February 20, 2025
S&P futures down 0.3% after a mostly higher but uneventful session Wednesday. Energy, A&D, airlines, semis, EVs, and defensives led, while builders, retail favorites, chemicals, banks, and restaurants lagged. Treasuries slightly firmer, dollar index down 0.2%, gold up 1.1%, Bitcoin futures up 1.2%, and WTI crude up 0.2%.
Markets remain lacking clear directional drivers. Trump added tariffs on lumber and forest products and hinted at a new China trade deal involving US purchases, investments, and security issues. House GOP facing budget resistance over Medicaid cuts, with shutdown risks increasing ahead of the March 14 deadline. Tensions between Trump and Zelensky rising, though market impact remains limited.
Economic Calendar:
- Today: Initial jobless claims; Fed speakers (Goolsbee, Musalem, Barr, Kugler).
- Friday: February flash PMIs, final Michigan consumer sentiment & inflation expectations, January existing home sales.
Earnings & Corporate News:
- Walmart (WMT) – Q4 beat but underwhelmed; FY26 guide below expectations.
- Alibaba (BABA) + Beat with strong AI-driven cloud growth.
- Carvana (CVNA) – Beat but guidance lacked detail.
- Toast (TOST) + Positive takeaways, but some scrutiny on GP outlook.
- CF Industries (CF) – Q4 light, though low expectations softened impact.
- BioMarin (BMRN) + Beat and guided above.
- Kyverna (KYVO) + Positive takeaways, but concerns on pricing/churn.
- Host Hotels (HST) – Missed on higher expenses.
- Exact Sciences (EXAS) – Light EBITDA guide.
- ACV Auctions (ACVA) – Q1 & 2025 guidance below, but viewed as conservative.
- Tanger (SKT) + Q4 FFO and guidance ahead.
- Cheesecake Factory (CAKE) ~ Comps and guide in line, but traffic negative.
- Bausch Health (BHC) + Beat with better guidance and debt restructuring boost.
- Trupanion (TRUP) – Sharp drop on subscriber growth concerns.
- IMAX (IMAX) ~ Sales light, profitability in line, positive China outlook.
- Vimeo (VMEO) – Guide below, focus on investments.
- Rogers (ROG) – Q1 guide well below expectations
US equities finished mostly higher in Wednesday’s session, though gains were limited in another quiet trading day. The Dow rose 0.16% (+63 points), the S&P 500 gained 0.24% (+13 points) to another record close, and the Nasdaq edged up 0.07% (+10 points). Meanwhile, small caps underperformed, with the Russell 2000 down 0.34% (-7 points).
Economic Data & Fed Policy:
January housing starts missed expectations, though building permits surprised to the upside. The FOMC minutes from the January meeting reaffirmed the Fed’s cautious, data-dependent stance, with officials noting uncertainty around Trump’s tariff and immigration policies. While some participants want to see further inflation progress before cutting rates, others see risks shifting more toward inflation than labor markets. The market continues to price in a first rate cut in July, with 40 basis points of cuts expected by year-end. Atlanta Fed President Bostic reiterated a patient approach, citing reduced confidence in the 2025 outlook.
Policy & Geopolitical Developments:
Trump reiterated plans for 25% tariffs on autos, semiconductors, and pharmaceuticals, though markets remain cushioned by a lack of implementation details and potential negotiations. GOP divisions over Trump’s tax and budget policies remain a key market focus, particularly the TCJA extension. On foreign policy, recent US-Russia talks yielded little change, though Trump’s increasingly critical stance on Ukraine’s leadership drew attention. In Washington, Trump signaled support for a $4.5T tax cut, while Senate Republicans pushed ahead on budget plans despite differences with Trump’s proposals.
Commodities & Treasuries:
Treasuries were firmer across the curve, reversing some of Tuesday’s yield spike, while the dollar index edged up 0.1%. Gold slipped 0.4%, while Bitcoin futures surged 2.5%. WTI crude added 0.4%, extending recent gains.
Company News by Sector
Information Technology (+0.15%)
- Apple (AAPL) unveiled the iPhone 16e, a lower-priced model using its proprietary chip, starting at $599.
- Analog Devices (ADI) +9.7%: Beat fiscal Q1 estimates and guided above consensus, highlighting improving cyclical demand in industrial and auto markets.
- Cadence Design Systems (CDNS) -8.8%: Strong Q4 backlog but weaker FY25 guidance; noted flat China revenue in 2025 despite AI momentum.
- Arista Networks (ANET) -6.4%: Fell after only a slight FY25 outlook increase and concerns over revenue impact from Meta’s lower CapEx.
Healthcare (+1.26%)
- Hims & Hers Health (HIMS) +17.5%: Jumped on the acquisition of at-home blood testing lab Sigmund NJ; deal terms undisclosed.
- Penumbra (PEN) +12%: Q4 earnings beat with strong case volume growth in vascular therapies; analysts see upside in VTE treatments.
- International Flavors & Fragrances (IFF) -5.2%: Q4 organic sales beat, but FY25 guidance fell short, citing FX headwinds and pharma divestment concerns.
Energy (+0.70%)
- Occidental Petroleum (OXY) +4.4%: Strong Q4 beat, with debt reduction, EBITDA growth, and a dividend increase, though Q1 oil production guidance disappointed.
- Devon Energy (DVN) +7.7%: Q4 earnings topped estimates, with higher-than-expected 2025 production guidance and lower capex.
Consumer Discretionary (+0.03%)
- Capri Holdings (CPRI) +5%: Shares surged on reports that Prada is evaluating a bid for Versace; also reaffirmed FY25 guidance.
- Toll Brothers (TOL) -5.9%: Q1 earnings missed; spring selling season seen as mixed, with Q2 deliveries below expectations.
- Etsy (ETSY) -10.1%: Q4 sales and active user counts missed estimates; weak Marketplace performance dragged down revenue.
Consumer Staples (+0.79%)
- Compass (COMP.EQ) +28.3%: Jumped after Q4 revenue and EBITDA beat, with strong momentum in Private Exclusive listings.
- Gildan Activewear (GIL) +3.2%: Q4 earnings beat and guided in line, showing stable demand in apparel markets.
Industrials (+0.08%)
- Flowserve (FLS) -6.5%: Q4 EPS and revenue missed, though solid bookings and improved margins offered some optimism.
- Wolverine World Wide (WWW) -17.5%: FY25 guidance came in weak, citing FX headwinds and restructuring costs.
- Parsons (PSN) -5%: Q4 missed estimates, and FY25 free cash flow conversion guidance came in lower than expected.
Financials (-0.03%)
- Shift4 Payments (FOUR) -17.5%: Q4 adjusted EBITDA and margins missed; acquisition of Global Blue (GB) for $2.9B overshadowed results.
- Howard Hughes Holdings (HHH) -8.9%: Pershing Square increased its stake, but the revised buyout proposal was deemed insufficient.
Real Estate (+0.16%)
- REITs and utilities outperformed as bond proxies, benefiting from lower yields.
Communication Services (0.00%)
- Meta (META) underperformed after breaking a 20-day streak of gains on Tuesday.
- Musk’s X (formerly Twitter) reportedly in talks to raise funds at a $44B valuation.
Materials (-1.16%)
- Celanese (CE) -21.5%: Q4 revenue in line but FY25 guidance sharply below expectations, citing weak acetyl chain demand.
- Louisiana-Pacific (LPX) -10.1%: Q4 sales beat, but 2025 guidance disappointed; company plans more investments in sliding capacity expansion.
Takeaways & Market Outlook
- Market remains in a holding pattern, with investors awaiting more clarity on Trump’s tariff, tax, and budget policies, as well as Fed policy signals.
- FOMC minutes reinforced patience on rate cuts, but the market still expects the first cut in July.
- Earnings remain mixed, with tech and industrials showing some weakness, while healthcare and energy outperformed.
- Upcoming focus: Walmart (WMT) reports Thursday, Nvidia (NVDA) next week, and further Fed commentary on balance sheet policy
Eco Data Releases | Thursday February 20th, 2025
S&P 500 Constituent Earnings Announcements | Thursday February 20th, 2025
Data sourced from FactSet Research Systems Inc.
