S&P futures up 0.4% Monday morning following last week’s selloff, with major averages declining for a second straight week. Asian markets were mixed, with Hong Kong rallying nearly 2%, while European markets edged higher. Treasuries were little changed after Friday’s rate increase. Dollar index up 0.1%, gold up 1.5%, Bitcoin futures up 2.4%, and WTI crude up 1%.
The market is rebounding despite Trump’s plan to impose 25% tariffs on steel and aluminum imports, with further reciprocal tariffs expected midweek. Investors seem to be looking past political uncertainty around Republican tax proposals and a potential government shutdown. Bullish sentiment is supported by a strong US macro backdrop, broadening earnings growth, increased AI capex, and retail and hedge fund buying.
Company News
- BP-US: Gained on news that activist Elliott took a stake in the company.
- TSMC-US: Guided Q1 revenue to the lower end of prior range due to January quakes but maintained FY outlook.
- DIS-US: Reports suggest Disney execs are concerned that recent price hikes at theme parks are deterring customers.
- TMUS-US: Announced it will launch satellite-to-cell service via SpaceX’s Starlink in July for $15/month.
- SMTC-US: Under pressure following a negative update on CopperEdge sales
US equities closed lower on Friday, with major indices declining: Dow (-0.99%), S&P 500 (-0.95%), Nasdaq (-1.36%), and Russell 2000 (-1.19%). Stocks ended near session lows, pushing all major averages into negative territory for the week. Big tech was broadly lower, with AMZN-US, TSLA-US, and GOOGL-US leading declines. Other underperformers included beauty and cosmetics (ELF-US), athletic apparel (NKE-US), pet products, energy, exchanges, and homebuilders. Outperformers included OTAs (BKNG-US, EXPE-US), China tech, industrial metals, hospitals, video games (TTWO-US), airlines, casinos, hotels, and E&C. Treasuries weakened with some curve flattening. The dollar index rose 0.4% but remained lower for the week. Gold gained 0.4%, Bitcoin futures fell 1.0%, and WTI crude settled up 0.6%, marking its third consecutive weekly decline.
The market was weighed down by rate relief reversal concerns after higher-than-expected average hourly earnings and inflation expectations in the University of Michigan consumer sentiment survey. Trade policy reentered the headlines as Trump is expected to announce reciprocal tariffs. Meanwhile, the EU signaled potential tariff cuts on US autos. Earnings results were mixed, with AMZN-US providing a weak guidance outlook largely due to FX headwinds. The House GOP made progress on a reconciliation bill, but tax provisions may be deferred to a second bill. Additionally, hawkish Fed commentary dampened expectations for rate cuts, with March rate cut odds falling below 10%.
The January nonfarm payrolls report showed a 143K increase, below the 170K consensus, but prior revisions added 100K jobs. The unemployment rate ticked down to 4.0% from 4.1%, while average hourly earnings rose 0.5% m/m (up from 0.3%). No impact from LA wildfires was noted. The February Michigan Consumer Sentiment Index fell to its lowest level since November 2023, with year-ahead inflation expectations rising to 4.3%, the highest since November 2023, and 5-10Y expectations climbing to 3.3%, the highest since June 2008. The January Manheim Used Vehicle Index rose to its highest level since December 2023. Several Fed officials, including Governor Kugler, Chicago’s Goolsbee, and Dallas’ Logan, signaled that interest rates may remain unchanged for longer due to strong labor markets and economic uncertainty.
Sector and Company News
Information Technology
- Monolithic Power Systems (MPWR-US): +9.0% on strong Q4 earnings, revenue beat, and improved order trends; announced $500M buyback.
- Fortinet (FTNT-US): +2.8% on earnings and revenue beat; positive outlook for FY25 with product growth acceleration.
- Synaptics (SYNA-US): Provided strong guidance, boosting shares.
- Bill Holdings (BILL-US): -35.5% after a weaker-than-expected take rate and slowing core revenue growth.
Consumer Discretionary
- Take-Two Interactive (TTWO-US): +14.0% after reiterating GTA VI release in fall 2025; strong bookings for NBA 2K.
- Uber Technologies (UBER-US): +6.6% after Bill Ackman’s Pershing Square announced a large position.
- Skechers (SKX-US): -12.7% after weak Q4 results, citing FX and China weakness; FY25 EPS and revenue below expectations.
- Nike (NKE-US): -4.3% following a downgrade to neutral at Citi on concerns over gross margin headwinds and demand creation investment.
Healthcare
- Doximity (DOCS-US): +36.0% on strong FQ3 results, upsell strength, and FY25 guidance raise.
- Neurocrine Biosciences (NBIX-US): -18.5% after missing Q4 EPS and revenue estimates, with increased R&D expenses.
- Illumina (ILMN-US): -9.6% on weak FY25 guidance, China concerns, and a downgrade to hold at TD Cowen.
Industrials
- United States Steel (X-US): -5.8% amid reports that Trump is considering allowing Nippon Steel’s deal to proceed.
Financials
- Genpact (G-US): +11.2% after beating Q4 earnings and revenue estimates; FY24 outlook positive.
- Newell Brands (NWL-US): -26.4% on weak Q4 core growth and disappointing FY25 guidance.
Energy & Materials
- ExxonMobil (XOM-US): Mixed trading as crude oil prices ended lower for the third consecutive week.
Consumer Staples
- e.l.f. Beauty (ELF-US): -19.6% after lowering FY25 guidance amid demand slowdown and macro challenges.
Eco Data Releases | Monday February 10th, 2025
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S&P 500 Constituent Earnings Announcements | Monday February 10th, 2025
Data sourced from FactSet Research Systems Inc.
