>>> US Notable earnings/guidance movers: MRCY +18.1%, AVNW +16.5%, SNAP +11.1%,

Notable earnings/guidance movers: MRCY +18.1%, AVNW +16.5%, SNAP +11.1%, LUMN +10.7%, CRUS +9%, ENPH +7.2 on upside; THG -20.8%, INTA -19.8%, FMC -19.5%, OSCR -14.9%, COLM -9.6%, GOOG -6.9%, HRB -5.4%, CMG -4.8% on downside
  • Earnings/guidance gainers: MRCY +18.1%, AVNW +16.5%, SNAP +11.1%, LUMN +10.7%, CRUS +9%, MAT +8.1%, ENPH +7.2%, MWA +3.7%, APAM +3%, VOYA +2.3%, ENVA +1.9%, VLTO +1.7%, MOD +1.6%, AZEK +1.5%, AMTM +1.3%, EA +1.2%
  • Earnings/guidance losers: THG -20.8%, INTA -19.8%, FMC -19.5%, OSCR -14.9%, COLM -9.6%, CVRX -7.1%, GOOG -6.9%, VRNS -6%, HRB -5.4%, CMG -4.8%, FICO -4.7%, AMD -3.8%, ICHR -3.8%, MDLZ -3.8%, OI -3.5%, PRU -3.5%, AMGN -1.6%, CSL -1.6%, ATEN -1.5%, EGHT -1.4%, UNM -1.3%, ALGT -1.1%

>>> US Close Dow +0.30% S&P +0.72% Nasdaq +1.35% Russell +1.41%

Closing Stock Market Summary
Today's market showed a positive bias, with investor sentiment buoyed by several key developments related to tariffs and their potential impact on inflation and corporate earnings growth. Specifically, Canada was granted a 30-day reprieve from tariff actions, while China's latest retaliatory measures appear more symbolic than substantial
Market expectations were high that President Trump would engage in talks with Chinese President Xi Jinping today; however, those discussions did not materialize.

The S&P 500 logged a 0.7% gain and the Nasdaq Composite jumped 1.4%.

Significant contributions to the market's performance were from large-cap stocks, with Alphabet (GOOG 207.71, +5.07, +2.5%) standing out, rising 2.5% to a fresh 52-week high before reporting earnings. Other stocks with notable gains included Palantir Technologies (PLTR 103.83, +20.09, +24.0%), which surged 24.0% following strong earnings results, and Spotify (SPOT 621.77, +72.69, +13.2%), up 13.2% after posting better-than-expected numbers.

On the downside, some earnings reports weighed on stock prices, with Dow component Merck (MRK 90.74, -9.05, -9.1%) dropping 9.1%, Estee Lauder (EL 69.47, -13.30, -16.1%) falling 16.1%, and PepsiCo (PEP 143.49, -6.78, -4.5%) retreating 4.5%, following disappointing results in their latest earnings reports.

The overall upside bias in stocks was also helped by the decline in rates following the December JOLTS - Jobs Openings Report, which showed a stark drop in openings to 7.600 million versus an upwardly revised 8.156 million (from 8.098 million) in November.

The 2-yr yield, at 4.24% before 10:00 ET, dropped five basis points from yesterday to 4.22%.

The decline in job openings was interpreted as an indication of a softening labor market, with employers posting fewer job listings than in previous months. This shift did not significantly alter market expectations regarding future rate cuts. Nonetheless, it does align with the prevailing sentiment that the Federal Reserve's next policy move is likely to be another rate reduction.
  • Dow Jones Industrial Average: +4.7% YTD
  • S&P Midcap 400: +3.1% YTD
  • Russell 2000: +2.7% YTD
  • S&P 500: +2.7% YTD
  • Nasdaq Composite: +1.8% YTD

Reviewing today's economic data:
  • December Factory Orders -0.9% (consensus -0.3%); Prior was revised to -0.8% from -0.4%
    • The key takeaway from the report is that the weakness in factory orders was concentrated in the volatile transportation equipment space; otherwise, there was a modest pickup in order activity.
  • December JOLTS - Job Openings 7.600 mln; Prior was revised to 8.156 mln from 8.098 mln

Looking ahead to Wednesday, market participants receive the following economic data:
  • 7:00 ET: Weekly MBA Mortgage Index (prior -2.0%)
  • 8:15 ET: January ADP Employment Change (consensus 155,000; prior 122,000)
  • 8:30 ET: December Trade Balance (consensus -$98.0 bln; prior -$78.2 bln)
  • 9:45 ET: Final January S&P Global U.S. Services PMI (prior 52.8)
  • 10:00 ET: January ISM Services (consensus 53.9%; prior 54.1%)
  • 10:30 ET: Weekly crude oil inventories (prior +3.46 mln)

>>> Electronic Arts beats by $0.06, misses on revs; guides Q4 EPS in-line, revs

Electronic Arts beats by $0.06, misses on revs; guides Q4 EPS in-line, revs below consensus (121.25 -1.86)
  • Reports Q3 (Dec) earnings of $1.11 per share, $0.06 better than the FactSet Consensus of $1.05; revenues fell 6.4% year/year to $2.21 bln vs the $2.32 bln FactSet Consensus.
  • Co issues guidance for Q4, sees EPS of $0.65-1.00 vs. $0.72 FactSet Consensus; sees Q4 revs of $1.444-1.594 bln vs. $1.65 bln FactSet Consensus.
Note: EPS estimates are GAAP while revenue is net bookings.

>>> Alphabet beats by $0.02, reports revs in-line, Google Cloud revenue increase

Alphabet beats by $0.02, reports revs in-line, Google Cloud revenue increased 30%; Expects to invest approximately $75 bln in capex in 2025 (207.71 +3.98)
  • Reports Q4 (Dec) earnings of $2.15 per share, $0.02 better than the FactSet Consensus of $2.13; revenues rose 11.8% year/year to $96.47 bln vs the $96.68 bln FactSet Consensus.
  • Google Search & Other revenue increased 12.5% yr/yr to $54.0 mln.
  • YouTube Ads revenue increased 13.8% to $10.5 bln.
  • Google Advertising revenue increased 10.6% to $72.5 bln.
  • Google Cloud revenue increased 30.0% to $11.96 bln.
  • Total operating income increased 31% and operating margin expanded by 5% percentage points to 32%.
  • Sundar Pichai, CEO, said: "Q4 was a strong quarter driven by our leadership in AI and momentum across the business. We are building, testing, and launching products and models faster than ever, and making significant progress in compute and driving efficiencies. In Search, advances like AI Overviews and Circle to Search are increasing user engagement. Our AI-powered Google Cloud portfolio is seeing stronger customer demand, and YouTube continues to be the leader in streaming watchtime and podcasts. Together, Cloud and YouTube exited 2024 at an annual revenue run rate of $110 billion. Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core businesses. We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025."

>>> Snap beats by $0.05, reports revs in-line (11.60 +0.43)

Snap beats by $0.05, reports revs in-line (11.60 +0.43)
  • Reports Q4 (Dec) earnings of $0.01 per share, $0.05 better than the FactSet Consensus of ($0.04); revenues rose 14.4% year/year to $1.56 bln vs the $1.55 bln FactSet Consensus.
    • Daily Active Users increased 9% year-over-year to 453 million, above the company's 451 mln forecast.
  • Co added, "Active advertisers more than doubled in Q4, with the improvements we have made to our advertising platform driving improved advertiser performance."

>>> Advanced Micro Devices beats by $0.01, beats on revs; guides Q1 revs in-line

Advanced Micro Devices beats by $0.01, beats on revs; guides Q1 revs in-line (119.50 +5.23)
  • Reports Q4 (Dec) earnings of $1.09 per share, excluding non-recurring items, $0.01 better than the FactSet Consensus of $1.08; revenues rose 24.2% year/year to $7.66 bln vs the $7.53 bln FactSet Consensus.
    • Data Center segment revenue in the quarter was a record $3.9 billion, up 69% year-over-year primarily driven by the strong ramp of AMD Instinct GPU shipments and growth in AMD EPYC CPU sales.
    • Client segment revenue in the quarter was a record $2.3 billion, up 58% year-over-year primarily driven by strong demand for AMD Ryzen processors.
    • Gaming segment revenue in the quarter was $563 million, down 59% year-over-year, primarily due to a decrease in semi-custom revenue.
    • Embedded segment revenue in the quarter was $923 million, down 13% year-over-year, as end market demand continues to be mixed.
  • Co issues in-line guidance for Q1, sees Q1 revs of $6.8-7.4 bln vs. $7 bln FactSet Consensus.
    • Non-GAAP gross margin is expected to be approximately 54%.

The Information : Meta Platforms is merging the teams behind Facebook and Messen

Meta Platforms is merging the teams behind Facebook and Messenger into one unit as the company prepares for layoffs across the business next week. Under the change, the head of Messenger, Loredana Crisan, will move to the company’s generative artificial intelligence group, while Facebook’s chief Tom Alison will also oversee Messenger, according to two people with direct knowledge of the situation.

Meta is also shuffling its generative AI group, which is responsible for the company’s key bets in AI, including its flagship AI model Llama and its Meta AI assistant. Ryan Cairns and Ning Li, engineering leaders in the group, will both move to other parts of Meta, according to one of the people. Both joined the generative AI group in November 2023, according to their profiles on LinkedIn.

The reorganizations are among several recent internal shakeups as Meta gears up for another round of mass layoffs, which are due to be announced Monday. Last week, Meta broke up the business unit inside Reality Labs, the department that develops augmented and virtual reality technology, and moved most of the work under Meta’s Chief Operating Officer Javier Olivan.

A Meta spokesperson said the company continues to make “organizational changes when appropriate because they help us improve our products and better serve the people and businesses who use them.”