In the early hours, U.S. equity futures barely budged as traders held their breath for the Consumer Price Index (CPI) report, which hit the wires at 8:30 a.m. ET. Economists had their fingers crossed for a modest 0.3% month-over-month uptick in January consumer prices, a slight dip from December's 0.4% rise. The annual inflation rate was expected to hold steady at 2.9%, with core inflation—excluding the volatile food and energy sectors—forecasted to climb 0.3% monthly and ease to 3.1% year-on-year.

However, the numbers told a different story. The CPI surged by 0.5% on a monthly basis and 3.0% annually. Core inflation also rose 0.4% from December to January and jumped 0.4% annually. This January CPI report is the last snapshot before the full brunt of Trump's tariffs hits, including a 10% levy on Chinese goods and tariffs on all steel and aluminum imports. The outlook for monetary policy? Not so rosy. Bloomberg reports that traders have now pushed their expectations for the next Federal Reserve rate cut from September to December. Meanwhile, futures took a nosedive, with the Nasdaq 100 flipping from positive territory to a 1% drop in mere minutes.

Federal Reserve Chair Jerome Powell is set to speak before the House Financial Services Committee, continuing his semiannual monetary policy testimony. Yesterday, he repeated his recent message to U.S. lawmakers: patience is key when it comes to interest rates. In other words, let's see how current policies play out before making any moves. The Fed is taking a short-term approach, reacting to macroeconomic data as it comes in. .

Wall Street was a bit subdued on Tuesday. The Nasdaq 100 took a slight hit, though it stayed close to the record it set in mid-December. Meanwhile, the Dow Jones and the S&P 500 managed to inch up, buoyed by reliable stalwarts like Coca-Cola, DuPont, and Apple. Apple, in particular, got a boost from whispers of a deal with Alibaba to integrate AI features into iPhones in China. Earnings season in the U.S. is always a spectacle, even if the market's theatrics—perhaps driven by algorithmic trading—are now a daily occurrence, with dramatic surges and plunges triggered by the tiniest decimal changes.

In Europe, The FTSE 100 reached new heights, while the Stoxx Europe 600 index, buoyed by industry, technology, and energy sectors, also reached a new high, above 547 points. Notably, it achieved this milestone without the help of its heavyweight, Novo Nordisk, whose market value is slimming down as fast as its popular drug Wegovy helps users shed pounds. 

In this climate of extremes, I can't help but focus on two headline-grabbing stocks as we kick off the year: Meta Platforms and Tesla. Let's start with Tesla, which has been on a losing streak, enduring six consecutive sessions of decline and dropping over 18% in 2025. Tesla faces a significant challenge: its core customer base doesn't align with the values and policies of the current U.S. administration. This isn't where you'd find Elon Musk's conflicts of interest, but it's clear that Tesla's sales are slipping, making its lofty valuation multiples all the more glaring. To be fair, Tesla's stock price did double in 2023 (+102%) and climbed another 63% in 2024. And let's not forget Musk's grand vision of creating an ecosystem that extends beyond cars. However, in the short term, the market is punishing Tesla for its sales struggles, and it risks alienating a segment of its target audience.

Meanwhile, Meta Platforms is currently the star of the show. I had to double-check the price chart this morning to believe it myself: Meta's share price has climbed for 17 consecutive days. The last time it dipped was on Thursday, January 16th, and since then, it's been on an upward trajectory. The result? A 23% increase in 2025, setting record after record. Curious about whether such a winning streak had ever happened since Meta, formerly Facebook, went public, I dug into the archives. The answer? Never. I even dusted off a makeshift model from our database to find any stock that had risen for 17 straight sessions in the past. Alas, my search came up empty. Either my model needs a tune-up, or this is a rare event in the last 25 years for American stocks in major indexes. If any reader has insights or data to share, I'm all ears. So, what's fueling this 17-day rally? Investors are rekindling their faith in Mark Zuckerberg's vision. He's hit pause on his metaverse obsession and is diving headfirst into artificial intelligence. Meta, with its open-source language model Llama, holds a unique position in the American tech landscape. The company is also preparing for the hardware race by negotiating to acquire FuriosaAI, a South Korean start-up specializing in AI chips. Among the so-called "magnificent seven" tech giants, Meta is the standout performer in 2025. Apple, Nvidia, Microsoft, Alphabet, and Tesla have all been on the decline since January 1st, while Amazon has managed a modest 6% rise. Meta, it seems, is the one to watch.

On the corporate side, there is a new series of interesting earnings reports today, with guest stars Cisco Systems, AppLovin, CVS Health, Dominion Energy, Robinhood and Kraft Heinz in the US. EssilorLuxottica, Heineken, Siemens Energy, Ahold Delhaize, Schindler, Michelin are expected on the eastern shore of the Atlantic.

In Asia Pacific, Japan, which was at rest yesterday, is recovering with a rise of 0.4%. China is rebounding, with the CSI300 up 0.3% and the Hang Seng gaining almost 2%, boosted by a Alibaba in great shape in the wake of the development of Chinese AIs and rumors of a partnership with Apple. South Korea and Australia also managed to gain around 0.5%. It is more complicated in India, where SENSEX lost 0.3% and confirmed its difficult start to the year: the Indian market is one of the few major financial centers to post a negative performance in 2025. European indices are mixed.

Today's economic highlights:

Consumer Price Index, he DOE crude oil inventories and the federal budget balance are on the calendar. See the full calendar here.

  • Dollar: EUR 0.9646 GBP 0.8034
  • Gold: $2,867
  • Crude Oil (BRENT): $76.26 WTI: 72.48
  • Rate United States 10 years: 4.60%
  • BITCOIN: US$95,000

In corporate news:

  • Gilead sciences: The company's fourth-quarter results exceeded expectations with an adjusted EPS of $1.90 and revenue of $7.57 billion, leading to a 2.6% dividend increase and an upward revision of its 2025 EPS forecast to $7.70 - $8.10, which boosted its shares by 4%.
  • Restaurant brands international: Reported mixed Q4 results with higher adjusted operating income and revenue that beat forecasts, an increased dividend, but also experienced slowing sales growth and missed some earnings estimates.
  • Lyft: The Q4 earnings exceeded expectations with a profit and an EPS of $0.06, despite lower revenue and bookings forecasts due to pricing pressures and competition, leading to a share price decline and the announcement of a $500 million share repurchase program.
  • Apple: Stocks, particularly in tech and property sectors, closed higher, boosted by Alibaba's share surge following advancements in its partnership with the company, amidst broader market concerns about US inflation and potential shifts in iPhone production strategies by suppliers.
  • Doordash: Reported strong fourth-quarter results with revenue surpassing estimates at $2.87 billion, driven by robust holiday season demand and a significant increase in monthly active customers, although its Q1 2025 gross bookings guidance fell below expectations.
  • Freshworks: Exceeded fourth-quarter earnings expectations and provided an annual revenue forecast for fiscal year 2025 that surpasses estimates, driven by consistent software demand.
  • Cvs health corporation: Reported a better-than-expected fourth-quarter profit with a notable increase in pharmacy business revenues and a slowdown in medical cost increases, alongside issuing a fiscal year 2025 adjusted EPS outlook of $5.75-$6.00, despite a 44% drop in EPS for the quarter.
  • Confluent: Reported a stable Q4 non-GAAP net income of $0.09 per share, a 22% increase in revenue to $261.2 million, surpassing estimates, and announced partnerships with Databricks and Jio Platforms to advance real-time AI and next-gen applications, while forecasting a fiscal year 2025 adjusted EPS of $0.35.
  • Baidu: Is negotiating with UAE officials to introduce its autonomous ride-hailing service, while planning to launch its advanced AI model, Ernie 5, in late 2025, and its CEO emphasizes the importance of investing in AI and cloud infrastructure despite new efficiencies and partnerships.

Analyst Recommendations:

  • Lyft: TD Cowen analyst John Blackledge cut the target on Lyft Inc. Class A to $14 from $16. Maintains hold rating.
  • Coty: Canaccord Genuity analyst Susan Anderson cut the target on Coty Inc. to $8 from $10. Maintains buy rating.
  • Upstart: J.P. Morgan analyst Reggie Smith raised the recommendation on Upstart Holdings Inc. to neutral from underweight.
  • PPG Industries:  J.P. Morgan analyst Jeffrey Zekauskas cut the recommendation on PPG Industries Inc. to neutral from overweight.
  • EOG Resources: RBC Capital Markets analyst Scott Hanold raised the recommendation on EOG Resources Inc. to outperform from sector perform.
  • On Holding: Goldman Sachs analyst Richard Edwards cut the recommendation on On Holding AG Class A to neutral from buy.
  • Vertex Pharmaceuticals: Canaccord Genuity analyst Whitney Ijem raised the recommendation on Vertex Pharmaceuticals Inc. to hold from sell
  • Moderna: BofA Global Research cut the target on Moderna Inc. to $34 from $41. Maintains underperform rating.
  • Take-Two: Deutsche Bank analyst Benjamin Soff raised the target on Take-Two Interactive Software Inc. to $235 from $190. Maintains buy rating.
  • Walmart: Bernstein raised the target on Walmart Inc. to $117 from $106. Maintains outperform rating.