Former US President Donald Trump’s return to office marked a significant day for financial markets. His first day back saw a flurry of executive orders, including invoking a national energy emergency and withdrawing the US from the Paris climate agreement. While trade tariffs weren’t immediately imposed, Trump hinted at potential 25% duties on Mexico and Canada, possibly enacted by February 1st. An executive order on inflation was also signed, aiming to provide emergency price relief. Additionally, the enforcement of a ban on TikTok was paused.
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Trump Media & Technology Group (DJT) Stock Performance
While US markets were closed for Martin Luther King Jr. Day, S&P 500 futures (ES=F) saw an increase. Trump Media & Technology Group (DJT) stock experienced a modest 1% rise in pre-market trading on Tuesday. Matt Britzman, senior equity analyst at Hargreaves Lansdown (HL.L), noted that UK markets opened flat, mirroring European trends, and suggested that US futures indicated a positive investor response to Trump’s inauguration speech and executive orders.
Netflix (NFLX) Earnings Anticipation
Streaming giant Netflix (NFLX) is set to release its fiscal fourth-quarter earnings after Tuesday’s market close. Pre-market trading showed a nearly 1% increase in share price, driven by analyst expectations of strong results. Bloomberg consensus estimates project revenue of $10.11 billion, slightly below Netflix’s guidance but exceeding last year’s $8.83 billion. Earnings per share are anticipated at $4.18, also slightly below guidance but surpassing the $2.11 reported in Q4 2023. Net subscriber additions are estimated at 9.18 million, lower than the previous year’s 13.12 million. Bloomberg Intelligence senior media analyst Geetha Ranganathan highlighted the potential impact of Netflix’s increasing focus on live sports content on the fourth-quarter results.
Tesla (TSLA) CEO’s Inauguration Attendance and Global Implications
Tesla (TSLA) CEO Elon Musk, a prominent Trump supporter, attended the inauguration and was appointed co-leader of the Department of Government Efficiency (DOGE). Other tech leaders present included Meta Platforms (META) CEO Mark Zuckerberg and Amazon (AMZN) founder Jeff Bezos. At the World Economic Forum in Davos, Eurasia Group founder Ian Bremmer discussed Musk’s connection to the new administration, raising concerns about potential conflicts of interest and suggesting a shift towards a “G-Zero world order” where no single power dominates the global agenda.
Apple (AAPL) iPhone Sales Decline in China
Apple (AAPL) CEO Tim Cook also attended the inauguration. However, news surfaced that Apple’s iPhone sales in China dropped 18.2% in the December quarter, losing its top spot to Huawei Technologies. Counterpoint Research attributed this shift to Huawei regaining its leading position. This follows Canalys data showing Apple falling to third place in the Chinese smartphone market, holding a 15% share. Apple’s shares remained flat in pre-market trading.
Coinbase (COIN) and the Bitcoin (BTC-USD) Surge
Bitcoin (BTC-USD) reached a new high of over $109,000 before Trump’s inauguration, fueled by his campaign promises to cryptocurrency enthusiasts. While the price retreated to $102,789 on Tuesday morning, sentiment remains positive. The launch of Trump and Melania Trump’s meme coins (TRUMP-OFFICIAL-USD, MELANIA-USD) further boosted the crypto market. Hargreaves Lansdown’s Britzman attributed Bitcoin’s dip to profit-taking after the recent rally, but anticipates continued favorable conditions for cryptocurrencies under Trump’s presidency. Coinbase (COIN), a proxy for digital token price movements, saw flat pre-market trading.
Conclusion: A Market in Transition
The return of Donald Trump coupled with significant developments in the tech and cryptocurrency sectors has created a dynamic and potentially volatile market environment. Investors are closely watching the unfolding policy changes and their impact on various industries. The performance of companies like DJT, NFLX, TSLA, AAPL, and COIN will likely provide key insights into the direction of the market in the coming weeks and months.
