- Asian Stocks Drop After Fed Minutes Show Caution: Markets Wrap
Asian equities fell Thursday after Federal Reserve minutes showed fresh caution on interest rate cuts and
President Donald Trump called for more tariffs. Shares across Asia Pacific dropped while mainland China and
Hong Kong benchmarks opened lower. US equity index futures declined in a sign the S&P 500 will pare much
of its Wednesday gains. Treasuries were steady in early trading and gold held near a record, underpinning
demand for haven assets. Fed minutes showed policymakers in January expressed a readiness to hold
interest rates steady amid stubborn inflation and economic-policy uncertainty. Officials also revealed pausing
or slowing the balance-sheet runoff — a process known as quantitative tightening, or QT, until the
government’s debt-ceiling drama is resolved. - S&P 500 closes at another record Wednesday as investors look past Trump tariff fears
The S&P 500 climbed to a fresh record on Wednesday as stocks remain resilient despite a continuously
cautious Federal Reserve and President Donald Trump’s threat of more tariffs. The S&P 500 rose 0.24%,
settling at 6,144.15 and earning its second record close in a row. The index also touched a fresh all-time high
during the session. The Nasdaq Composite added 0.07% to close at 20,056.25, while the Dow Jones Industrial
Average advanced 71.25 points, or 0.16%, to end at 44,627.59. - Oil prices ease after report of U.S. crude inventories rise
Oil prices edged lower on Thursday after an industry report showed a build in U.S. crude stockpiles and as
tariff concerns weighed on sentiment, falling back from gains made in the previous session on worries over
supply disruptions in Russia. Brent futures were down 22 cents, or 0.29%, at $75.82 a barrel by 0135 GMT.
U.S. West Texas Intermediate crude dropped 30 cents, or 0.42%, to $71.95. The March contract expires on
Thursday and the more active April contract eased 0.26% to $71.84. Oil prices held near a one-week high on
Wednesday. Besides the higher U.S. inventories, import tariffs announced by the Trump administration could
dent oil prices by raising the cost of consumer goods, weakening the global economy and reducing fuel
demand. Concerns about European and Chinese demand were also helping keep prices in check. - Trump tariff worries keep gold near record high
Gold prices held firm near a record high on Thursday, as U.S. President Donald Trump’s tariff plans stoked
fears of higher inflation and a major global trade war. Spot gold rose 0.2% to $2,937.74 an ounce by 0235
GMT, trading near the all-time high of $2,946.85 hit on Wednesday. U.S. gold futures gained 0.7% to
$2,955.90. “Uncertain outlooks for both global trade and inflation are proving to be conducive for gold and
are acting to bring the $3,000 level within range,” said Tim Waterer, chief market analyst at KCM Trade.
Since his inauguration, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and
aluminum. He said on Wednesday he would announce tariffs related to lumber, cars, semiconductors and
pharmaceuticals “over the next month or sooner.” - UK inflation leaps to higher-than-expected 3% in January
The U.K.’s inflation rate rose sharply to 3% in January, coming in above analyst expectations of a 2.8%
reading, according to data released by the Office for National Statistics (ONS) on Wednesday. Core inflation,
which excludes more volatile energy, food, alcohol and tobacco prices, rose by 3.7% in the 12 months to
January, which was up from 3.2% in the previous month. The ONS stated Wednesday that the largest upward
contribution to the monthly change in the CPI came from transport and food and non-alcoholic beverages. - Fed officials are worried about tariffs’ impact on inflation and see rate cuts on hold, minutes show
Federal Reserve officials in January agreed they would need to see inflation come down more before
lowering interest rates further, and expressed concern about the impact President Donald Trump’s tariffs
would have in making that happen, according to meeting minutes released Wednesday. Policymakers on the
Federal Open Market Committee unanimously decided at the meeting to hold their key policy rate steady
after three consecutive cuts totaling a full percentage point in 2024. In reaching the decision, members
commented on the potential impacts from the new administration, including chatter about the tariffs as well
as the impact from reduced regulations and taxes. The committee noted that current policy is “significantly
less restrictive” than it had been before the rate cuts, giving members time to evaluate conditions before
making any additional moves. Members said that the current policy provides “time to assess the evolving
outlook for economic activity, the labor market, and inflation, with the vast majority pointing to a still
restrictive policy stance. Participants indicated that, provided the economy remained near maximum
employment, they would want to see further progress on inflation before making additional adjustments to
the target range for the federal funds rate.“ - China keeps benchmark lending rates steady as PBOC prioritizes financial stability
China kept its key lending rates unchanged Thursday, as Beijing prioritizes financial stability over interest rate
easing to bolster the economy. The People’s Bank of China held the 1-year loan prime rate unchanged at
3.1%, and the 5-year LPR at 3.6%. The decision was in line with Reuters poll estimates. The benchmark
lending rates — normally charged to banks’ best clients — are calculated monthly based on designated
commercial banks’ proposed rates submitted to the PBOC. The one-year LPR influences corporate loans and
most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.
“Pressure on the banks’ net interest margins and exchange rate amid slower pace of the Federal Reserve’s
rate cuts all lead to a stabilization of China’s policy rate,” said Bruce Pang, adjunct associate professor at
Chinese University of Hong Kong business school. While the PBOC officials said late last year, they would cut
banks’ reserve requirement ratio and interest rates at an “appropriate time,” the rate cuts are yet to
materialize, as policymakers face more trade tensions with the U.S. “We still think [the 7-day rate] has a
decent chance to be cut in Q1,” Lynn Song, chief economist at ING said, as the real interest rate remains
relatively high. “Cutting rates further could help encourage investment and consumption on the margins,”
Song said, adding that the yuan’s depreciation pressure have subsided recently, making the case for a rate
cut. Supporting the yuan carries some risks for the economy, as a weaker yuan could help keep Chinese
exports competitively priced abroad, while a stronger currency makes imports more expensive at a time
when consumer demand has been weak. - HSBC shares declined 0.3% following a recent strong rally that took the stock to trade at highest since
2001, after the lender reported pretax profit that beat estimates and detailed a $2 billion share buyback
JPMorgan (neutral): Analyst Kian Abouhossein says strong results will likely lead to mid-single-digit consensus
EPS upgrade for 2025, potentially low-to mid-single in outer years. Strategic update could be seen as
disappointing “in terms of both impact and transparency” particularly the limited cost savings plan with lack
of clarity of how much is actually going to stick and improve the cost run rate. Restructuring plan to take
material shine away from results but market to be pleased about pre-provision profits performance, outlook.
Jefferies (buy): Analyst Joseph Dickerson notes 4Q results and guides underwrite mid-teens ROTE through at
least 2026. Better banking NII performance and upped guide and cost savings implying at least 4% revisions
to 2025 consensus pre-tax profit. Says some investors would have hoped for a better than $2b share
buyback, but he sees it as time constrained given targeted completion by 1Q results. 2024 YEAR RESULTS:
Pretax profit $32.31 billion, +6.5% y/y, estimate $31.68 billion. Revenue $65.85 billion, -0.3% y/y, estimate
$65.2 billion. Common equity Tier 1 ratio 14.9% vs. 14.8% y/y, estimate 15%. FOURTH QUARTER RESULTS:
Pretax profit $2.28 billion vs. $977 million y/y. Revenue $11.56 billion, -11% y/y. Net interest margin 1.54%
vs. 1.52% y/y. COMMENTARY: Announces up to $2B Buyback. Aims to Generate About $0.3BN of Cost
Reductions in 2025. Annualised Reduction $1.5BN in Cost Base by 2026 End. - Occidental Petroleum shares rose 4.4% after the oil and gas producer hit its near-term debt-reduction
target and beat fourth-quarter earnings expectations, which offset a full-year outlook that came in below
the average analyst estimate
Bloomberg Intelligence analyst Vincent Piazza: Debt reduction of $4.5 billion in 4Q and two agreements to
sell $1.2 billion of assets in 1Q “may aid sentiment and engagement” as company resizes balance sheet.
Boosting quarterly dividend 9% clarifies pathway to increasing distributions to shareholders despite uncertain
backdrop. JPMorgan analyst Arun Jayaram (neutral, PT $59): Upside 4Q featured OXY reaching near-term
$4.5b deleveraging target, but also notes softer than expected 1Q25 guide. Notes $1.1 billion of special
charges in 4Q, including $334 million of oil and gas impairments and a $925 million pretax environment
reserve at OxyChem. Citi analyst Scott Gruber (neutral, PT $56): Sees full-year volumes as solid, with
outperformance versus forecast in the Gulf. 2025 capex at $7.5b in-line with consensus, although tilt toward
1H points to weaker FCF early in year. FOURTH-QUARTER RESULTS: Adjusted EPS 80c, estimate 70c. Net sales
$6.76 billion, -5.7% y/y, estimate $7.09 billion. Total average global production 1,463 Mboed. FIRST-QUARTER
FORECAST: Sees production 1,370 to 1,410 mboed. YEAR FORECAST: Sees capital expenditure $7.4 billion to
$7.6 billion, estimate $7.4 billion. Sees production 1,385 to 1,445 mboed. - Palantir plunges after CEO Karp changes share sales plan, Pentagon budget cut report
The share price of Palantir fell as much as 12.5% Wednesday after news that CEO Alex Karp had adopted a
new stock trading plan, and a report that the Pentagon has been ordered to prepare to cut the U.S. defense
budget by 8% each year for the next five years. Palantir is best known for its contracting work
providing software and technology services for defense agencies. On Tuesday night, Palantir in a regulatory
filing disclosed that Karp’s new plan will allow him to sell nearly 10 million shares of company stock in the
next six months. The Washington Post on Wednesday reported that Defense Secretary Pete Hegseth has
ordered senior Pentagon leaders and other military brass to develop plans to slash the defense budget over
the next half-decade. The budget for the current fiscal year is around $850 billion. The Post reported that
Hegseth ordered the proposed cuts to be drawn up by Monday. Palantir closed trading Wednesday at
$112.06 per share, a drop of 10%. Shares were down more than 5% in after-hours trading. - Supermicro Stock Rises for Fifth-Straight Session After Business Update
Shares of Super Micro Computer (SMCI) notched their fifth straight session of gains Wednesday as
momentum continued to build after the company’s business update last week. Supermicro shares gained 8%
Wednesday, making the company one of the top performers in the S&P 500—just a day after the stock
overtook Palantir Technologies (PLTR) as the best-performing S&P 500 component this year. Shares have
nearly doubled in value since the start of 2025. During Supermicro’s business update last week, Chief
Executive Officer Charles Liang said sales could reach $40 billion in 2026, driven by demand for artificial
intelligence data-center servers. That would represent 60% growth from the high end of the company’s 2025
revenue guidance. - Amplitude (NASDAQ:AMPL) Exceeds Q4 Expectations, Stock Soars
Data analytics software provider Amplitude (NASDAQ:AMPL) reported Q4 CY2024 results exceeding the
market’s revenue expectations , with sales up 9.4% year on year to $78.13 million. Guidance for next
quarter’s revenue was optimistic at $79.5 million at the midpoint, 2.3% above analysts’ estimates. Its non
GAAP profit of $0.02 per share was in line with analysts’ consensus estimates. Amplitude (AMPL) Q4 CY2024
Highlights: Revenue: $78.13 million vs analyst estimates of $76.65 million (9.4% year-on-year growth, 1.9%
beat); Adjusted EPS: $0.02 vs analyst estimates of $0.01 (in line); Adjusted Operating Income: $239,000 vs
analyst estimates of -$841,420 (0.3% margin, significant beat); Management’s revenue guidance for the
upcoming financial year 2025 is $327.8 million at the midpoint, beating analyst estimates by 2.3% and
implying 9.5% growth (vs 8.3% in FY2024); Operating Margin: -45.4%, down from -30.2% in the same quarter
last year; Free Cash Flow Margin: 2%, down from 6% in the previous quarter; Customers: 591 customers
paying more than $100,000 annually; Annual Recurring Revenue: $312 million at quarter end, up 11% year on
year; Market Capitalization: $1.58 billion.”Amplitude closed 2024 strong. Our platform strategy is resonating
with customers, and we’re making great progress with enterprises,” said Spenser Skates, CEO and co-founder
of Amplitude.
