- Asian Stocks Gain as Tech Jumps on Alibaba Results: Markets Wrap
Chinese technology shares led gains in Asian stocks after Alibaba Group Holding Ltd. reporting its fastest pace
of revenue growth in more than a year boosted optimism toward the sector. The yen weakened past 150 per
dollar. Equities in Hong Kong and a gauge of Asian shares advanced after Alibaba surged as much as 13% on
the back of its earnings. The region’s index is in line to notch a sixth straight weekly gain, the longest winning
streak in almost a year. Bank of Japan Governor Kazuo Ueda signaled a readiness to quell a surge in bond
yields, comments which led the yen to post its first decline in three days. While investors remain wary about
rising geopolitical tensions and a widening tariff war, Alibaba and other Chinese technology shares have
surged in recent weeks on enthusiasm over DeepSeek’s artificial-intelligence model. Global funds piling into
that surge have driven a $1.3 trillion rally in Chinese stocks. - Dow closes more than 400 points lower Thursday, S&P 500 slides from recent highs
Stocks retreated on Thursday following two days of all-time highs for the S&P 500 as investors dumped some
popular names in the wake of a lackluster forecast from retail giant Walmart that prompted questions about
the outlook of the economy. The Dow Jones Industrial Average lost 450.94 points, or 1.01%, to end at
44,176.65. The S&P 500 shed 0.43% and closed at 6,117.52, and the Nasdaq Composite dipped 0.47% and
closed at 19,962.36. - Oil extends gains on strong U.S. demand hopes, Russia supply concerns
Oil prices extended gains on Friday, headed for a weekly increase, as falling inventories of U.S. gasoline and
distillate raised expectations of solid demand while concerns over supply disruptions in Russia lent support.
Brent futures climbed 16 cents, or 0.2%, to $76.64 a barrel by 0123 GMT. U.S. West Texas
Intermediate crude edged up 17 cents, or 0.2%, to $72.65. Both benchmarks were set for a weekly gain of
about 3%. U.S. crude oil stockpiles rose while gasoline and distillate inventories fell last week as seasonal
maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.
“Drawdowns of U.S. gasoline and distillate stockpiles, along with concerns over tight supplies in Russia, are
supporting oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities. - Gold set for eighth weekly gain as tariff threats boost safe-haven demand
Gold prices remained steady on Friday, on track for their eighth straight weekly gain, supported by safe
haven inflows on concerns over U.S. President Donald Trump’s tariff threats. Spot gold held its ground at
$2,940.32 an ounce, as of 0251 GMT. Bullion has risen about 2% so far this week, and scaled an all-time high
of $2,954.69 in the previous session. U.S. gold futures remained unchanged at $2,956.10. “The uncertainties
are still there and gold still seems strong at this moment but in the near term we might see a pullback,” said
Brian Lan, managing director at Singapore-based dealer GoldSilver Central. - Japan’s inflation rate climbs to a 2-year high of 4% in January, supporting rate hike calls from BOJ
members
Japan’s inflation in January climbed 4% year on year, hitting its highest level since January 2023, further
strengthening the case for rate hikes by the country’s central bank. The core inflation rate — which excludes
prices of fresh food — rose to 3.2% from 3% in the prior month and beat economists’ expectations of 3.1%,
according to a Reuters poll. This figure was the highest since June 2023. The so called “core-core” inflation
rate, which strips out prices of both fresh food and energy and is closely monitored by the BOJ, climbed
slightly to 2.5% from 2.4% in the month before. The headline inflation rate, which had come in at 3.6% in
December, has remained above the Bank of Japan’s 2% target for 34 straight months. Immediately after the
data release, the yen strengthened 0.15% to trade at 149.39 against the dollar. The inflation figures boost the
case for rate hikes by the BOJ, which deliberated tightening them at its January meeting, with its summary of
opinions warning of inflation risks and weakness in the yen. - Moscow loathed the U.S. for years as its economy paid a high price for war — now, it’s doing a U-turn
Since invading Ukraine three years ago, Russia has spent a significant amount of energy demonizing the U.S.
and denigrating its leadership, economy and culture — and what it saw as Washington’s “hegemony” in the
global world order. U.S.-led international sanctions prompted more vitriol from Moscow, with Russian
President Vladimir Putin and other senior officials slamming the almost continuous slew of punitive
restrictions on key sectors of the Russian economy and its elite, as the war continued. But the arrival of a
friendlier administration under President Donald Trump and fledgling talks with the U.S. to end the conflict in
Ukraine — as well as a way back in from the economic and geopolitical cold — are prompting a U-turn in
Moscow, with the Kremlin dramatically softening the adversarial position it has occupied in recent years.
As tensions between Trump and Ukraine’s President Volodymyr Zelenskyy spilled over into open acrimony on
Wednesday, with Trump calling Zelenskyy a “dictator,” Putin broke his silence on the rapprochement
between Russia and the U.S. this week, after the first formal, sit-down talks by officials since early 2022.
“I rate [the negotiations in Saudi Arabia] highly, there is a result,” Putin said. “In general, as I was told, it [the
mood] was very friendly. On the American side, there were entirely different people who were open to the
negotiation process without any bias, without any prejudice to what was done in the past,” he said in
comments translated by NBC News. - Airbus could prioritize deliveries to non-U.S. customers if Trump tariffs impede trade, CEO says
Airbus could prioritize deliveries to its non-U.S. customers if tariffs disrupt the European plane maker’s
imports stateside, CEO Guillaume Faury said Thursday. “We have a large demand from the rest of the world,
so [if] we face very significant difficulties to deliver to the U.S., we can also adapt by bringing forward
deliveries to other customers which are very eager to get planes,” Faury told CNBC’s Charlotte Reed, in an
interview discussing the company’s full-year results. “Those tariffs are looming, and we don’t know what they
will be, [and], if and when we would have tariffs come in, what they would impact. So we stand ready to
adapt accordingly,” Faury said, referring to U.S. President Donald Trump’s wide-ranging tariff threats which
have already been ramped up against China. Faury nevertheless stressed that Airbus had made moves in
recent years to not only buy more from the U.S. and sell a significant number of aircraft and helicopters in
the U.S., but also to base part of its production locally. That includes a large output site in Mobile, Alabama,
with two final assembly lines for the company’s A220 and A320 family jets, with another U.S. line under
construction to build A320 and A321s for the domestic market. A host of large U.S. carriers are Airbus
customers, including American Airlines, Delta, United and JetBlue. “So we have a lot of potential flexibilities,”
Faury said regarding the potential imposition of duties, whose details remain uncertain. - Alibaba shares soar 11% in Hong Kong after stellar earnings as China’s e-commerce sector recovers
Alibaba shares surged in Hong Kong Friday following stellar quarterly results, boosted by growth in the
company’s cloud Intelligence and e-commerce segments. The Chinese tech giant’s shares soared as much as
as 11%, and were last trading 9.18% higher. “We expect the outlook for BABA’s ecommerce business to
remain strong in 1HCY25F, driven by the continued trade-in subsidies,” Nomura said in a note Friday.
In an attempt to stimulate consumption, China last year announced plans to allocate 300 billion yuan ($41.5
billion) in ultra-long special government bonds to bolster its trade-in and equipment upgrade policy.
Domestic e-commerce growth is recovering toward sustainable growth and profits, and the overall sentiment
is boosting the broader China technology sector, Vey Sern Ling, senior equity advisor at UBP, said in an email
to CNBC. Chinese tech stocks have largely been on a tear since AI startup DeepSeek came into the fore,
challenging the U.S.-led AI ecosystem with its R1 model amid claims of superior performance and
substantially lower costs. - Walmart fell 6.5% after it forecast lower-than-expected profit for the full year, signaling that the world’s
largest retailer isn’t immune to risks in the broader economic environment
The company is anticipating adjusted earnings to come between $2.50 to $2.60 per share, below the average
analyst projection. For the upcoming year, Walmart expects overall net sales growth in the range of 3% to
4%, which is lower than the 5% growth the company experienced in the last fiscal year. Walmart historically
starts the year with a cautious outlook and lifts guidance later on, Bloomberg Intelligence analyst Jennifer
Bartashus said. “Walmart is doing exactly what they do every year,” Bartashus said, adding that there aren’t
any new threats to the business. But investor expectations are high after a 77% run-up in the stock price over
the past 12 months. On a call with analysts, John David Rainey, the company’s chief financial officer,
described its guidance as consistent with past years, but acknowledged “there are still uncertainties related
to consumer behavior and global economic and geopolitical conditions.” Walmart is the first big-box retailer
to report quarterly figures after the holiday season. Comparable sales, excluding fuel, rose 4.6% at US
Walmart stores open at least a year for the quarter ended Jan. 31, higher than what Wall Street analysts
were expecting. “I would describe the consumer as steady,” Rainey said. General merchandise sales are
improving, he said, and demand from the holiday season was in line with what the company expected. Food
prices rose in the low-single digits during the latest quarter, while general merchandise items got cheaper.
The company saw higher transaction counts and customers spent more per trip, on average. January
recorded the strongest sales over the period, executives said. - Unity’s (NYSE:U) Q4: Beats On Revenue But Stock Drops
Game engine maker Unity (NYSE:U) reported Q4 CY2024 results beating Wall Street’s revenue expectations ,
but sales fell by 25% year on year to $457.1 million. On the other hand, next quarter’s revenue guidance of
$410 million was less impressive, coming in 5.6% below analysts’ estimates. Its GAAP loss of $0.30 per share
was 18.6% above analysts’ consensus estimates. Unity (U) Q4 CY2024 Highlights: Revenue: $457.1 million vs
analyst estimates of $431.8 million (25% year-on-year decline, 5.9% beat); EPS (GAAP): -$0.30 vs analyst
estimates of -$0.37 (18.6% beat); Adjusted EBITDA: $106.1 million vs analyst estimates of $85.23 million
(23.2% margin, 24.5% beat); Revenue Guidance for Q1 CY2025 is $410 million at the midpoint, below analyst
estimates of $434.3 million; EBITDA guidance for Q1 CY2025 is $62.5 million at the midpoint, below analyst
estimates of $91.99 million; Operating Margin: -27.1%, up from -42.5% in the same quarter last year; Free
Cash Flow Margin: 23.1%, down from 25.8% in the previous quarter; Market Capitalization: $8.65 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, Unity
grew its sales at a 17.8% annual 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. This quarter,
Unity’s revenue fell by 25% year on year to $457.1 million but beat Wall Street’s estimates by 5.9%. Company
management is currently guiding for a 10.9% year-on-year decline in sales next quarter. Looking further
ahead, sell-side analysts expect revenue to decline by 1.6% over the next 12 months, a deceleration versus
the last three years. This projection is underwhelming and suggests its products and services will face some
demand challenges. - Wayfair Q4 Earnings: Revenue Beat, Active Customers Decline, EBITDA Boost And More
Wayfair Inc. (NYSE:W) shares are trading higher in the premarket session on Thursday. The company
reported fourth-quarter adjusted earnings per share of 25 cents loss. The analyst consensus estimate pegs at
a loss of 2 cents per share. Wayfair reported quarterly sales of $3.121 billion (up 0.2% year over year),
beating the street view of $3.06 billion. U.S. net revenue increased 1.1% year over year to $2.7 billion, while
International net revenue slumped 5.7% to $381 million. Active customers totaled 21.4 million as
of December 31, 2024, a decrease of 4.5% year over year. Orders delivered in the fourth quarter were 10.7
million, a decrease of 5.3% year over year. Repeat customers placed 8.5 million orders, a decrease of 5.6%
year over year. Adjusted EBITDA margin expanded slightly to 3.1% in the quarter under review, compared
with 3% in the year-ago period. “These results enabled us to drive nearly $100 million dollars of adjusted
EBITDA in the quarter, and deliver on our goal of approximately 50% year-over-year dollar growth for 2024,”
said Niraj Shah, CEO, co-founder and co-chairman, Wayfair. Shah continued, “We’re making smart, high
return investments across the business, and at the same time remain committed to growing adjusted EBITDA
dollars year-over-year.” - MercadoLibre (MELI) Beats Q4 Earnings and Revenue Estimates
MercadoLibre (MELI) came out with quarterly earnings of $12.61 per share, beating the Zacks Consensus
Estimate of $7.26 per share. This compares to earnings of $3.25 per share a year ago. These figures are
adjusted for non-recurring items. This quarterly report represents an earnings surprise of 73.69%. A quarter
ago, it was expected that this operator of an online marketplace and payments system in Latin America
would post earnings of $11.27 per share when it actually produced earnings of $7.83, delivering a surprise of -30.52%. Over the last four quarters, the company has surpassed consensus EPS estimates three times.
MercadoLibre , which belongs to the Zacks Internet – Commerce industry, posted revenues of $6.06 billion for
the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.71%. This compares to
year-ago revenues of $4.26 billion. The company has topped consensus revenue estimates four times over
the last four quarters. The sustainability of the stock’s immediate price movement based on the recently
released numbers and future earnings expectations will mostly depend on management’s commentary on
the earnings call. MercadoLibre shares have added about 22.1% since the beginning of the year versus the
S&P 500’s gain of 4.5%. - Rivian Automotive (RIVN) Reports Q4 Loss, Tops Revenue Estimates
Rivian Automotive (RIVN) came out with a quarterly loss of $0.52 per share versus the Zacks Consensus
Estimate of a loss of $0.66. This compares to loss of $1.36 per share a year ago. These figures are adjusted for
non-recurring items. This quarterly report represents an earnings surprise of 21.21%. A quarter ago, it was
expected that this a manufacturer of motor vehicles and passenger cars would post a loss of $0.89 per share
when it actually produced a loss of $1.03, delivering a surprise of -15.73%. Over the last four quarters, the
company has surpassed consensus EPS estimates just once. Rivian Automotive , which belongs to the Zacks
Automotive – Domestic industry, posted revenues of $1.73 billion for the quarter ended December 2024,
surpassing the Zacks Consensus Estimate by 21.50%. This compares to year-ago revenues of $1.32 billion. The
company has topped consensus revenue estimates two times over the last four quarters. The sustainability of
the stock’s immediate price movement based on the recently-released numbers and future earnings
expectations will mostly depend on management’s commentary on the earnings call. Rivian Automotive
shares have added about 4.7% since the beginning of the year versus the S&P 500’s gain of 4.5%. - Block Q4 Earnings, Revenue Miss Estimates. Square Stock Falls
Square-parent Block (XYZ) on Thursday reported fourth-quarter earnings and revenue that missed Wall Street
estimates. Square stock fell as investors mulled mixed results for key financial metrics and 2025 guidance.
Released after the market close, Square earnings for the period ended Dec. 31 were 71 cents per share on an
adjusted basis, up 51% from the year-earlier period. Also, Square said net revenue came in at $6.032 billion,
up 4% from a year earlier, including Cash App transactions for Bitcoin. Wall Street analysts had predicted
Block earnings of 88 cents a share on revenue of $6.295 billion. Financial analysts also view gross profit as a
key metric for Square stock. In Q4, gross profit rose 14% to $2.31 billion vs. estimates of $2.33 billion. - Guardant Health (GH) Reports Q4 Loss, Tops Revenue Estimates
Guardant Health (GH) came out with a quarterly loss of $0.62 per share versus the Zacks Consensus Estimate
of a loss of $0.50. This compares to loss of $1.58 per share a year ago. These figures are adjusted for non
recurring items. This quarterly report represents an earnings surprise of -24%. A quarter ago, it was expected
that this provider of oncology testing services would post a loss of $0.55 per share when it actually produced
a loss of $0.45, delivering a surprise of 18.18%. Over the last four quarters, the company has surpassed
consensus EPS estimates three times. Guardant Health , which belongs to the Zacks Medical – Biomedical and
Genetics industry, posted revenues of $201.81 million for the quarter ended December 2024, surpassing the
Zacks Consensus Estimate by 0.98%. This compares to year-ago revenues of $155.05 million. The company
has topped consensus revenue estimates four times over the last four quarters. The sustainability of the
stock’s immediate price movement based on the recently-released numbers and future earnings expectations
will mostly depend on management’s commentary on the earnings call. Guardant Health shares have added
about 60.4% since the beginning of the year versus the S&P 500’s gain of 4.5%. - Japan eyes Tesla investment in Nissan after failed Honda merger- FT
A high-level Japanese group, including former Prime Minister Yoshihide Suga, is proposing that Tesla
(NASDAQ:TSLA) invest in struggling carmaker Nissan Motor (TYO:7201) following the collapse of its merger
talks with Honda (NYSE:HMC) Motor (TYO:7267), the Financial Times reported on Friday citing sources
familiar with the matter. The initiative is being led by Hiro Mizuno, a former Tesla board member, and is
supported by Suga and his former aide Hiroto Izumi, the FT report stated. The group hopes that Elon Musk’s
Tesla will become a strategic investor, leveraging Nissan’s underutilized U.S. factories to expand domestic
production amid US tariff threats, it added. The plan emerged after Nissan (OTC:NSANY) walked away from
Honda’s $58 billion merger proposal, raising fears of a potential takeover by foreign investors, including
Taiwanese tech giant Foxconn (SS:601138). The FT reported that Tesla’s interest could counter such risks
while boosting its manufacturing footprint in the US. Nissan’s U.S. plants in Tennessee and Mississippi have a
combined capacity of 1 million vehicles but produced only 525,000 units in 2024. Tesla’s investment would
help ramp up production, the FT said. Neither Tesla, Musk, Nissan, nor other involved parties have officially
announced any such news.
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