- Stocks Rise, Euro Strengthens on US-Russia Talks: Markets Wrap
Asian equities rose as US-Russia talks spurred expectations for an end to the war in Ukraine. Risk sentiment
was also stoked by the improving prospects for Chinese markets. A gauge of equities in the region climbed for
a second day, led by shares in Japan and Hong Kong. European stock index futures gained over 1% and S&P
500 contracts also advanced. Global markets looked past the higher-than-expected US inflation figures —
which eroded bets on rate cuts — with traders focusing on US President Donald Trump’s Ukraine peace talks
with Russia. The euro rose versus most of its Group-of-10 peers, strengthening 0.5% against the dollar.
The upswing in risk appetite came after the Asian regional stock gauge underperformed its global peers so far
this year as Trump’s tariff threats, a stronger dollar and China’s lack of domestic policy stimulus weighed on
the market. Chinese equities though have been lifted in recent weeks by an artificial intelligence
breakthrough. - Dow closes 200 points lower, S&P 500 falls after hot consumer inflation report
The S&P 500 tumbled and interest rates spiked Wednesday after consumer prices rose more than expected
in January, raising concern that inflation may reignite. The broad market index slipped 0.27% to end at
6,051.97, and the Dow Jones Industrial Average tumbled 225.09 points, or 0.5%, to 44,368.56. The Nasdaq
Composite eked out a 0.03% gain to close at 19,649.95. - Oil falls as potential Ukraine peace deal may ease supply disruptions
Oil prices fell on Thursday on expectations a potential peace deal between Ukraine and Russia would mean
the end of sanctions that have disrupted supply flows and U.S. President Donald Trump’s intention to
introduce reciprocal tariffs stoked inflation jitters. Brent futures were down 55 cents, or 0.73%, at $74.63 a
barrel by 0141 GMT while U.S. West Texas Intermediate (WTI) crude dropped 52 cents, or 0.73%, to $70.85.
Brent and WTI fell more than 2% on Wednesday after Trump said Russian President Vladimir Putin and
Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him, and
Trump ordered top U.S. officials to begin talks on ending the war in Ukraine. Russia is the world’s third
largest oil producer and sanctions imposed on its crude exports as a result of its invasion of Ukraine nearly
three years ago has supported higher prices. Analysts at ANZ said in a note on Thursday oil prices eased on
news of the potential peace talks because of “optimism that risks to crude oil supplies would ease.” - Gold inches higher on trade war concerns; U.S. data in focus
Gold prices edged higher on Thursday, as markets closely tracked developments in U.S. President Donald
Trump’s tariff plans, which could ignite a global trade war, while investors awaited crucial U.S. data due later
in the day. Spot gold was up 0.2% at $2,908.50 per ounce, as of 0240 GMT. Bullion hit a record peak of
$2,942.70 on Tuesday. U.S. gold futures firmed 0.3% to $2,936.50. Trump said that he would
impose reciprocal tariffs as soon as Wednesday evening on every country that charges duties on U.S. imports,
in a move that ratchets up fears of a widening global trade war and threatens to accelerate U.S. inflation. - Consumer prices rise 0.5% in January, higher than expected
Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to
hold the line on interest rates. The consumer price index, a broad measure of costs in goods and services
across the U.S. economy, accelerated 0.5% for the month, putting the annual inflation rate at 3%. They were
higher than the respective Dow Jones estimates for 0.3% and 2.9%. Excluding volatile food and energy prices,
CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared to respective
estimates for 0.3% and 3.1%. - India’s inflation cools to lower-than-expected 4.31% in January
India’s headline inflation dipped year-on-year for a third straight month to 4.31%, providing more room for
monetary easing after the country’s central bank cut rates for the first time in nearly five years last week. The
January reading was the lowest since August 2024, and came below expectations of 4.6% from economists
polled by Reuters. A drop in inflation could clear the way for another rate cut by the Reserve Bank of India,
which slashed the repo rate to 6.25% from 6.5% on Friday in its bid to boost a slowing economy. - East Germany is a far-right stronghold — and economic concerns helped make it happen
Eight automakers including BYD, at least nine financial securities companies, three state-owned
telecommunications operators and smartphone brand Honor are among the many that have rushed to
integrate with DeepSeek in the last week. “This is quite unprecedented,” Wei Sun, principal analyst of
artificial intelligence at Counterpoint Research, said in an email Monday. She pointed to the rate of adoption,
scale of business integration and breadth of specific industries covered. A big factor in the widespread
interest is timing, as well as DeepSeek’s open-source availability in China. - Chinese businesses rush to try DeepSeek AI at ‘unprecedented’ scale
Washington’s envoys will push partners on the continent to take on more responsibility for Kyiv, when U.S.
and European officials meet in Brussels to discuss assistance for Ukraine on Wednesday. President Donald
Trump’s administration has sent out numerous smoke signals that it expects Europe to shoulder the burden
of supporting Kyiv. The Russia-Ukraine war is approaching its third anniversary, and Washington wants
something back from Ukraine. - AppLovin shares surge after profit, revenue beat, strong outlook
Applovin Corp (NASDAQ:APP) shares jumped more than 29% after the closing bell as the company reported
fourth-quarter earnings that topped Wall Street estimates. The mobile technology company posted earnings
per share of $1.73 for the fourth quarter, surpassing analysts’ expectations of $1.25. Revenue rose to $1.37
billion, exceeding the consensus estimate of $1.26 billion. AppLovin projected revenue in the range of $1.355
billion to $1.385 billion for the first quarter of 2025, above analysts’ expectations of $1.321 billion. - CVS Health Corp. shares surged 14.9% after its fourth-quarter results signaled improved performance
from the company whose insurance and drugstore units have been struggling
Lower-than-expected costs in the Aetna insurance unit helped drive CVS’s profit above estimates, as the
company spent a smaller percentage of premium revenue on medical expenses than analysts expected. The
company had also already accounted for some anticipated fourth-quarter losses in the third quarter.
Adjusted earnings for the quarter were $1.19 a share, outpacing analysts’ average estimate of 92 cents.
CVS is trying to turn around its drugstore chain and insurance business, where profit has been hit by
underpricing of plans and cuts to quality ratings that help determine payments from US health programs.
They company is “encouraged” by recent conversations with the government about payment rates for
Medicare Advantage, a private version of the US health program for older and disabled people, CEO David
Joyner said. Rates proposed by the government didn’t take into account increased health-care use and costs,
he said. Revenue in all major divisions — insurance, drugstores and health services — were ahead of Street
expectations, as was overall quarterly revenue of $97.7 billion. Adjusted earnings for 2025 will be $5.75 to $6
a share, CVS said, while the average estimate was $6. CVS called the guidance an “appropriately achievable
baseline” with “opportunities for outperformance.” Investors had expected the 2025 profit outlook to come
“comfortably below” analyst estimates, so CVS’s expectation “looks fine,” Leerink Partners analyst Michael
Cherny wrote. - Heineken NV shares surged 14.1% after the brewer announced a buyback and reported strong beer
sales including in Brazil and Mexico, helping the company gain ground on rivals in more than half of its key
markets
Beer volumes grew 1.6% in 2024, Heineken said, beating analysts’ expectations of a 1.39% gain. That was
driven by strong demand for premium brands such as Birra Moretti and non-alcoholic products including
Heineken 0.0. Operating profit is likely to rise between 4% and 8% in 2025, Heineken said, slightly lower than
the 8.3% this year that also beat guidance. The company also announced a two-year €1.5 billion share
buyback. “The company is ticking the box on volume growth and profit delivery,” Jefferies analyst Edward
Mundy said, though he also pointed to softness in European beer sales in the fourth quarter which Heineken
largely attributed to poor weather. In the US, volumes of Heineken 0.0 rose even as sales of its broader
portfolio fell, in line with the rest of the industry. CEO Van den Brink told reporters on a call he is monitoring
potential US tariffs but did not see a major impact. The US accounts for less than 5% of Heineken’s global
revenues. There is room for positive surprises this year including in Vietnam as demand recovers, Bernstein
analyst Trevor Stirling said. - Kraft Heinz said it will discount key items in the coming year while improving products and boosting
marketing in order to compete for inflation-weary customers
The food company forecast full-year adjusted earnings per share and organic sales below estimates. Also
rattling investors, it issued a blanket warning that its outlook doesn’t account for the “significant worsening”
of tariffs, food regulation changes, changes to SNAP benefits, currency impacts, and an overall declining
macro environment. Shares fell 3.2%. The company noted pressure on some major brands, including
Lunchables, Kraft Mayonnaise, Kraft Mac & Cheese and Capri Sun, and said it will assess opportunities to
drive more sales. Executives laid out plans to increase volume. The company also expects benefits from
efficiency measures, but will raise prices where commodities face higher costs, such as coffee, and in
emerging markets. The company, however, is seeing growth in discount retailers like Dollar General and club
channels as consumers make more frequent trips to the supermarket in an attempt to spend less. “The
outlook for 2025 was weak,” wrote Arun Sundaram, an analyst at CFRA. He maintained a buy rating on the
stock. “Yet, we think KHC will see better days ahead, potentially by Q2 2025.” - Cisco Systems Inc. gained 6.9% in afterhours trading after giving an upbeat sales forecast for the
current quarter, helped by companies spending more on computing infrastructure to take advantage of AI
technology
Revenue in the quarter ending in April will be $13.9 billion to $14.1 billion, Cisco said. Analysts
had predicted a figure at the bottom end of that range. The company — the largest seller of networking gear
— also raised its fiscal 2025 target by about $1 billion to just more than $56 billion. That compared with a
$55.97 billion average estimate. Corporate clients have been bolstering their networking systems to help
speed the creation and use of artificial intelligence. The outlook suggests that spending by those customers is
helping make up for weaker orders from the federal government, which had put some projects on hold after
the change of administration in Washington. Cisco’s switches and routers are the key pieces of equipment
that direct data traffic in and out of networks and around the internet. The company has also pushed further
into software and services, a shift accelerated by last year’s acquisition of the data-crunching business
Splunk. Product orders rose 29% from a year ago in the fiscal second quarter, which ended Jan. 25. Minus the
contribution from Splunk, new orders were up 11%, the company said. Sales rose 9% to $14 billion in the
second quarter, just above the average estimate of $13.9 billion. The revenue expansion in the period was
the company’s first in a year. Profit climbed to 94 cents a share, minus some items. Wall Street projected 91
cents. Deferred revenue — a sign of future sales — now totals $27.8 billion, the company said. That’s up 8%
from a year ago. - Trade Desk Inc., which offers technology to help marketers place ads online, tumbled 27.1% in
afterhours trading after its first-quarter forecast fell short of what analysts were expecting
The company sees revenue of $575 million in the quarter, compared with the $581.5 million average
estimate. Adjusted earnings before interest, taxes, depreciation and amortization are forecast at $145
million, below estimates of $191.6 million. For the fourth quarter, Trade Desk reported sales of $741 million,
trailing estimates of $759.8 million. In November, the company had called for fourth-quarter revenue of “at
least $756 million.” Adjusted earnings of 59 cents a share beat expectations of 54 cents. Chief Executive
Officer Jeff Green acknowledged that results in the fourth quarter fell short of expectations. He said the
company took steps in December to reorganize its business to focus on new opportunities.
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