In a series of notable developments across global markets, the U.S. retracted its tariff on Colombia following an agreement for Colombia to accept military aircraft carrying deported migrants. Meanwhile, China's factory output experienced a contraction in January, with the official purchasing managers' index registering at 49.1. Despite this contraction, Asia-Pacific markets showed resilience as they mostly rose on Monday. In the tech arena, former President Donald Trump has denied Oracle's involvement in purchasing TikTok, stating that "very substantial people" are in talks with him regarding the acquisition of the app.
China's manufacturing sector faced a setback as the factory output contracted in January. The purchasing managers' index, an indicator of economic health in the manufacturing sector, dropped to 49.1, signaling a contraction. Despite this downturn, Asia-Pacific markets remained buoyant, displaying gains at the start of the week. This positive sentiment was echoed in U.S. markets, where both the S&P 500 and Nasdaq Composite recorded a rise of approximately 1.7% last week, while the Dow Jones Industrial Average saw an increase of 2.2%.
In the technology sector, significant milestones were achieved by leading companies. Baidu's Wenku platform celebrated reaching 40 million paying users, showcasing its growing influence in the digital content space. Concurrently, Alibaba's Accio expanded its user base to 500,000 small businesses globally, marking a substantial presence in the e-commerce domain. In addition, Alphabet and Meta Platforms experienced remarkable success as their shares hit all-time highs, driven by optimism surrounding their advancements in artificial intelligence.
A notable shift has been observed in China's AI applications, which are evolving beyond traditional chatbots like those developed by OpenAI's ChatGPT and Anthropic's Claude.ai. This evolution highlights the country's commitment to expanding its technological capabilities and exploring new frontiers in artificial intelligence. The optimism surrounding AI also contributed to Alphabet and Meta Platforms achieving record-high stock prices.
Amidst these developments, former President Trump is reportedly negotiating a deal to secure TikTok's operations in the U.S., as reported by Reuters. Sources indicate that Oracle might be involved in this deal, although Trump has publicly denied Oracle's participation. This ongoing saga keeps stakeholders on edge as they await further updates on TikTok's future in the U.S. market.
Looking ahead, investors are bracing for a week filled with crucial earnings reports and significant monetary policy announcements. Meta Platforms, Microsoft, and Tesla are set to release their earnings on Wednesday, with Apple following suit on Thursday. The U.S. Federal Reserve will conclude its meeting on Wednesday, and investors are keenly awaiting Chair Jerome Powell's comments for any indications regarding future interest rate adjustments.
In other financial news, industrial profits in China saw a resurgence in December, climbing by 11%, marking their first growth since July. This growth provides a glimmer of hope for China's industrial sector amidst recent challenges. Additionally, spot gold prices surged to their highest levels in nearly three months on Friday, suggesting that some investors are turning to gold as a safe haven amidst market uncertainties.
The S&P 500 has been experiencing fluctuations since its post-election surge in November. The index ended 2024 lower than its position at the beginning of December, reflecting ongoing market volatility.