The precious metal sell off seems to have led to a broader reaction

Confirmation of Warsh as the next chairman of the Fed was the excuse for the dollar to appreciate and for gold, precious metals, and stocks, to a lesser degree, to finish lower. Silver suffered its biggest fall in history. Interestingly, given Trump’s desire to see rates lower, Warsh is generally considered more hawkish than dovish on monetary policy. He, for example, is not a big fan of QE. He wants to shrink the Fed’s balance sheet, an eminently sensible idea that carries risks as market liquidity declines. Overall, the market seemed to welcome his nomination.

The first month of the year is over, seems to have gone in a flash. It has been an eventful one on many fronts. Earnings season has likely seen greater volatility in individual stock reactions, with Microsoft down 10% Meta up 10% on their announcements as examples. Stock markets around the globe made gains in January, if only modestly. The S&P 500 is gaining just over 1% in local currency but down in sterling terms. The FTSE 100 is up almost 3%. Best performing sectors, metals, energy, from memory, one of the big fund managers underweights, and industrials. Small caps outperformed large caps. There was a modest rally in the bond markets over the month. Real gold may have had a good month, so-called digital gold, or to others, Bitcoin, had a bad month, down 10%, and almost 25% over the year.

What to look forward to in February? More corporate earnings for one, no Federal Reserve meetings to ponder over. Geopolitics will continue to make headlines. Tensions between Iran and the US continue as Ayatollah Ali Khamenei has warned that any attack on his country would spark a regional conflict, as the US continues to build up its forces nearby. At some point, I assume Trump will announce an arbitrary tariff on someone, only to back track. This week, the January Purchasing Manager Survey will be released. On Tuesday, the latest US jobs report. On Wednesday, we will get Eurozone inflation data. Then on Thursday, the Bank of England meets to decide on whether to cut interest rates further, or not. The market odds are for no change. More jobs data from the US in the form of jobless claims, and on Friday, the latest employment report, including average earnings.

Stocks around the globe are starting the month off in negative territory, and the slump in precious metals seems to have fed into the equity market. Comments from Nvidia CEO that the proposed $100 billion investment in OpenAI was “never a commitment” and that the company would consider any funding rounds “one at a time.” Seems to have unnerved the Nasdaq.