U.S. stocks hit new highs, gold reclaims 4500, and the 20-year U.S. Treasury yield awaits resolution — global markets may face a policy test next week

Employment Report Sparks “No Rate Cut” Expectations, Federal Reserve Likely to Hold Steady

Last Friday, the U.S. Department of Labor released December non-farm payroll data, which became the market focus. The number of new jobs added was only 50,000, well below the expected 60,000, with the private sector increasing by just 37,000. However, the unemployment rate unexpectedly fell to 4.4%, and hourly wage growth rebounded. This “mixed” employment report directly altered market expectations for Fed rate cuts—interest rate swap markets show the probability of a rate cut in January has dropped to zero, with traders expecting the first cut to occur only in June.

Fed Chairman Barkin subsequently stated that the hiring environment remains sluggish, with employment growth only at a moderate level. This confirms the market consensus: the labor market has entered a “pause without layoffs or hiring” equilibrium. Nick Timiraos, a reporter from The Wall Street Journal known as the “Fed whisperer,” explicitly pointed out that this weak employment report provides ample reason for the Fed to stay on the sidelines this month.

U.S. Treasury Yields Fluctuate, 20-Year Treasury Yield Moves Globally

Despite pressure from employment data, the U.S. Treasury market performed differently. The 2-year U.S. Treasury yield rose 5 basis points to 3.538%, while the 10-year yield surged and then retreated. More notably, attention is on the movement of the 20-year U.S. Treasury yield—this long-term indicator often reflects market expectations for future economic prospects and inflation, and its direction will directly influence global asset allocation.

Meanwhile, the Trump administration announced the purchase of $200 billion worth of mortgage-backed securities, pushing the 30-year mortgage rate to a new low since February 2023, falling below 6% to 5.99%, in an attempt to ease the high cost of living.

Geopolitical Risks Rise, Gold and the Dollar Play “See-Saw”

Ongoing geopolitical tensions have become a driver for safe-haven assets. Trump recently hinted at “surprise military actions” and threatened tough measures against Iran, Mexico, and others, also claiming he wants to acquire Greenland at all costs. Against this backdrop, the U.S. dollar index broke through the 99.0 level, reporting at 99.1; gold re-entered the $4,500 range, up 0.7% at $4,509 per ounce. WTI crude oil rose slightly by 0.65% to $58.8 per barrel.

U.S. Stocks Reach New Highs Again, Tech Leading, Chinese Stocks Retreat

Despite increased macro uncertainty, U.S. stocks continued their rally. The Dow Jones and S&P 500 both hit record closing highs, rising 0.48% and 0.65%, respectively; the Nasdaq surged 0.81%. In individual stocks, Intel jumped over 10%, its largest single-day gain since September; Tesla rose more than 2%, Meta gained over 1%, and Apple ended a seven-day losing streak. The China Golden Dragon Index retreated 1.3%.

European markets generally rose, with France up 1.44%, and the UK and Germany up 0.8% and 0.53%, respectively.

Cryptocurrency Market Steady, BTC and ETH Continue to Rise

Driven by global stock market gains, cryptocurrencies also performed steadily. Bitcoin is at $96,910, up 1.95% in 24 hours; Ethereum is at $3,360, up 2.19%, both continuing their upward momentum.

In Hong Kong stocks, the Hang Seng Index night futures closed at 26,408 points, up 167 points; the China Enterprises Index night futures closed at 9,119 points, up 70 points.

Market Focus Shifts to Supreme Court Ruling, Trump Tariff Case to Be Decided Next Week

The Supreme Court is expected to announce a series of major rulings next Wednesday (January 14), including the legality of Trump’s broad global tariff policies. Conservative and liberal justices both questioned the legality of Trump’s invocation of the 1977 Emergency Powers Act to impose tariffs during the hearings. This ruling will directly impact global trade patterns and market expectations.

This Week’s Highlights: Earnings Season Begins, TSMC in Focus

Major banks will release their Q4 earnings reports this week, with profit growth being the core belief of the bulls. According to LSEG data, analysts expect the overall earnings growth rate of S&P 500 constituents to be about 13% in 2025, further increasing to over 15% in 2026. Notably, TSMC will announce its earnings on Thursday (January 15), and its performance will serve as an important indicator of the tech industry’s health.

Japanese Prime Minister Fumio Kishida is reportedly considering dissolving the House of Representatives on January 23, with a possible general election in early or mid-February, which has driven the yen down to a nearly one-year low of 157.96.