Market Review: January 28, 2025

Closing Recap
Tuesday, January 28, 2025
Index |
Up/Down |
% |
Last |
DJ Industrials |
136.77 |
0.31% |
44,850 |
S&P 500 |
55.42 |
0.92% |
6,067 |
Nasdaq |
391.75 |
2.03% |
19,733 |
Russell 2000 |
4.84 |
0.21% |
2,288 |
After the worst trading day of 2025 for the Nasdaq (falling over -3%), a rebound in tech lifted the S&P and Nasdaq, led by mega cap tech (AMZN, META – both record highs, AAPL, NVDA, MSFT, GOOGL) and strength in software (CRM, CRWD, DDOG, HUBS, MDB, NOW, SNOW, ZS) along with a bounce in semiconductors (SOX) after the emergence of a low-cost Chinese artificial intelligence model, DeepSeek pressured chip makers Monday. While market breadth was positive on Monday despite the declines in the Nasdaq and S&P overall, today’s breadth was slightly negative (by 1.2:1 margin) as it was mostly a bounce in tech that boosted markets, while Consumer Staples, REITs and Utilities all fell over 1%. A big day for markets coming up tomorrow with earnings from three of the “Mag7” (META, MSFT, TSLA) reporting (AAPL reports Thursday) along with IBM, NOW and the FOMC policy meeting. The Fed is widely expected to hold rates steady at the Jan. 28-29 meeting, the first pause since they began the rate-cut cycle in September. Tomorrow’s FOMC meeting will be followed by the first estimate of Q4 GDP on Thursday and December Personal Consumption Expenditures (PCE) on Friday. Markets also watching the tariff situation as the White House Press Secretary, in her first speaking duties, noted that the proposed February 1st date for potential tariffs on Mexico, Canada and China still holds.
Economic Data
- Consumer Confidence index for January 104.1 below consensus 105.6.
- December Durables ex-transportation orders +0.3% (vs. est. +0.4%) and vs Nov -0.2%; Dec Durables ex-defense orders -2.4% vs Nov -1.3% (prev -0.4%); Dec nondefense cap orders ex-aircraft +0.5%, (est. +0.3%) vs Nov +0.9%.
- Dallas Fed Texas service sector revenue index 5.7 in January vs 13.9 in December; Dallas Fed Texas service sector index of general business activity outlook 7.4 in January vs 10.8 in December.
- The Richmond Fed index rose to an 8-month high of -4 from -10 (was -6) in December, leaving the index further above the 52-month low of -21 in September, but below a 7-month high of zero in May. The ISM-adjusted Richmond Fed also rose, to a 15-month high of 50.7 from 49.5 (was 51.0) in December.
- November 20-metro area home prices +4.3% (consensus +4.3%) from year ago vs +4.2% in October (previous +4.2%) — S&P CoreLogic Case-Shiller. US November home prices in 20 metro areas +0.4% seasonally adj (consensus +0.3%) vs revised +0.4% in October (previous +0.3%). US November 20-metro area home prices non-adjusted -0.1% vs -0.2% in October (previous -0.2%).
Commodities, Currencies & Treasuries
- The U.S. dollar index (DXY) gained +0.5% back near the 108 level, rising vs. the euro and yen following renewed tariff threats from the Trump administration. Trump said on Monday he planned to impose tariffs on imported computer chips, pharmaceuticals and steel in an effort to persuade the producers to make them in the U.S. The dollar strengthened 0.65% to 155.5 against the Japanese yen, trying to snap three straight sessions of losses. The euro fell -0.5% to $1.0437 and Sterling weakened -0.4% to $1.2441.
- Treasury yields edged slightly higher today as bonds slipped. The U.S. Treasury sold $44B in 7-year notes at a yield of 4.457% vs. 4.466% when issued prior as the bid-to-cover was 2.64 (vs. 2.76 prior auction) as primary dealers take 9.86% of U.S. 7-year notes sale, direct 23.06% and indirect 67.08%. Note the Federal Reserve’s two-day meeting began today and concludes tomorrow where it is expected to keep interest rates steady. The European Central Bank will also meet this week and is expected to cut interest rates.
- Gold prices rebounded, rising $29.10 to settle at $2,767.50 an ounce following a dip in the previous session triggered by tech-led wider market sell-off, as increasing uncertainties over U.S. President Donald Trump’s proposed tariffs kept investor interest in the safe-haven asset. Oil prices gained as WTI crude +$0.60 or 0.82% to settle at $73.77 per barrel while Brent Crude futures settle at $77.49/bbl, up 41 cents, or 0.53% as protests at Libyan ports threaten to cut off some crude exports.
Macro |
Up/Down |
Last |
WTI Crude |
0.60 |
73.77 |
Brent |
0.41 |
77.49 |
Gold |
29.10 |
2,767.50 |
EUR/USD |
-0.0065 |
1.0426 |
JPY/USD |
1.13 |
155.62 |
10-Year Note |
0.019 |
4.548% |
Sector News Breakdown
Retail, Consumer Staples & Restaurants:
- In Retail: AS, BOOT, GIL, KTB, ONON, SKX, VFC, and WMT among retailers touching 52-week highs today; VSCO was upgraded to Overweight from EW at Barclay’s and raised tgt to $53 from $51 as it checks off its 3 critical fundamental catalysts: 1) positive promotional inflection this quarter; 2) sustainable positive comp inflection in FYQ324; and 3) positive sales-to-inventory spread. DKS price tgt was raised to $280 at Truist saying they continue to be impressed by DKS’ execution on its strategic initiatives and management’s ability to elevate the shopping experience & strengthen relationships with key vendor partners.
- In Consumer Staples: In products, KMB shares were little changed after mixed Q4 results (EPS just missed and sales beat); in Food, SYY Q2 adj Ebitda rose 4.5% y/y to $969M vs. est. $977.5M, sales rose 4.7% y/y to $20.2B vs. est. $20.1B, and EPS $0.93 vs. est. $0.92 while reiterating fy25 guidance, with sales growth of 4-5% and adjusted EPS growth of 6-7%; said product costs rose 2.1% y/y, driven by hikes in the prices of dairy and poultry and operating expenses rose 4.4%. SFD 26.1M share IPO (downsized from 34.8M shares), opened at $21.05 after priced below range at $20.00 (range was $23 – $27).
- In Home Furnishing: Evercore initiates a negative tactical call on TSCO into the print as believes the stock price and valuation are reflecting the better near-term comp trends and it’d expect management to guide conservatively for the year, with the mid-point slightly below street estimates of ~$2.20 in EPS for 2025. While TSCO should benefit from rate cuts in 2025, Evercore believes not as much as traditional home improvement or home furnishing companies. Therefore, Evercore prefers SHW and HD (both in its Top 5) in the home category as well as Wayfair (W) in the home furnishings category.
Autos, Leisure, Gaming & Lodging:
- In Autos, Leisure Vehicles/RVs: GM reported a beat on top and bottom line and raised guidance for year, but shares fell sharply after good run in stock; PII shares slip as weak guidance offset better Q4 results; said adjusted EPS for 2025 is expected to decline about 65% y/y, much weaker than expected and expects 2025 sales down 1%-4% (shares of other leisure related names like HOG were active on headlines).
- In Cruise lines: big gains for the sector after RCL better results with Q4 EPS $1.63 tops $1.50 estimate and revs rose to $3.76B from $3.3B y/y and vs. ests. $3.77B; notes net cruise costs, excluding fuel, increased 13.4%, compared with a 6.2% rise a year earlier; carried 2.2 million passengers in Q4, +11.3% y/y; guides FY EPS view to $14.35-$14.65 vs. est. $14.41; said expects to benefit from higher bookings this year at record prices and the introduction of river cruises to its vacation offerings (CCL, NCLH shares rose in reaction). VIK shares slumped after RCL announced the launch of Celebrity River Cruises, a premium river cruise vacation that will begin taking bookings this year, committing to an initial order for 10 transformative ships and plans to sail in 2027.
Energy
- In Utilities: NEP shares tumbled after saying it’s suspending its distribution to common unitholders for an “indefinite” period, facilitating a business plan that doesn’t include any equity issuance. OKLO and LTBR signed an agreement to conduct a feasibility study for the co-location of Lightbridge’s commercial-scale fuel fabrication facility. Nuclear related Utes (CEG, NRG, SMR, TLN, VST), which tumbled yesterday after new AI technology from Chinese startup DeepSeek raised doubts about future U.S. electricity demand and tech spending, rebounded partially today as investors look to the sector.
- In the Energy sector: oil stocks underperformed, led by declines in natural gas producers as prices fell amid warm weather forecasts; all eyes on major oil names with CVX, XOM reporting results on Friday.
Financials
- In Banks: KBW recapped Q4 bank earnings saying they generally exceeded expectations in 4Q24 (>80% beat), leading to positive EPS revisions (+2% to both 2025/2026E) with NII performance generally in-line to better than expected (in part due to high deposit betas early in the cutting cycle). This, along with building optimism around financial deregulation and a more pro-growth economic policy, has supported bank stock performance in early 2025 (BKX +8% and KRX +5% vs. S&P 500 +2%).
- In Brokers/Asset Managers: IVZ Q4 adj EPS $0.52 beats the $0.47 estimate as ended the quarter with $1.85 trillion in assets under management as of Dec. 31, up 16.4% y/y; investment management fees rose 12.4% to $1.13 billion in Q4; total net flows stood at $60.9 billion, compared with total net outflows of $8.3 billion a year ago.
- In Consumer Finance/Payments: AFRM was upgraded to Neutral at Compass and raised its tgt to $61 saying it underappreciated AFRM’s ability to re-accelerate growth, maintain elevated growth that has compounding benefits as the company benefits from very strong operating leverage. SYF shares declined on results and guidance as forecast 2025 net revenue in the range of $15.2B-$15.7B, below revenue of about $16.13B for 2024 and below consensus as spending levels moderate and interest rates dip. Elon Musk’s X said it has struck a deal with Visa (V), the largest U.S. credit card network, to be the first partner for what it is calling the X Money Account.
- In Insurance: WRB catastrophe losses for the quarter come in lighter than anticipated and underlying loss and combined ratios were in line, driving a bottom-line beat. EG released the results of a much-anticipated reserve study: a $1.5bn pre-tax charge or $2.2bn net of a $700mn release. BHF shares popped up this morning after the Financial Times reported the company is seeking to sell itself. https://tinyurl.com/4h8ak862
Biotech & Pharma:
- ATAI, along with partner Beckley Psytech, reports results from mid-stage trial of its experimental treatment for alcohol use disorder.
- LPTX shares tumbled after saying it will discontinue late-stage trials of its drug, sirexatamab, in patients with gastric cancer saying the study for gastric cancer treatment to be negative on primary PFS endpoints; said will explore partnership opportunities to test sirexatamab in combination with a type of cancer drugs.
- MRK announced a $10B stock buyback plan.
- NBIX announced they amended their partnership with Takeda around the AMPA program (osavampator/NBI-‘845) where Neurocrine gains full WW development and commercialization with the exception of Japan.
- NVO said the FDA approves its diabetes drug Ozempic for chronic kidney disease, expanding its use.
- SGRY shares jumped after Reuters reported Bain Capital Private Equity LP submits a non-binding proposal to acquire 100% of Surgery Partners’ shares for cash consideration of $25.75 per share https://tinyurl.com/mus6sc4a
Healthcare Services & MedTech movers:
- In Medical Equipment/Labs/Life Sciences: Sartorius (SOAGY) shares rose after annual underlying earnings before interest, tax, depreciation and amortization (EBITDA) of 945M euros ($985.54M), topping ests of 932.7M; Q4 orders for its key Bioprocess Solutions division (BPS) rose 23.1% to 856.7M euros; shares of RGEN, TMO, WAT, AVTR, DHR move higher in reaction initially.
- In Medical Supplies/Distribution: LNTH to acquire Evergreen, a clinical stage radiopharma CDMO + biotech, in a $250M up-front and potential $1B total transaction (vs. LNTH prior mkt cap $6.8B). The deal enhances LNTH’s capabilities as a fully integrated radiopharmaceutical company and adds OCTEVY – a registrational-stage diagnostic asset targeting neuroendocrine tumors.
Transports
- In Industrials: CR reported 4Q24 sales slightly ahead, led by stronger core sales growth in PFT while EPS topped views as both core sales and orders rose 8% Y/Y, with backlog expanding to a record $1.24B. GGG reported Q4 sales, adj, op. profit and adj. EPS (core sales down 6%; $0.12 op. miss) all below as experienced an organic decline in each region, led by AP and EMEA.
- In Electrical Components/Equipment: Melius downgraded 4 of its “capex thematic” names from Buy to Hold, cutting shares of VRT, ETN, TT and JCIWhile Melius said it is not concerned about earnings results for any of the four in ’25, or even ’26 for that matter, it is concerned about the P/E that investors will be willing to apply to those results (citing DeepSeek fears). It does, however, raise the risk that this AI CAPEX arms race has peaked. Citi said PWR, VRT, ETN now more reasonable valuations following sell-off given the DeepSeek news that the Chinese startup has developed an AI model that is more cost and computationally efficient than those at US Tech peers.
- Heavy Duty Machinery: CNH was upgraded to Outperform from Perform at Oppenheimer and instating a $16 price target saying now into the second year of equipment sales declines, they believe CNH is approaching trough EPS in 2025. The firm also said they believe recent pressure in CF is an opportunity amid a dynamic nat gas backdrop and nitrogen demand recovery; consider INGR a top pick on HSD EPS growth with an attractive entry point. PCAR shares dipped after Q4 EPS and revs both fell short of consensus views.
- In Transports: in airlines, JBLU Q4 revs $2.28B vs. est. $2.26B on smaller loss of (-$0.21) per share vs. est. (-$0.31), while Q4 capacity decreased (-5.1%) and reports Q4 CASM decreased (-0.4%); sees Q1 RASM (-0.5%) to up 3.5%. In truckers, MRTN reported Q4 EPS that beat consensus forecast, primarily driven by better than anticipated margin leverage in both trucking segments.
Aerospace & Defense
- In Aerospace & Defense: BA reported a core Q4 EPS loss that missed expectations by a wide margin, less than week after it warned of a large net loss; its core loss per share widened to (-$5.90) from (-$0.47) and vs. est. loss (-$3.22); BWXT wins more than C$1B in contracts for nuclear energy projects; LMT shares slip as posted Q4 net income of $527M or $2.22 per share, a 71% slide y/y as it booked $1.29B in losses associated with classified programs at its aeronautics and missiles and fire control business units; Q4 sales $18.62B vs. est. $18.84B; forecasts EPS about $27-$27.30 below est. $27.82; sees 2025 sales about $73.75B-$74.75B vs. est. $74B; RTX Q4 adj EPS $1.54 tops est. $1.38 and sales $21.62B also beat est. $20.54B; guides FY 2025 adj sales $83B-$84B vs estimate $84.47B and sees FY 2025 adj EPS $6.00-$6.15 vs estimate $6.07; guides free cash flow $7B-$7.5B.
Materials, Metals & Mining
- In the Steel sector: NUE reported Q4 adj EPS of $1.22 vs. our $0.77, the Street’s $0.68, and the guidance range of $0.55-$0.65 provided in mid-December; Q4 Steel Mills EBIT nicely exceeded on stronger and associated overhead leverage, Q4 EBITDA was $746M, down -14% q/q vs. 3Q24’s $864M and down 45% vs. 4Q23’s $1.35B; guides Q1 Steel Mills and Steel Products EBIT to be flattish q/q in 1Q25, Raw Materials EBIT to decline q/q.
- In Chemicals: ECL was upgraded to Overweight at Morgan Stanley and increase its PT from $263 to $280 as expects higher than historical incremental margins (I.E., 45-50% versus teens/ twenties historically) as volume trends improve; 20% operating income margin target likely achieved by 2026.
Technology
- In Software: strong group for second day (IGV), led by CRWD, ESTC, MDB, TWLO, ZS, DDOG among others; SAP said it was more optimistic about its financial results this year due to faster growth in cloud computing and artificial intelligence; guided operating profit in 2025, on a constant currency basis, to be between 10.3B euros and 10.6B euros ($10.75B-$11.06B) compared to prior view of about 10.2B euros. ADSK was upgraded to Outperform at Mizuho and raised tgt to $400 from $280 saying with the smooth rollout of the new Transaction Model, they estimate ADSK can achieve ~$10B revenue by FY29E, accelerating its 5-year CAGR to ~13% (from ~11% pre-transition) and delivering ~$15 FCF/share alongside ~400bps margin expansion. ROP was upgraded to Buy from Hold at TD Cowen and raise tgt to $615 from $535 saying sees accelerating revenue growth in 2025, expecting discontinuation of headwinds from 2024, including production issues. BABA shares popped late day on headlines pertaining to its AI learning model
- In Networking/Comm Equipment: JNPR shares tumbled after a report that the Dept. of Justice may be more inclined to file a lawsuit to block its planned $14B sale to HPE Hewlett Packard Enterprise is scheduled to meet with DOJ on Tuesday to discuss the deal as the regulator appears to be leaning toward a lawsuit to block the transaction, citing a Capitol Forum report from late Monday. https://tinyurl.com/383wb8p9
- In Optical Sector: CIEN was upgraded to Overweight at JP Morgan and raised tgt to $88 saying pullback in shares offers entry point and sees limited impact from DeepSeek related concerns to earnings. Other near-term drivers include higher momentum in relation to Telecom CAPEX recovery following a tougher investment backdrop as well as inventory digestion headwinds in 2024.
- Semiconductors: the sector rebounded but lags vs. software, but not down like yesterday’s -9% tumble amid DeepSeek AI concerns; AMD was downgraded to Hold from Buy at Melius Research PT $129 down from $160 saying they are now more cautious on x86 server and PC as well over the long-term for AMD; ALAB upgraded from Market Perform to Outperform at Northland with $120 tgt noting shares have declined 38% since Northland’s downgrade based on the valuation on 1/2/25. Most of that decline occurred yesterday. While demand for AI training may diminish, expect demand for inference to make up for any decrease in AI training. NVDA rebounded and recovered its 200day moving average of $121.75 with strong gains today.
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.