Market Overview
Today's market displayed a positive bias, supported by developments in tariffs and their impact on inflation and corporate earnings. Notably, Canada received a 30-day reprieve from tariff actions, while China's retaliatory measures seemed more symbolic. Despite high expectations, President Trump did not engage in talks with Chinese President Xi Jinping. The S&P 500 gained 0.7%, and the Nasdaq Composite rose by 1.4%.Stock Performance
- Alphabet (GOOG, Financial): Rose 2.5% to a new 52-week high, closing at $207.71, before reporting earnings.
- Palantir Technologies (PLTR, Financial): Surged 24.0%, closing at $103.83, following strong earnings results.
- Spotify (SPOT): Increased by 13.2%, closing at $621.77, after posting better-than-expected numbers.
Downside Movements
- Merck (MRK): Dropped 9.1% to $90.74 due to disappointing earnings.
- Estee Lauder (EL): Fell 16.1% to $69.47 after releasing unfavorable earnings results.
- PepsiCo (PEP, Financial): Retreated 4.5% to $143.49 following its earnings report.
Interest Rates and Economic Data
The decline in rates contributed to the market's positive bias. The December JOLTS report showed a decrease in job openings to 7.600 million from a revised 8.156 million in November. The 2-year yield dropped to 4.22% from 4.24%, indicating a softening labor market. This did not significantly change expectations for future rate cuts but aligned with the belief that the Federal Reserve's next move could be a rate reduction.Year-to-Date Performance
- Dow Jones Industrial Average: +4.7%
- S&P Midcap 400: +3.1%
- Russell 2000: +2.7%
- S&P 500: +2.7%
- Nasdaq Composite: +1.8%
Economic Data Review
- December Factory Orders: -0.9% (consensus -0.3%); prior was revised to -0.8% from -0.4%. Weakness was mainly in transportation equipment.
- December JOLTS - Job Openings: 7.600 million; prior revised to 8.156 million from 8.098 million.
Upcoming Economic Data
- 7:00 ET: Weekly MBA Mortgage Index (prior -2.0%)
- 8:15 ET: January ADP Employment Change (consensus 155,000; prior 122,000)
- 8:30 ET: December Trade Balance (consensus -$98.0 billion; prior -$78.2 billion)
- 9:45 ET: Final January S&P Global U.S. Services PMI (prior 52.8)
- 10:00 ET: January ISM Services (consensus 53.9%; prior 54.1%)
- 10:30 ET: Weekly crude oil inventories (prior +3.46 million)
International Markets
- Europe: DAX +0.4%, FTSE -0.2%, CAC +0.6%
- Asia: Nikkei +0.6%, Hang Seng +2.8%, Shanghai 0.0%
Commodities
- Crude Oil: -0.36 @ 72.76
- Natural Gas: -0.10 @ 3.25
- Gold: +18.40 @ 2874.90
- Silver: +0.51 @ 33.04
- Copper: +0.05 @ 4.37
GOOG,PLTR,SPOT,MRK,EL,PEP
Guru Stock Picks
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- Add in VRSN by 0.15%
Today's News
Advanced Micro Devices (AMD, Financial) reported a strong fourth quarter with revenue of $7.7 billion, surpassing expectations by $170 million, and a 24.2% year-over-year growth. Despite a forecasted sequential revenue decline for Q1 2025, AMD projects a 30% year-over-year increase. The company's shares rose by 3% following the report, driven by strong demand for AI chips and a positive outlook on long-term growth.
PayPal Holdings (PYPL, Financial) experienced a 12% drop in stock price despite exceeding Q4 earnings expectations and providing strong 2025 guidance. Analysts attribute the decline to high market expectations and concerns over the company's branded checkout acceleration and unbranded payment volume growth. PayPal is focusing on profitable growth, particularly in its Braintree segment.
Alphabet (GOOG, GOOGL) saw a post-market drop of over 6% after narrowly surpassing profit expectations in its Q4 earnings. While revenue rose 12% to $96.47 billion, in-line with projections, some units underperformed. CEO Sundar Pichai highlighted advances in AI and strong demand for Google Cloud, but the market reacted to the lackluster performance in certain areas.
PepsiCo (PEP, Financial) shares fell 4.8% as the company reported Q4 earnings that highlighted challenges in the salty and savory snack categories. Inflationary pressures and higher borrowing costs have impacted consumer demand, and the company is considering expanding its healthy snack options amid ongoing geopolitical tensions.
Nvidia (NVDA, Financial) faces pressure as the U.S. semiconductor market reacts to looming China tariffs. The market is adjusting to potential impacts, with Nvidia being a significant player in the sector.
Marathon Petroleum (MPC, Financial) saw a 6.8% increase in shares after surpassing Q4 estimates, buoyed by strong performance in the energy sector, which was the leading sector in market gains.
Palantir Technologies (PLTR, Financial) soared by 24% following a robust Q4 performance that exceeded Wall Street expectations, driven by accelerating AI developments and strong software demand.
Uber (UBER, Financial) is set to release its Q4 results, with investors focusing on gross bookings and plans for autonomous vehicles. The company faces challenges from foreign exchange headwinds and competition in the mobility segment.
Enphase Energy (ENPH, Financial) reported strong Q4 results, with a 26.5% revenue increase and a robust financial outlook for Q1 2025, driven by increased shipments of IQ Batteries and a substantial cash position.
Chipotle Mexican Grill (CMG, Financial) experienced a decline in after-hours trading after reporting Q4 earnings that matched consensus expectations. The company's growth was driven by new restaurant openings and digital sales, though some metrics fell short of market expectations.
GuruFocus Stock Analysis
- Estée Lauder Stock Crashes 16.7% as Surprise Loss Sparks Major Layoffs--Is the Worst Yet to Come? by Khac Phu Nguyen
- Atlanta Fed's Bostic Sees No Immediate Rate Changes Amid Economic Uncertainty by Faizan Farooque
- Spotify Soars 11.7% as User Growth Smashes Records by Khac Phu Nguyen
- Merck Stock Plunges 9.5% After China Halt--Is This the Beginning of Bigger Trouble? by Khac Phu Nguyen
- China Hits Back: Google, Nvidia, Intel in the Crosshairs by Khac Phu Nguyen
