Israel, Hamas agree to ceasefire deal

Good morning. Here's what happened overnight and what you need to know today.

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1.

Israel-Gaza deal: Israel and Hamas have agreed to a phased ceasefire following a 15-month war that has killed tens of thousands and devastated Gaza, media reported. Mediators from both sides have agreed to the deal, AP, Reuters, the WSJ and others reported. The six-week truce begins with a prisoner exchange: 33 Israeli hostages, including women, children, and men over 50, will be freed in return for Palestinian prisoners. Negotiations will then tackle the release of remaining hostages, a permanent ceasefire, and Israel’s withdrawal from Gaza. The final phase will focus on recovering the bodies of deceased hostages and reconstructing Gaza under the supervision of Egypt, Qatar and the UN. The deal, mediated by Egypt, Qatar and the US, still faces challenges, including determining Gaza's governance post-war and the implementation of long-term security measures. Both sides are under international pressure to uphold the agreement. (Reuters)(AP)(WSJ)

2.

Inflation relief: Cooling core US inflation in December 2024 surprised markets and reignited hopes for Federal Reserve rate cuts, as core CPI rose just 0.2%—below forecasts of 0.3%. Data from the US Bureau of Labor Statistics showed inflation rose 0.4% in December with annual inflation ending at 2.9%, driven by a 4.4% surge in gas prices. This was up from November's 0.4% monthly increase (2.7% annually) but aligned with economists’ expectations. Core inflation, excluding food and energy, increased 0.2% monthly and 3.2% annually, both below forecasts of 0.3% and 3.3%. Categories driving inflation included airfares, medical care, and rents, while hotel stays and car prices moderated. The final inflation report of President Joe Biden’s tenure spurred market rallies, with stocks and Treasuries rising as traders upped bets on earlier rate cuts. Former Fed economist Julia Coronado said “the underlying inflation trends look very healthy. If it weren’t for these policies that look to be inflationary, I would think that the Fed would have reason to be pretty confident.” (US BLS)(Capital Brief)(WSJ)(Bloomberg)

3.

Wall Street beat: JPMorgan Chase, Goldman Sachs, Citigroup and other major US banks reported strong, better-than-expected 4Q earnings, fuelled by a resurgence in trading, investment banking and dealmaking. Revenue growth was driven by corporate optimism, CEO confidence and strong equity and debt markets, while profits benefited from the absence of 2023 FDIC charges related to the regional banking crisis. The results come as regulatory rollbacks under the Trump administration are expected to ease capital requirements and support growth. However, JPMorgan CEO Jamie Dimon and others cautioned about ongoing risks. “Geopolitical conditions remain the most dangerous and complicated since World War II,” Dimon said. “Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time.” JPMorgan’s net profit jumped 50% to USD14 billion ($22.53 billion), while Goldman’s more than doubled to USD4.11 billion. Citigroup earned USD2.86 billion, recovering from a year-ago loss, and announced a USD20 billion share buyback. Wells Fargo saw profits rise 47%, boosted by investment banking fees. BNY Mellon, the oldest US bank, reported a 462% rise in net income, exceeding Wall Street estimates with higher fee revenue and assets under custody and administration 9% higher to USD52.1 trillion. (JPM)(GS)(Citi)(Wells Fargo)(BNY)(Capital Brief)(Bloomberg)

4.

(Black)Rock solid: BlackRock hauled in USD641 billion ($1.03 trillion) in new client funds in 2024, propelling annual revenue past USD20 billion for the first time and cementing its position as the world’s largest asset manager. Total assets under management climbed to USD11.55 trillion, slightly below analysts’ expectations of USD11.66 trillion, according to estimates cited by the FT. Quarterly revenue surged 23% year-on-year, while net income rose 21% to USD1.67 billion. Annual revenues totalled USD20.41 billion. Strategic acquisitions, including Global Infrastructure Partners, Preqin and HPS Investment Partners, drove growth in private markets. In an employee memo, BlackRock announced leadership changes and flagged a new global partners office will focus on connecting asset owners with capital markets. “This is just the beginning,” CEO Larry Fink said in a statement. “Our record organic growth and financial results do not yet reflect the full integration or pending acquisitions of the high-growth businesses of GIP, HPS and Preqin.”(BlackRock release) (Capital Brief)(Bloomberg)(FT

5.

Lethal crackdown: At least 78 bodies and 166 survivors have been pulled from a gold mine by a court-ordered rescue operation in Stilfontein, South Africa, after police blocked food and water for months to stop illegal mining in one of the country’s deadliest mining crackdowns. Ongoing since Monday, the rescue operation has exposed the harrowing conditions faced by the miners, known locally as "zama zamas" - from an isiZulu expression for taking a chance. All survivors, many emaciated and disoriented, were immediately arrested for offences like illegal immigration and mining. Hundreds remain underground as volunteers and civil groups assist in retrieving decomposing bodies. Authorities justified the siege as necessary to combat illegal mining, which they said cost the economy USD2.4 billion ($3.85 billion) in 2024. Trade unions and opposition politicians, have condemned the government’s approach as wilful negligence, demanding an inquiry. (BBC)(Reuters)

6.

German stagnation: Europe’s largest economy entered its first back-to-back economic contraction since the early 2000s, with German GDP shrinking by 0.2% in 2024 and 0.3% in 2023, according to the Federal Statistics Office. The downturn stems from weak global demand, competition from China, high energy costs, and struggles in the automotive sector. Exports fell 0.8% last year, and a 0.1% contraction in the fourth quarter signals no imminent recovery. Consumer spending rose by 0.3%, buoyed by wage growth and slower inflation, but analysts warn stagnation may persist into 2025 as export opportunities deteriorate after Donald Trump’s inauguration. "There are currently very strong indications that 2025 will be the third year of recession in a row," LBBW economist Jens-Oliver said.(FSO)(Reuters)(FT)

7.

TikTok shutdown?: TikTok is preparing for a possible US shutdown on Sunday if the Supreme Court does not block a federal law requiring its Chinese parent ByteDance to sell its US operations, sources told Reuters. The company has assured its 7,000+ U.S. employees that jobs, pay and benefits will remain secure next week even if the app is banned, The New York Times reported. TikTok plans to notify users of the ban through pop-ups and allow them to download their data, reports said. The 19 January deadline comes as over 700,000 US users join the Chinese app RedNote in anticipation of the ban, amid speculation billionaire and X owner Elon Musk could acquire TikTok’s US operations. Popular YouTube creator MrBeast also sparked speculation about possible deals to acquire the app after posting about potential billionaire backers, though no concrete plans have been announced. (NYT)(Reuters)

8.

Dye out: The US FDA banned the artificial food colouring Red No. 3, a dye linked to cancer in male rats, from food and drugs, after decades of use in products like candy, baking decorations and medications. Effective 15 January, 2027, the ban follows a 2022 petition from advocacy groups invoking the Delaney Clause, which prohibits carcinogens in food. Red No. 3 is found in 26% of baking decorations, 13% of candy, and 11% of cookies, according to GoCoCo data. Critics argue the dye is unnecessary and point to safer alternatives used in Europe. California banned the dye in 2023 and advocacy groups now urge the FDA to ban other artificial dyes under scrutiny. (Bloomberg)