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Northern Data (NB2) is poised to capitalize on the increasing demand from artificial intelligence (AI) and high-performance computing (HPC) sectors, according to a report by Canaccord Genuity. The brokerage initiated coverage of Northern Data with a buy rating and set a price target of 60 euros ($62), highlighting the company's strategic positioning in the AI market. Northern Data's Taiga Cloud business is seen as a key player in what is described as a "generational opportunity" in AI infrastructure. The company, which is 52% owned by Tether, is also considering divesting its Peak Mining business. This move could provide the necessary funds to expand its GPU and data-center capabilities, potentially enhancing its growth prospects beyond fiscal year 2025. Despite a significant 74% rally in its stock price over the last three months, Canaccord believes there is still room for further upside, driven by evident investor interest.
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Since Donald Trump's election victory, the US dollar has strengthened significantly, echoing its performance after his 2016 win. The DXY Index, which tracks the dollar's value against major trading partners, has not shown signs of weakening this time, supported by Trump's economic policies and the Federal Reserve's actions. Despite the traditional negative impact of a strong dollar on risk assets, Bitcoin has surged, though its growth might moderate. Trump's intention to impose tariffs could heighten global geopolitical tensions, potentially increasing the dollar's appeal as a safe-haven. The US economy is outperforming others with over 3% GDP growth and higher inflation, leading to elevated federal funds rates and only two anticipated rate cuts in 2025. This scenario has led to an appreciation of the dollar and rising yields, which in turn might be putting downward pressure on Bitcoin's price.
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Starbucks Corporation (SBUX) is anticipated to recover in 2025 under the leadership of new CEO Brian Niccol, who took over in September 2024. Analyst Peter Saleh from BTIG highlights that Niccol's focus on improving service speed, simplifying pricing, and enhancing store operations could set the stage for substantial growth in same-store sales and earnings by 2026. Despite a challenging 2024, where Starbucks experienced a 7% decline in global comparable-store sales, Saleh remains optimistic, setting a price target of $115, suggesting about a 30% upside from current levels. The company's financial performance has been lackluster, with international sales dropping significantly and operating profit margins shrinking. However, Saleh believes that 2025 will be a year of transition and investment, aiming for a sustainable turnaround. Starbucks shares ended 2024 down 5%, underperforming compared to the S&P 500's 23% advance, but there's hope that Niccol's strategies will rejuvenate the brand's market position.
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The article discusses the financial landscape at the end of 2024 and the beginning of 2025. U.S. stocks concluded the year on a down note, but the S&P 500 still managed a significant annual gain of 23.31%, driven largely by artificial intelligence stocks like Nvidia and Broadcom. However, the market's momentum waned in the last quarter, with the S&P 500 only gaining 1.9%, disappointing expectations set by earlier quarters. In Asia, markets had a mixed start to 2025, with China's CSI index dropping over 3% due to disappointing manufacturing data. Bitcoin saw a dramatic rise, breaking the $100,000 mark, fueled by optimism following Donald Trump's election win. Meanwhile, Nippon Steel's acquisition of U.S. Steel hangs in the balance, with the company offering the U.S. government veto power over production cuts to sway President Biden's decision. Alibaba, in a bid to capture more market share, drastically reduced prices on its AI model, Qwen-VL, highlighting the competitive AI market in China. The article also hints at potential market turbulence in 2025 due to policy changes and economic factors.
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On January 1, 2025, Ukraine ceased the transit of Russian gas to several European countries, marking a significant shift in Europe's energy landscape. This action ended a long-standing agreement between Russia and Ukraine, which was not renewed due to the ongoing conflict. The cessation affects countries like Slovakia, Austria, and Moldova, which were heavily reliant on Russian gas. The European Commission had anticipated this move and worked with member states to mitigate its impact. The stoppage will result in financial losses for both Ukraine, which will lose transit fees, and Gazprom, which will see a decline in gas sales. Ukrainian President Volodymyr Zelenskyy emphasized that this decision was made to prevent Russia from profiting from the war. Despite the potential for energy supply disruptions, the EU's gas storage levels are relatively high, and alternative supply routes like the TurkStream pipeline are available. Political developments and weather conditions will influence gas prices in the coming months, with ongoing talks between some EU members, Russia, and Ukraine aiming for a possible resumption of supplies.
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The article discusses a notable shift in market sentiment towards MicroStrategy (MSTR), a company known for its significant Bitcoin holdings. Previously, traders were aggressively buying call options on MSTR, viewing it as a leveraged play on Bitcoin's potential rise. However, recent data indicates a change in this trend. The 250-day put-call skew for MSTR has moved from a bearish -20% to neutral, suggesting that the market's bullishness has waned. This shift coincides with a substantial decline in MSTR's share price, which has dropped by over 44% from its peak, and a 34% drop in valuation in just the past two weeks. Analysts like Markus Thielen from 10x Research have noted that the narrative of MSTR as a Bitcoin treasury asset is losing its appeal, especially as other companies adopt Bitcoin at a smaller scale. Despite MSTR's significant Bitcoin acquisitions, its stock underperformed in December, falling by 25% while Bitcoin itself only dropped by 3%. This indicates that investors are now less inclined to pay a premium for Bitcoin exposure through MSTR when they can acquire it directly at a lower cost.
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On New Year's Day 2025, New Orleans was struck by a horrific attack when a man drove a pick-up truck, displaying an ISIS flag, into a crowd on Bourbon Street, killing 15 and injuring at least 30. The suspect, identified as Shamsud-Din Jabbar, a 42-year-old Army veteran from Texas, was killed in a subsequent shootout with police. The FBI is investigating this as a terrorist act, with additional concerns about potential explosive devices found in the area. Concurrently, authorities are exploring a possible connection with another incident in Las Vegas where a Tesla Cybertruck exploded, killing one. Both vehicles were rented from Turo, leading to an investigation into any links between the attacks. The New Orleans incident has raised security concerns, especially with the city preparing for the Super Bowl, as safety measures like bollards were not yet installed due to construction delays. The investigation continues, with law enforcement looking into "people of interest" and potential military connections between the suspects.
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The Bank of Korea (BOK) is navigating through a complex economic landscape influenced by both domestic political turmoil and external economic pressures. Soohyung Lee, a Monetary Policy Board member, highlighted that while South Korea has managed to recover from past political uncertainties within six months, the looming threat of U.S. tariffs under President-elect Donald Trump poses significant risks. These tariffs could not only affect South Korea's export-driven economy but also contribute to inflation in the U.S., potentially keeping U.S. interest rates high and strengthening the dollar, which in turn could weaken the Korean won. Despite these challenges, the BOK has tools at its disposal to manage market volatility, though it does not target specific exchange rates. The economic growth forecast for 2025 has been adjusted downwards to 1.8%, reflecting the combined impact of internal and external pressures. To counteract these effects, the government plans to boost domestic demand through tax exemptions and wage incentives. However, the BOK's primary focus remains on controlling inflation and ensuring financial stability, even as it cautiously remains optimistic about South Korea's economic resilience.
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The U.S. dollar is poised to remain strong into 2025, bolstered by a robust U.S. economy and expectations of pro-dollar policies under a potential second Trump presidency. The euro and British pound have weakened significantly against the dollar, reaching multi-month lows as markets react to economic forecasts and political uncertainties in Europe. Investors are optimistic about a scenario where lower taxes and deregulation could further support U.S. economic growth. However, the prospect of Trump's tariff policies has introduced inflationary concerns, potentially leading to fewer Federal Reserve rate cuts than anticipated. This scenario has already influenced currency markets, with the euro expected to possibly reach parity with the dollar in the medium term. Key economic indicators like jobless claims and manufacturing reports will be crucial in assessing the ongoing strength of the U.S. economy. Meanwhile, Europe faces a more downbeat economic outlook, with political instability and structural issues expected to hinder growth in major economies like Germany and France.
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As France steps into the new year, the political and economic uncertainty that has been a hallmark of the euro zone's second-largest economy shows no signs of abating. The political crisis, triggered by President Emmanuel Macron's call for snap parliamentary elections last summer, has resulted in a fragmented National Assembly where both far-left and far-right parties claimed victory. This led to the formation of a short-lived centrist government, which was ousted in a confidence vote over disagreements on the 2025 budget. Now, with a new minority government in place, the challenges remain the same: managing a budget deficit projected at 6.1% and a debt of 112% of GDP, both exceeding EU limits. The political instability has not only affected financial markets, with France's CAC 40 index falling by 2.2% in 2024, but also led to a downgrade by Moody's, highlighting concerns over fiscal consolidation. Amidst this, Macron has acknowledged his misstep in calling for the snap elections, admitting it has brought more division than solutions. The economic outlook for 2025 is grim, with forecasts predicting minimal growth and potential stagnation, as political parties position themselves for the next presidential election, possibly even pushing for an early vote in 2025.
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The U.S. housing market experienced a significant slowdown in mortgage demand towards the end of December 2024, primarily due to a sharp rise in mortgage interest rates. According to the Mortgage Bankers Association, total mortgage application volume dropped by 21.9% over the two weeks ending December 27, 2024, compared to the previous period. This decline was influenced by an increase in the average contract interest rate for 30-year fixed-rate mortgages, which rose to 6.97% from 6.89%. The rise in rates, which were 21 basis points higher than the previous year, led to a 36% drop in refinance applications, although they were still 10% higher than the same period in the previous year. Purchase mortgage applications also saw a decline, falling by 13% and being 17% lower than the year before. Despite more homes being available on the market, high prices and elevated interest rates have kept many properties unsold. The housing market's typical slowdown in December was exacerbated by these economic conditions, leading to a notable decrease in housing activity.
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In the final days of the Biden administration, the SEC issued a tight deadline for Elon Musk to settle or face civil charges over alleged securities violations during his $44 billion acquisition of Twitter in 2022. Musk publicly criticized the SEC's actions, suggesting political motivation behind the ultimatum. With Donald Trump's impending presidency, where Musk has significant influence, there are concerns about the future of regulatory oversight on Musk's enterprises, including Tesla, SpaceX, and Neuralink. These companies are currently under scrutiny for various issues ranging from securities violations to safety concerns with Tesla's Autopilot system, and environmental and labor practices at SpaceX. Musk's close ties with Trump, including his appointment to a new government efficiency role, could potentially sway regulatory actions in his favor. Legal experts suggest that while political interference is a risk, strong cases against Musk might still proceed. The article highlights the complex interplay between Musk's business interests and political affiliations, potentially affecting the regulatory landscape for his companies.
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In 2024, the Chinese automotive market has shown a clear preference for hybrid-powered vehicles over battery-only ones, as evidenced by BYD's sales figures where nearly 2.5 million out of 4.3 million passenger cars sold were hybrids. This trend contrasts with Tesla, which continues to focus on battery-only vehicles and is expected to maintain its sales momentum in China. Li Auto, another key player, reported a record delivery of over 500,000 vehicles, most of which incorporate a fuel tank for extended range. Leapmotor, in partnership with Stellantis, also reported significant sales and has set ambitious targets for the future. The market's shift towards new energy vehicles, including both hybrid and battery-powered cars, has been supported by government incentives and policies aimed at promoting domestic brands and reducing reliance on foreign manufacturers. This trend is part of a broader push in China to increase the adoption of new energy vehicles, with penetration rates surpassing 50% in recent months.
