Here are five things you need to know this morning
Trump threatens to indict Powell: The Trump administration has threatened to indict Federal Reserve Chair Jerome Powell. The action is ostensibly over congressional testimony he gave last summer about a Fed building project. However, Powell says that is a “pretext” to gain more influence over the central bank and monetary policy. U.S. President Donald Trump has previously blamed the Fed’s policy for holding back the economy and has also previously spoken publicly about potentially firing Powell. The move sparked renewed concerns about the independence of the central bank, and unpredictability of the Trump administration. There has been evidence this morning of a revived “sell America” sentiment in the markets, with the U.S. dollar, Treasuries and U.S. stock futures all under pressure.
Bank stocks dip on Trump credit card pledge: U.S. bank stocks traded lower in the pre-market after Trump called for a one-year cap on credit card interest rates at 10 per cent. According to his social media post, the cap would come into force on Jan. 20. U.S. lawmakers are saying the cap would require approval from congress. A joint statement from five banking bodies says the cap would reduce credit availability and be devastating for millions of Americans.
Strong holiday season for Lululemon: Lululemon expects fourth quarter sales to come in at the higher end of its guidance. The Vancouver-based maker of athletic and leisure wear says revenue is expected to be more than US$3.5 billion, thanks to strong holiday-season sales. Lululemon’s founder and Elliott Investment Management are pushing for changes and new board members at the company, amid slumping sales. Lululemon’s CEO will also be stepping down at the end of this month.
Shopify boosting AI-based sales: Shopify is allowing merchants to sell products directly on Google and Microsoft’s AI platforms. The company is enabling ‘AI-native shopping’, allowing users to shop and check out directly on both Google and Microsoft AI platforms. Last fall, the e-commerce platform signed a similar deal with OpenAI. The Ottawa-based company is also giving non-Shopify merchants the ability to list their products on its catalog.
China and EU working toward EV dispute settlement: China and the European Union have agreed on steps to resolve their dispute over the imports of Chinese electric vehicles to the bloc. A “guidance document” released by the EU on Monday gives instructions for Chinese EV manufacturers on making price offers for EV exports, including minimum import prices and other details. The EU had imposed tariffs of up to 35.3 per cent on Chinese EV imports in 2024 following an anti-subsidy investigation. The EU says Chinese EV manufacturer’s plans for investments in the EU will also be considered. Both the U.S. and Canada have imposed 100 per cent tariffs on Chinese EVs. The announcement comes as Prime Minister Mark Carney prepares for his visit to China this week.
