February 18, 2025
S&P futures +0.2% Tuesday morning after a mixed but positive week for U.S. equities, led by big tech. Asian markets mostly higher, with Hong Kong extending its rally, though mainland China declined. European markets narrowly mixed. Treasuries weaker, 10-year yields above 4.50%. Dollar index +0.3%. Gold +0.8%. Bitcoin futures -0.8%. WTI crude +1.4%.
No major updates on tariffs or GOP consensus on legislative priorities. Senate leaders may introduce a “skinny” resolution without the TCJA extension. DOGE in focus amid concerns about economic impact from job and spending cuts. U.S.-Russia talks in Saudi Arabia on Ukraine peace face skepticism due to absent European and Ukrainian officials. Markets watching strong Q4 earnings against softer guidance. Fed’s Waller leaned dovish, suggesting disinflation could resume, opening the door for rate cuts. China in focus after Xi met with tech leaders.
Key data today includes Empire manufacturing for February, with Fed’s Daly and Barr scheduled to speak. Wednesday features housing starts, building permits, January FOMC minutes, and Fed Vice Chair Jefferson’s comments. Thursday brings initial jobless claims and heavy Fedspeak, while Friday wraps up with flash PMIs, consumer sentiment, and existing home sales.
GICS Sector Performance & Company News:
Information Technology:
- Broadcom (AVGO): Exploring acquisition of Intel’s (INTC) chip design and marketing business.
- Taiwan Semiconductor (TSM): Interested in controlling some or all of Intel’s chip plants.
- Spotify (SPOT): Introducing high-quality audio with new Music Pro plan.
Industrials & Materials:
- Sherwin-Williams (SHW): Acquiring BASF’s Brazilian Architectural Paints business for $1.15B.
- Southwest Airlines (LUV): Cutting ~15% of corporate workforce to streamline operations.
- H&E Equipment (HEES): Accepted takeover bid from HRI, outbidding previous deal with URI.
- Huntsman (HUN): Q4 EBITDA slightly below expectations
Consumer Discretionary & Staples:
- Amazon (AMZN): NC warehouse workers rejected union representation.
- Tesla (TSLA): China may withhold self-driving license for leverage in trade talks
- Conagra (CAG): Lowered 2025 guidance due to customer service disruptions and FX
U.S. equities were mixed in a quiet Friday session, with the Dow (-0.37%), S&P 500 (-0.01%), Nasdaq (+0.41%), and Russell 2000 (-0.10%). However, the S&P 500 and Nasdaq posted weekly gains for the first time in three weeks. Treasuries firmed as yields continued to pull back. The dollar index fell 0.5%, marking its fourth weekly decline in five weeks. Gold dropped 1.5%, Bitcoin futures rose 1.5%, and WTI crude declined 0.8%, capping a modest weekly loss.
Market sentiment was shaped by a range of factors, including Trump’s proposed reciprocal tariffs, with investors focusing on the delayed implementation and potential negotiations (as India’s Modi confirmed). Analysts noted that firmer components in the January CPI and PPI reports could have a muted effect on core PCE, while positive December revisions helped offset weaker January retail sales. Expectations for Fed rate cuts have shifted to the second half of the year, but Powell’s congressional testimony did not unsettle markets. Other bullish drivers included Ukraine ceasefire hopes, GOP legislative progress, upbeat earnings, and retail dip buying.
January retail sales fell 0.9% m/m, more than the expected 0.1% decline, marking the first drop since August 2024. However, December sales were revised higher to 0.7%. Auto sales were weak as anticipated, and control-group sales declined 0.8% against an expected 0.4% rise. Industrial production for January exceeded expectations, though it moderated from December’s upwardly revised levels. Import prices rose less than forecast, while export prices came in higher than expected. Dallas Fed’s Logan cautioned that even with improving inflation data, the Fed should be cautious about rate cuts. Trump announced plans to unveil new auto tariffs by April 2. The Munich Security Conference drew attention, with VP Vance emphasizing NATO’s role in European defense.
GICS Sector Performance & Company News:
Information Technology (+0.60%)
- Applied Materials (AMAT) -8.2%: Strong FQ1 earnings, but weaker guidance due to expanded export control headwinds.
- Twilio (TWLO) -15.0%: Mixed Q4 results; revenues slightly ahead, but EPS and operating income missed; Q1 guidance mixed with weak Segment results.
- Informatica (INFA) -21.5%: Q4 revenue missed; ARR headwinds from lower cloud renewals; multiple downgrades.
- Dell Technologies (DELL) +3.7%: Reportedly near a deal to sell $5B worth of AI servers to xAI.
- Taiwan Semiconductor (TSM) +1.0%: Open to a deal to operate Intel’s U.S. factories following Trump’s request.
Consumer Discretionary (-0.27%)
- DraftKings (DKNG) +15.2%: Q4 EBITDA beat; revenue in line; raised low-end FY25 revenue forecast.
- Airbnb (ABNB) +14.5%: Q4 revenue and EBITDA beat; Nights & Experiences booked exceeded expectations.
- Wynn Resorts (WYNN) +10.4%: Q4 earnings and revenue beat; strong results from both Las Vegas and Macau.
- Restaurant Brands (QSR) -2.8%: Downgraded at TD Cowen, citing Canadian consumer headwinds and slower Burger King market share gains.
Communication Services (+0.41%)
- Roku (ROKU) +14.1%: Q4 revenue and earnings beat; strong platform revenue offset device weakness.
- Warner Music Group (WMG) +3.4%: Upgraded at Citi; new contracts with Spotify include price escalators.
Financials (+0.14%)
- Coinbase (COIN) +: Q4 results exceeded expectations; company highlighted crypto regulatory shifts.
- Goodyear (GT) +17.3%: Q4 earnings and revenue beat; EMEA outperformed on better volumes.
- DaVita (DVA) -11.1%: Q4 revenue and earnings beat, but treatments per day declined; weak FY25 EPS guidance.
Health Care (-1.11%)
- Dexcom (DXCM) +5.9%: Q4 EPS missed but sales were in line; analysts highlighted record new user additions.
- CRISPR Therapeutics (CRSP) +14.3%: Upgraded at Evercore ISI, citing new upside opportunities from CTX320 and CTX310 programs.
Industrials (-0.29%)
- Procore Technologies (PCOR) +16.5%: Q4 revenue beat; strong backlog momentum; AI-driven customer interest.
- Trucking and industrial metals outperformed.
Materials (-0.33%)
- Copper prices declined; chemicals sector showed strength.
Energy (+0.13%)
- Sector led gains; WTI crude fell 0.8% on the week.
Real Estate (-0.44%)
- Sector underperformed, with no major earnings surprises.
Consumer Staples (-1.16%)
- Sector lagged; food and beverage stocks performed well.
Utilities (-0.51%)
- Sector remained weak, with no notable earnings drivers.
Eco Data Releases | Tuesday February 18th, 2025
S&P 500 Constituent Earnings Announcements | Tuesday February 18th, 2025
Data sourced from FactSet Research Systems Inc.
