Welcome back to Carter’s Corner, where the financial markets never sleep, and neither do the headlines. In case you missed it, January is officially over… and if you thought 2025 would ease us in, you clearly haven’t checked your portfolio lately.

This week served up US Federal Reserve and European Central Bank rate decisions, the declaration of trade war 2.0, and a crypto selloff that had traders pinching pennies and questioning their life choices. Oh, and let’s not forget that everything (including the new stock market) is bigger in the Lone Star State (except my exes… because all my exes live in Texas).

So, whether you’re celebrating all-time highs or coping with a big fat margin call, sit back and relax— because we’ve got a lot to break down. Let’s dive on in:

US Markets

During last week’s meeting, the US Federal Reserve held interest rates steady… but the tone was noticeably more cautious about all that sticky inflation that you’ve noticed at the pump, at the supermarket and everywhere else. Investors were looking for more confidence from the Fed, especially because they know that the Fed moves markets… but the central bank made it crystal clear they’re still not fully convinced inflation is as tame as it should be despite fighting it for years.

Meanwhile, US stocks took a hit on Friday as the Trump administration rolled out a fresh batch of tariffs— this time targeting continental neighbors Canada, Mexico, and, of course, the beast from the far east: China. But not all investors ran for the hills. Tech stocks saw inflows as traders used the DeepSeek-driven DeepDrama selloff as a prime buying opportunity. While tensions flared, the market kept its eye on big tech earnings, looking for AI hope to power through the uncertainty… and give hope for a high-tech future.

European Markets

Across the Atlantic, deep in the heart of Europe, the ECB cut interest rates for the fifth time, bringing them down 25 bps to 2.75%. This means a ‘less tense’ monetary policy, but Eurozone GDP didn’t budge in Q4 2024, where it clocked in at 0% growth. Traders are now expecting another 75 bps in rate cuts this year— because, well, what else is the ECB gonna do if the workforce isn’t productive?

Despite sluggish growth, UK and European equities had a stellar week: the UK’s FTSE 100 hit an all-time high to close out January with its best month in over two years, while Europe’s Stoxx 600 joined the party,  hit a new all-time high as well, and notched a sixth-straight week on the up and up— its longest winning streak in over ten months. Maybe central bank cuts do still have a little juice left in them to spike the markets.

Commodities & Currencies

The US dollar flexed hard last week, rising over 1% and sending currency exchange markets into a wild tailspin:

• The USD hit a record high against the Chinese yuan (culprit: TARIFFS)
• The USD reached its highest level vs. the Canadian dollar since 2003 (culprit: TARIFFS)
• The USD climbed to its highest vs. the Mexican peso since 2022 (culprit: TARIFFS)
• The euro dropped to its lowest level in over two years (culprit: TARIFF anxiety)
• The Swiss franc slid to its weakest since May (culprit: TARIFF anxiety)

And while gold hit a new all-time high, crypto markets took the brunt of the damage last week, with $1.8 billion in liquidations in a single day as traders reacted to Trump’s new tariff policies in a frenzy of havoc in the global economy (more on this below).

Let’s break down the big stories last week:

Trump’s First Tariff Rollout Heats Things Up

The Trump administration wasted no time rolling out fresh tariffs to its neighbors and arch enemies: hitting trading partners Canada and Mexico, and of course, China. While the official narrative is all about (MAGA) boosting American manufacturing and jobs, markets weren’t exactly thrilled about all this. US stocks slid, currency around the globe markets went haywire, and commodities braced for more volatility ahead.

For investors, this isn’t just about trade— it’s about big bad inflation. Tariffs often lead to higher costs for businesses and consumers, meaning the US Fed might have to rethink its rate path amid this new reality. High stakes corporate earnings calls these next few weeks from the world’s biggest and most innovative companies will set the scene for what’s to come:

Are companies bracing for impact, or will they find ways to pass costs onto consumers? Corporate profits are at all time highs, so don’t be surprised if they do.

Either way, the markets…and investors are watching and waiting for more clarity.

The TXSE: Major Cash for Wall Street’s New Rival

A few months ago, we discussed disruption in the US stock market ecosystem as the Texas Stock Exchange (TXSE) made headlines and gained momentum. Well last week, the stakes were raised when it received $161 million backing from BlackRock, Citadel Securities, and other notable institutions to go on and take the NYSE and Nasdaq by storm. Here in Carter’s Corner, we’re all about competition… and because the Lone Star State wants its own stock exchange, why the hell not? This major raise shows they’re not playing around.

If approved by the SEC, TXSE could launch as early as 2026 It’s only a matter of time until companies have a bona fide alternative listing venue outside of traditional financial hubs. The pitch? Lower fees, fewer regulations, and a business-friendly environment to lure companies away from New York.

For investors, it was only a matter of time and effort until the stock exchange ecosystem was upset. More competition = more innovation (hopefully). But will TXSE be able to pull top-tier IPOs? Let’s see. Stay tuned for what this means for the future of US equity markets.

Carter’s Crypto Corner: The Wild West of Finance

• What’s Next for Crypto Amid Global Tariffs?

Crypto got body-slammed and rickrolled by Trump’s tariff announcements last week. With $1.8 billion in liquidations in just 24 hours, it was a bloodbath for some of the biggest crypto whales. Bitcoin dipped hard, Ethereum followed, and even stablecoins saw massive volume shifts. Is this a blip or a dip? Who knows.

But what’s next? Well, if the trade war heats up, expect Bitcoin to take on a more defensive role— especially if traditional markets start looking shaky.

Meanwhile, gold hit a fresh all time high, so don’t be surprised if crypto traders start treating Bitcoin like digital gold again.

• Czech National Bank Considers Buying Bitcoin

The head of the Czech National Bank wants to allocate up to 5% of its $146 billion reserves into Bitcoin. The logic? Hedge against inflation, protect against currency devaluation, and, well, get ahead of the game. Crypto bros prague-tied hard on the news!

If the Czech Republic embraces Bitcoin, it would be one of the largest central bank Bitcoin allocations ever… potentially paving the way for other nations to follow suit as it sets a great precedent for strategic reserves coming into fruition. The domino effect is real.

• Tesla Marks Up Its Bitcoin Holdings for a $600M Gain

In last week’s Q4 earnings call, Tesla revealed it still has 9,700 BTC on its balance sheet… aka more than you. To make matters better, data released showed that the company marked up its stash’s valuation, booking a $600 million gain in Q4 gracias to the Trump bump and Bitcoin crossing the $100,000 mark for the first time ever.

Tesla joins the ranks of MicroStrategy, the biggest corporate Bitcoin bull in the world, which continues to scoop up Bitcoin as a strategic reserve asset. Why should you care? Because more corporations see digital assets as legit balance sheet holdings and are buying more than you— a trend that’s only going to grow over the next weeks/months/quarters/years.

• Yes, Crypto Is Exciting… But So What?

Just like out in the real Wild West, anything goes in crypto. Here’s what it means for investors with exposure to the most exciting asset class on planet Earth:

• Geopolitical risks (tariffs, trade wars, economic slowdowns) could turn Bitcoin into a global hedge.
• If central banks start hoarding Bitcoin, we’re in for a new era of digital gold reserves. If you’re into crypto and this doesn’t excite you, I don’t know what to tell ya…
• Institutional adoption keeps ramping up. First, it was MicroStrategy. Now, members of the Mag 7 like Tesla are joining the party, and they have major cash to throw around. Just wait until central banks begin their massive hoarding in the coming months.

The narrative around crypto isn’t just speculation and dank memes anymore— we’re in the early innings of a seismic global financial shift towards digital assets. So fasten your seatbelts and keep your hands and arms inside the ride at all times.

Final Thoughts: Because Why Not?

Another week, another dollar— and that, ladies and gentlemen, is always accompanied by drama.

Between the onset of the tariff wars, new exchanges making big strides forward, and crypto being crypto, January 2025 closed out with some notable financial headlines that have investors on the edge of their seats. Just like every week, let’s see how it all plays out…

The lesson here? Stay open to opportunity— markets are unpredictable and it’s important to stay tuned in to what’s affecting your portfolio. If you have any questions, please slide into my DMs as I’d love to hear from you.

That’s enough for today— see y’all next week. Be cool, keep learning, and stay invested.