Crypto News: Overblown fears

Fresh data Wednesday showed US inflation to be slowing again, triggering a stock rally and a plunge in bond yields as investors (some of whom just days ago thought the Fed wouldn't cut rates anytime soon) became hopeful again. Equities erased their losses for the new year with the S&P 500 up about 2%—its biggest gain since after the US election. A surge in Treasuries pushed 10-year yields down by almost 15 basis points—easing fears of the 5% rate horizon. Commodities roared, with oil topping $80 a barrel. The concerted cross-asset advance was the best for a consumer-price-index day since at least late 2023, according to data compiled by Bloomberg. Krishna Guha of Evercore said the CPI report adds weight to the argument that markets have "overtraded" the inflation story and should stop being so risk averse. "It reinforces the base case for two Fed cuts, and keeps open the possibility of a March cut," he said. —David E. Rovella

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Reports this week that a deal was near in Gaza turned out to be true as Israel and Hamas on Wednesday agreed to a ceasefire deal that will release dozens of hostages and bring a temporary halt to the 15-month war. The ceasefire is to start Sunday—a day before Donald Trump 's inauguration—and last six weeks, Qatari and US officials said. Thirty-three hostages captured after Hamas attacked Israel in October 2023 will be released while Israel will withdraw from populated areas of the Gaza Strip and release hundreds of Palestinian prisoners. While US President Joe Biden praised the agreement as one originally laid out by his administration and the result of "painstaking" negotiations by the White House (as well as more recently advisers to President-elect Donald Trump), Israeli Prime Minister Benjamin Netanyahu's office said several details still needed to be worked out and that a deal hadn't been finalized. Here's what may come next.

US President Joe Biden, left, and Antony Blinken, US secretary of state, speak on the ceasefire deal between Israel and Hamas at the White House Wednesday. Photographer: Aaron Schwartz/Sipa

On Monday, Canada was offering the incoming Trump administration a bit of a carrot, promising to buy all sorts of American goods to forestall a trade war. Well today, America's neighbor to the north revealed a stick, too. Canada has drawn up an initial list of C$150 billion ($105 billion) of US-manufactured items that it would hit with tariffs if Trump decides to levy tariffs against Canadian goods, as he has threatened. The list is said to be a draft and would come into play only if the Trump moves first. More tariffs from Canada might be added later depending on what the US does.

Nate Anderson has decided to disband renowned short seller Hindenburg Research, the firm that's caused expensive headaches for the likes of Carvana, nursing home operator PACS Group, controversial game company Roblox and most famously the Indian conglomerate Adani Group. "The plan has been to wind up after we finished the pipeline of ideas we were working on," Anderson said. "Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs—we shook some empires that we felt needed shaking."

Nate Anderson Photographer: Bonnie Jo Mount/The Washington Post

The biggest banks in America are ending the Biden years on a high note. The four giant lenders that reported full-year results Wednesday notched their second-most profitable year ever in 2024, trailing only the Democrat's first year as president. The group's trading and lending revenue benefited from interest-rate moves, while investment banking fees jumped 32% from a moribund 2023. Of course, an extra earnings bump came in the fourth quarter as Trump's election win set off market swings. But that wasn't the only driver, as consistently low unemployment and expectations for future rate cuts by the Federal Reserve fueled the rally.

But for employees at one of those banks, there was a lot of bad news in 2024—and it looks like more is coming. Last year's mass firings by Citigroup Chief Executive Officer Jane Fraser could continue, given the bank is planning to reserve $600 million for severance payments. That's 14% less than last year's termination set aside, when Fraser slashed 10,000 of the bank's workers. The New York-based bank is about halfway through a years-long reorganization that it initially anticipated would take away 20,000 jobs globally. Citigroup has been a laggard among its banking peers, but the firm may be making progress in its revamp—fourth-quarter compensation and benefits expenses came in below analyst expectations.

Two senior executives are said to be leaving First Abu Dhabi Bank as one of the Gulf's largest lenders continues to grapple with an exodus of senior managers. Sameh Al Qubaisi, head of global markets, and Suhail Bin Tarraf, chief operating officer, are set to leave the bank. The exits are the latest in an ongoing re-shuffle of the bank's top management layers under chief executive Hana Al Rostamani, who became one of the Gulf region's top female bankers when she was named CEO in 2021.