The Rising Star 02/01/2025

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Sterling set for worst start to a year since 2015!

GBP collapsed 1.2% on the first day of trading in 2025, ripping through the 2024 lows (1.23654) set in April last year. The pound slides against the dollar as the anticipation of inflationary policies under the incoming administration heats up.  President-elect Trump is expected to bring in higher tariffs and greater tax cuts, which has led to a more hawkish view from the Fed who may ease interest rates at a slower pace than other central banks. Talk about starting the year with a bang!

Tesla in trouble! Tesla’s stock tumbled 7.02% today as it faces a drop in its annual deliveries for the first time. Fourth-quarter vehicle deliveries missed out on expectations by about 22,000 cars, leading to a 1% decline in total deliveries for the year 2024. Just to add to Tesla’s turmoil, this was paired with developments in the ongoing case of Elon Musk’s Pay Package, where some shareholders filed a notice of appeal with the Supreme Court of the State of Delaware, rejecting the lower courts ruling last month to void the $56 billion compensation.

China leading the EV revolution! BYD sold 4.3mn EVs and hybrids in 2024, far surpassing its target of 3.6mn. Intense competition, price wars, and hundreds of billions of dollars in government subsidies over the past decade have resulted in them being incredibly price competitive. Consequently, China is expected to sell more EVs than vehicles with internal combustion engines for the first time in 2025.

As the world's second-largest oil consumer, China plays a huge role in determining oil prices. A transition to EVs will signify an already falling demand for gasoline and diesel to power combustion engines. This shift may spark a reduction in the demand for its main commodity, crude oil, while simultaneously boosting the need for coal to produce electricity.

UK House Prices Rise More Than Expected in December

UK house prices rose 0.7% in December, beating expectations, following a 1.2% increase in November. Annual growth reached 4.7%, the highest since late 2022, driven by buyers acting before the stamp duty hikes likely to take effect in April 2025. Mortgage-based indices have shown annual growth: Halifax (+4.8%), Nationwide (+3.7%), and Zoopla (+1%) signalling a surprisingly resilient mortgage market in 2024, despite ongoing affordability challenges. The average house price in the UK now sits at £269,426… good luck, Gen Z.