Since the Federal Reserve began cutting interest rates in September, bond markets have experienced a surprising sell-off, with the yield on US 10-year Treasuries rising to 4.7%. This global repricing has been felt across major economies, including the UK, the eurozone, and Canada, while China remains an exception due to concerns over growth. Bond investors are grappling with inflation, persistent economic uncertainty, and mounting public debts, which have pushed yields higher. While rising yields are a challenge for indebted governments, they may also signal a healthier economy, as higher yields often accompany expectations of robust growth. In the US, economic expansion and rising productivity, particularly driven by AI, could lead to further increases in yields. While higher yields pose risks, they may also compel governments to implement necessary fiscal reforms and encourage economic growth, potentially benefiting global economies in the long term.

On January 17th, China’s National Bureau of Statistics (NBS) reported a 5% growth in the economy for 2024, matching the official target despite challenges such as a property slump, low consumer confidence, and a shrinking population. The NBS attributed the recovery to stimulus policies, but other data reveals mixed signals. Retail sales rose, particularly in household appliances, and the property market showed signs of stabilisation. However, concerns persist, including deflation and weak nominal growth of just 4.2%, raising doubts about the accuracy of official statistics. The government is likely to increase the budget deficit to boost demand, but traditional stimulus methods face diminishing returns. While some economists question the validity of the official growth figures, the Chinese government continues to suppress dissenting voices, undermining confidence in the economy’s true performance. To sustain recovery, China needs effective stimulus, not censorship.

The Ethiopian Securities Exchange officially opened on January 10th, marking a significant step in the country’s economic liberalisation under Prime Minister Abiy Ahmed. With just one listed stock and no brokers, the exchange had a quiet start, but officials view it as a vital part of reforms aimed at opening up Ethiopia’s economy. The government is gradually allowing foreign competition in sectors like banking and telecoms, with plans to attract 50 listings within five years. While banks, already trading shares informally, are expected to be key participants, state-owned enterprises may also list, including Ethio Telecom. However, the success of the exchange is uncertain, as African markets are often small and illiquid, and Ethiopian firms are reluctant to disclose financial details. The launch comes amid a challenging economic backdrop, including high inflation, a devalued currency, and ongoing internal conflicts, which may deter foreign investment despite the government’s efforts to relax financial controls.

Economists are revising their forecasts in response to President-elect Donald Trump’s planned economic policies, including raising tariffs, cutting taxes, and restricting immigration. These changes are expected to lead to higher inflation and interest rates for at least the next two years. The consumer price index (CPI) is now projected to rise 2.7% by December 2025, up from an earlier forecast of 2.3%. Inflation is expected to add around $600 in costs for the average household over a year. Trump’s proposed tariffs, particularly on China and other countries, are likely to raise inflation further, though the exact impact remains uncertain. These policies, alongside Trump’s tax cuts and deregulation, could stimulate demand and economic growth, but might also lead to lower GDP growth due to the higher costs from tariffs and immigration restrictions. Overall, economists predict a slight increase in GDP growth and the unemployment rate to remain stable at 4.3% by the end of 2025. The Federal Reserve is expected to maintain higher interest rates through 2027 to manage persistent inflation.

Wall Street is facing consequences for offering low interest rates on sweep accounts, which hold clients’ cash in brokerage accounts. Wells Fargo and Bank of America’s Merrill Lynch unit have agreed to pay $60 million to settle SEC investigations into their handling of these accounts. Despite rising Federal Reserve rates, the banks continued paying minimal interest on these sweep accounts, profiting from the difference between low deposit rates and higher loan rates. The SEC found that the banks lacked adequate policies to ensure they acted in clients’ best interests, as required by law. While the banks did not admit fault, they have since raised the interest rates paid on these accounts. The issue highlights the broader practice of low-interest sweep accounts, which remain common across the industry.

The legal dispute between It Ends With Us co-stars Justin Baldoni and Blake Lively has become a highly publicised clash, centred around creative control and professional conduct during filming. Tensions arose early when Baldoni made an inappropriate comment about Lively’s weight, which she later described as part of a broader pattern of toxic behaviour. As the production progressed, Lively sought to influence the script and the direction of the film, which Baldoni resisted. The dispute escalated with Lively accusing Baldoni of attempting to undermine her contributions and retaliating against her for speaking out. Baldoni, in turn, filed a countersuit, alleging that Lively was attempting to take control of the project behind the scenes. Both sides have provided detailed accounts of the conflict, offering a rare glimpse into the challenges of navigating creative differences, professional relationships, and power dynamics in Hollywood. The legal battle has captured widespread attention, shedding light on the complexities of the entertainment industry.

The value of the $TRUMP memecoin, backed by Donald Trump, surged to over $14bn shortly after its launch, only to plummet when his wife, Melania, introduced a rival memecoin, $MELANIA. The $TRUMP coin, launched on Trump’s Truth Social platform, was initially priced at $6 but reached $75 before Melania’s coin, which quickly achieved a market cap of $8.5bn, caused the value of Trump’s coin to fall sharply. The Trump coin’s market cap later recovered some losses. Trump’s family business holds a significant stake in the $TRUMP coin, and its insiders will begin selling tokens over the next few months. The launches have raised concerns about the financial motivations behind the coins, with some industry experts warning that many investors may be hurt by the moves.

Global exchange-traded fund (ETF) flows reached a record $1.5 trillion in 2024, driven by a surge in demand following Donald Trump’s presidential victory. This surpassed the previous record of $1.2 trillion set in 2021. Both equity and fixed-income ETFs saw record inflows, making up 95% of total flows, as investors sought cheaper, more transparent alternatives to mutual funds. The rise in ETF popularity is partly attributed to rising markets and the shift away from traditional mutual funds, particularly in the US where ETFs also offer tax advantages. Notably, actively managed ETFs grew significantly, with assets surpassing $1 trillion for the first time. The US dominated ETF flows, particularly in the S&P 500, but other markets, such as South Korea and Ireland, also reported strong growth. Despite some sectors like defensive equities and emerging market bonds facing outflows, technology-focused ETFs saw significant inflows, driven by investor interest in artificial intelligence.

Pension funds are increasingly showing interest in bitcoin, with notable schemes in the US, UK, and Australia making small allocations to cryptocurrency. This follows a surge in bitcoin’s value, which more than doubled in 2024, prompting conservative trustees to explore the asset. Notable investors include the State of Wisconsin Investment Board and Michigan’s pension fund, which hold significant stakes in bitcoin and ethereum exchange-traded funds (ETFs). Despite past failures in the crypto market, such as losses from FTX and Celsius Network, experts predict growing institutional adoption of crypto. However, many consultants remain cautious, warning that the high volatility of cryptocurrencies makes them unsuitable for pension funds without expert management.

With US corporate earnings reports set to flood in over the next fortnight, the performance of major companies will be crucial for Wall Street’s direction, following a rocky start to 2025. Analysts predict a strong quarter, with S&P 500 profits expected to rise by 11.4% year-on-year, driven by the tech sector, although earnings growth for other sectors is also anticipated to improve. However, investors remain cautious about the impact of higher interest rates and the potential influence of President Trump’s policies, particularly his proposed tariffs and deregulation. Companies like Netflix, GE, Procter & Gamble, and tech giants such as Amazon and Microsoft will be under scrutiny, with guidance on the economic outlook and Trump’s agenda likely to play a significant role in shaping market sentiment.

The article delves into the growing interest in gold as a safe investment amid global uncertainties. Egon von Greyerz, a prominent figure in the precious metals market, operates high-security vaults in Zurich and Singapore, storing gold for ultra-wealthy clients. He highlights gold’s enduring value, viewing it as a hedge against inflation and market collapse. As geopolitical instability and economic risks rise, many are turning to gold, from the super-rich to average investors. The Royal Mint, for instance, saw a significant increase in gold purchases in 2024. Von Greyerz’s clients, often concerned about the future, invest heavily in gold, viewing it as a reliable store of value. Meanwhile, businesses like Hatton Garden Metals offer gold to a broader customer base, including collectors and those seeking wealth preservation. The article explores gold’s cultural significance, its role in modern finance, and how it remains a tangible, secure asset in uncertain times.

French champagne sales have seen a significant decline, with shipments dropping nearly 10% in 2024, according to the producers’ association. Key markets like the US and France have witnessed reduced demand for the luxury beverage, driven by economic and political uncertainty. The trend is also influenced by the rise of more affordable alternatives like prosecco and crémant, as well as changing consumer habits, particularly among younger generations who are increasingly opting for non-alcoholic options. Additionally, climate-related issues have impacted the 2024 harvest. Despite these challenges, industry leaders emphasise the need to adapt by targeting new markets and maintaining environmental standards to ensure future success.

Donald Trump has pledged to delay TikTok’s ban in the US, offering the company an additional 90 days to find an American buyer before facing a shutdown. The Chinese-owned app had ceased functioning for US users after a federal ban came into effect on Saturday, and Trump plans to sign an executive order allowing TikTok to continue operating under US ownership, proposing a 50% stake for an American entity. This follows legislation passed in April requiring TikTok to sell to a non-Chinese owner. Despite initially pushing for the ban, Trump reversed his stance, likely due to his significant use of the app during his 2024 campaign. However, some Republicans, including Speaker Mike Johnson and Senators Tom Cotton and Pete Ricketts, have opposed delaying the ban, insisting that TikTok must sever ties with China to comply with the law. Democrats, including Senate leader Chuck Schumer, have also called for more time to find a solution.