- Stocks Decline After Nvidia, European Futures Drop: Markets Wrap
Asian equities declined Thursday as investors parsed the latest tariff announcements from US President
Donald Trump and earnings from Nvidia Corp. failed to impress. Equity gauges in China and technology stocks
in Hong Kong fell while 10-year Treasury yields inched higher. European equity index futures declined as
much as 0.9% after Trump said that his administration would impose tariffs of 25% on the European Union.
The president also said that previously announced levies on Mexico and Canada would come into force on
April 2. Trump’s comments were at times contradictory and sowing confusion as the tariffs on US neighbors
were to take effect from next month. Nvidia shares fell in after-hours trading as the chipmaker delivered
good-but-not-great quarterly numbers, leaving investors — who have become accustomed to blowout results
— disappointed. - S&P 500 ekes out gain on Wednesday, ending four-day run of losses
The S&P 500 eked out a gain on Wednesday, snapping a four-day run of losses. The broad market index
advanced 0.01% to close at 5,956.06. The Dow Jones Industrial Average dropped 188.04 points, or 0.43%, to
end at 43,433.12. The 30-stock average was earlier up as much as 245.34 points, or about 0.6%. Meanwhile,
the tech-heavy Nasdaq Composite rose 0.26% and ended at 19,075.26. - Oil prices climb from 2-month lows as Trump axes Chevron’s Venezuela license
Oil prices climbed for the first time in three days on Thursday, with supply worries resurfacing after U.S.
President Donald Trump announced a reversal of a license given to Chevron to operate in Venezuela,
potentially tightening crude supply. Brent crude oil futures rose 19 cents or 0.3% to $72.72 a barrel by 0154
GMT. U.S. West Texas Intermediate crude oil futures were up 16 cents or 0.2% at $68.78 per barrel.
A day earlier, the contracts settled at their lowest since December 10 due to a surprise build in U.S. fuel
inventories that hinted at weakening demand and hopes for a potential peace deal between Russia and
Ukraine. Both benchmarks have lost about 5% so far this month. Trump on Wednesday said he
was reversing a license given to Chevron to operate in Venezuela by his predecessor Joe Biden more than two
years ago. Chevron exports about 240,000 barrels per day of crude from its Venezuela operations, over a
quarter of the country’s entire oil output. Ending the license means Chevron will no longer be able to export
Venezuelan crude. - Gold slips on dollar strength, rising Treasury yields; US inflation data in focus
Gold inched lower on Thursday, pressured by a stronger U.S. dollar and rising Treasury yields, while investors
awaited a key inflation report to assess the Federal Reserve’s policy path. Spot gold was down 0.1% at
$2,912.94 an ounce, as of 0232 GMT. U.S. gold futures fell 0.1% to $2,927.20. The dollar index rose 0.2%
against its rivals to move further from recent 11-week lows as vague pledges from President Donald Trump
to impose tariffs on Europe and further delays to levies planned for Canada and Mexico stoked uncertainty.
Benchmark 10-year U.S. Treasury yields also rebounded from an earlier drop, making non-yielding gold less
appealing. - China likely to cut inflation outlook to two-decade low, lay out stimulus plans at ‘Two Sessions’ meeting
China is expected to acknowledge a significant softening in domestic demand next week, while
revealing highly anticipated details on fiscal stimulus aimed at shoring up growth in the face of heightened
U.S. trade tensions. The country’s annual parliamentary gathering, known as the “Two Sessions,” starts on
Tuesday with the Chinese People’s Political Consultative Conference — a top advisory body — followed by
the meeting of its legislature, the National People’s Congress. The gathering has lasted for about a week in
recent years and is typically followed by a press conference with the foreign minister and heads of economic
departments. At the opening meeting of the NPC on Wednesday, Beijing is expected to revise down its
annual consumer price inflation target to around 2% — the lowest in more than two decades — from 3% or
higher in prior years, according to the Asia Society Policy Institute. That marks an implicit recognition of
modest domestic demand. The new inflation goal would act more as a ceiling than a target to be realized.
China has been under deflationary pressure with nominal GDP growing slower than real GDP for the seventh
straight quarter in the final quarter of 2024, Larry Hu, chief China economist at Macquarie, said in a note.
Consumer prices climbed just 0.2% in 2024 and 2023, while producer prices have declined for over two years. - Modi wants Tesla to build cars in India. Making the plan work may not be easy
India has been striving to become a global manufacturing hub, having successfully invited major companies
such as Apple to set up as well as expand production in the country. To further bolster its manufacturing
prowess, the South Asian nation has been eyeing Tesla to set up its base in the country. And the carmaker
that has appeared reluctant for long is now signaling interest in the market as the Indian government
attempts to welcome it by implementing a new EV tariff policy. Tesla is reportedly recruiting and scouting
showroom locations in the country, following a meeting between Indian Prime Minister Narendra Modi and
Tesla CEO Elon Musk earlier this month. “One thing is for sure, Tesla is coming to India based on the recent
news, and the government is also very serious about it,” Puneet Gupta, Director for the Indian automotive
market at S&P Global Mobility, told CNBC. India introduced an EV policy last year that proposes to lower
the import duties on EVs to 15% from about 70%, with the government set to start accepting applications
under this policy before March-end, according to domestic news agency IANS. This relaxation only applies to
premium EVs priced at over $35,000 and requires investments totaling nearly $500 million and long-term
plans to set up local manufacturing. The EV policy represents a targeted move to appeal to Tesla’s business
interests, signaling India’s readiness to support EV manufacturing, Ammar Master, a South Asia director of
Automotive at GlobalData, told CNBC. - US House Republicans advance Trump’s tax cut plan
The Republican-controlled U.S. House of Representatives late on Tuesday advanced President Donald
Trump’s tax-cut and border security agenda, delivering a major boost to his 2025 priorities. The vote on
passage was 217-215 with Representative Thomas Massie, a prominent fiscal hawk, as a lone Republican
voting in opposition, and no Democrats supporting the controversial measure. One Democrat did not vote.
The measure is a preliminary step to extending Trump’s 2017 tax cuts later this year. Tuesday’s vote sent the
budget resolution to the Senate, where Republicans are expected to take it up. “We have a lot of hard work
ahead of us, but we are going to deliver the American First agenda,” House Speaker Mike Johnson told
reporters after the vote. “We’re going to celebrate tonight, and we’ll roll up our sleeves and get right back in
the morning.” The final vote came after Johnson and No. 2 House Republican Steve Scalise spent hours
persuading holdouts to back the move. The measure’s passage followed an unusual series of maneuvers in
which Johnson canceled a vote on the bill, because it lacked the votes for passage, and then promptly
reversed course. Both leaders said Trump himself had been contacting reluctant members about the need to
advance the $4.5 trillion tax-cut plan, which would also fund the deportation of migrants living in the U.S.
illegally, tighten border security, energy deregulation and military spending. - Nvidia delivered good-but-not-great quarterly numbers on Wednesday, drawing a muted response from
investors accustomed to blowout results
Sales will be about $43 billion in the fiscal first quarter, which runs through April, Nvidia said. Analysts had
estimated $42.3 billion on average, with some projections ranging as high as $48 billion. The company also
warned that gross profit margins would be tighter than anticipated as it rushes to roll out a new chip design
called Blackwell. After fluctuating between gains and losses, Nvidia shares ended down 1.5% in afterhours
trading. “Guidance was slightly underwhelming,” Edward Jones analyst Logan Purk said. But early sales of the
Blackwell chip should help ease investor concerns after earlier reports of production delays, he said. The
company got $11 billion of revenue from Blackwell in the fourth quarter, something Nvidia described as the
“fastest product ramp” in its history. “Demand for Blackwell is amazing,” Chief Executive Officer Jensen
Huang said. Though the company’s fiscal fourth-quarter sales topped analysts’ estimates, they did so by the
smallest margin since February 2023. Earnings, meanwhile, had the narrowest amount of upside since
November 2022. Sales in the fourth quarter, which ended Jan. 26, rose to $39.3 billion. That matched
estimates, though some projections ranged as high as $42 billion. Profit was 89 cents a share, minus certain
items. Wall Street was looking for 84 cents. The data center unit, by far Nvidia’s biggest source of revenue,
generated sales of $35.6 billion. That beat the average estimate of $34.1 billion. Gaming-related sales — once
Nvidia’s core business — amounted to $2.5 billion. Analysts projected $3.02 billion on average. Automotive
was $570 million. During the conference call, Huang argued that DeepSeek will stoke interest in a new
approach to AI, expanding demand for Nvidia products. The DeepSeek model relies on fine-tuning, so it will
require more computing sessions than the “one shot” training of other software, he said. In fact, the
approach might require millions of times more computing power than today, he said. Though Blackwell will
help handle those computing tasks, the rollout has come at a cost. The expense of getting the product to
market has weighed on profit margins, Nvidia said. The savings will come later when the company is able to
refine its supply chain, according to Chief Financial Officer Colette Kress. Gross margin, or the percent of
revenue remaining after deducting the cost of production, will return to a “mid-70s” percentage by the end
of the year. In the current quarter, that measure will be about 71%, Nvidia said, about a point below the
average of analysts’ estimates. - Salesforce misses on revenue, issues disappointing guidance
Salesforce reported weaker-than-expected quarterly revenue on Wednesday and issued a forecast that fell
short of analysts’ estimates. The stock price slipped 4% in extended trading. Here’s how the company did
compared with LSEG consensus: Earnings per share: $2.78 adjusted vs. $2.61 expected; Revenue: $9.99
billion vs. $10.04 billion expected. Revenue increased 7.6% from a year ago in the quarter that ended Jan. 31,
according to a statement. Net income rose to $1.71 billion, or $1.75 per share, from $1.45 billion, or $1.47
per share, a year earlier. The top category of subscription and support revenue was service, at $2.33 billion.
The figure was up about 8% and below the $2.37 billion consensus among analysts surveyed by Visible Alpha.
In the sales category, Salesforce generated $2.13 billion in revenue, up 8% and also trailing Visible Alpha’s
consensus of $2.17 billion. During the quarter, the company introduced its second-generation Agentforce
artificial intelligence agent technology, which answers employee questions in the Slack team communications
app. Salesforce said it has completed more than 3,000 paid deals involving Agentforce since October.
Agentforce has gotten involved in 380,000 conversations through Salesforce’s help website, with humans
getting involved in 2% of cases, according to the statement. “A lot of other vendors are talking about their
agent capabilities, but few are able to show that they’ve got this really running at scale,” co-founder and CEO
Marc Benioff said on a conference call with analysts. Agentforce will make a modest contribution to revenue
in fiscal 2026, with a larger effect in the following year, said Amy Weaver, Salesforce’s outgoing finance chief.
Benioff referred to a forthcoming product in the area of information technology service management,
where ServiceNow operates. The U.S. Department of Government Efficiency is using Slack, Benioff said.
“We’ll work closely with the government,” he said. “We’ll do anything we can to help them succeed.” The
company called for $2.53 to $2.55 in adjusted earnings per share for the fiscal first quarter, with $9.71 billion
to $9.76 billion in revenue. Analysts polled by LSEG had anticipated adjusted earnings of $2.61 per share,
with $9.9 billion in revenue. For fiscal 2026, Salesforce is targeting $11.09 to $11.17 in adjusted earnings per
share on $40.5 billion to $40.9 billion in revenue, implying 7.4% growth. The LSEG consensus was for adjusted
earnings per share of $11.18 on $41.35 billion in revenue. - Seven & i shares plunge over 12% as management buyout falls through
Shares of Japan’s Seven & i Holdings plunged as much as 12.44% Thursday after the company said the
founding family had failed to secure the financing needed to buyout the convenience store operator.
This translates to a loss in market cap of about over $5 billion. Earlier on Thursday, Yomuiri newspaper
reported that Seven & i had abandoned the management buyout plan, stated to be worth over 8 trillion yen
($53.69 billion). “They [the founding family] have been unable to secure the financing required to submit a
definitive proposal to acquire 7&i. As a result, there is no actionable proposal from Mr. Junro Ito and Ito
Kogyo for 7&i to consider at this time,” the company said in a filing. Junro Ito is Seven & i’s vice president and
the son of late Masatoshi Ito, founder of Seven & i. Ito-Kogyo is a company affiliated with the vice president,
and is Seven & i’s second-largest stakeholder with an 8.2% stake. On Wednesday, Reuters reported that
trading house Itochu had decided not to participate in the buyout. Itochu had considered investing 1 trillion
yen in the deal but then backed out as there were few synergies between its food and beverage business and
Seven & i, Nikkei reported. Local media in November reported that the founding family was teaming up
with “three Japanese megabanks and major American financial institutions,” to launch the buyout.
Seven & i in 2024 rejected a buyout bid from Canadian convenience store operator Alimentation Couche
Tard. Couche-Tard had initially made an offer of $14.86 per share to take over Seven & i in August last year.
The offer was rejected, with Seven & i saying it “grossly undervalues” the company. The company
then reportedly raised its offer in October by over 22% to $18.19 per share, valuing Seven & i at 7 trillion
Japanese yen, or about $47 billion. Seven & i said that it “remains committed to exploring all opportunities to
unlock value for shareholders and continues to assess a full range of strategic alternatives, including the
proposal from Alimentation Couche-Tard, Inc.” - Paramount (NASDAQ:PARA) Misses Q4 Sales Targets
Multinational media and entertainment corporation Paramount (NASDAQ:PARA) fell short of the market’s
revenue expectations in Q4 CY2024 as sales rose 4.5% year on year to $7.98 billion. Its non-GAAP loss of
$0.11 per share was significantly below analysts’ consensus estimates. Paramount (PARA) Q4 CY2024
Highlights: Revenue: $7.98 billion vs analyst estimates of $8.14 billion (4.5% year-on-year growth, 1.9% miss);
Adjusted EPS: -$0.11 vs analyst estimates of $0.13 (significant miss); Adjusted EBITDA: $406 million vs analyst
estimates of $549.3 million (5.1% margin, 26.1% miss); Operating Margin: 1.6%, down from 5.3% in the same
quarter last year; Free Cash Flow Margin: 0.7%, down from 5.8% in the same quarter last year; Market
Capitalization: $8.13 billion. Broadcasting companies have been facing secular headwinds in the form of
consumers abandoning traditional television and radio in favor of streaming services. As a result, many
broadcasting companies have evolved by forming distribution agreements with major streaming platforms so
they can get in on part of the action, but will these subscription revenues be as high quality and high margin
as their legacy revenues? Only time will tell which of these broadcasters will survive the sea changes of
technological advancement and fragmenting consumer attention. Sales Growth: a company’s long-term sales
performance can indicate its overall quality’. - Snowflake (NYSE:SNOW) Posts Better-Than-Expected Sales In Q4, Stock Soars
Data warehouse-as-a-service Snowflake (NYSE:SNOW) reported revenue ahead of Wall Street’s expectations
in Q4 CY2024, with sales up 27.4% year on year to $986.8 million. Its non-GAAP profit of $0.30 per share was
67.3% above analysts’ consensus estimates. Snowflake (SNOW) Q4 CY2024 Highlights: Revenue: $986.8
million vs analyst estimates of $957.6 million (27.4% year-on-year growth, 3% beat); Adjusted EPS: $0.30 vs
analyst estimates of $0.18 (67.3% beat); Adjusted Operating Income: $92.85 million vs analyst estimates of
$41.8 million (9.4% margin, significant beat); Management’s product revenue guidance for the upcoming
financial year 2026 is $4.28 billion at the midpoint (beat vs. expectations of $4.24 billion); Operating Margin:
39.2%, down from -35.6% in the same quarter last year; Free Cash Flow Margin: 0%, down from 8.3% in the
previous quarter; Customers: 580 customers paying more than $1 million annually; Net Revenue Retention
Rate: 126%, down from 127% in the previous quarter; Billings: $1.60 billion at quarter end, up 16.5% year on
year; Market Capitalization: $54.2 billion. “We delivered another strong quarter, with product revenue of
$943 million, up a strong 28% year-over-year, and remaining performance obligations totaling $6.9 billion,”
said Sridhar Ramaswamy, CEO of Snowflake. Data Storage: Data is the lifeblood of the internet and software
in general, and the amount of data created is accelerating. As a result, the importance of storing the data in
scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand
from analyzing simple, structured datasets to high-scale processing of unstructured data such as images,
audio, and video. Sales Growth: A company’s long-term sales performance is one signal of its overall quality.
Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three
years, Snowflake grew its sales at an incredible 43.8% compounded annual growth rate.
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