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ASML, the Dutch semiconductor equipment maker, reported a substantial rise in fourth-quarter net bookings, signaling robust demand for its advanced chipmaking tools. Despite a global tech sell-off triggered by concerns over AI spending due to the introduction of DeepSeek's cost-effective AI model, ASML's shares initially surged by 11% before settling at a 7.4% increase. The company's financial performance exceeded expectations, with net sales and profit both surpassing consensus estimates. ASML's CEO, Christophe Fouquet, expressed optimism about the future, suggesting that lower-cost AI models could lead to increased applications and thus more demand for semiconductors. However, ASML anticipates a normalization of demand in China in 2025, following a period of heightened demand due to U.S. export restrictions. This outlook, combined with ASML's strong order backlog, provides reassurance to investors about the company's valuation and future growth potential.
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Treasuries experienced a dip as traders grappled with mixed economic signals from recent US reports, leading to uncertainty about future interest rate movements. The 10-year Treasury yield increased to 4.52% after a holiday, reflecting a re-steepening of the yield curve. This movement was mirrored in Europe, where concerns about increased defense spending and potential new debt issuance pushed benchmark rates up for a second day. Federal Reserve officials, including Governor Christopher Waller and Philadelphia Fed President Patrick Harker, indicated that rates would likely remain unchanged for the time being, citing persistent inflation and a robust economic outlook. The market's anticipation of a possible rate cut in 2025 was tempered by these comments, with money markets pricing in a quarter-point reduction. Additionally, discussions between US and Russian officials in Saudi Arabia about ending the war in Ukraine added another layer of complexity to the bond market dynamics, with Europe contemplating increased fiscal spending on defense and reconstruction.
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Bitcoin, typically known for its volatility, has recently exhibited an unusually stable trading pattern, confined within a narrow range of $91,000 to $109,000 since late November. This period of low volatility is highlighted by Glassnode data, which shows the 2-week realized volatility has plummeted to an annualized rate of 32%, one of the lowest in recent years. Similarly, the market's expectation for future volatility, as indicated by the options implied one-month volatility, has also fallen below an annualized 50%. Analyst Checkmate's "Choppiness Index" further underscores this stability, marking the current trading range as the most constricted since 2015. This prolonged consolidation suggests that bitcoin might be gearing up for a significant price movement, either upward or downward, as volatility tends to revert to the mean after extended periods of calm.
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The Solana memecoin ecosystem has been hit by another negative event with the apparent rug pull of the LIBRA token, as reported by Galaxy Research. This follows the introduction of the TRUMP token in January, which led to a liquidity drain in the ecosystem. The LIBRA incident could further damage the memecoin sector, potentially reducing the demand for Solana's SOL, which has been largely driven by interest in SOL-denominated assets. Since LIBRA's launch, Solana's value has plummeted, trading 8.6% lower at $168.73. The situation has also had political repercussions, with Argentina's President Javier Milei facing impeachment threats for promoting LIBRA, which briefly reached a $4.5 billion market cap before crashing. Hayden Davis, the CEO of Kelsier who launched LIBRA, also introduced the MELANIA token and admitted to sniping both tokens, although he denies it was a rug pull, describing it instead as a plan that went awry with $100 million now under his custody.