Global central banks are cutting rates — the Fed might not be as inclined

The Bank of England lowered interest rates by 25 basis points on Thursday, following the European Central Bank’s cut of the same amount on Jan. 30. The Reserve Bank of India is also widely expectedly to trim its repo rate by 25 basis points when its policy meeting ends on Friday.

Many economies seem to be settling into a lower-rate environment as policymakers look to boost economic growth. That’s in stark contrast with the U.S. — it’s unclear if the U.S. Federal Reserve would even deliver on its two rate cuts in 2025, forecast in December, given the uncertainties over the economic impact of U.S. President Donald Trump’s policies.

Ahead of Trump’s inauguration, the U.S. dollar began strengthening and hit its highest level in more than two years, as measured by the U.S. dollar index. That’s already affected companies such as Amazon, which blamed the currency for weighing down its expected revenue in the current quarter.

U.S. exceptionalism might still be in place for now, but an edge can, after all, cut both ways.

Disappointing guidance from Amazon
Amazon shares fell more than 4% after giving disappointing revenue guidance for the current quarter, citing difficulties posed by a strong U.S. dollar. Based on the company’s forecast, growth rate for the quarter would come in between 5% to 9%, the slowest increase since Amazon went public in 1997. That said, the tech giant beat earnings and revenue expectations for the fourth quarter — and is poised to surpass Walmart as the S&P 500 company with the highest quarterly revenue. Walmart reports on Feb. 20.

Positive day for markets
On Thursday, the S&P 500 advanced 0.36% for its third consecutive winning day, while the Nasdaq Composite climbed 0.51%. The Dow Jones Industrial Average, however, lost 0.28%. Across the Atlantic, European markets were in a jubilant mood. The pan-European Stoxx 600 index rose 1.17%, closing at a record high. The U.K.’s FTSE 100 gained 1.21%, likewise hitting a new record.

Bank of England cuts rates
The Bank of England lowered its benchmark interest rate by 25 basis points to 4.5%, its first cut of the year. All members of the monetary policy committee voted to lower rates, but two out of nine had voted for a larger cut of 50 basis points. Central bank governor Andrew Bailey said he expects more cuts this year. The BOE also halved its growth forecast for the U.K.’s economy in 2025 to 0.75% from 1.5%.

China will respond to ‘bullying’
Tariffs imposed on China by U.S. Donald Trump have sparked a backlash by the world’s second-biggest economy. China will protect its interests “in the face of one-sided acts of bullying,” Chinese Ministry of Commerce Spokesperson He Yongqian said Thursday, according to a CNBC translation. However, He added that China would not provoke trade disputes and remained ready to resolve problems through discussions.

[PRO] IBM outperforms Nvidia
Not Nvidia, not Apple and not Amazon — the best-performing stock in the Dow over the past three months has been IBM, which climbed 27%. However, the tech company needs to do more in the field of artificial intelligence for its stock to continue performing well, according to one chief investment officer.

 How Calvin Klein and Tommy Hilfiger got caught in Trump’s trade war with China

China has blacklisted the owner of Calvin Klein and Tommy Hilfiger, which could force the company to shut down stores and manufacturing in the country, in an early repercussion of Trump’s trade war. While China’s Ministry of Commerce began investigating PVH September for allegedly refusing to source cotton from the Xinjiang region, which has become notorious for its Uyghur detention camps, Beijing officially placed the company on its list of “unreliable entities” on Tuesday.