OPENING CALL

Stock futures rose Wednesday as President Donald Trump's early announcements reverberated across markets.

Markets rose globally, outside of China , after Trump reiterated a threat to impose an additional 10% tariff on Chinese goods.

Tickmill said trade uncertainties and looming short-term volatility were keeping Treasurys stable for now, and investors were also awaiting the Federal Reserve's rate decision next week which could further shape the dollar's trajectory.

A combination of a strict trade policy and lowered expectations of rate cuts could support both yields and the dollar, it added.

Stocks to Watch

Agilysys's profit sank, as sales challenges dragged down the company's 2025 outlook. Shares fell premarket 18%.

Interactive Brokers gained 4.5% after it reported better-than-estimated adjusted earnings as revenue rose 22%.

Netflix will raise prices to capitalize on surging demand, after posting record subscriber gains. Shares jumped.

Oracle rose 8% after the company, along with ChatGPT maker OpenAI and SoftBank Group, announced an investment of as much as $500 billion in building AI infrastructure known as Stargate in the U.S.

The announcement of the venture lifted other AI-related stocks. Nvidia rose and Arm Holdings gained more than 5%.

Seagate Technology earnings beat analysts' expectations and revenue jumped 50%. The stock rose 4.8%.

United Airlines earnings beat analyst expectations. Shares rose more than 3%.

Watch For:

Earnings from Johnson & Johnson, Procter & Gamble, Abbott Laboratories, GE Vernova, Amphenol, Travelers, Discover Financial, Halliburton, Textron, Ally Financial, and Alcoa.

Today's Headlines/Must Reads:

- $TRUMP Is Already Worth Billions. What to Know About the Meme Coin.

- EVs, Heat Pumps Saw Continued Sales Growth at the End of 2024

- Trump Pushes for Early Renegotiation of Trade Deal With Mexico, Canada

MARKET WRAPS

Forex:

UniCredit said the dollar could fall if Trump's proposed trade tariffs prove to be less tough than he was threatening during his electoral campaign.

This might prompt speculators to unwind long positions in the dollar, and such long positions are at multi-year highs, leaving the currency exposed to a position adjustment.

Bonds:

ING said the 10-year Treasury yield was likely to fall for now, but there are many forces which could ultimately lift it above 5% in the weeks and months ahead.

"We've just had a material prior move higher in yields, and typically they are followed by a test back lower again."

In addition, mutual fund data flows show a resetting of duration longs for the first couple of weeks of 2025, a reversal for the significant preference for duration shorts into the turn of the year, it said.

Morgan Stanley Wealth Management said a major reason to consider more asset diversification is that correlations between stocks and bonds have turned positive.

Higher yields--and thus lower prices--are coinciding with lower stock prices, it says.

"This was the painful dynamic in 2022 when most investors experienced losses in both the stock and bond sleeves of their portfolios."

Traditionally, stocks and bonds have been negatively correlated, with the securities' respective prices moving inversely to each other and the value of a portfolio consisting of 60% stocks and 40% bonds is now being challenged.

"With correlations recently flipping when the 10-year U.S. Treasury yield surpassed 4.5%--the fair value for the long-run rate, where nominal GDP can struggle to cover capital costs."

Energy:

Crude futures returned to positive territory after opening the trading session lower as investors weigh trade risks.

"The oil market's attention is slowly turning away from U.S. sanctions against Russia towards President Trump's potential trade policy," ING said.

"Trade and tariff risks and the potential for retaliation are growing."

Traders were also keeping an eye on supply-side news, as a rare winter storm in the south threatens to disrupt oil production and Russian oil exports dropped significantly last week following the latest batch of sanctions.

Pepperstone said policy direction by the Trump administration could play a dominant role in the oil market's trajectory in the short term.

On the supply side, Trump's national energy emergency declaration and his push for energy independence are significant drivers of bearish momentum, as the policies could likely turn the U.S. into a net energy exporter, which might have lasting implications for global oil prices.

Traders will assess the balance between economic growth, energy security and policy risks, as more details emerge over energy production and trade agreements, it added.

Metals:

Renewed tariff concerns have pushed gold prices to their highest levels on safe-haven demand since Trump's victory in the November elections, Pepperstone said.

Gold's strong upward momentum isn't random, but rooted in forward-looking expectations of escalating trade risks tied to tariffs.

The new administration hasn't yet discussed critical issues, amplifying market sensitivity to short-term issues, it added.

Gold Chart

Comex gold futures were looking to test resistance at $2,800, RHB said, according to the chart .


TODAY'S TOP HEADLINES


Adidas Shares Jump After Preliminary Results Beat Expectations

Shares in Adidas climbed after the company beat its own profit expectations amid fierce competition in the sector and as its biggest rival, Nike, continues to pursue a brand revamp strategy.

The German sporting-goods company reported on Tuesday an operating profit of 1.34 billion euros ($1.40 billion) for 2024, up from 268 million euros in 2023 and surpassing the company's own guidance of around 1.2 billion euros.


Tesla Sits at 'Epicenter' of a 'Cambrian Explosion' in New Tech. Sounds Exciting.

Morgan Stanley analyst Adam Jonas believes artificial intelligence is about to "get physical."

That has big implications for the manufacturing economy-and for Tesla stock.


Pension Funds Want Private Equity to Open Up About Fees and Returns

A group of U.S. pensions and other institutions is pushing private-equity firms to share more information on their fees and investment returns, in a bid to address simmering frustration with the industry's disclosures.

The Institutional Limited Partners Association, a trade group that counts the retirement plans of public workers in California and Wisconsin as members, proposed this week new guidelines to standardize financial reporting by private-equity firms, people familiar with the matter said.


Trump promised to lower gas prices - but his tariffs could help raise them instead

President Donald Trump's "drill, baby, drill" pledge is well known, but drivers may end up paying more at the pump in the coming months despite his plans to lift U.S. oil production.

The biggest reason gasoline prices are likely to climb is "seasonality," said Patrick De Haan, head of petroleum analysis at GasBuddy.


Pentagon Plans for Bigger U.S. Troop Role at Border

WASHINGTON-Pentagon officials are planning options for using federal troops to secure the U.S.-Mexico border against drug traffickers, human smugglers and migrants, a potentially major shift in military priorities ordered by President Trump, officials said Tuesday.

Use of the armed forces in a domestic role is restricted by laws prohibiting troops from engaging in law enforcement functions except in narrow circumstances. But an executive order Trump signed Monday described border threats normally left to law enforcement agencies as an "invasion" justifying a military response.


Trump's Ukraine Envoy Has a Hard Climb to Any Peace Deal

WASHINGTON-President Trump has handed retired Lt. General Keith Kellogg the job of ending the Ukraine war in a hundred days. Almost no one thinks he can do it-especially the Russians.

Rather, they say Kellogg's role as a special envoy to Ukraine, which comes amid a flurry of such appointments, is an opening gambit in peace talks that Trump is determined to control himself. But dealmaking with Russian President Vladimir Putin will be far more difficult than Trump promised on the campaign trail, when he said he would end the conflict before he took office.


Jan. 6 Defendants Leave Prison as Trump's Broad Pardons Draw Sharp Reactions

Some of the highest profile defendants convicted in the Jan. 6, 2021, Capitol riot were set free Tuesday, as President Trump's broad grant of clemency drew mixed reactions within his own Republican party and among those who stormed the building that day.

Those who walked out of prison included Enrique Tarrio, the pardoned former chairman of the far-right Proud Boys group who was sentenced to 22 years, and Oath Keepers founder Stewart Rhodes, whose 18-year sentence Trump commuted to time served. Both were convicted of seditious conspiracy, the most serious charge stemming from the attack and one which required prosecutors to prove the men plotted to use force to thwart the peaceful transfer of power.


Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

A.G.F. Management Ltd. 4Q

Economic Indicators (ET):

0830 Dec Industrial product and raw materials price indexes

Stocks to Watch:

Constellation Software Announces Annual Interest Rate for Series 1 Debentures

RAMM Pharma Exploring Strategic Options for the Potential Sale of Its Subsidiary, Canapar Corp; RAMM Pharma Corp. Also Exploring Strategic Options for the Potential Sale of Industrial Facility in Ragusa, Italy; Part of Effort to Streamline Ops, Focus on Operating Businesses While Seeking Growth; Potential Sales Aimed at Enhancing Shareholder Value, Ensuring Long-Term Sustainability of Co.

RioCan Real Estate Investment Trust Announces Offering of C$550M of Senior Unsecured Debentures

Other News:

Trudeau Promises Robust Response After Trump's Feb. 1 Tariff Pledge


Expected Major Events for Wednesday

07:00/UK: Dec Public sector finances

(MORE TO FOLLOW) Dow Jones Newswires

01-22-25 0619ET