This article and its opinions were written by Paul Reid, a financial journalist for Exness.
As we dive into the second half of January, let’s take a closer look at the key financial headlines that have shaped the markets this week. From economic growth in China to shifts in U.S. monetary policy, these developments are poised to influence trading strategies and market sentiment.
China’s economy grew by 5% in 2024, matching both market and government estimates. This growth is largely attributed to recent stimulus measures aimed at bolstering economic activity. However, concerns linger regarding consumer spending and potential deflation risks. The stability in China’s GDP could provide a positive backdrop for global markets, especially in Asia, as investors evaluate trade and investment opportunities.
In a surprising turn of events, Apple’s stock experienced a significant drop, marking its worst day in months. This decline overshadowed positive earnings reports from major banks and broke a three-day winning streak for the S&P 500. Given Apple’s status as a bellwether for technology shares, this performance could considerably impact market sentiment moving forward.
The United States has announced sweeping sanctions targeting Russian oil producers, raising concerns about potential oil supply shocks. Consequently, oil prices have surged due to fears of tighter supply. This development is likely to introduce increased volatility in energy markets and could have broader implications for inflation rates globally, affecting investor sentiment across various asset classes.
Federal Reserve Governor Christopher Waller hinted at the possibility of multiple interest rate cuts in 2025, with the first cut potentially occurring in the first half of the year. This news carries significant implications for bond markets and may influence equity markets as investors recalibrate their expectations regarding monetary policy and economic growth.
Despite ongoing threats of a trade war with the U.S., analysts suggest that the BRICS bloc (Brazil, Russia, India, China, and South Africa) is likely to continue expanding. This expansion could reshape global trade dynamics and investment flows as emerging markets seek alternatives to traditional Western alliances.
The week’s financial headlines suggest a mixed outlook for markets:
China’s GDP growth meeting expectations offers a glimmer of hope amid ongoing concerns about consumer spending and deflation risks. If China’s economy is looking good, USD impact on overall markets may be temporarily impacted and will likely cause volatility.
Meanwhile, the significant decline in Apple’s stock raises questions about the resilience of technology shares, which are often viewed as indicators of broader market health. Keep your eyes on other Tech companies for a domino effect.
The impact of US sanctions on Russian oil has introduced more volatility into energy markets, potentially exacerbating inflationary pressures and affecting global economic stability. Oil is famous for massive swings, so set Stop Loss and consider Take Profit within recent ranges.
Additionally, the speculation surrounding Federal Reserve interest rate cuts suggests a shift in monetary policy that could have far-reaching implications for both bond and equity markets. Market sentiment is high for USD-related assets as Trump steps into his term, but sentiment rallies don’t always have sufficient volumes for a long bull run, and momentum can drop fast. Watch out for corrections on the charts.
Lastly, the anticipated expansion of the BRICS bloc amid trade tensions reflects a changing global economic landscape, where emerging markets may seek new alliances in response to traditional power dynamics. This is more of a long-term influence, but news coming out of BRICS can sway sentiment. If you are planning to hold commodities in the long-term, take note of announcements and how the markets react.
If you’d like to look behind the markets and understand what’s driving prices in 2025, consider visiting the Exness blog.
Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness.
