S&P futures down 0.8% Monday morning, following last week’s 2% drop in the S&P 500, a 2% decline in the Nasdaq, and a 3.5% loss in the Russell 2000. Asian markets were broadly lower, with Taiwan, South Korea, Australia, and Hong Kong all falling more than 1%. European markets also under pressure, down over 1%. Treasuries weakened with some curve flattening, as the 30-year yield approaches 5%. Dollar index up 0.3%. Gold down 0.4%. Bitcoin futures fell 2.8%. WTI crude rose 1.3%, adding to last week’s 3.5% gain.
Bond yield increases remain the central concern, exacerbated by firmer growth, deficit concerns, and sticky inflation, with oil prices adding pressure. Dollar strength continues to weigh on risk sentiment, while uncertainty around tariffs, stretched valuations, and concentration risk persists. High expectations ahead of Q4 earnings season add to bearish sentiment.
Macro Focus
Busy week ahead: NY Fed 1-year inflation expectations out Monday. Tuesday includes NFIB small business optimism and PPI. Wednesday highlights CPI, empire manufacturing, house prices, and the Fed’s Beige Book. Retail sales, homebuilder sentiment, and jobless claims are due Thursday. Industrial production, housing starts, and building permits cap off the week Friday.
Corporate News
- AAPL-US: Facing supply chain issues and losing market share in China per Ming-Chi Kuo; criticized by META-US CEO Zuckerberg over lack of innovation and ‘random rules.’
- META-US: Press focused on the company’s alignment with Trump policies.
- JNJ-US: Reportedly considering a bid for ITCI-US.
- GILD-US: Entered partnership with LEO Pharma on inflammatory disease treatments.
- HSY-US: CEO Michel Buck confirmed to retire in 2026.
- CFIUS: Extended deadline for Nippon’s divestiture of X-US.
- BOOT-US: Positively preannounced for Q4.
- SKX-US: Highlighted positively in financial press.
US equities closed lower on Friday, with the Dow down 0.55%, the S&P 500 off 1.17%, and the Nasdaq dropping 1.92%, while the Russell 2000 fell 1.09%. Markets recorded a second consecutive week of losses, driven by rate pressures and fiscal policy concerns. Treasuries saw higher yields across the curve, with the 10Y yield nearing 4.70%. The dollar index rose 0.5%, gold gained 0.9%, Bitcoin futures were up 3.3%, and WTI crude jumped 3.6%, bolstered by additional sanctions on Russia.
A stronger-than-expected December payrolls report (256K vs. ~160K consensus) fueled concerns about the Fed’s policy trajectory, pushing the first rate cut expectation to October 2025 and tightening financial conditions further. Inflation expectations also jumped, with the University of Michigan’s 1Y inflation expectations hitting 3.3%, the highest since November 2023. Fiscal dynamics and Trump 2.0 tariff and tax policies added volatility, alongside ongoing concerns about weak breadth, market concentration, and stretched valuations.
Corporate Highlights by GICS Sector
- XOM-US (Exxon Mobil): Declined 1.7% after flagging weaker-than-expected Q4 performance in its Upstream and Chemicals segments, with impairments across several business units.
- HP-US (Helmerich & Payne): Rose 4.5% following a Citi upgrade to buy, citing undervaluation and positive sentiment following the KCA Deutag transaction.
Industrials
- ATRO-US (Astronics): Increased 2.8% after raising Q4 revenue guidance and highlighting margin expansion and improved free cash flow projections.
- JOBY-US (Joby Aviation): Declined 7.9% after a JPMorgan downgrade to underweight, citing overvaluation and potential Trump 2.0 policy headwinds.
Financials
- JEF-US (Jefferies Financial Group): Dropped 10.8% after missing EPS estimates due to weaker margins and disappointing investment banking revenue. Trading and asset management showed relative strength.
Consumer Staples
- STZ-US (Constellation Brands): Fell 17.1% after fiscal Q3 revenue and EPS missed estimates. Beer net sales growth guidance was reduced amid subdued consumer spending and tariff uncertainty.
- NEOG-US (Neogen): Lost 5.4% after cutting FY25 revenue and EBITDA guidance, citing dollar strength and higher costs.
Consumer Discretionary
- CPRI-US (Capri Holdings): Gained 10.3% on reports Prada may acquire its Versace label. The stock was upgraded by Wells Fargo and Citi.
- TSLA-US (Tesla): Showcased the new Model Y in China amid subdued broader market performance.
- W-US (Wayfair): Fell 2.8% after announcing its exit from the German market.
Information Technology
- NVDA-US (NVIDIA): Criticized forthcoming US chip export restrictions.
- ON-US (ON Semiconductor): Dropped 7.5% following a downgrade from Truist, citing mixed demand for diversified end-market semis.
Communication Services
- WBD-US (Warner Bros. Discovery): Declined 3.6% after announcing the cancellation of its planned Venu Sports JV with DIS-US and FOXA-US.
- Social Media Stocks: Advanced after the Supreme Court signaled it might uphold a TikTok ban.
Healthcare
- WBA-US (Walgreens Boots Alliance): Gained 27.5% after reporting Q1 EPS and revenue beats and reaffirming FY25 guidance. U.S. Healthcare and International segments offset weaker U.S. Retail Pharmacy performance.
- HIMS-US (Hims & Hers Health): Fell 1.1% after Citi downgraded the stock to sell, citing potential disruptions to its GLP-1 revenue stream.
Materials
- PENG-US (Penguin Solutions): Rose 7.9% on strong Q1 results, aided by a major hyperscale customer deployment and a positive AI deal pipeline.
Utilities
- CEG-US (Constellation Energy): Gained 25.2% after confirming a $26.6B cash/stock acquisition of Calpine. Guided FY EPS to exceed the top end of guidance at $8.40 (FactSet $8.27)
Eco Data Releases | Monday January 13, 2025
S&P 500 Constituent Earnings Announcements | Monday January 13, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
