“Who Said Tariffs?”

Hi there! Over the weekend I was having a virtual meetup with some of my girlfriends. We were just catching up, talking about everything, when someone mentioned that 2025 is the Year of the Snake. Now, I don't usually pay much mind to this kinda thing, but something about it compelled me to do some research.

Turns out, the Snake isn't just about slyness and apple eating like most people think. Rather, it is about wisdom, transformation, and intuition. Funny thing is, my theme for this year is to stay focused. When I heard about the Snake's energy, it felt like the universe was giving me a stamp of confirmation, hissing, "Yeah girl, you're on the right track!"

Get this! As I dug further, I realized I was born in the Year of the Snake (many moons ago...lol). People like me, born under this sign, are known to be skilled communicators, excellent problem-solvers, naturally strategic, with a splash of mystery.

I am stepping into this new year with that Snake energy, ready and focused. This year I will shed that old skin and rise to the most impactful version of myself.

Alright, let’s dig in!

Last Week’s Market Overview (January 26 - February 1, 2025)

Last week U.S. markets were volatile, with mixed results across major indices as investors balanced concerns over AI developments, corporate earnings, and geopolitical factors. The Dow emerged as the outperformer, while the S&P 500 and Nasdaq faced downward pressure, particularly in the tech sector. European equities advanced on strong corporate earnings and accommodative monetary policy, while Asian markets made modest gains amid holiday-thinned trading. Treasury yields fell to near year-to-date lows, and the dollar strengthened on tariff headlines.

U.S. Markets Recap

Equities:

Stocks fluctuated throughout the week, initially selling off due to AI-related concerns before rebounding on positive tech earnings. The Dow gained +0.27%, while the S&P 500 closed lower at -1.00%, and the Nasdaq fell -1.64%. Value stocks outperformed growth, and small caps declined -0.98%.

Key Developments:

• DeepSeek, a Chinese AI startup, rattled tech shares with claims of superior performance at lower costs.

• The Magnificent Seven earnings season kicked off:

  • Meta Platforms (META) and Apple (AAPL) exceeded expectations and provided strong guidance.

  • Tesla (TSLA) missed earnings but rallied on optimism about autonomous driving and robotics, and holding their Bitcoin.

  • Microsoft (MSFT) lagged due to slowing cloud-computing growth.

Fixed Income:

• The Bloomberg U.S. Aggregate Bond Index rose despite fluctuations post-Fed decision. The 10-year Treasury yield fell by nearly 10 basis points, while the two-year yield remained stable.

• Treasury yields ended January near their lowest levels of the year, despite initial fears of inflationary pressures from tariff threats.

• The bond market reacted to the DeepSeek news, as potential cost reductions in AI could lower inflation and interest rate expectations.

Commodities:

• Oil: West Texas Intermediate (WTI) crude prices declined due to weaker-than-expected global growth, increased U.S. stockpiles, and fluctuating demand from China.

• Gold: Prices rebounded near record highs, driven by looser monetary policy in Europe and Canada, and safe-haven buying amid tariff threats.

• Silver posted gains, while copper declined.

Currencies:

• The U.S. dollar strengthened, gaining nearly 1% for the week, marking its strongest performance since mid-November. Tariff announcements and positive personal spending data supported the greenback.

• The Euro and British Pound weakened against the dollar, while the Japanese Yen appreciated slightly.

U.S. Economic Recap (January 26 - February 1, 2025)

• Consumer Spending: Real spending in December rose 0.4% month-over-month, pushing inflation higher. The personal savings rate dipped to 3.8%.

• Federal Reserve Decision: The Fed held rates steady at 4.25% to 4.50%. Chair Powell’s press conference reassured markets, but bond yields rose slightly on concerns about inflation.

Global Markets Recap (January 26 - February 1, 2025)

Europe:

• European equities reached new highs, buoyed by strong earnings from ASML, Nokia, and Shell.

• The European Central Bank (ECB) delivered its fourth consecutive rate cut, supporting market optimism.

Asia:

• Markets were subdued due to Lunar New Year holidays. Japan’s markets remained open, closing higher after the Bank of Japan hinted at more rate hikes.

• China’s PMI slipped into contraction, raising concerns about economic momentum.

Crypto Recap (January 26 - February 1, 2025)

• The total crypto market cap dropped just under 1% to $3.708 trillion.

• Bitcoin fell from $105,000 to $97,000 early in the week, then plunged below $91,000 after tariff announcements, triggering $2.1 billion in liquidations. It rebounded following the pause on tariffs against Mexico and Canada.

• Poland became the fifth-largest host of Bitcoin ATMs, surpassing El Salvador.

• Tether integrated USDT into Bitcoin’s Lightning Network, enhancing transaction speed and security.

• Last week’s top crypto gainers:

  • DeXe (DEXE), Hyperliquid (HYPE), Mantra (OM), Ondo Finance (ONDO)

Here are other key highlights from last week:

• Illinois considering strategic Bitcoin reserve with 5-year Hold Strategy.

• Tesla’s Bitcoin gains surge after accounting rule changed.

• Tokenization, AI and real-world adventures: The next wave of crypto engagement.

• Robinhood hinted at Bitcoin futures launch.

The excitement continues this week!

Key Developments So Far:

• ISM Manufacturing PMI (Mon): Rose to 50.9, the highest since October 2022.

• JOLTS Job Openings (Tues): Fell to 7.6 million, the lowest since September 2024.

• David Sacks announced plans for a sovereign wealth fund to invest in Bitcoin and digital assets, reinforcing the U.S.’s leadership in crypto.

Upcoming U.S. Economic Releases:

• ADP Nonfarm Payrolls (Wed)

• ISM Services PMI (Wed)

• Jobless Claims (Thurs)

• Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings (Fri)

• Consumer Sentiment (Fri)

Events to Watch:

• Tariff developments and potential retaliatory actions from China.

• Federal Reserve commentary on the economic outlook and inflation.

Fed speakers this week:

• FOMC Member Bostic: Expressed caution regarding rate cuts due to housing market dynamics.

• FOMC Member Daly: Emphasized the need for patience in policy adjustments.

• Vice Chair Jefferson: Indicated gradual rate cuts over the medium term but emphasized caution due to a strong economy.

Upcoming Speeches:

• FOMC Members Barkin, Goolsbee, Bowman, Waller, Daly, Kugler scheduled to speak throughout the week.

Earnings: 

• Palantir (PLTR): Beat earnings, shares surged 25%.

• AMD: Beat earnings but shares fell 6% on cautious data center revenue outlook.

• Alphabet (GOOGL): Beat earnings but missed revenue expectations due to slower Google Cloud growth.

Upcoming Earnings to pay close attention to are outlined in red below.

Global Economic Events This Week:

Trading Tip:

“Stocks to watch this week - Exxon Mobil (XOM) and RBC Bearings (RBC)!”

Week 1/26/25 - 2/01/25 Recap

Special Tools and Strategies

Crypto Leverage Trading

On February 2, 2025, Bitcoin experienced a dramatic drop below $90.5K following the announcement of new tariffs by President Donald Trump on Canada, Mexico, and China. This sudden shift triggered over $2 billion in liquidations across the derivatives market. According to CoinGlass, approximately $465 million in Bitcoin leverage positions were wiped out within 24 hours, with $389 million of these being long positions.

For many traders, this event was a harsh lesson in the dangers of leverage trading. Leverage can amplify your gains, but it can just as easily magnify your losses. If you’re considering leverage trading, understanding its mechanics and risks is essential.

What is Leverage Trading?

Think of leverage like a mortgage when buying a house. You may put down 10% of the home’s value, but you’re controlling the entire property. Similarly, in crypto, leverage allows you to control a larger position than your initial investment by borrowing funds.

Example:

If you use 5x leverage on a $1,000 investment, you’re controlling $5,000 worth of crypto. A 2% price move in your favour becomes a 10% gain. But if the market moves against you by 2%, you face a 10% loss or, worse, liquidation.

Key Concepts:

• Margin: The initial deposit you put down to open a leveraged position.

• Liquidation Price: The price at which your position is automatically closed to prevent further losses.

• Funding Rates: Fees paid between traders to keep positions open in perpetual futures contracts.

Understanding Leverage Trading: FAQ

How Exactly Does Crypto Leverage Multiply Both Gains and Losses?

When you trade with leverage, small market moves have outsized effects on your position. For instance, with 10x leverage, a 1% price increase equals a 10% profit. Conversely, a 1% price drop means a 10% loss.

What Happens to Your Position During Market Volatility?

In volatile markets, price swings can trigger liquidations quickly. If your collateral drops below the required margin, your position is closed automatically. This happened to thousands of traders during the February 2025 crypto crash.

Which Exchanges Offer Leverage and How Do They Differ?

Popular platforms include Binance, Bybit, and Mexc. Each has unique leverage limits, fee structures, and may require a VPN in restricted areas. For example, Binance offers up to 125x leverage, but higher leverage comes with stricter margin requirements.

What are Common Cryptocurrencies for Leverage Trading?

While no cryptocurrency is inherently better for leverage trading, certain tokens are frequently chosen due to their market characteristics. The most popular choices typically offer high trading volume, significant price volatility, and widespread market adoption. These include: BTC, AVAX, SOL, ARB, ORDI, OP, NEAR, and SNX.

Why Do Experienced Traders Use Lower Leverage Than Beginners Might Expect?

In my experience, seasoned traders rarely go beyond 3x to 5x leverage. They understand that while higher leverage can boost profits, it also significantly increases the risk of total liquidation.

Risk Management for Leveraging in Crypto

Position Sizing Guidelines:

Only risk a small portion of your capital on any single trade. For example, if you have $10,000, risking 1-2% per trade helps protect your portfolio from catastrophic losses.

Stop-Loss Placement Strategies:

Always set a stop-loss to limit potential losses. Place it at a strategic level - not too tight to avoid getting stopped out prematurely, but not too loose to prevent excessive loss.

Warning Signs of Overleveraged Positions:

If you’re constantly close to liquidation or relying on “hopium” instead of strategy, you’re likely overleveraged. Red flags include frequent margin calls and emotional trading decisions.

Emergency Procedures During Market Volatility:

Have a plan in place for volatile conditions. This includes:

• Monitoring news for sudden market shifts

• Adjusting stop-losses as needed

• Reducing leverage in uncertain markets

Advantages and Disadvantages of Leverage Trading

In my experience, traders who approach leverage with caution tend to last longer in the market. I’ve seen many beginners get wiped out because they chased quick profits without understanding the risks. Always prioritize protection over profit. Remember, surviving in the market is the first step to thriving.

Leverage trading in crypto can be incredibly rewarding, but it’s also one of the riskiest strategies out there. The February 2025 Bitcoin drop is a perfect example of how quickly the market can turn against you. With proper planning, risk management, and a conservative approach, you can harness the power of leverage responsibly.

Actionable Steps:

• Start with low leverage (2x-5x).

• Always set stop-losses.

• Never risk more than 1-2% of your portfolio on a single trade.

• Keep learning and stay informed.

Trade smart, stay cautious, and remember the goal is to protect your capital first and grow it second.

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.