“Trade what’s happening… not what you think is gonna happen.“ — Doug Gregory

1. U.S. Enlists Mexico, EU and Japan in Its Minerals Race With China — The U.S. has agreed to work with Japan, Mexico and the European Union on the development of critical minerals used in industries such as defense, the Trump administration said on Wednesday.
The move builds on President Trump’s efforts to combat China’s dominance in the sector. Under the proposed agreements, the nations will work together to identify critical minerals necessary for certain industries and develop policies to encourage their mining and processing into products like rare earth magnets, U.S. officials said. Such minerals are used in components critical for the production of high-end military technologies and consumer products such as cars.
2. Bitcoin Drops Below $70,000 as ‘Forced Deleveraging’ Accelerates — Bitcoin tumbled well below $70,000 as the unwinding of leveraged bets and broader market turbulence deepened a selloff that’s hammered cryptocurrencies over the past three weeks. The downturn has also erased all of Bitcoin’s gains since the election of President Donald Trump, whose crypto-friendly stance had fueled the token’s meteoric rise last year. But the market started cracking this month as rising geopolitical tensions sent tremors across global financial markets and curbed risk taking. That sparked Bitcoin’s precipitous decline from mid-January and set off a self-reinforcing cycle of selling as funds liquidated assets to meet redemptions and unwind leveraged bets.
3. Job Openings Sink to a Post Pandemic Low — The number of job openings in December fell to the lowest level in eight years, excluding the COVID-19 pandemic era, underscoring the fragility of the U.S. labor market in the new year. U.S. job openings dropped by 386,000 in December to 6.5 million, the government said in a report delayed by federal shutdowns. That’s the lowest total since 2017, excluding the 2020-21 time frame. The exceedingly small gap between hires and separations illustrates just how weak the labor market has gotten since last spring. The economy is barely adding net new workers.

The week ahead — Economic data from Econoday.com:

“Do More of What Works and Less of What Doesn’t” — unknown

1. Fed Holds Rates Steady, Nods to Stabilization in Jobless Rate — Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments. The Federal Open Market Committee voted 10-2 Wednesday to hold the benchmark federal funds rate in a range of 3.5%-3.75%. Governors Christopher Waller and Stephen Miran dissented in favor of a quarter-point reduction. The upgraded assessment of the labor market is likely to hold expectations for a near-term rate cut at bay, despite escalating pressure from the Trump administration. Heading into the meeting, investors saw another cut as unlikely until at least June.
2. Meta Reports Record Sales, Massive Spending Hike on AI Buildout — The company said capital spending would reach up to $135 billion in 2026, about 20% higher than Wall Street expectations and nearly double last year’s investment level. Chief Executive Mark Zuckerberg plans to build new data centers around the globe, release new cutting edge AI models and further infuse the core advertising business with AI this year.
3. US Trade Gap Widens From Smallest Since 2009 as Imports Rise — The goods and services trade gap nearly doubled from the prior month to $56.8 billion, Commerce Department data showed Thursday. The 94.6% widening was the largest since 1992, while the shortfall for the month exceeded all projections in a Bloomberg survey of economists. That was the case again in November, with a surge in inbound shipments of pharmaceuticals and a slide in gold exports. Overall imports increased 5%, also boosted by capital goods, such as computers and semiconductors. The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product. After the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add 0.65 percentage point to fourth-quarter growth, now estimated at 4.2%.
4. Trump Picks a Reinvented Warsh to Lead the Federal Reserve — Warsh, who served on the US central bank’s Board of Governors from 2006 to 2011 and has previously advised Trump on economic policy, would succeed Jerome Powell when his term at the helm ends in May. It marks a comeback for Warsh, 55, whom the president passed over for the top job in 2017 when he selected Powell. If confirmed by the Senate, the former Fed governor will take charge of US monetary policy at a time when many economists and investors see its traditional insulation from elected officials as being under threat from the White House. Warsh aligned himself with the president in 2025 by arguing publicly for lower interest rates, going against his longstanding reputation as an inflation hawk.

The week ahead — Economic data from Econoday.com: