- Stocks Fall, Dollar Strengthens on Trump Tariffs: Markets Wrap
Asian equities and US stock index futures fell while the dollar and gold rallied in a sign of investor caution
after President Donald Trump outlined tariffs on US imports of steel and aluminum. A gauge of Asian equities
dropped, weighed down by selling pressure for shares in Hong Kong and mainland China. Japanese markets
are closed. Contracts for the S&P 500 and Nasdaq 100 both declined as did those for the region-wide Euro
Stoxx 50. Demand for haven assets pushed an index of the dollar higher for a third consecutive session. Gold
rose above $2,940 briefly to set a new high. The moves are the latest sign investors are struggling to
distinguish threat from action within Trump’s tariffs, while also gauging the potential flow-on effects for
global trade, corporate earnings and inflation. While tariffs on China have gone into effect, uncertainty over
more levies have sparked fresh concerns retaliatory measures will intensify a global trade war. - S&P 500 closes higher, Nasdaq pops nearly 1% Monday as investors shrug off tariff worries
Stocks rose Monday as major tech names outperformed to start the week, while traders looked past the
latest U.S. tariff threat from President Donald Trump. The Dow Jones Industrial Average added 167.01 points,
or 0.38%, led by a 4.8% gain in McDonald’s. The 30-stock index closed at 44,470.41. The S&P 500 gained
0.67% to end at 6,066.44, and the Nasdaq Composite climbed 0.98% to 19,714.27. The market remains jittery
on a mix of inflation worry coupled with concern over how Trump’s plan for tariffs could adversely affect the
U.S. economy. - Oil steady as investors digest new U.S. steel, aluminum tariffs
Oil prices were steady on Tuesday as traders digested another round of trade tariffs, this time a 25% levy on
all U.S. imports of steel and aluminum, which could weigh on global economic and energy demand in the
world’s biggest oil consumer. Brent crude futures were up 11 cents, or 0.14%, at $75.98 a barrel by 0128
GMT, while U.S. West Texas Intermediate crude rose 5 cents or 0.07% to $72.37. President Donald Trump
substantially raised tariffs on steel and aluminum imports to the U.S. on Tuesday to a flat 25% “without
exceptions or exemptions” to aid the struggling industries that could increase the risk of a multi-front trade
war. The tariff rate will hit millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South
Korea and other countries. Tariffs could dampen global economic growth and energy demand,
weakening oil prices. Trump last week postponed 25% duties on imports from Mexico and Canada, and 10%
on Canadian crude oil to March 1, pending negotiations with those two nations. The president also
introduced 10% additional tariffs on China, for which Beijing retaliated with its own levies on some U.S.
imports, including a 10% duty on crude. Those retaliatory tariffs on some U.S. exports were due to take effect
on Monday, with no sign yet of progress in talks between Beijing and Washington. Also weighing on crude
demand, the U.S. Federal Reserve will wait until next quarter before cutting rates again, according to a
majority of economists in a Reuters poll who previously expected a March cut. - Trump’s fresh tariffs catapult gold prices to record peaks
Gold prices soared to a record high on Tuesday, as investors flocked to the safe-haven asset after U.S.
President Donald Trump imposed new 25% tariffs on steel and aluminum imports, fueling concerns over a
potential trade war and inflation. Spot gold was up 1.1% at $2,939.80 per ounce, as of 0229 GMT, after
hitting a record high of $2,942.70 earlier in the session. U.S. gold futures also climbed 1.1% to $2,966.00.
Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% “without
exceptions or exemptions” in a move to aid the struggling industries but which increases the risk of a multi
front trade war. Gold has hit an eighth record-high level so far this year, driven by Trump’s tariff threats,
which have fueled global growth uncertainties, trade war concerns, and inflationary pressure. Bullion is
traditionally considered a hedge during political and economical instability. - Asian economies scramble to appease Trump as the U.S. president ratchets up tariff threats
Trump said Friday that he would announce reciprocal tariffs, duties that match those levied on U.S. goods by
respective countries, as soon as Tuesday, to take effect immediately. Most economies in Asia had higher
average tariffs on imports compared with the U.S. as of 2023, Barclays said, citing data from the World Trade
Organization. “Just because these economies have dodged tariffs for now, [it] doesn’t mean they can breathe
easy,” Stefan Angrick, senior economist at Moody’s Analytics told CNBC. “Washington’s mood could shift and
tariffs could still be imposed later.” - Hong Kong will file complaint to WTO on U.S. tariffs, official says
Hong Kong will file a complaint on recent U.S. tariffs imposed on the city to the World Trade Organization,
claiming the U.S. has completely ignored the city’s status as a separate customs territory, chief secretary Eric
Chan said on Tuesday. “This is absolutely inconsistent with the WTO rules. Of course, they have totally
disregarded Hong Kong is a separate customs territory,” Chan, the China-ruled city’s number two official,
told reporters. “We will file a complaint to the WTO regarding this unreasonable arrangement,” he said
without giving specifics. Chan was responding to a U.S. decision to impose 10% tariffs on goods from the
Asian financial hub as U.S. President Donald Trump targets Chinese imports. The U.S. Postal Service last week
suspended all inbound mail and packages from China and Hong Kong, then reversed that decision soon
afterwards. The move to stop accepting parcels from China and Hong Kong had caused chaos and confusion
among retailers and express shipping firms over how to deal with the U.S. tariffs. “All I can say is the policies
are mercurial,” said Chan. Trump’s move also included closing the “de minimis” duty exemption for packages
valued at under $800, with the stated aim of stopping the flow of fentanyl and precursor chemicals into the
United States. Hong Kong has long been known as a free and open trading hub, but China’s imposition
on Hong Kong of a sweeping national security law in 2020 drew criticism from the U.S. and led it to end the
former British colony’s special status under U.S. law, escalating tensions between China and the U.S.
The U.S. subsequently stipulated that goods made in Hong Kong for export to the U.S. needed to be labelled
as made in China, ending one of Hong Kong’s longstanding competitive advantages as a trading hub. - Musk-led investor group offers $97.4 billion for OpenAI — Altman declines
Elon Musk is leading a group of investors in offering to buy control of OpenAI for $97.4 billion, CNBC
confirmed. The offer is for the nonprofit that oversees the artificial intelligence startup behind ChatGPT. In a
statement sent to CNBC, Musk’s attorney Marc Toberoff said he submitted the offer on Monday. “It’s time
for OpenAI to return to the open-source, safety-focused force for good it once was,” Toberoff wrote. The
consortium of investors includes Musk, his startup xAI, and long-time investors in his other businesses
including, Baron Capital Group, Valor, Atreides, Vy Capital, Joe Lonsdale’s 8VC, and an investment vehicle led
by Endeavor CEO Ari Emanuel. The statement from Toberoff said that the offer is “to purchase all assets of
OpenAI, Inc.” with funds to be “used exclusively to further OpenAI, Inc.’s original charitable mission.”
In a post on X, OpenAI CEO Sam Altman wrote, “no thank you but we will buy twitter for $9.74 billion if you
want.” Musk then replied to Atlman on X, with “swindler,” and in a reply to a different user, called him “Scam
Altman.” The Wall Street Journal first reported on the unsolicited bid on Monday. Musk, who is a top advisor
to President Donald Trump, is in the middle of a heated legal and public relations battle with Altman. They
were two of the co-founders of OpenAI in 2015, establishing the entity as a nonprofit focused on AI research.
OpenAI has since emerged as a giant in generative AI, launching ChatGPT in 2022 and setting off a wave of
investment in new tools and infrastructure for next-generation AI products and services. SoftBank is close to
finalizing a $40 billion investment in OpenAI at a $260 billion valuation, sources told CNBC’s David Faber last
week. Microsoft has been the biggest backer to date. Musk is suing OpenAI, accusing it of antitrust violations
and to try and keep it from converting into a for-profit corporation. - American Express shares fall as much as 3.4% after the credit-card company said first-quarter revenue
growth will be lower than fourth-quarter growth
The company is still confident in its annual revenue guidance, Chief Financial Officer Christophe Le Caillec
said at the UBS Financial Services Conference. Shares in peers Capital One Financial, Discover Financial
Services and Synchrony Financial also fall to session lows. - Shares of ORIC Pharmaceuticals jump as much as 16% after Cantor published a note suggesting that the
accidental release of Pfizer’s prostate cancer data offered a positive read for one of ORIC’s product
candidates
A snippet of a news item on the ASCO Genitourinary Cancers Symposium’s website highlighted Pfizer’s
mevrometostat. The item was set to be published on Feb. 13, the day of the oral presentation and abstract
release, according to Cantor analyst Prakhar Agrawal. “There is no PFS data in the image, but high-level news
commentary sounds very positive for mevro and thus ORIC”. Suggests buying ORIC into the ASCO
presentation. Pfizer’s “late-breaker abstract” for the ASCO Genitourinary Cancers Symposium is anticipated
at 10am New York time on Feb. 13. Representatives for Pfizer and ASCO didn’t immediately respond to a
request for comment from Bloomberg News. - McDonald’s shares rise as much as 5.4% in the biggest intraday gain in almost five years after the
restaurant chain reported fourth-quarter comparable sales that topped Wall Street expectations, driven by
stronger-than-anticipated international results. While US comparable sales fell short of estimates, the
company noted during its earnings call that an E. coli outbreak impacted results, and several analysts call
improving traffic trends in the region encouraging
FOURTH QUARTER RESULTS: Comparable sales +0.4% vs. +3.4% y/y, estimate -0.93% (Bloomberg Consensus);
US comparable sales -1.4% vs. +4.3% y/y, estimate -0.41%; International operated markets comparable sales
+0.1% vs. +4.4% y/y, estimate -1.14%; International developmental licensed markets comparable sales +4.1%
vs. +0.7% y/y, estimate -0.38%; EPS $2.80 vs. $2.80 y/y; Adjusted EPS $2.83 vs. $2.95 y/y, estimate $2.84;
Revenue $6.39 billion, -0.3% y/y, estimate $6.45 billion; Operating income $2.87 billion, +2.4% y/y. YEAR
FORECAST: Sees net restaurant unit expansion contributing slightly over 2% to systemwide sales growth, in
constant currencies; Sees operating margin percent in the mid-to-high 40% range; Sees capital expenditures
$3.0 billion to $3.2 billion, estimate $2.8 billion; Sees the effective income tax rate between 20% and 22%;
Sees nearly 1,800 net restaurant additions; Sees free cash flow conversion rate in the low-to-mid 80% range.
Systemwide sales to loyalty members were approximately $30 billion for the full year and approximately $8
billion for the quarter across 60 loyalty markets, with full year growth of 30% over prior year; “Accelerating
the Arches continues to be the right strategy as we focus on growing market share,” said Chairman and CEO
Chris Kempczinski; Systemwide sales increased 2% in 4Q; Consolidated operating income increased 2% in 4Q. - BP shares rise as much as 7%, to the highest intraday since August, after Bloomberg reported that
activist investor Elliott has built a significant stake and is pushing the company to consider transformative
measures, citing people familiar with the matter
Jefferies analysts including Giacomo Romeo (buy) say Elliott’s involvement may lead to board changes,
portfolio rationalization and capex prioritization on upstream projects. Portfolio rationalization may focus on
exiting low-carbon assets as well as certain retail regions. RBC analysts including Biraj Borkhataria (sector
perform) say the key issue at BP is poor capital allocation along with recent strategic shifts that have
weakened its earnings potential. Company looks set to miss its Ebitda targets in 2025 “in a significant way”
because of these issues and weaker macro conditions. Introduction of a serious activist is likely to cause
“some agitation” for those underweight. - Rockwell Automation shares rise as much as 9.7%, the most intraday since July 2022, after the producer
of industrial automation products reported adjusted earnings per share for the first quarter that beat the
average analyst estimate. Analysts pointed to margins and order trends as positives and described
management’s outlook as cautious
Adjusted EPS $1.83 vs. $2.04 y/y, estimate $1.56 (Bloomberg Consensus). Orders up roughly 10% y/y. “We
continue to expect gradual sequential improvement in our sales and margins as we move through this fiscal
year, including potential impacts from tariffs,” CEO Blake Moret said in a statement. FIRST QUARTER
RESULTS: Sales $1.88 billion, -8.3% y/y, estimate $1.88 billion; Organic sales -8%; Free cash flow $293 million
vs. negative $35.3 million y/y; Adjusted tax rate 17.5% vs. 17.9% y/y; Capital expenditure $71 million, +4.6%
y/y; Total segment operating margin 17.1% vs. 17.3% y/y. YEAR FORECAST: Sees full-year 2025 reported sales
midpoint about $8.1 billion, saw about $8.2 billion; Sees Reported sales change -5.5% to +0.5%, saw -4% to
+2%; Still sees adjusted EPS $8.60 to $9.80, estimate $9.15; Still sees EPS $7.65 to $8.85; Still sees organic
sales -4% to +2%. Jefferies (buy, PT $350): Strong margins drove the beat, with the company citing benefits
from its focus on cost discipline and operational excellence, analyst Saree Boroditsky wrote in a note to
clients; The company maintained adjusted EPS guidance for the year, while lowering total sales guidance, the
analyst noted. - Super Micro stock rises ahead of earnings
Super Micro Computer, Inc. (NASDAQ:SMCI) shares climbed 10% today, as the market anticipates the
company’s earnings report due tomorrow after the closing bell. Investors are keenly awaiting updates on
both the earnings and the company’s status regarding its Nasdaq listing. Super Micro has been facing scrutiny
from short sellers and is under pressure to comply with Nasdaq’s requirements. The company has until
February 25, 2025, to file its annual report for the fiscal year ended June 30, 2024, and its quarterly report for
the period ended September 30, 2024, to avoid delisting. Super Micro has recently appointed BDO as its
auditor and indicated that restatements of financials might not be necessary, which could be a positive sign
for meeting Nasdaq’s conditions. Wedbush analyst Matt Bryson provided a neutral stance, citing several
“substantial unknowns” that could affect the company’s performance. “Key questions that need to be
answered in our view are: 1) How is the company progressing in filing its delayed financials? … 2) Can SMCI
meet sales expectations?” said Bryson, highlighting the uncertainty around Super Micro’s ability to comply
with Nasdaq’s filing requirements and to achieve its sales targets. The consensus among analysts is that
Super Micro’s sales are expected to be around $5.9 billion, with guidance between $5.5 billion and $6.1
billion for the second quarter. There are concerns about potential delays in large tier 2 cloud projects and
softer demand for components tied to AI system installations, which could impact the current quarter’s
results. However, there is optimism for robust AI spending over the intermediate term, which could benefit
Super Micro’s future performance.
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