Market Review: February 04, 2025

Closing Recap
Tuesday, February 04, 2025
Index |
Up/Down |
% |
Last |
DJ Industrials |
134.13 |
0.30% |
44,556 |
S&P 500 |
43.29 |
0.72% |
6,037 |
Nasdaq |
262.06 |
1.35% |
19,654 |
Russell 2000 |
31.79 |
1.41% |
2,290 |
U.S. stocks rallied all day, closing near the highs as trade war fears with Canada and Mexico eased following a 30-day tariff delay for each country after both agreed to fortify their border with troops. Meanwhile, China imposed targeted tariffs on American imports and put several U.S. companies, including Google, on notice for possible sanctions, in a measured response to the sweeping 10% duties on Chinese imports imposed by President Donald Trump. China’s new measures include a 15% levy on U.S. coal and LNG and 10% for crude oil, farm equipment and a small number of trucks shipped to China from the U.S. Despite the headlines with China, and reports that talks between President Trump and China’s Xi were pushed off, markets rallied broadly helped by better earnings results and signs of a tighter labor market and into key jobs data the rest of the week. The Communications sector (XLC) rose for a twelfth consecutive day as shares of GOOGL (into earnings tonight), and NFLX hit all-time highs today and META extended gains after record highs last week, also rising a 12th straight day. Energy (XLE) was the top S&P sector, up 2% followed by Technology (XLK) +1.45%, and Consumer Discretionary (XLC) while defensive Consumer Staples (XLP) and Utilities (XLU) fell the most. More focus on earnings tonight with GOOGL, AMD, AMGN, EA, MDLZ and CMG among the top highlights with tomorrow morning focus on DIS, UBER, NVO, and BSX. Lots of market optimism remains as the S&P not far from record highs. Big earnings winners today included PLTR, FOXA, XYL, REGN, MPC and SPOT and biggest losers, EL, CLX, MRK, PEP, and PYPL.
Economic Data
- December JOLTs actual job openings fall to 7.6M from previous 8.098M and below ests 8.0M. US job openings fell in December by more than forecast to a 3-month low, consistent with a gradual slowdown in the labor market.
- Dec factory orders ex-defense -0.9% vs Nov -0.4%, Durables orders unrevised at -2.2%, nondurables orders +0.3% vs Nov +0.4%, total manufacturing inventories +0.4% vs Nov +0.4%, nondefense cap orders ex-aircraft revised to +0.4% from +0.5%; Dec shipments revised to +0.5% from +0.6%.
Commodities, Currencies & Treasuries
- U.S. oil prices finished lower, but off their worst levels if the day after an official said U.S. President Donald Trump plans to restore his "maximum pressure" campaign on Iran in a bid to drive down Iranian oil exports to zero, which offset some weakness from tariff drama between Washington and Beijing. WTI crude oil prices fell -$0.46 or 0.63% to settle at $72.70 per barrel while Brent crude rose $0.24 or 0.32% to settle at $76.20 per barrel. Prices had fallen -3% Monday to lowest since late December, amid trade war fears between the U.S. and China.
- April gold futures rise, gaining $18.70 or 0.65% to settle at $2,875.80 an ounce as concerns about potential economic fallout from President Trump’s tariffs and other inflationary policies have provided strong support for gold as a safe-haven asset, lifting prices to record highs this week.
Macro |
Up/Down |
Last |
WTI Crude |
-0.46 |
72.70 |
Brent |
0.24 |
76.20 |
Gold |
18.70 |
2,875.80 |
EUR/USD |
0.0037 |
1.0381 |
JPY/USD |
-0.46 |
154.30 |
10-Year Note |
-0.03 |
4.513% |
Sector News Breakdown
Autos:
- In Autos/Leisure: RACE Q4 adj EPS €2.14 tops est. €1.86 on better revs €1.74B vs. est. €1.65B, but guidance was below ests as sees 2025 Adj EBITDA at least €2.68B (vs. est. €2.8B) and sees 2025 Adj diluted EPS €8.60 (vs. est. €8.94); NIO was downgraded to Neutral from Overweight at JP Morgan. DA Davidson said HOG checks revealed challenged Q424 U.S. retail trends, elevated non-current inventories and positive feedback on HOG’s MY25 product pricing.
- In Auto Suppliers: APTV was upgraded to Buy from Hold at HSBC Holdings while downgraded ALV to Hold from Buy in earnings outlook. The firm said earnings forecasts still reduced on cautious market demand expectations for 2025, yet closer to the trough. HSBC sees consensus expectations now low enough for Aptiv to start surprising positively as its growth reaccelerates. HSBC expects the Auto division spinoff, scheduled for Q126, to trigger upgrades of market valuation, now below peers when adjusted for growth. ALV downgraded with 2025 guidance below HSBC’s view and continued top-line weaknesses in China vs market production.
Retail, Consumer Staples & Restaurants:
- In the Beauty sector: EL shares slide as Q4 EPS and revs top views (EPS $0.62/$4B vs. est. $0.32/$3.98B) but guidance disappoints as sees Q3 organic net sales growth -10% to -8% and EPS $0.24-$0.34 vs. et. $0.63 and total sales growth down -10%. DA Davidson said ELF U.S. tracked channel POS further softened in the two weeks ended January 25th. For the March quarter-to date, Y/Y growth notched lower to +2.1% from +3.0% despite easier comps
- In Food & Beverages: PEP Q4 EPS core $1.96 vs. est. $1.94; Q4 revs $27.78B vs. est. $27.89B; Q4 organic revs +2.1% vs. est. +2.27%; trimmed its full-year outlook to a low-single-digit increase in organic revenue; announces 5% increase to annualized dividend to $5.69 per share. BRBR Q1 Ebitda $125.3M rose 25% y/y vs. was $16.1M ahead of the consensus estimate as revs increased 23.8%, supported by 20.8% volume growth and a 3.0% benefit from price/mix; raised its FY25 guidance and now expect revenue in the range of $2.26-$2.34B.
- In Consumer Products: CLX Q2 EPS and rev beat ($1.55/$1.69B vs. est. $1.40/$1.63B) as Q2 GM’s up 30 bps and raised the lower end of its gross margin target to now expect a rise of 125 to 150 basis points; raised 2025 EPS to $6.95-$7.35 from $6.65-$6.90 prior while maintained its fiscal 2025 organic sales growth target.
- In Retail: PVH shares slipped as China imposes limited tariffs on smaller set of US imports as put PVH, the holding company for brands including Calvin Klein on a list for potential sanctions. Goldman Sachs said they are closely monitoring the outcome of the de minimis exemption for small packages following the announcement of incremental tariffs on goods from Mexico, Canada and China and said most exposed names include: FIVE, DLTR, GOOS, KTB, SN, CURV, and YETI. Jefferies downgraded both BRLT, OLLI to Hold from Buy and lower estimates on KSS given increasing margin pressure. The firm said in terms of actionable ideas, buy FIVE where inventories are contained and margins well off peak and sell LULU where gross margins are at peak and inventories building.
- In Home Furnishing/Furniture: Wells Fargo said by the numbers. 1) Absent mitigation efforts, the firm models a ~4%-5% price increase would be needed to fully offset all potential tariffs (w/ BBY, Furnishings, FND more at risk); Alt sourcing, vendor negotiation, FX offsets are key levers. Based on sales mix, AZO, HD, W and BBY appear most exposed to additional FX headwinds (w/ a collective HSD%-LDD% sales penetration in CAN/MEX).
Leisure, Gaming & Lodging:
- In Hotels & Lodging: Evercore ISI upgraded MAR to Outperform from In Line with a $330 price target saying the shares are "woefully" under-indexed to Lodging Brand compounders and cites a constructive view on travel demand, appreciation for the brand business model, including network effect of large loyalty plans like Bonvoy. The firm also raised its price tgts for HLT to $275 from $240 and Hyatt (H) to $175 from $155. VCSA confirms receipt of the unsolicited non-binding acquisition proposal from Davidson Kempner Capital Management at $5.25 per share and said special committee will review the offer,
- In Casino & Gaming: DKNG, FLUT shares were weak initially after competitor BetMGM (50% JV between Entain and MGM) provided a strong business update, including 2024 net revenue of $2.1 billion, up 7% y/y, with growth and player engagement metrics accelerating throughout the year; expects to report a core profit with net revenues of $2.4 billion to $2.5 billion for the full year.
Energy
- In MLPS: OKE and MPLX have entered into definitive agreements to form joint ventures to construct a new large-scale 400,000-barrel per day liquefied petroleum gas export terminal in Texas City, Texas, and a new 24-inch pipeline from Oneok’s Mont Belvieu, Texas, storage facility to the new terminal. Texas City Logistics, the export terminal joint venture, is owned 50% by Oneok and 50% by MPLX, with MPLX constructing and operating the facility, and is expected to be completed in early 2028. Oneok’s and MPLX’s share of the total investment in the export terminal is expected to be approximately $700M each for a total of $1.4B.
- In Refiners: MPC reports Q4 adj EPS $0.77 vs. est. $0.02 on revs $33.47B vs. est. $31.94B; Q4 Midstream segment posted adj. core profit of $1.71B vs $1.57B y/y but refining and marketing margin fell to $12.93/bbl from $17.81/bbl in Q4 2023.
Financials
- In Asset Managers: Yesterday, Vanguard announced fee cuts to 87 ETFs and index funds equating to ~25% of its AUM which pressured asset managers. Jefferies said they see this as a continuation of the trend across the passive industry and expect BLK to have a targeted response. Specifically, BLK’s iShares LT strategy is to reinvest 1.5-2.5% of total ETF rev. back into pricing annually. Goldman Sachs said they estimate that if BLK follows suit with comparable fee rate reductions, the potential revenue headwind would be small in the 0.7%-2.6% range. KKR and APO both reported Q4 EPS results that topped consensus
- In FinTech: PYPL reported Q4 adj EPS $1.19 above the $1.12 consensus estimate on better revs $8.37B (est. $8.26B) and provided better Q1 EPS view ($1.15-$1.17 vs est. $1.13) and FY EPS $4.95-$5.10 vs est. $4.90, but shares fell as Q4 adj operating margins contracted by 34 basis points to 18% and posted lower-than-expected Q4 total payment volume $437.8B vs estimate $438.64B; also announced $15B buyback.
- In Insurance: Insurance broker WTW beat Wall Street estimates for Q4 profit, driven by a strong performance in its risk and brokerage business; posted solid organic growth and better-than-expected margins, despite anticipated 2025 headwinds from F/X. MTG posted Q4 beat on a higher reserve release, and higher net premiums, partially offset by higher new notices which increased +3% Q/Q to 14,127 from 13,679 in 3Q. The portfolio delinquency rate increased to 2.40% from 2.24% in 3Q (2.25% in 4Q23).
Biotech & Pharma:
- MRK shares fall to 52-week lows after saying it will temporarily pause shipments of Gardasil vaccine to China, starting February through at least mid-year; the Dow component reported better Q4 results ($1.72/$15.6B vs. $1.67/$15.51B) but forecast 2025 sales $64.1B-$65.6B below ests $67.31B and EPS $8.88-$9.03 vs. est. $9.02.
- PFE Q4 adj EPS $0.63 topped the $0.47 estimate on better revs $17.76B (est. $17.26B) helped by strong sales of its heart disease drug and a smaller-than-feared drop in COVID vaccine sales; the co reaffirmed its 2025 EPS/rev view and said remains on track to deliver overall net cost savings of approximately $4.5B by end of 2025.
- REGN Q4 EPS $12.07 topped the $11.19 estimate; Q4 revs $3.79B vs. est. $3.75B; said sees 2025 CapEx $850M-$975M and sees 2025 non-GAAP R&D $5.00B-$5.20B.
- SUPN said the U.S. FDA has approved its drug-device combination, Onapgo, to treat movement-related symptoms of Parkinson’s disease; approval comes after previous declines in 2022 and 2024 due to quality/device concerns.
- UTHR announces full enrollment of the Teton 1 study of inhaled Treprostinil for the treatment of idiopathic pulmonary fibrosis.
- HIMS rises above $41 to all-time highs, rising a 6th straight day.
- Vaccine makers slipped initially (PFE, BNTX, MRNA) after the Senate Finance Committee voted Tuesday to advance the nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services (HHS) after a pair of contentious hearings last week. Kennedy, 71, is expected to be considered by the full Senate sometime next week after the panel approved his nomination 14-13 along party lines.
- In Managed Care: CNC reported 4Q revenue and EPS that were ahead of the street, with HBR and SG&A both 40 bps better than consensus and reaffirmed its >$7.25 2025 EPS guidance; also raised its 2025 premium revs +$4B on Medicaid revenue and better than expected performance during Medicare/PDP AEP.
Transports
- In Machinery: CNH reported Q4 adj EPS $0.15 below the $0.18 estimate and said it expects 2025 adj. EPS between $0.65-$0.75 below the $0.85 consensus estimate (watch AGCO, DE); CMI Q4 revs fell -1.1% y/y to $8.45B but topped the $8.12B estimate while EPS missed views and said they anticipate that demand will be slightly weaker in North America on-highway truck markets; sees FY25 revenue down 2% to up 3%.
- E&C sector: ACM raised the low end of EPS (by $0.05) and EBITDA guidance (by $5M) and reiterated its LT target of a 17% margin by the end of FY26, with further potential beyond that. Jacobs Solutions (J) Q1 profit topped consensus on higher revenue from its water and life sciences businesses, announces 2025 buyback program to repurchase $1.5 bln in shares annually through 2028.
Aerospace & Defense
- PLTR shares surged after Q4 rev growth of 36% y/y which handily topped consensus of ~28% y/y driven by acceleration in US Commercial and US Government; the co guided to strong 36% revenue growth for Q1, and initial 2025 revenue guidance of 31% Y/Y was also well above.
- HUBB Q4 adj EPS $4.10 beats the $4.02 estimate but revs $1.33B misses the $1.41B estimate; sees FY25 adjusted EPS $17.35-$17.85 (vs. consensus $17.70) and said anticipates total sales growth and organic sales growth of 4-5%
- TDG Q1 results mixed as EPS $7.83 topped the $7.75 per share est. but revs $2.01B just below the $2.03B estimate; raises FY25 adjusted EPS view to $35.51-$37.43 from $35.36-$37.28 (est. $37.44) while backs FY25 revenue view $8.75B-$8.95B vs. consensus $8.9B.
- WWD mixed Q1 results; Q1 adj EPS $1.35, vs est. $1.18, adj EBIT $107Mm vs est. $98.7Mm on sales $773Mm vs est. $775Mm; says on track to deliver FY guidance, narrowed FY adj EPS guide to $5.85-6.25 vs est. $6.07.
Internet, Media & Telecom
- In Media: SPOT shares jumped as Q4 revs rose 16% y/y to 4.24B euros vs. est. 4.19B and posted Q4 premium subscribers’ growth of 11% to 263M vs. ests of 260M; said expects Q1 operating income of 548M euros above analysts’ est. of 450.6M euros; guides Q1 monthly active users (MAUs) of 678M, in line with estimates. FOXA Q2 adj EPS $0.96 tops the $0.64 consensus on better revs of $5.08B (est. $4.85B) as Q2 Cable network programming revenue ($2.17B), TV revenue ($2.96B) and Advertising revs ($2.42B) all above consensus.
- In Video Games: Nintendo (NTDOY) cut its full-year sales Switch forecast by 12% to 11M units ahead of the launch of a successor device this year; lowered its operating profit forecast by 22.2% to 280B Yen ($1.8B) for the financial year ending March; sold 9.54M Switch units in the April-December period, bringing lifetime sales to 150.86M units
- Communications & Networking: LITE announced that Michael Hurlston will be joining the firm as President and CEO, as well as Director of the company, effective February 7, as Alan Lowe retires but stays on as a BoD member. The company also released prelim earnings which pointed to better-than-anticipated revenue and adj-EPS. FN shares slipped after results and guidance overnight as Q2 results showed weakness in its datacom business. AAOI shares fell after a short report from Culper Research.
- Software sector: jobs cuts at both CRM and OKTA as CRM is cutting more than 1,000 jobs as it simultaneously hires workers to sell new artificial intelligence products, Bloomberg News reported, and OKTA said to reduce workforce by approximately 180 employees.
Semiconductors:
- AMD, CRUS among chip makers with earnings after the bell tonight.
- China has opened antitrust investigations into NVDA and Google just hours after imposing 10%-15% tariffs on some US imports, per Financial Times this morning. China is reportedly looking for new trade war leverage against President Trump.
- IFNNY Infineon shares rose in Europe after results and guidance; upgraded its full-year revenue outlook and reported quarterly results and guidance above expectations; guided for flat-to-slightly up Automotive revenue in FY25; Power & Sensor segment is also expected to be up significantly in FY25.
- NXPI reported In-Line Dec Q revenue of $3.11B (-4.3% q/q), with non-GAAP (NG) EPS at $3.18 (-$0.05/ -$0.02 vs Stifel’s/ Street estimates), with slight Auto outperformance offset by Comms Infrastructure coming in below expectations; 1Q revenue is expected to be down 9% q/q, lower than consensus
- RMBS Q4 results + forward guide as set record high total revenue, product revenue, profitability and record cash generation; another record was 8 new semiconductor products launched in 2024.
- SMCI shares rose after the company said that it will give a business update on Feb. 11 following the market close.
- SYNA announced Michael Hurlston is stepping down as president and CEO and as a member of the board of directors, effective immediately, as Mr. Hurlston will assume the role of CEO at Lumentum Holdings Inc.
Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.