- Asian Shares Advance Amid Chinese AI Optimism: Markets Wrap
Asian stocks gained as AI optimism boosted tech shares in Hong Kong and China, while other investors
remained cautious due to tensions between the US and European Union over tariffs and the war in Ukraine.
Tencent Holdings Ltd. jumped as much as 7.8% in Hong Kong, extending a winning run that’s gotten a boost
from DeepSeek’s debut. A gauge of Asian shares rose to its highest level since November, helped by
technology companies. The dollar was little changed, while Treasury futures edged lower with cash trading
closed globally due to Presidents’ Day in the US. China’s tech-powered rally is gaining momentum as
DeepSeek’s breakthrough in artificial intelligence drove a $1.3 trillion rally in the country’s shares. A potential
meeting this week between President Xi Jinping and e-commerce icon Jack Ma may fuel optimism further.
That contrasts with increasing discord between the US and Europe, which prompted a drop in German and
French bond futures. - S&P 500 closes little changed on Friday, but Wall Street notches weekly gains
The S&P 500 was little changed on Friday in a pause from a strong performance this week, as investors
weighed the latest on the global trade and inflation fronts. The Dow Jones Industrial Average shed 165.35
points, or 0.37%, closing at 44,546.08. The S&P 500 ticked down 0.01% to 6,114.63, and the Nasdaq
Composite added 0.41% to close at 20,026.77. The three major averages ended the week in the green, as
sentiment improved after investors got more certainty around President Donald Trump’s tariff plans, while
new inflation data wound up being more constructive than first thought. Traders also shrugged off data
released Friday that reflected a 0.9% slump in retail sales for January, worse than the Dow Jones estimate for
a 0.2% decline. This week, the S&P 500 added about 1.5%, while the Dow advanced roughly 0.6%. The
Nasdaq was 2.6% higher on the week. - Oil edges lower as potential Ukraine peace deal eases supply worries
Oil prices felll slightly on Friday on prospects for a peace deal between Russia and Ukraine that could ease
global supply disruptions by ending sanctions against Moscow, but losses were limited by a delay in U.S.
immediate reciprocal tariffs. Brent futures closed down 28 cents, or 0.37%, at $74.74 a barrel. U.S. West
Texas Intermediate (WTI) crude settled 55 cents, or 0.77%, lower at $70.74. Both contracts were on track for
weekly gains of about 1%. President Donald Trump ordered U.S. officials this week to begin talks on ending
the war in Ukraine after Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy
expressed a desire for peace in separate phone calls with him. Lifting sanctions on Moscow in the event of
a peace deal should boost global energy supplies. Russian oil exports could be sustained if workarounds to
the latest U.S. sanctions package are found, the International Energy Agency (IEA) said in its latest oil market
report. This week, Trump ordered commerce and economic officials to study reciprocal tariffs against
countries that place tariffs on U.S. goods and to return their recommendations by April 1. - Gold dips on profit-taking, still eyes seventh weekly gain
Gold prices fell over 1% on Friday due to profit-taking, although they remained poised for their seventh
straight weekly rise, driven by fears of a global trade war in the wake of U.S. President Donald Trump’s push
for reciprocal tariffs. Spot gold fell 1.5% to $2,883.80 an ounce, but remained on track for a weekly gain of
0.7%. Bullion hit a record peak of $2,942.70 on Tuesday. U.S. gold futures settled 1.7% lower at $2,897.40. - Japan’s Economy Outperforms Forecasts, Keeping BOJ on Track
Japan’s economy outperformed forecasts as business spending and net trade helped fuel a third straight
quarter of growth that will keep the Bank of Japan on track for further interest rate hikes. The yen
strengthened. Gross domestic product grew at an annualized pace of 2.8% in the three months through
December from the prior period, the Cabinet Office reported Monday. That compared with a revised 1.7%
clip in the previous period and beat the 1.1% consensus estimate. While Monday’s data showed that Japan’s
economy continues to grow steadily, there were also pockets of weakness in the report. Net exports grew in
part because imports fell, casting a doubt on the health of domestic demand. Private consumption edged
higher in the quarter, exceeding forecasts, but it slowed markedly versus the prior quarter. On an annual
basis, the value of private consumption was lower in 2024 than it was a decade earlier. Even so, the numbers
will likely give central bank authorities confidence they can continue to look for opportunities to unwind the
BOJ’s ultraeasy policy settings with gradual rate hikes. - Australia Set for First Rate Cut Since 2020 as Trade Risks Mount
Australia’s central bank is poised to cut interest rates for the first time in four years even as the board
remains alert to potential inflationary pressures from mounting global trade turmoil and risks of an election
splurge at home. A majority of economists in a Bloomberg News survey as well traders expect the Reserve
Bank to finally embark on easing on Tuesday with a 25 basis-point reduction in the cash rate to 4.1%. That
would be the RBA’s first cut since November 2020 and may provide a shot in the arm for Prime Minister
Anthony Albanese, who needs to overcome poor polling to secure a second term. Money markets are pricing
about 85% chance of a cut. Yet a pick up in consumer spending, aided by tax cuts and government subsidies,
along with rising uncertainties about the impact of US trade policies may also convince policymakers to stay
cautious. The RBA’s level of policy restrictiveness remains broadly on par with major counterparts because it
didn’t tighten as aggressively in 2022-2023. The board had sought to hold onto labor market gains while
bringing inflation back to target — a delicate balance that has drawn some criticisms. - China’s Xi Jinping speaks to entrepreneurs in a rare high-profile meeting amid economic headwinds
Chinese President Xi Jinping delivered a speech at a symposium with prominent entrepreneurs on Monday,
according to state media Xinhua, signaling a shift toward renewed support for the private sector. The
meeting sends a “very clear signal of top-level support” to the private sector entrepreneurs, Peiqian Liu, Asia
economist at Fidelity International told CNBC, “this will likely reignite the animal spirit and optimism about
renewed growth momentum in China.” “It could potentially be even more powerful than fiscal stimulus,
should policymakers show more decisive support towards the development of tech sector in China,” Liu
added. Beijing has been grappling with lackluster domestic consumption, a prolonged real estate slump and
external headwinds such as tariffs on its exports. The meeting could mark “a symbolic turning point for
Chinese tech sector after years of heightened scrutiny,” said Lynn Song, chief economist at LNG, emphasizing
the timing of this meeting underscored Beijing’s urgency to cheer up the private sector amid economic
malaise and external tariff risks. It could mean that “the regulatory overhang that we have had for the past
two years or so is at an end,” said Andy Maynard, managing director and head of equities at China
Renaissance. Reuters reported last week that Alibaba’s founder Jack Ma could be among the entrepreneurs
invited to the meeting. Ma’s potential return to the limelight could reinforce the expectation that Beijing is
softening its approach on large tech companies, Maynard said. Beijing initiated a regulatory storm against the
country’s large technology companies in late 2020 out of concerns that they were growing too large and
powerful. Mainland China’s CSI 300 index was little changed following the news. - Trump confirms Zelensky will take part in Ukraine peace talks as US, Russia prepare Saudi meeting
A team of advisers to U.S. President Donald Trump is set to meet with Russian officials next week in Saudi
Arabia to begin negotiations aimed at ending the war in Ukraine, two U.S. government officials familiar with
the matter told CBS News. The delegation, led by Secretary of State Marco Rubio, National Security Adviser
Mike Waltz, and Middle East envoy Steve Witkoff, will represent Trump in discussions following his
recent phone calls with President Volodymyr Zelensky and Russian President Vladimir Putin.
Trump confirmed the efforts, adding that the U.S. is working hard to facilitate peace and assuring that
Zelensky will be involved in the talks. Concerns have been raised about Ukraine’s role in the negotiations,
with European officials emphasizing that Kyiv must not be sidelined. Trump reaffirmed that Zelensky would
have a say in the process and mentioned the possibility of allowing European nations to purchase U.S.-made
weapons for Ukraine. - Procter & Gamble shares fell 4.8% on Friday after BNP Paribas analyst Kevin Grundy said the midpoint of
P&G’s fiscal 2025 organic sales guidance seems to be “very likely to be off the table,” due to near-term
uncertainty in the US market
Grundy issued the research note after a Feb. 13 meeting with a P&G executive. On short-term volatility, CEO
Jon Moeller said short-term volatility is “probably higher today” than he can recall it ever being. In the US,
P&G is monitoring recent signals of some slowing in its categories, and retailer de-stocking. Still, P&G has
“ample” flexibility in its P&L to protect EPS if organic sales growth were to slow. Europe business remains
“very strong,” LatAm is “super strong,” while in China, P&G says “still too early but not taking off”. Grundy
rates P&G outperform, PT $191. Meanwhile, Evercore ISI analyst Robert Ottenstein attributes Friday’s
weakness to a news item on diaper competition that characterized Walmart’s and Target’s launch in 2023 of
“retailer-exclusive diaper brands” as “disrupting the U.S. diaper market”. - Coinbase Global shares fell 8% even after the crypto exchange operator reported total revenue for the
fourth quarter that beat estimates, with the company’s results powered by a rally in digital assets linked to
President Donald Trump’s reelection. Raymond James has “little confidence” that current momentum can
continue, citing future competition and the likelihood that strong memecoin trends reverse
FOURTH QUARTER RESULTS: Total revenue $2.27 billion, estimate $1.87 billion. Transaction revenue $1.6
billion, estimate $1.24 billion. Subscription & services revenue $641.1 million, +71% y/y, estimate $608.3
million. Trading volume $439 billion vs. $154 billion y/y, estimate $428 billion. Adjusted Ebitda $1.29 billion,
estimate $920.5 million. Net income $1.29 billion vs. $273 million y/y, estimate $613.9 million. EPS $4.68 vs.
$1.04 y/y, estimate $2.27. FIRST QUARTER FORECAST: Sees subscription & services revenue $685 million to
$765 million, estimate $634.2 million. - Broadcom, TSMC eye possible Intel deals to split storied chipmaker, WSJ reports
Intel’s rivals Taiwan Semiconductor Manufacturing Co. and Broadcom are each eyeing potential deals that
would break the U.S. chipmaking icon in two, the Wall Street Journal reported on Saturday, citing people
familiar with the matter. Broadcom has been closely examining Intel’s chip design and marketing business,
the Journal reported, adding that the company had discussed a potential bid with its advisers but would likely
only proceed if it found a partner for Intel’s manufacturing business. TSMC, the world’s biggest contract
chipmaker, has separately studied controlling some or all of Intel’s chip plants, potentially as part of an
investor consortium or other structure, the report said. Broadcom and TSMC are not working together, and
all of the talks so far are preliminary and largely informal, the Journal added. Intel’s interim executive
chairman, Frank Yeary, has been leading the discussions with possible suitors and Trump administration
officials, who are concerned about the fate of a company seen as critical to national security, the report said.
Yeary has been telling individuals close to him that he is most focused on maximizing value for Intel
shareholders, the report added. Intel, Broadcom, TSMC and the White House did not immediately respond to
Reuters’ requests for comment. A White House official told Reuters on Friday that President Donald
Trump’s administration might not support Intel’s U.S. chip factories being operated by a foreign entity after
Bloomberg reported that TSMC was considering taking a controlling stake in Intel’s factories at Trump’s
request. The White House official said the Trump administration supported foreign companies investing and
building in the U.S. but was “unlikely” to support a foreign firm operating Intel’s factories. Bloomberg
reported that Trump’s team raised the idea of a deal between the two firms in recent meetings with officials
from TSMC, who were receptive, citing a person familiar with the matter. Intel was among the largest
beneficiaries of the U.S. push to onshore critical chip manufacturing led by former President Joe Biden’s
administration. In November, the U.S. Commerce Department said it was finalizing a $7.86 billion
government subsidy for Intel. The company is one of a few chipmakers that design and manufacture
semiconductors. TSMC boasts a market valuation about eight times larger than that of Intel. The Taiwanese
company’s customers include AI chip leader Nvidia and AMD, which is Intel’s fierce rival in PC and server
markets. - Applied Materials (NASDAQ:AMAT) Reports Q4 In Line With Expectations But Quarterly Revenue
Guidance Slightly Misses Expectations
Semiconductor machinery manufacturer Applied Materials (NASDAQ:AMAT) met Wall Street’s revenue
expectations in Q4 CY2024, with sales up 6.8% year on year to $7.17 billion. On the other hand, next
quarter’s revenue guidance of $7.1 billion was less impressive, coming in 0.8% below analysts’ estimates. Its
non-GAAP profit of $2.38 per share was 3.7% above analysts’ consensus estimates. Applied Materials (AMAT)
Q4 CY2024 Highlights: Revenue: $7.17 billion vs analyst estimates of $7.14 billion (6.8% year-on-year growth,
in line); Adjusted EPS: $2.38 vs analyst estimates of $2.30 (3.7% beat); Adjusted Operating Income: $2.19
billion vs analyst estimates of $2.13 billion (30.6% margin, 2.9% beat); Revenue Guidance for Q1 CY2025 is
$7.1 billion at the midpoint, below analyst estimates of $7.16 billion; Adjusted EPS guidance for Q1 CY2025 is
$2.30 at the midpoint, roughly in line with what analysts were expecting; Operating Margin: 30.4%, up from
29.3% in the same quarter last year; Free Cash Flow Margin: 7.6%, down from 31.3% in the same quarter last
year; Inventory Days Outstanding: 136, up from 133 in the previous quarter; Market Capitalization: $147
billion. “The industry drive to accelerate the development of advanced compute and more sophisticated AI is
gaining momentum,” said Gary Dickerson, President and CEO. Reviewing a company’s long-term sales
performance reveals insights into its quality. Any business can have short-term success, but a top-tier one
grows for years. Over the last five years, Applied Materials grew its sales at an impressive 13% compounded
annual growth rate. Its growth surpassed the average semiconductor company and shows its offerings
resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and
long-term investors should be prepared for periods of high growth followed by periods of revenue
contractions (which can sometimes offer opportune times to buy). - Meta Platforms stock just closed higher for the 20th straight day
Meta Platforms (META) has far and away been the biggest winner among the “Magnificent Seven” stocks so
far this year. And on Friday, the company extended what’s been a record winning streak into new territory,
notching its 20th straight day of gains. Said another way, the stock hasn’t had a losing session in the month of
February. Said yet another way, Meta stock hasn’t had a losing session since Donald Trump was inaugurated
as the 47th president of the United States. So far this year, Meta stock has only closed lower five times.
Tesla (TSLA) stock, in contrast, has had two separate five-day losing streaks in 2025. Year to date, Meta stock
is now up 25.8%, far outpacing its Magnificent Seven peers. Amazon (AMZN) is the next best-performing
stock among this group of Big Tech stalwarts, having risen 4.2% this year through Friday’s close. Tesla has
been the laggard of the group, falling 11.9% in 2025. With a close at a record high of $736.67 on Friday, Meta
stock is now up over 600% from its lows hit back in the fall of 2022. Amid that year’s tech washout that
followed the Federal Reserve’s decision to begin raising interest rates aggressively in the face of a 40-year
high in inflation, Meta stock fell more than 70% from peak to trough. - Nvidia shakes up stock portfolio, cratering Serve Robotics and sending WeRide soaring
Nvidia (NVDA) on Friday disclosed its latest equity holdings, and the reveal led to some wild swings in the
fortunes of companies that saw their shares bought or sold by the chip giant. The biggest winner on Friday
were shares of WeRide (WRD), a Chinese autonomous driving play, that saw its stock nearly double after
Nvidia disclosed a new stake in the company of around 1.8 million shares, worth about $57 million at Friday’s
market prices. WeRide stock rose 83.5% on the day. Nebius Group (NBIS), a Netherlands-based AI company
that was split out of Russian search giant Yandex last year, saw its stock rise as much as 14% after Nvidia
disclosed a new 1.2 million share position worth about $56 million at Friday’s market prices. The stock settled
up 6.7% on the session.
