling price increases moderated. Sentiment improved slightly but remained subdued. 1Y trend: "Down" (PMI)

Comment: What's Up With Megalomaniacs?

As management technologies have progressed, particularly with the advent of personal computers and the Internet in the 1960s, the executive branch of government has gained a powerful new tool to centralize its control over citizens. Today, as corporate social networks harvest vast amounts of private data from people around the globe, this control has become Orwellian and is routinely misused by those at the top of the government hierarchy. This situation poses an extreme danger, not only to all forms of democratic and decentralized governance but also to the future of humanity itself. Transforming our world into a machine that produces thrills and extravagant experiences for a handful of megalomaniacs represents one of the bleakest forms of dystopia imaginable.

To counter this trend, it is imperative to urgently reduce the executive powers granted to individuals across all branches of government and to transfer those powers to elected representative bodies. The highest office in the land should be abolished altogether. Our planet no longer requires rulers; instead, it needs collective housekeepers who prioritize the well-being of the entire community.