>>> What to look at today - 5th of February 2025

Contracts for US and European equities dropped, brushing off gains in Asian stocks as investors navigate the trade war and earnings from Wall Street’s big tech companies.  Euro Stoxx 50 contracts fell 0.4%, while contracts on the S&P 500 declined 0.5%, after Google’s parent Alphabet Inc. and Advanced Micro Devices Inc. tumbled in extended trading. A gauge of Asian shares rose for a second straight day while equities fell in China, which reopened Wednesday after Lunar New Year holidays. The yen gained against the greenback and gold rose to a record high on haven demand. Asian technology shares tracked their US peers higher just as investors turned cautious on China, which retaliated soon after the US imposed a 10% tariff on all imports from the Asian country. The first volleys in the latest US-China trade war made clear that Xi Jinping is taking a more cautious approach than during Donald Trump’s first term.  10-year Treasuries and an index of dollar strength extended losses, after US job openings fell in December by more than forecast to a three-month low.  The US jobs data “eased concerns about aggressive Fed rate hikes, which led to a weaker dollar, providing a tailwind for Asian markets,” said Manish Bhargava, chief executive officer at Straits Investment Management. “Investors may be adopting a ‘wait-and-see’ approach to the US-China trade war, shifting focus to broader economic indicators.” Traders are turning to the US ISM services data for more clues on the Federal Reserve’s rate path. Activity in the services sector likely grew more slowly in January amid winter storms across much of the country and wildfires on the West Coast. High-frequency payroll data suggest hiring activity was relatively steady on a seasonally adjusted basis, according to Bloomberg Economics.  Amid rising trade tensions, the US Postal Service said it was temporarily suspending inbound international packages from China and Hong Kong. While it’s not clear what prompted the move, it comes after Trump revoked a “de minimis” rule for China, which previously allowed small packages under $800 to enter the US duty-free. Trump told reporters there’s no rush to talk to Xi and he’ll speak to the Chinese president at the appropriate time. While China’s tit-for-tat response to US was seen by some investors as a measured response to avoid a full-blown standoff, others are concerned that the weaker-than-expected manufacturing activity data and yuan’s depreciation could weigh on Chinese stocks.

Nikkei +0.09% Hang Seng -1.25% CSI -0.56% Shanghai -0.63% Shenzen +0.44%

Eur$ CNH CNY JPY GBP CHF RUB TRY WTI$ Gold BTC ETH

S&P -0.56% Nasdaq -0.78% EuroStoxx -0.40% FTSE -0.28% Dax +0.37% SMI -0.03%

Macro :
- Crypto Czar Sacks Is Studying Feasibility of US Bitcoin Reserve
- Xi’s Reply to Trump Tariffs Shows China Has More to Lose
- UK-France Eleclink Cable Outage Shortened 5 Days to Feb. 5
- EU Prepares to Target Silicon Valley if Trump Pursues Tariffs:FT
- Class 8 Truck North American Orders Fall 9.1% YoY in January

Keep an eye on :
- ALFA SS : Alfa Laval 4Q Adjusted Ebita Misses Estimates
- ALMB DC : Alm Brand 4Q Pretax Profit Beats Estimates
- ALMA FH : Alma Media 4Q Adjusted Operating Profit Beats Estimates
- BPM IM : UniCredit Submits BPM Bid to Government for Green Light: Ansa
- ACA FP : Credit Agricole 4Q Net Income Beats Estimates
- DEMANT DC : Demant FY Hearing AIDS Revenue Meets Estimates
- DNB NO : DNB Bank 4Q Net Interest Income Beats Estimates
- ELI BB : Elia Postpones Signing HVDC Deals for Princess Elisabeth Island
- EQNR NO : Equinor 4Q Adj Oper Income After Tax Beats Estimates (1)
- ALESK FP : Esker Squeeze-Out Requested by Bridgepoint-Backed Bidder
- FXPO LN : Ferrexpo Plunges 51% After $3.8 Billion Ukrainian Civil Claim
- FCT IM : Fincantieri Gets Order for Four Vessels by Norwegian Cruise Line
- GSK LN : GSK 4Q Adjusted EPS Beats Estimates; Boosts Long-Term View
- DLAR LN : UK Banknote Printer Weighs Bids for Entire Firm; Shares Jump
- SHBA SS : Handelsbanken 4Q Net Interest Income Beats Estimates
- HUSQB SS : Husqvarna 4Q Net Sales Beats Estimates
- KEZSKOB FH : Kesko 4Q Adjusted Ebit Misses Estimates
- LOOMIS SS : Loomis 4Q Ebita Beats Estimates
- HLUNB DC : Lundbeck Sees 2025 Revenue at Constant Currency +7% to +10%
- MELE BB : Melexis 1Q Revenue Forecast Misses Estimates
- MTRS SS : Munters 4Q Net Sales Beats Estimates
- NOD NO : Nordic Semiconductor 1Q Revenue Forecast Beats Estimates
- NORION SS : Norion Bank 4Q Operating Profit Beats Estimates
- NOVOB DC : *NOVO 4Q WEGOVY SALES DKK19.87B, EST. DKK19.99B Novo Sees 2025 Sales at Constant Exchange Rates +16% to +24%
- PNDORA DC ; Pandora Sees 2025 Organic Revenue +7% to +8%, Est. +9.91%
- RNO FP : Nissan Said Likely to Reject Honda Offer in Blow to Tie-Up (1)
- RILBA DC : Ringkjoebing Landbobank FY Pretax Profit Meets Estimates
- SAN SM : Santander Commits to Spend €10B in Buybacks Over 2025, 2026 (1)
- STADA IPO : Stada CEO Sees Strong Demand Ahead of Big Europe IPO: ECM Watch
- UCG IM : UniCredit Submits BPM Bid to Government for Green Light: Ansa
- WRT1V FH : Wartsila 4Q Adjusted Ebit Beats Estimates

>>> Europe : Brokers Upgrades & Downgrades - 5th of February 2025

>>> Up
* Banca Generali Raised to Buy at Deutsche Bank; PT 56 euros
* Kering Raised to Outperform at Mediobanca SpA; PT 300 euros
* Mattel Raised to Buy at Jefferies; PT $28
* Schroders Raised to Outperform at RBC; PT 395 pence
* Simon Property Raised to Overweight at Piper Sandler; PT $205
* SSR Mining Raised to Sector Perform at RBC; PT C$11.47

>>> Down
* Alphabet Cut to Hold at Punto Casa de Bolsa; PT $203.84
* AMAG Austria Cut to Hold at Erste Group; PT 26.30 euros
* Anora Group Oyj Cut to Hold at SEB Equities; PT 3.10 euros
* Grieg Seafood Cut to Hold at ABG; PT 71 kroner
* Inditex Cut to Underperform at Mediobanca SpA; PT 44 euros
* LVMH Cut to Hold at Stifel; PT 710 euros
* Marks & Spencer Cut to Hold at Jefferies; PT 370 pence
* Pfizer PT Cut to $27 from $29 at Citi
* Raspberry PI Cut to Hold at Jefferies; PT 770 pence
* Snap Cut to Market Perform at JMP; PT $16
* Spirax Cut to Hold at HSBC; PT 8,200 pence
* Swatch Cut to Underperform at Mediobanca SpA
* Truecaller Cut to Hold at SEB Equities; PT 68 kronor

>>> Initiation
* Envipco Rated New Buy at SpareBank; PT 8.14 euros
* Kion Rated New Equal-Weight at Oxcap; PT 37.10 euros
* Moreld Rated New Buy at Pareto Securities; PT 21 kroner
* Orsted Rated New Buy at SpareBank; PT 365 kroner

>>> Call

>>> 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.”