- Global Assets Stabilize, Hang Seng Index Rallies: Markets Wrap
Stocks, Treasuries and other assets steadied as investors sought to move on from weak US economic data
that had rattled financial markets Tuesday. US stock-index futures pointed to gains, Treasury 10-year yields
rebounded in Asian trading while gold, Bitcoin and oil all traded within a tight range after declines overnight.
Hong Kong equities surged, extending a rally that started last month driven by optimism that China’s
technological breakthroughs may help revive the sluggish economy. Investors sought safer corners of the
market Tuesday after a weak US consumer confidence reading raised worries about the outlook for the
broader economy from President Donald Trump’s policies and their impact on global growth. Chances for
early action on Trump’s tax cut plans improved as House Republicans passed a budget blueprint Tuesday. The
steadiness Wednesday will get a test later when Nvidia Corp. reports earnings. - S&P 500 slides for a fourth day after consumer confidence data disappoints, Nasdaq drops 1%
The S&P 500 fell for a fourth consecutive session on Tuesday as traders weighed concerns around economic
growth and global trade. The broad market index slipped 0.47%, closing at 5,955.25. The Nasdaq Composite
dropped 1.35% to end the day at 19,026.39. Nvidia’s 2.8% fall led the tech-heavy index’s decline, and the
Nasdaq this week slipped into negative territory for the year. The Dow Jones Industrial Average was an
outlier, advancing 159.95 points, or 0.37%, to close at 43,621.16. - Oil edges up after U.S. stockpiles report helps offset worries on rising supply
Oil prices climbed in early Asian trading hours on Wednesday, bouncing off two-month lows hit in the prior
session, after an industry group reported U.S. crude stockpiles fell last week. Brent crude oil futures rose 27
cents, or 0.4%, to $73.29 a barrel by 0134 GMT. U.S. West Texas Intermediate crude oil futures were up 25
cents, or 0.4%, to $69.18 per barrel. U.S. crude stocks fell 640,000 barrels in the week ended February 21,
market sources said on Tuesday citing American Petroleum Institute data. Official U.S. stockpiles data is due
later on Wednesday. Analysts polled by Reuters estimated a 2.6-million-barrel increase in U.S. crude stocks
last week. The report helped offset some concerns on rising oil supply around the globe. That, and dour
economic reports by the U.S. and Germany, pulled oil prices more than 2% lower on Tuesday. Brent crude
closed at its lowest since December 23 on Tuesday, while WTI recorded its lowest settlement since December.
U.S. data showed consumer confidence in February deteriorated at its sharpest pace in 3-1/2 years, with
12-month inflation expectations surging. Meanwhile, the German economy shrank in the last three months
of 2024 compared to the prior quarter. Oil prices have also been buffeted by concerns that U.S. President
Donald Trump’s decisions about tariffs against China, and other trading partners, could add to pressure on
the country’s economy. That has eased worries on tighter near-term oil supply despite fresh
U.S. sanctions against Iran, ANZ Bank analysts wrote in a note to clients. - Gold inches higher as tariff uncertainty boosts safe-haven demand
Gold prices inched higher on Wednesday after hitting a one-week low in the previous session, as
uncertainties stemming from U.S. President Donald Trump’s tariff plans dampened risk appetite and boosted
demand for safe-haven bullion. Spot gold was up 0.1% at $2,918.01 an ounce, as of 0237 GMT, after falling
more than 2% on Tuesday. U.S. gold futures rose 0.5% to $2,932.50. Trump opened yet another front on
Tuesday in his assault on global trade norms, ordering a probe into potential new tariffs on copper imports to
rebuild U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many
consumer goods. Trump tariff concerns, which are causing this rather lackluster state of confidence in the
U.S. economy from a consumer side of the mindset, are supporting gold, said Kelvin Wong, senior market
analyst, Asia Pacific, at OANDA. Offering further signs that Americans were growing anxious about the
potential negative impact of Trump’s policies, U.S. consumer confidence deteriorated at its sharpest pace in
3-1/2 years in February, while 12-month inflation expectations surged. - Ukraine to agree with US on terms for minerals deal
Ukraine has agreed with the US on a deal to jointly develop its natural resources, people familiar with the
matter said, a move that could ease recent tension with President Donald Trump and advance his
administration’s goal of a ceasefire with Russia. Ukraine’s Cabinet is expected to recommend on Wednesday
that the deal be signed, according to the people, who asked not to be identified discussing private
deliberations. President Volodymyr Zelenskyy is planning to travel to the US Friday to seal the agreement, the
people said. - House Republicans advance Trump’s tax cut plan
The Republican-controlled U.S. House of Representatives late on Tuesday advanced President Donald
Trump’s tax-cut and border agenda, delivering a major boost to his 2025 agenda. The vote on passage was
217-215, with one Republican voting in opposition and no Democrats supporting the controversial measure.
One Democrat did not vote. It followed an unusual series of maneuvers by Speaker Mike Johnson in which he
canceled a vote on the bill — apparently because it lacked the votes for passage — and members of the House
were advised there would be no further votes for the night. He then promptly reversed course, only to bring
the budget up for passage. The turn of events came after Johnson and No. 2 House Republican Steve Scalise
spent hours persuading holdouts to back the move, a preliminary step to extending Trump’s 2017 tax cuts
later this year. Both leaders said Trump himself had also been contacting reluctant members about the need
to advance the $4.5 trillion tax-cut plan, which would also fund the deportation of migrants living in the U.S.
illegally, tighten border security, energy deregulation and military spending. Doubts about House Republican
unity prompted Senate Republicans to enact their own budget resolution as a Plan B ploy last week: a $340
billion measure that covers Trump’s border, defense and energy priorities but leaves the thornier issue of tax
policy for later in the year. The House budget seeks $2 trillion in spending cuts over ten years to pay for
Trump’s agenda. The tax cuts Trump is seeking would extend breaks passed during his first term in office, his
main legislative accomplishment, that are due to expire at the end of this year. Several hardline conservatives
sought deeper spending cuts and stronger control over separate government funding legislation to avert a
potential shutdown after current funding expires on March 14. - Tesla stock crashes below $1T value as Europe sales slump 45% in January
Tesla’s shares closed sharply lower Tuesday following data showing that European and British sales fell
sharply in January, as the electric carmaker grappled with increased competition from Chinese rivals and a
greater push into the sector from European manufacturers. Analysts fear CEO Elon Musk’s political visibility
in the U.S. is turning off some European buyers. Tesla’s stock closed down 8.4% Tuesday, and the market cap
of the company has now fallen below the $1 trillion level – last at $970.4 billion. The stock is now down 18%
year-to-date. Tesla’s new car registrations in the European union, the European Free Trade Association and
the UK slid 45.2% year-on-year to 9,945 registrations. The company’s market share also slid to 1% from 1.8%
a year earlier, data from the European Automobile Manufacturers’ Association showed on Tuesday.
The sales drop came amid a 2.1% overall y-o-y drop in new car registrations in January, with declines in
France, Italy, and Germany. But battery EVs were seen gaining market traction in the region, with the market
share of BEVs rising to 15% from 10.9% a year ago. Overall new BEV sales grew by 34% to 124,341 units,
while petrol car registrations slid 18.9% to 290,301 units. But Tesla (NASDAQ:TSLA) appeared to have failed
to capitalize on increased popularity of EVs in the region. Volkswagen (ETR:VOWG_p) sales grew 14.9% in
January the most among their peers, as the automaker ramped up its EV offerings. Toyota (NYSE:TM) sold
more of its Luxury Lexus line, while Renault (EPA:RENA) also clocked higher sales. - European semiconductor stocks dropped on Tuesday as Bloomberg News reported that the Trump
administration is pressuring US allies to escalate their chip restrictions on China
Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron and
ASML engineers from maintaining semiconductor gear in China, according to people familiar with the matter.
Extra restriction and further chipmaking fabs being blocked will add to the negative impact for both ASML
and Tokyo Electron, Berenberg says. That said, for ASML, Berenberg says it believes “the incremental impact
on service is very limited after all the restriction over the past years”. - Zoom Communications projected slower-than-expected revenue growth for the year, dimming optimism
that an expanded suite of products will bring a sales surge
Revenue will be about $4.79 billion in the fiscal year ending in January 2026, Zoom said. Profit, excluding
some items, will be $5.34 to $5.37 a share. Analysts estimated adjusted sales of $4.81 billion and earnings of
$5.37 a share. Shares fell 8.5%. The outlook raises questions about the sustainability of Zoom’s revenue
recovery, according to John Butler, an analyst at Bloomberg Intelligence. As the world reopened from
pandemic restrictions, many individuals and small businesses let their Zoom licenses lapse, and this ongoing
churn has concerned investors. Average monthly churn in this segment was 2.8% in the quarter, in line with
estimates. By contrast, business customers have largely held onto videoconferencing services even amid new
return-to-office rules. Enterprise revenue increased 5.9% to $706.8 million in the quarter, beating estimates.
Zoom said it had 4,088 customers who contributed more than $100,000 over the past year. For the quarter
that ended in January, sales grew 3.3% to $1.18 billion, in line with the average analyst estimate. Profit,
excluding some items, was $1.41 per share, compared with an average estimate of $1.31. - Super Micro stock rallies after meeting Nasdaq deadline to avoid delisting
Super Micro (SMCI) rose as much as 15.5% in after-hours trading on Tuesday after the company met a
deadline from the Nasdaq to submit delayed regulatory filings in order to avoid delisting. After the close on
Tuesday, Super Micro filed updated quarterly reports for its fiscal year ended June 30, 2024, as well as
quarters ended Sept. 30, 2024 and Dec. 31, 2024. Shares fell 11.8% during regular hours ahead of the release.
Super Micro Computer makes server products using Nvidia’s (NVDA) AI chips for data centers. The company
delayed submitting its quarterly and annual filings to the US Securities and Exchange Commission after
a report from short seller Hindenburg Research last August accused Super Micro of accounting
manipulations. The allegations sent Super Micro stock tumbling as the company faced an investigation from
the Department of Justice, its accountant resigned, and its delayed SEC filings put the server maker at risk of
being delisted by the Nasdaq. The company missed its first Nasdaq deadline to submit its SEC filings and
avoid delisting in late 2024 but was granted an extension through Feb. 25. Super Micro has denied
Hindenburg’s accusations of accounting violations. The company has hired a new accountant and said in
December that an independent review of its business found no evidence of misconduct. - World’s largest brewer AB InBev posts fourth-quarter revenue beat even as volumes slide
The world’s largest brewer AB InBev on Wednesday posted better-than-expected fourth-quarter sales
despite an annual decline in volumes. The drinks maker, whose brands include Budweiser, Corona and Stella
Artois, reported an 3.4% increase in fourth-quarter revenue to $14.84 billion, versus the 2.9% decline to
$14.05 billion forecast by LSEG analysts. Full-year sales rose by 2.7% to $59.77 billion, compared to the $59.3
billion performance expected by analysts. Total volumes declined 1.9% in the quarter and 1.4% over the full
year stretch, which the company largely attributed to weak demand in China and Argentina. Excluding those
two countries, volumes rose 0.9%. - Novo Nordisk rose 2.8% after US firm Hims & Hers Health said it will soon stop selling some compound
weight-loss drugs that rival the Danish company’s offering
US regulators said Novo Nordisk’s weight-loss and diabetes drugs are no longer in short supply. The FDA’s
ruling means compounding pharmacies no longer have permission to make exact copies of Novo’s brand
name drugs, but they have 60 or 90 days to stop making them. “We will remove all commercially-available
doses” of semaglutide, the main ingredient in Ozempic and Wegovy, following the end of a US Food and Drug
Administration shortage late last week, Him & Hers Chief Financial Officer Yemi Okupe said. Hims & Hers
Health stock fell 22.3% in the US. - First Solar Q4 earnings miss estimates, stock edges higher on strong guidance
First Solar, Inc. (NASDAQ:FSLR) reported fourth-quarter earnings that fell short of analyst expectations, but
the solar panel manufacturer’s shares rose 1.6% in after-hours trading as investors focused on strong
revenue growth and upbeat guidance for 2025. The company posted adjusted earnings per share of $3.65 for
the fourth quarter, missing the analyst consensus of $4.83. However, revenue came in at $1.5 billion, slightly
above the $1.49 billion estimate and up significantly from $0.9 billion in the previous quarter. For the full
year 2024, First Solar reported net sales of $4.2 billion, a 27% increase from $3.3 billion in 2023. The
company attributed the growth to higher module sales volumes to third parties. Looking ahead, First Solar
provided guidance for 2025 that largely met or exceeded analyst expectations. The company forecasts full
year revenue between $5.3 billion and $5.8 billion, compared to the consensus estimate of $5.52 billion.
Earnings per share are projected to be in the range of $17.00 to $20.00, with the midpoint slightly below the
$20.17 analyst estimate. “In 2024, we continued building the foundations required for our long-term growth
strategy,” said Mark Widmar, CEO of First Solar. “Even as we maintained a highly selective approach to
bookings, we expanded manufacturing capacity by commissioning our Alabama facility and progressed
construction of our new Louisiana facility.” The company ended 2024 with a net cash balance of $1.2 billion,
up from $0.7 billion at the end of the third quarter. First Solar expects to maintain a strong financial position,
projecting a year-end 2025 net cash balance between $0.7 billion and $1.2 billion.
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