MARKETS

Stocks ascended yesterday as investors parsed the latest round of Big Tech earnings, finding them generally palatable. Thursday’s biggest winner was IBM, which had its best day since NSYNC was topping the charts after it posted strong AI-boosted Q4 revenues. Walgreens fell after announcing it would suspend the quarterly dividend it has been doling out to shareholders for 90+ years.

ECONOMY

US Tariffs Take Effect on Mexico, Canada, and China

Hefty US import taxes went into effect today on goods from America’s top international trade partners. Under President Donald Trump’s new policy, the US will impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on goods from China—countries that collectively account for $1.6 trillion in annual US trade.

What’s Happening?

• White House Press Secretary Karoline Leavitt denied a Reuters report that Trump would delay the tariffs by one month and allow exemptions for some items. More details are expected today.
• North American business is heavily integrated under USMCA (formerly NAFTA), and importers typically pass along tariff costs to consumers.

Key Sectors Impacted:

• Oil & Gas: Crude oil is the No. 1 product the US imports from Canada, accounting for 60% of US oil imports. Midwestern states could see gas prices spike by as much as 70 cents per gallon.
• Automobiles: Canada and Mexico account for nearly half of US motor vehicle imports. Tariffs will impact supply chains, raising production costs.
• Agriculture & Alcohol: The US imported $38.5 billion in agricultural goods from Mexico in 2023 and $26 billion of alcohol in 2022. Expect price hikes on avocados, tequila, and beer.

Trade War Escalation?

• Canada has readied a list of $105 billion in US goods for counter-tariffs.
• Mexico has pledged a similar response.
• Trump hinted at more tariffs coming by mid-February on computer chips, oil, and gas.

WORLD

Helicopter Flights Restricted in DC After Deadly Plane Crash

• Officials have limited helicopter flights over DC following a midair collision between an American Airlines plane and a military helicopter.
• At least 41 bodies have been recovered from the 67 presumed dead.
• Black boxes from both aircraft have been recovered, and investigations are ongoing.
• In a separate incident, a medical transport jet crashed in Philadelphia, sparking fires in nearby homes.

Meta Eyes Texas for Incorporation

• After Elon Musk moved Tesla’s incorporation out of Delaware, Mark Zuckerberg is considering following suit with Meta.
• Texas offers more business-friendly tax and regulatory policies.
• Delaware’s corporate-friendly legal system has long attracted major corporations, but recent rulings against Musk’s Tesla pay package have led to skepticism.

HEALTHCARE

FDA Approves Non-Opioid Pain Pill

For the first time in over 20 years, the FDA has approved a new pain medication that isn’t an opioid. Vertex Pharmaceutical’s Journavx offers a non-addictive alternative for short-term pain relief.

How It Works:

• Opioids like OxyContin and Vicodin block pain by targeting the brain’s reward center, leading to addiction risks.
• Journavx blocks pain signals before they reach the brain.
• Trials showed it outperformed a placebo but was less effective than opioids combined with acetaminophen.
• Priced at $15.50 per pill, analysts predict sales could exceed $1 billion annually.
• The next hurdle: gaining approval for chronic pain treatment.

NEWS

What Else Is Happening?

• The Trump administration has reportedly begun a process for mass firing FBI agents involved in the Jan. 6 investigation.
• Venezuela has released six detained Americans after diplomatic talks.
• OpenAI unveiled a new “mini” AI model, aiming for better reasoning at a lower cost.
• The FCC is demanding CBS release a 60 Minutes interview transcript amid Trump’s lawsuit against the network.
• Chuck Todd is leaving NBC News and taking his podcast, Chuck Toddcast, elsewhere.
• Black History Month begins today.