Finance

Market speculation picks up to start 2025 as crypto stocks jump

Published

5 months ago

January 2, 2025

Business Finance News

Traders work at the New York Stock Exchange on Dec. 31, 2024.

NYSE

Crypto trades jumping. Roaring Kitty boosting meme stocks. Broader market ripping on no apparent catalysts.

Animal spirits are on the run at the dawn of 2025 trading.

Many speculative pockets of the stock market surged in early trading Thursday, the first session of the new year, right after the S&P 500 closed out the best two-year run since 1998.

Stocks tied to the price of bitcoin jumped as the cryptocurrency climbed back over $96,000. Microstrategy added 4% premarket after climbing more than 360% in 2024. Crypto-related companies Coinbase, Robinhood, Mara Holdings and Riot Platforms also traded higher after a big 2024.

Elsewhere, retail traders active on social media were busy playing a guessing game after online personality Roaring Kitty posted another cryptic message on X of a short clip of the late musician Rick James. Some believe the meme stock leader, AKA Keith Gill, was referring to Unity Software, whose stock soared 10% in premarket, while others think he’s back touting his original favorite GameStop, whose shares also caught a bid in premarket.

Meanwhile, semiconductor stocks — 2024’s big winners — helped lead the market again after the artificial intelligence trade lost some steam at the end of last year. Broadcom jumped 2% Thursday, while Nvidia gained 1.6%.

What’s more, golf stock Topgolf Callaway Brands jumped 8.5% on the back of an upgrade at Jefferies to buy from hold. The investment bank said shares of the golf equipment maker looked oversold and raised its price target to 65% above where the stock closed the year.

With a pickup in market speculation, broad stock futures were on the rise to kick off 2025. Dow futures advanced as much as 300 points. S&P 500 futures added 0.8%, and Nasdaq-100 futures rose 1%.

Thursday’s dramatic moves resembled the initial rallies on the back of Donald Trump’s election victory in November, as investors bet his pro-business policies would drive companies and the economy to strong growth. Those gains slowed toward the end of 2024 as concern grew that the president-elect’s protectionist policies could stir inflation or disrupt chains, and as the Federal Reserve signaled fewer interest rate cuts in 2025.

“Many investors assume that the incoming administration’s push for deregulation will unleash ‘animal spirits,'” Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said in a recent note to clients. “But what if it only accelerates the concentration of monopoly power in the hands of a few, diluting the efficacy of broad economic measures and leaving behind even larger swaths of the populace?”

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

2 days ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”