- Asian Stocks Gain as Tariff Timeline Lifts Mood: Markets Wrap
Asian equities advanced Friday as markets reacted positively to signs reciprocal US tariffs may be weeks from
coming into effect, raising the prospect for negotiations that could make them less punitive. A benchmark of
Asian shares gained for a third consecutive day. US equity index futures were higher after the S&P 500
neared a record on Thursday, helping lift a measure of global shares to an all-time high. The South Korean
won gained while the yen fluctuated. Support for equities suggests investors have focused on chances that
talks could blunt the impact of the tariffs, echoing the response to delays on those leveled at Canada and
Mexico earlier this month. The work required to propose reciprocal tariffs will occur on a country-by-country
basis and could take until April to complete, said Howard Lutnick, Trump’s nominee to lead the Commerce
Department. - Dow closes more than 300 points higher as Trump holds off on imposing new tariffs, Nvidia jumps
Stocks rose Thursday as new inflation data and updates on U.S. tariff plans appeared to ease some concerns
around inflationary pressures and global trade tensions. The Dow Jones Industrial Average jumped 342.87
points, or 0.77%, to 44,711.43. The S&P 500 climbed 1.04% to 6,115.07, and the Nasdaq Composite advanced
1.50% to 19,945.64. The Dow hit session highs after President Donald Trump signed a presidential
memorandum to examine reciprocal tariffs on foreign nations, but fell short of implementing any levies after
teasing major trade policy changes this week. He also suggested that additional tariffs, including on auto
imports, are on the way, Reuters reported. - Oil set to snap three-week losing streak amid rising fuel demand
Oil prices rose in early trade on Friday, set to snap a three-week losing streak, amid rising fuel demand and
expectations that Trump’s plans for reciprocal global tariffs would not come into effect until April, giving
more time to avoid a trade war. Brent futures were up 19 cents at $75.25 a barrel by 0300 GMT, while
U.S. West Texas Intermediate (WTI) crude rose 12 cents to $71.41. For the week, Brent was up 0.7% and WTI
0.5%. Global oil demand has surged to 103.4 million barrels per day, a 1.4 million bpd increase year-over
year, analysts at JPMorgan said in a report on Friday. - Gold set for seventh weekly gain as trade war risks lift demand
Gold prices held steady on Friday and were poised for a seventh consecutive weekly gain as U.S. President
Donald Trump’s plans to impose reciprocal tariffs on every country taxing U.S. imports fueled concerns of a
global trade war. Spot gold held its ground at $2,929.05 per ounce, as of 0303 GMT. Bullion hit a record peak
of $2,942.70 on Tuesday. U.S. gold futures rose 0.4% to $2,957.40. On Thursday, Trump tasked his economics
team with devising plans for reciprocal tariffs on every country taxing U.S. imports, and the targets include
China, Japan, South Korea and the European Union. A major trigger for gold prices this week was Trump’s
announcement to impose reciprocal tariffs, which is creating tariff war concerns and could impact global
economies, said Ajay Kedia, director at Mumbai-based Kedia Commodities. The market is slightly overbought,
which can create some technical profit booking after nearing the $3,000 level, Kedia said. - U.S. and India to double bilateral trade in five years, Prime Minister Modi says, as Trump tariffs loom
New Delhi and Washington will work to more than double bilateral trade to $500 billion by 2030, Indian
Prime Minister Narendra Modi said at a joint press conference with U.S. President Donald Trump on
Thursday. Speaking at the conclusion of the two leaders’ meeting in Washington, Modi also said that “Our
teams will work on concluding very soon, a mutually beneficial trade agreement.” Trump acknowledged
India’s recent move to reduce tariffs on select imports and said he would begin talks on disparities on trade
and hoped to reach an agreement. The remarks came hours after Trump signed a presidential memorandum
outlining his plan to impose “reciprocal tariffs” on foreign nations, including India. The U.S. would simply
charge the same tariff rates that India charges, Trump said, while the trade deficit with India could be
addressed with the sale of oil and gas. India simple average tariff on countries with the most-favored-nation
status stand at 17%, compared with the U.S. that levies 3.3%. The U.S. enjoys MFN status with most major
economies. U.S. total goods trade with India is estimated at $129 billion in 2024, according to the Office of
the U.S. Trade Representative. India’s surplus with the U.S., its second-largest trading partner, reached $45.7
billion last year. The U.S. will increase its military sales to India starting this year and ultimately provide F-35
fighter jets to the Asian ally, Trump said at the briefing, in an effort to confront what he called “the threat of
radical Islamic terrorism.” India is the world’s biggest defense equipment importer. Modi said India and the
U.S. would also work together on developing artificial intelligence and semiconductors while focusing on
establishing strong supply chains for strategic minerals. The lofty target of $500 billion in trade could be
achievable, Raghuram Rajan, professor of finance at University of Chicago Booth School of Business and
former Reserve Bank of India governor, told CNBC’s “Squawk Box Asia.” - UK economy ekes out 0.1% growth in the fourth quarter, beating expectations
The U.K. economy grew by 0.1% in the fourth quarter, beating expectations, according to a preliminary
estimate from the U.K.’s Office for National Statistics (ONS) on Thursday. Economists polled by Reuters had
expected the country’s GDP to contract by 0.1% over the period. The services and construction sectors
contributed to the better-than-expected performance in the economy, up 0.2% and 0.5% respectively, but
production fell by 0.8%, the ONS said. The British economy had recorded zero growth in the third quarter and
lackluster monthly GDP data since then, with a 0.1% contraction in October and a 0.1% expansion in
November. The ONS said on Thursday that growth had picked up in December, with an estimated 0.4%
month-on-month expansion thanks to growth in services and production. The British pound was up 0.4%
against the dollar after the data release, and flat against the euro. Sluggish growth and a recent drop in
inflation prompted the Bank of England last week to make its first interest rate cut of the year, bringing its
benchmark rate down to 4.5%. - Wholesale prices rose 0.4% in January, more than expected
A gauge of wholesale prices rose in January, indicating that pipeline inflation pressures are persisting and
likely keeping the Federal Reserve on the sidelines regarding interest rate cuts. The producer price index,
which measures what producers get for their goods and services, increased by a seasonally adjusted 0.4% on
the month, compared to the Dow Jones estimate for 0.3%, the Bureau of Labor Statistics reported Thursday.
Excluding food and energy, core PPI was up 0.3%, in line with the forecast. The release comes the day after
the BLS reported that the consumer price index rose 0.5% on the month, putting the annual inflation rate at
3% and well out of reach of the Fed’s 2% long-run goal. Together, the releases likely will push back
expectations for a rate cut until the second half of the year, though inflation data can be volatile and the
outlook could change depending on what subsequent months show. - Trump’s Ukraine Plans Mean a $3 Trillion Bill for European Allies
Donald Trump is starting to tell European Union leaders what they need to do if they want to secure peace in
Ukraine. His demands are set to push the bloc to its limits. Trump spoke with Vladimir Putin on Wednesday,
setting the wheels in motion for peace talks, just as his defense secretary was explaining to his European
allies that they are going to have to shoulder most of the burden for any settlement. Bloomberg Economics
calculates that protecting Ukraine and expanding their own militaries could cost the continent’s major
powers an additional $3.1 trillion over the next 10 years. - Singapore’s annual GDP expands at fastest pace since 2021, lifted by trade, finance and manufacturing
sectors
Singapore’s GDP expanded by 4.4% in 2024, marking its fastest growth since 2021, government data showed
Friday, as it got a boost from wholesale trade, finance and insurance, and manufacturing sectors.
The economy had expanded by 1.8% in 2023. For the fourth quarter alone, Singapore’s GDP grew 5% year on
year, higher than the 4.7% forecast by economists polled by Reuters, but lower than the 5.7% expansion seen
in the previous quarter. The 5% growth figure also surpassed advance estimates of 4.3% announced on Jan.
This will be the last piece of key economic data from the city-state, before Prime Minister Lawrence Wong
delivers the budget for the country for 2025 on Feb. 18. Singapore’s retail trade sector, as well as the food
and beverage sector contracted, partly as people shifted their spending to overseas travel destinations, the
ministry added. The country maintained its GDP growth forecast at 1%-3% for the full year for 2025.
Singapore’s ministry of trade and industry said that external demand outlook for 2025 largely remains
unchanged, as overall GDP growth in the country’s key trading partners is expected to ease from 2024 levels. - Siemens AG shares jumped 4.7% as robust demand for the company’s electrification products boosted
revenues and a long-standing slump in factory-automation sales showed signs of abating
Group revenue increased 3% in the three months through December, with revenue expected to grow by as
much as 7% this year. Demand for Siemens’ electrification products, like software and microgrid controllers
that service data centers, has surged amid massive investments in infrastructure to power artificial
intelligence applications in the US. Siemens in December said the unit would reach annual profit margins as
high as 20% within the next three to five years. The factory-automation business, which has suffered from an
ongoing slump in China, is showing signs of recovery, with demand increasing from semiconductors,
electronics, and aerospace industries. - EssilorLuxottica shares rose 7.2% as it reported fourth-quarter revenue at constant exchange rates of
€6.8 billion, 9.2% higher than the previous year and ahead of estimates
North America, where the French-Italian group generates about 40% of its revenue, improved 7.8% in the
quarter, partly due to a recovery in sunglass sales led by the Sunglass Hut unit. The group’s China results
were bolstered by sales of Stellest myopia lenses, which grew around 50% in the quarter. EssilorLuxottica is
expanding its production capacity for Ray-Ban Meta glasses and focusing on med-tech, including the
distribution of its Nuance Audio eyewear line and acquisitions in clinical ophthalmology. - Unilever shares dropped 5.6% after the consumer goods company reported fourth-quarter and full-year
results. While analysts found the print to be solid, they flagged management commentary on a “slow start”
to 2025
Citi (buy): Analyst Cedric Besnard says 4Q results were in line, but notes HPC volumes were “a bit light”.
Besnard does not expect consensus expectations to “move much around the results,” apart from on share
buyback contribution, which is dependent on how much was already baked into the stock. “While the print
confirms the strength of the model, lack of potential further catalysts until later in the year with comments
on a slow start to the year (we think comment on H1 margin comps were more expected) may temper
enthusiasm in the ST”. RBC Capital Markets (underperform): Analysts James Edwardes Jones and Wassachon
Udomsilpa say the results were solid overall. Outlook “emphasizes a slow start to 2025” and would not be
surprised if consensus expectations for 1Q/2Q came down. FOURTH QUARTER RESULTS: Underlying sales
+4%, estimate +3.93%. Underlying volume +2.7%, estimate +2.86%. Underlying pricing +1.3%, estimate
+1.11%. 2024 YEAR RESULTS: Revenue EU60.76 billion, estimate EU60.58 billion. Underlying operating profit
EU11.18 billion, estimate EU10.92 billion. Underlying operating margin 18.4%, estimate 18.3%. Operating
profit EU9.40 billion, estimate EU10.47 billion. Free cash flow EU6.93 billion, estimate EU6.54 billion.
COMMENTARY: “We expect underlying sales growth (USG) for full year 2025 to be within our multi-year
range of 3% to 5%. We anticipate a modest improvement in underlying operating margin for the full year
versus 18.4% in 2024. We expect rising inflation in cocoa and dairy costs to put pressure on margins in
2025.” - Barclays Plc shares dropped 4.7% after the bank left its earnings guidance for next year unchanged
despite strong fourth-quarter performance
The bank’s traders had their best fourth-quarter performance in at least a decade, with revenue from
equities trading surging 40% to £604 million. Revenue from the Barclays UK retail division also jumped 46% to
£2.62 billion in the quarter. While that helped Barclays notch a return on tangible equity of 10.5% for the
year, investors were left feeling disappointed when that better-than-expected performance didn’t translate
into an upgraded outlook. Barclays expects it to be roughly 11% in 2025 and more than 12% in 2026. The
lender said it still plans to return at least £10 billion to shareholders between 2024 and 2026, even after
returns improved above what the company was originally anticipating. - Airbnb issued an upbeat forecast for the first three months of 2025, citing “continued strong demand”
after a strong holiday travel season
For the January-to-March quarter, it sees the key metric of nights and experiences booked growing at a
“relatively stable” pace compared to the same period last year, which saw a roughly 8.5% gain not including
Leap Day, the company said. Wall Street was projecting an 8.3% increase for the current period, according to
estimates. Airbnb expects revenue to be $2.23 billion to $2.27 billion, and plans to invest $200 million to
$250 million into launching and scaling new products starting in May. Airbnb’s fourth-quarter nights booked
and adjusted earnings beat expectations, thanks to an “acceleration in growth” across all regions, particularly
in Asia Pacific and Latin America. Shares rose 14.1% afterhours. - Twilio (NYSE:TWLO) Beats Q4 Sales Targets But Stock Drops
Cloud communications infrastructure company Twilio (NYSE:TWLO) reported revenue ahead of Wall Street’s
expectations in Q4 CY2024, with sales up 11% year on year to $1.19 billion. The company expects next
quarter’s revenue to be around $1.14 billion, close to analysts’ estimates. Its non-GAAP profit of $1 per share
was 3.2% below analysts’ consensus estimates. Twilio (TWLO) Q4 CY2024 Highlights: Revenue: $1.19 billion
vs analyst estimates of $1.18 billion (11% year-on-year growth, 1.5% beat); Adjusted EPS: $1 vs analyst
expectations of $1.03 (3.2% miss); Adjusted Operating Income: $197 million vs analyst estimates of $197.8
million (16.5% margin, in line); Revenue Guidance for Q1 CY2025 is $1.14 billion at the midpoint, roughly in
line with what analysts were expecting; Adjusted EPS guidance for Q1 CY2025 is $0.91 at the midpoint, below
analyst estimates of $0.98; Operating Margin: 1.1%, up from -33.6% in the same quarter last year; Free Cash
Flow Margin: 7.8%, down from 16.7% in the previous quarter; Customers: 325,000, up from 320,000 in the
previous quarter; Net Revenue Retention Rate: 106%, up from 105% in the previous quarter; Market
Capitalization: $22.18 billion. A company’s long-term performance is an indicator of its overall quality. While
any business can experience short-term success, top-performing ones enjoy sustained growth for years. Over
the last three years, Twilio grew its sales at a 16.2% compounded annual growth rate. Although this growth is
acceptable on an absolute basis, it fell slightly short of our benchmark for the software sector, which enjoys a
number of secular tailwinds. - Palo Alto Networks (NASDAQ:PANW) Surprises With Q4 Sales
Cybersecurity provider Palo Alto Networks (NASDAQ:PANW) announced better-than-expected revenue in Q4
CY2024, with sales up 14.3% year on year to $2.26 billion. The company expects next quarter’s revenue to be
around $2.28 billion, close to analysts’ estimates. Its non-GAAP profit of $0.81 per share was 3.9% above
analysts’ consensus estimates. Palo Alto Networks (PANW) Q4 CY2024 Highlights: Revenue: $2.26 billion vs
analyst estimates of $2.24 billion (14.3% year-on-year growth, 0.9% beat); Adjusted EPS: $0.81 vs analyst
estimates of $0.78 (3.9% beat); Adjusted Operating Income: $640.4 million vs analyst estimates of $623.2
million (28.4% margin, 2.8% beat); The company slightly lifted its revenue guidance for the full year to $9.17
billion at the midpoint from $9.15 billion; Management lifted its full-year Adjusted EPS guidance to $3.21,
beating analysts’ estimates; Operating Margin: 10.6%, up from 2.7% in the same quarter last year; Market
Capitalization: $129.1 billion. “In Q2, our strong business performance was fueled by customers adopting
technology driven by the imperative of AI, including cloud investment and infrastructure modernization,” said
Nikesh Arora, Chairman and CEO of Palo Alto Networks. A company’s long-term sales performance can
indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for
years. Thankfully, Palo Alto Networks’s 20.8% annualized revenue growth over the last three years was
decent. Its growth was slightly above the average software company and shows its offerings resonate with
customers. This quarter, Palo Alto Networks reported year-on-year revenue growth of 14.3%, and its $2.26
billion of revenue exceeded Wall Street’s estimates by 0.9%. Company management is currently guiding for a
14.6% year-on-year increase in sales next quarter. - Intel Stock Surges on Speculation of TSMC Deal
Intel (INTC) shares jumped Thursday, extending their recent rally on speculation of a deal with Taiwan
Semiconductor Manufacturing Company (TSM). The storied chipmaker has been the subject of discussions
involving a potential U.S. chipmaking partnership with TSMC, Baird analysts said Wednesday. TSMC could
send engineers to Intel’s foundry business as part of such a venture, and potentially launch a new entity
jointly owned by TSMC and Intel that could benefit from U.S. government funding under the Chips Act, the
analysts said. Intel’s foundry business has struggled to keep up with TSMC, losing $13.4 billion in 2024.
A TSMC spokesperson declined to remark on such a deal, while Intel did not immediately respond to a
request for comment. The discussions come as Vice President JD Vance said Tuesday the Trump
administration wants artificial intelligence chips to be designed and manufactured domestically. Policies
favoring U.S. chip manufacturers could benefit Intel’s foundry, which makes chips in the U.S. for third parties.
Shares of Intel popped over 9% to $24.52 in Thursday afternoon trading and have gained nearly 30% so far
this week. However, even with recent gains, the stock is down more than 40% over the past 12 months.
Menu