ADDX GO Market Morning Wrap - 13th Feb

Stock Market

Key Events

• On Wednesday, OpenAI CEO Sam Altman announced that the company is close to releasing GPT-4.5, which will be its last "non-chain-of-thought model." OpenAI is expected to launch GPT-5 in the coming months, integrating technologies from its previously planned o3 model, which has now been scrapped.
• Donald Trump reiterated that interest rates should be lowered. Shortly after, the U.S. reported higher-than-expected inflation data for January. Trump responded by labeling the report as "Bidenflation." Analysts suggest that Trump is aiming to preemptively mitigate potential political risks in his possible second term.
• At the World Government Summit in Dubai, $GOOGL Google CEO Sundar Pichai stated that "useful" quantum computing is still 5 to 10 years away. He compared the current state of quantum computing to the early 2010s when Google was making breakthroughs in AI with Google Brain.
• Robinhood $HOOD reported Q4 2024 revenue of $1.014 billion, a 115% YoY increase, with net income soaring to $916 million from $30 million a year ago. The company's cryptocurrency revenue reached $358 million. Following the earnings release, Robinhood’s stock surged over 15% in after-hours trading.
• AppLovin $APP , a rising player in mobile applications and AI, saw its stock jump 29% in after-hours trading after reporting impressive Q4 2024 results. The company posted revenue of $1.373 billion, up 44% YoY, surpassing estimates of $1.26 billion. Net income soared 248% to $599 million. Advertising revenue grew 73% to $999.5 million, while app revenue slightly declined by 1% to $373.3 million.
• Wall Street strategists, including those from Morgan Stanley, JPMorgan, and UBS, are increasingly optimistic about China's stock market, citing the impact of DeepSeek’s AI model. Morgan Stanley noted that after years of limited global investor interest, there is renewed focus on China’s tech and AI sectors.
• Bank of America compared this AI-driven momentum to Alibaba’s IPO in 2014, which fueled the rise of China’s "new economy" sector. Analysts argue that China’s AI breakthrough does not need to be “best in class” but simply “good enough” to support large-scale adoption, productivity gains, and economic growth.
• On February 11, Chinese e-commerce giant JD.com officially entered the food delivery market, announcing a "zero commission" policy for restaurants. Merchants joining before May 1 will enjoy a full year of commission-free operations. This aggressive move underscores JD’s ambition to expand its food delivery footprint and attract more merchants.

Forex

Key Events

• January CPI rose 0.5% (forecast: 0.3%), with annual inflation at 3.0% and Core CPI at 3.3% YoY (exceeding forecasts of 2.9% and 3.1% respectively).
• Fed Chair Jerome Powell testified at a House Financial Services Committee hearing, noting that while recent CPI data shows substantial progress toward the Fed’s 2% inflation goal, inflation remains slightly above target. Powell stressed that the Fed will not overreact to any single data point and plans to keep monetary policy restrictive for the time being, allowing “enough time” for current measures to take effect.
• Powell also hinted that potential tariff policies could eventually force the Fed to adjust interest rates, although he emphasized that decisions are driven by economic conditions. He reassured that the Fed retains full access to necessary data and confirmed his commitment to his role regardless of external political pressures. Additionally, Powell addressed concerns over regulatory volatility, mentioning that changes in the Fed Financial Regulatory Vice Chair position might lead to more fluctuations, but reiterated that the 2020 policy framework does not limit the Fed’s ability to respond to inflation.

Cryptocurrency