- Asian Stocks Retreat as Samsung, SK Hynix Weigh: Markets Wrap
Asian equities fell Friday, as concerns over the impact DeepSeek will have on the artificial intelligence market
pressured South Korean chipmakers. US futures climbed after robust results from Apple Inc. A gauge of the
region’s shares halted a two-day gain, with SK Hynix Inc. and Samsung Electronics Co. falling in delayed
reaction to the selling of AI stocks, as the nation’s markets reopened after Lunar New Year holidays. The
former is a key supplier to Nvidia Corp. while Samsung’s pivotal chip division reported a smaller-than
expected profit. Markets in mainland China, Hong Kong and Taiwan remain closed. Earnings for mega-cap
tech companies face heightened scrutiny after investors dumped AI-related stocks earlier this month. Nvidia
shares rose Thursday but remained on track for their worst week since September. The Nasdaq 100 is also set
to drop for the first week in three. - Dow closes more than 150 points higher in volatile session after slew of earnings reports
Stocks rose on Thursday, posting gains in a bout of rocky trading as investors weighed the latest earnings
from Big Tech companies. The Dow Jones Industrial Average popped 168.61 points, or 0.38%, closing at
44,882.13. At its session highs, it had added nearly 300 points. The S&P 500 rose 0.53% to 6,071.17, while the
Nasdaq Composite gained 0.25% to end at 19,681.75. Stocks cut gains late in the session after President
Donald Trump announced his intention to implement 25% tariffs on goods imported from Canada and
Mexico. - Oil prices rise amid US tariff threat but still set for weekly loss
Oil prices rose on Friday as markets weigh the threat of tariffs by U.S. President Donald Trump on Mexico and
Canada, the two largest crude exporters to the U.S., that could take effect this weekend. Brent crude
futures for March, which expires on Friday, gained 38 cents at $77.25 a barrel at 0110 GMT. The more-active
April contract was at $76.23 a barrel, up 34 cents. U.S. West Texas Intermediate crude (WTI) gained 49 cents
to $73.22. For the week, Brent is set to fall 1.6% while WTI has declined 2%. However, for the month of
January Brent is set to gain 3.6%, its best months since June, and WTI is set to climb 2%. Trump has
threatened to impose a 25% tariff as early as Saturday on Canadian and Mexican exports to the United States
if those two countries do not end shipments of fentanyl across U.S. borders. It is unclear if the tariffs would
include crude oil. On Thursday, Trump said he would soon decide whether to exclude Canadian and
Mexican oil imports from the tariffs. - Gold hits record high as Trump tariff worries mount
Gold prices hit a record high on Friday and were set for a fifth consecutive weekly gain, as investors flocked
to the safe-haven metal due to heightened U.S. tariff concerns, while awaiting a key inflation report due later
in the day for further direction. Spot gold was up 0.1% at $2,797.48 per ounce, as of 0216 GMT, rising about
1% so far in the week. Earlier in the session, prices hit an all-time high of $2,799.71. President Donald
Trump said on Thursday that the United States would impose a 25% tariff on imports from Mexico and
Canada, repeating his warning to the two countries. Gold is considered a safe investment during geopolitical
and economic turmoil and tends to thrive in a low interest rate environment. - European Central Bank warns of weak economy after delivering quarter-point rate cut
The European Central Bank announced a 25-basis-point interest rate cut on Thursday, its fifth one since the
central bank began easing monetary policy in June last year. The reduction brings the ECB’s deposit facility,
its key rate, to 2.75%. Markets had been pricing in an over 90% chance of a 25-basis-point cut ahead of the
announcement. The ECB is grappling with balancing a re-acceleration of euro area inflation in recent months
with sluggish economic growth in the region. Headline euro area inflation rose for the third consecutive
month to 2.4% in December, after falling below the ECB’s 2% target several months earlier. A renewed pick
up in inflation was expected, as base effects from lower energy prices fade. Preliminary data released
Thursday showed that the euro zone economy flatlined in the fourth quarter of 2024. Economists polled by
Reuters had expected growth of 0.1% over the period, following a 0.4% expansion in the three months to the
end of September. - GDP grew at a 2.3% pace in the fourth quarter, less than expected
U.S. economic growth slowed a bit more than expected in the final three months of 2024, the Commerce
Department reported Thursday. Gross domestic product, a measure of all the goods and services produced
across the sprawling U.S. economy during the period, showed that the economy accelerated at a 2.3%
annualized pace in the fourth quarter. Economists surveyed by Dow Jones had been expecting an increase of
2.5%. - France’s shrinking economy betrays urgent need to overcome budget wrangles
France’s economy shrank slightly in the fourth quarter, flash data showed Thursday, highlighting the urgent
need for warring French lawmakers to overcome their differences and agree on a 2025 budget. The economy
recorded a 0.1% contraction in the fourth quarter on the previous three months, the country’s statistics
agency INSEE revealed Thursday, down from growth of 0.4% in the third quarter of 2024. Economists polled
by Reuters had expected growth to be flat. France’s beleaguered economy was given a boost by the Olympic
Games in Paris last summer, but political upheaval has ensued since then, leaving fiscal challenges — namely,
France’s big budget deficit and growing debt pile — unresolved. Political stasis has dogged Paris since snap
parliamentary elections were held last June and July. Both the far-left and far-right performed well in
respective rounds of the vote, prompting wranglings in the National Assembly over who should govern. In the
end, President Emmanuel Macron installed a conservative government in September, alienating political
factions to the left and right. Reliant on the far-right for support, then-Prime Minister Michel Barnier’s
centrist government was vulnerable to challenges from both sides of the political spectrum and, after his
deficit-reducing 2025 budget plans were rejected, the government was ousted in a no-confidence vote in
December. - Canada and Mexico face 25% tariffs on Saturday, Trump says
US President Donald Trump has said he will follow through with his threat to hit imports from Canada and
Mexico with 25% border taxes, known as tariffs, on 1 February. But he added that a decision about whether
this would include oil from those countries had not yet been made. Speaking to reporters in the Oval Office,
Trump said the move was aimed to address the large amounts of undocumented migrants and the fentanyl
that come across US borders as well as trade deficits with its neighbours. The president also suggested that
he was still planning to impose new tariffs on China, which he said earlier this month would be 10%, but did
not give any details. - Apple shares rise 3% as boost in services revenue overshadows iPhone miss
Apple’s overall revenue rose 4% in its first fiscal quarter, but it missed on Wall Street’s iPhone sales
expectations and saw sales in China decline 11.1%, the company reported Thursday. But shares rose about
3% in extended trading after the company gave a forecast for the March quarter that suggested revenue
growth. Here’s how Apple did versus LSEG consensus estimates for the quarter that ended Dec. 28. Earnings
per share: $2.40 vs. $2.35 estimated; Revenue: $124.30 billion vs. $124.12 billion estimated; iPhone revenue:
$69.14 billion vs. $71.03 billion estimated; Mac revenue: $8.99 billion vs. $7.96 billion estimated; iPad
revenue: $8.09 billion vs. $7.32 billion estimated; Other products revenue: $11.75 billion vs. $12.01
billion estimated; Services revenue: $26.34 billion vs. $26.09 billion estimated; Gross margin: 46.9% vs. 46.5%
estimated. Apple said it expected growth in the March quarter of “low to mid single digits” on an annual
basis. The company also said it expected “low double digits” growth for its Services division. Apple said it
expected the strong dollar to drag on Apple’s overall sales about 2.5%, and after accounting for currency, the
overall growth rate would be similar to the December quarter’s 6%. Wall Street was expecting guidance for
the March quarter of $1.66 in earnings per share on $95.46 billion in revenue. Apple’s profit engine, its
Services division, which includes subscriptions, warranties and licensing deals, reported $23.12 billion in
revenue, which is 14% higher than the same period last year. Apple CEO Tim Cook told analysts on a call
Thursday that the company had more than one billion subscriptions, which includes both direct subscriptions
for services such as Apple TV+ and iCloud, as well as subscriptions to third-party apps through the company’s
App Store system. Although Apple’s overall sales rose during the quarter, the company’s closely watched
iPhone sales declined slightly on a year-over-year basis. The December quarter is the first full quarter with
iPhone 16 sales, and Apple released its Apple Intelligence AI suite for the devices during the quarter. Apple’s
iPhone miss versus LSEG estimates was the biggest for the company in two years, since its first-quarter
earnings report in fiscal 2023. At the time, Apple said its miss was because it was unable to make enough
iPhone 14 models because of production issues in China. In the first fiscal quarter, the company saw
significant weakness in Greater China, which includes the mainland, Hong Kong and Taiwan. Overall China
sales declined 11.1% during the quarter to $18.51 billion. It is the largest drop in China sales since the same
quarter last year when they fell 12.9%. Cook told CNBC’s Steve Kovach that iPhone sales were stronger in
countries where Apple Intelligence is available. Currently, the software is only available in a handful of
English-speaking countries, and it isn’t accessible in China or in Chinese. - Caterpillar shares fall as much as 5.1%, the most intraday since Oct. 30, after the machinery producer
forecast a year-over-year revenue decline in 2025. Analysts said the guidance will weigh on estimates and
described the fourth quarter as also underwhelming
YEAR OUTLOOK: Sees Fy25 Sales and Revenues Slightly Lower Y/Y; Sees 1Q 2025 Sales and Revenues Lower
Than 1Q 2024; Cat: No Significant Change in Dealer Inventory Seen by End 2025; Cat: Sees Fy25 Adj Op Profit
Margin in Top Half of Target Range. FOURTH QUARTER RESULTS: Adjusted EPS $5.14 vs. $5.23 y/y, estimate
$5.05 (Bloomberg Consensus); EPS $5.78 vs. $5.28 y/y; Revenue $16.22 billion, -5% y/y, estimate $16.72
billion; Financial segment revenue $883 million, +6% y/y, estimate $858.3 million; Machinery, Energy &
Transportation segment revenue $15.33 billion, -5.6% y/y, estimate $15.76 billion; Adjusted operating
income $2.96 billion, estimate $3.15 billion; Machinery, Energy & Transportation segment operating income
$2.94 billion, -5.4% y/y, estimate $3.11 billion; Financial Products segment operating income $137 million,
27% y/y, estimate $199 million; R&D expenses $519 million, -6.3% y/y, estimate $538.1 million. - Chipmaker Intel beats revenue expectations amidst Q4 loss
Intel reported a fourth-quarter loss on Tuesday, but better than expected revenue as the US chip giant
continues to struggle to stake its place in the artificial intelligence revolution. The company posted a net loss
of $126 million for the quarter ending December 28, compared to a profit of $2.67 billion in the same period
last year. Revenue declined seven percent to $14.3 billion, which was slightly better than expected by
analysts. The company’s share price rose two percent in after-hours trading following the earnings release.
“While Intel’s revenue decline remains concerning, the overall results came in ahead of the most pessimistic
forecasts, possibly propped by broader market and geopolitical factors,” said Emarketer analyst Jacob
Bourne. For the full year 2024, Intel recorded a substantial net loss of $18.8 billion, compared to a profit of
$1.7 billion in 2023, largely due to restructuring charges and challenging market conditions. Intel is one of
Silicon Valley’s most iconic companies, but its fortunes have been eclipsed by Asian powerhouses TSMC and
Samsung, which dominate the made-to-order semiconductor business. The company was also caught by
surprise with the emergence of Nvidia, a graphics chip maker, as the world’s preeminent AI chip provider.
Last month, Intel’s Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his
plans to turn the company around. His abrupt departure came after the company in August vowed to cut
more than 15,000 jobs in a draconian cost reduction plan, and paused or delayed construction on several
chipmaking facilities. Intel’s shares fell 60 percent last year, and its market valuation is about $90 billion, just
a fraction of Nvidia, which makes the premium chips that are fueling the AI boom. Despite the losses, interim
co-CEO Michelle Johnston Holthaus highlighted positive developments. “The fourth quarter was a positive
step forward as we delivered revenue, gross margin and EPS above our guidance,” she said. Holthaus told
analysts during an earnings call that Intel could find opportunities to capitalize on buzz generated this week
by Chinese startup DeepSeek, with its powerful new chatbot developed at a fraction of the cost of its US
competitors. - Earnings call transcript: Visa beats Q1 FY2025 expectations, stock rises
Visa Inc (NYSE:V). reported stronger-than-expected earnings for the first quarter of fiscal year 2025, with
earnings per share (EPS) of $2.75, surpassing the forecast of $2.66. The company also outperformed revenue
predictions, posting $9.51 billion against an anticipated $9.35 billion. Following the announcement, Visa’s
stock experienced a notable rise, closing at $349.25 in after-hours trading, reflecting a 3.94% increase from
the previous close. Key Takeaways: Visa’s EPS and revenue both surpassed analyst expectations; Payments
volume grew by 9%, with significant increases in cross-border transactions; The stock price climbed to a new
high in after-hours trading, indicating strong investor confidence. Visa demonstrated robust performance in
the first quarter, driven by a 10% year-over-year increase in net revenue to $9.5 billion. The company’s
payments volume saw substantial growth, particularly in international markets, where it rose by 11%. Cross
border volume, excluding intra-Europe, increased by 16%, highlighting Visa’s strong position in global
transactions. Financial Highlights: Revenue: $9.5 billion, up 10% year-over-year; Earnings per share: $2.75, up
14% year-over-year; Payments volume growth: 9% in constant dollars; Cross-border volume growth: 16%.
Visa exceeded market expectations with an EPS of $2.75 compared to the forecasted $2.66, a positive
surprise of about 3.4%. The company also reported higher-than-expected revenue of $9.51 billion, beating
the forecast by $160 million. Visa’s stock responded positively to the earnings announcement, rising 2.13%
during regular trading hours and an additional 1.81% in after-hours trading. The stock reached $349.25,
surpassing its 52-week high, which underscores investor optimism about the company’s future prospects. - Mastercard stock hits all-time high on Q4 earnings strength
Mastercard (NYSE: MA) stock was rising on Thursday after the credit card and payment processor reported
better-than-expected fourth quarter earnings. The second largest payment processor generated revenue of
$7.5 billion in the quarter, which was 14% higher than the same quarter a year ago. This exceeded analysts’
estimates of $7.4 billion. Net income rose 20% in Q4 to $3.3 billion, while earnings jumped 23% to $3.64 per
share. The adjusted earnings were $3.82 per share, which topped estimates of $3.70. Mastercard stock
climbed about 5% to $576 per share shortly after the opening bell and settled at roughly $572 per share – a
4% increase. That is an all-time high for the stock. Mastercard stock has risen 9% year-to-date and 28% over
the past 12 months. Mastercard has always been an extremely efficient company, mainly due to its duopoly
and dominance in the credit card space, and its business model. It makes most of its money on swipe fees
when consumers buy things on its network. It is not a lender, so there’s no credit risk, and it has relatively
little physical overhead compared to banks and other financial firms. So, its margins are exceedingly high. In
the fourth quarter, for example, it had an operating margin of 52.6%, up from 51.5% a year ago. That means
for every dollar of sales, it makes 52.6% in profit after subtracting expenses. Most companies are happy to be
in the 20% range. For the full year, the operating margin was even higher at 55.3%, which was down slightly
from 55.8% in 2023. - KLA (KLAC) Tops Q2 Earnings and Revenue Estimates
KLA (KLAC) came out with quarterly earnings of $8.20 per share, beating the Zacks Consensus Estimate of
$7.73 per share. This compares to earnings of $6.16 per share a year ago. These figures are adjusted for non
recurring items. This quarterly report represents an earnings surprise of 6.08%. A quarter ago, it was
expected that this maker of equipment for manufacturing semiconductors would post earnings of $7.03 per
share when it actually produced earnings of $7.33, delivering a surprise of 4.27%. Over the last four quarters,
the company has surpassed consensus EPS estimates four times. KLA, which belongs to the Zacks Electronics –
Miscellaneous Products industry, posted revenues of $3.08 billion for the quarter ended December 2024,
surpassing the Zacks Consensus Estimate by 4.88%. This compares to year-ago revenues of $2.49 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. KLA shares have added
about 13.2% since the beginning of the year versus the S&P 500’s gain of 2.7%. - United Rentals rises as much as 3.2% after the equipment company said 4Q revenue grew 9.8% from
the year-earlier period and topped expectations
The quarter’s rental revenue increased 9.7% to $3.42b, with fleet productivity increasing 4.3% year-over-year
including the impact of the Yak acquisition. Management said it took advantage of a strong market to sell
used equipment in the quarter, generating proceeds of $452m. Used equipment sales amounted to $438m in
the year-earlier quarter. United Rentals also provided a 2025 forecast that doesn’t include the impact of the
pending acquisition of H&E Equipment Services. FOURTH QUARTER RESULTS: Adjusted EPS $11.59 vs. $11.26
y/y, estimate $11.73; Revenue $4.10 billion, +9.8% y/y, estimate $3.96 billion; Rental rev. $3.42 billion, +9.7%
y/y, estimate $3.34 billion; Service and other revenue $86 million, +3.6% y/y, estimate $87.3 million;
Contractor Supplies sales $39 million, +8.3% y/y, estimate $37.6 million; Sales of rental equipment $452
million, +3.2% y/y, estimate $424.8 million; Sales of new equipment $96 million, +85% y/y, estimate $54.4
million; Adjusted Ebitda $1.90 billion, +5% y/y, estimate $1.88 billion; Adjusted Ebitda margin 46.4% vs.
48.5% y/y, estimate 47.9%. YEAR FORECAST: Sees revenue $15.6 billion to $16.1 billion, estimate $15.81
billion (Bloomberg Consensus); Sees adjusted Ebitda $7.2 billion to $7.45 billion, estimate $7.4 billion; Sees
free cash flow $2.0 billion to $2.2 billion, estimate $2.51 billion; Sees cash from operating activities $4.5
billion to $5.1 billion; Qtr Div $1.79 / Shr, Prior $1.63 Regular Cash. - Nokia shares rise as much as 4.6% after the telecom equipment maker reported 4Q sales and profits
beating estimates, helped by a strong network infrastructure business and a string of licensing deals. The
Ebit guidance for the year ahead, while missing estimates at mid-point, likely reflects some conservatism
by the management and an additional €100m investment to drive growth, according to analysts
FOURTH QUARTER RESULTS: Adjusted operating profit EU1.14 billion, estimate EU962.1 million (Bloomberg
Consensus); Adjusted operating margin 19.1%, estimate 16.6%; Adjusted gross margin 47.2%, estimate
44.9%; Adjusted EPS EU0.18, estimate EU0.13; Net sales EU5.98 billion, estimate EU5.74 billion; Mobile
Networks net sales EU2.43 billion, -0.8% y/y, estimate EU2.35 billion; Network Infrastructure net sales EU2.03
billion, estimate EU1.97 billion; Cloud & Network Services net sales EU1.05 billion, +7.9% y/y, estimate
EU1.03 billion; Nokia Technologies net sales EU463 million, +84% y/y, estimate EU348 million; Group
Common & Other net sales EU6 million, -76% y/y; Net cash balance at period end EU4.85 billion; Operating
profit EU917 million; Mobile Networks operating profit EU187 million, -33% y/y, estimate EU232.1 million;
Network Infrastructure operating profit EU398 million, estimate EU348.3 million; Cloud & Network Services
operating profit EU236 million, +5.8% y/y; Nokia Technologies operating profit EU356 million vs. EU169
million y/y, estimate EU253.7 million; Group Common & Other operating loss EU35 million, -67% y/y,
estimate loss EU85.3 million; Mobile Networks gross margin 38.1% vs. 38.3% y/y, estimate 40%; Network
Infrastructure gross margin 45.4%, estimate 41.9%; Cloud & Network Services gross margin 48.1% vs. 47.6%
y/y, estimate 43.8%; Nokia Technologies gross margin 99.8% vs. 100% y/y, estimate 99.9%. 2024 YEAR
RESULTS: Adjusted operating margin 19.1%, estimate 12.5%; Dividend per share EU0.14, estimate EU0.14.
