US earnings rebound meets geopolitics relief

Описание: US President Donald Trump’s decision to forgo imposing tariffs on European NATO members and to rule out a forceful takeover of Greenland has driven a positive shift in global equity markets, according to Ira Epstein from Linn Associates. Epstein states that Trump adopts a strategy of escalating situations only to de-escalate them publicly, which was evident in his recent comments at the World Economic Forum in Davos. This approach, in Epstein’s view, is intended to bolster Trump’s reputation as a skilled negotiator while keeping global markets on edge.

Epstein notes the immediate market reaction saw the major US indices finishing in the green. Stocks like Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL), and United Airlines (NASDAQ: UAL) rebounded, while Netflix (NASDAQ: NFLX) suffered a downturn following a muted earnings outlook and halting buybacks to fund its Warner Brothers Discovery acquisition. The VIX volatility index dropped notably, which Epstein interprets as markets pricing in greater stability. He highlights US banks as outperformers, with Charles Schwab (NYSE: SCHW) and Citizens Financial (NYSE: CFG) delivering strong quarterly results. Energy companies Halliburton (NYSE: HAL) and others also advanced, propelled by higher natural gas prices.

Turning to commodities, Epstein sees the parabolic rise in gold prices as unsustainable and argues for caution as it approaches $5,000 an ounce. He also points to growing copper demand driven by electric vehicles and AI infrastructure, while flagging credit cap proposals as potentially disruptive for US credit markets.