Morning Preview: January 22, 2025

Early Look

Wednesday, January 22, 2025

Futures

Up/Down

%

Last

Dow

53.00

0.12%

44,291

S&P 500

26.25

0.43%

6,110

Nasdaq

183.00

0.84%

21,892

 

 

Another push higher for U.S. futures, adding to last week’s gains and yesterday’s advance, as the tech heavy Nasdaq is helped by AI headlines late yesterday, blowout Netflix (NFLX) earnings/subscriber numbers (stock +15% overnight) and possible moderate trade tariff headlines from Donald Trump’s administration. On Tuesday, stocks were hot while the country is dealing with freezing temps as investors were in a buying mood the day after Donald Trump was announced as 47th President of the United States. All three major U.S. stock indexes started the session with tentative gains and gathered steam throughout the day to finish near highs. President Trump signed a spate of executive orders, but none of which contained the word “tariff,” much to the market’s relief as stocks climbed. It was a broad market rally as @RyanDetrick tweeted on market breadth, “today will be the 6th consecutive day with more than 68% of S&P 500 components higher. That is the longest streak ever.” Utilities (XLU) surged along with Industrials and Small caps as the Russell 2000 led. Semiconductor chips (SOX) rose 1.3% ahead of an expected announcement by the President last night of a $500 billion private sector AI infrastructure investment. Shares of AI server firms extend gains rise premarket after U.S. President Donald Trump confirmed a private sector investment of up to $500 bln to fund infrastructure for artificial intelligence. Shares of Oracle (ORCL) rise another 9% after Trump announces joint venture called Stargate with OpenAI and SoftBank to build data centers and create over 100,000 jobs in the U.S. (NVDA, AVGO, ARM, DELL, VRT, SMCI, TEM, among AI names moving higher as well as nuclear names). In Asian markets, The Nikkei Index surges 618 points or 1.58% to settle at 39,646, the Shanghai Index falls -29 to 3,213, and the Hang Seng Index declines -327 points to 19,778. In Europe, the German DAX jumps 257 points or 1.23% to 21,299, while the FTSE 100 gains 35 points to 8,583.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 52.58 points, or 0.88%, to 6,049.24.
  • The Dow Jones Industrial Average rose 537.98 points, or 1.24%, to 44,025.81.
  • The Nasdaq Composite gained 126.58 points, or 0.64%, to 19,756.78.
  • The Russell 2000 Index advanced 42.09 points, or 1.85% to 2,317.97.

Economic Calendar for Today

  • 7:00 AM ET MBA Mortgage Applications Data
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 10:00 AM ET                Leading Index M/M for December
  • 1:00 PM ET US Treasury to sell $13B in 20-year notes
  • 4:30 PM ET API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: ABT ALLY APH BKU CBSH CMA FCCO FNB GEV HAL HBT JNJ PG TDY TRV TXT UCB
  • Earnings After the Close: AA AMTB BANR BWFG CACI CADE CATY CBAN CNS CVBF DFS EGBN EQBK HBNC HXL INBK KMI KNX LOB NVEC OBK PLXS QCRH RLI SLG STLD TCBX TFIN WSBC

Other Key Events:

  • Barclays World Economic Forum, 1/20-1/24, in Switzerland
  • Goldman Sachs Global Strategy Conference 2025, 1/20-1/23 in London, Paris, Zurich
  • World Economic Forum (WEF) Annual Meeting 2025, 1/20-1/24, in Davos Switzerland

 

 

Macro

Up/Down

Last

Nymex

0.20

76.03

Brent

0.30

79.59

Gold

9.30

2,768.50

EUR/USD

0.0016

1.0445

JPY/USD

0.34

155.84

10-Year Note

-0.003

4.576%

 

Sector News Breakdown

Consumer

  • Aptiv (APTV) announces intention to separate its electrical distribution systems business. New Aptiv to be a high growth, high margin provider of full sensor-to-cloud tech solutions, including highly engineered interconnects and components serving diverse end markets. New EDS to be a leading global supplier of low voltage and high voltage signal, power, and data distribution solutions for automotive and commercial vehicle markets with multiple levers for revenue, earnings and cash flow growth.
  • Celsius Holdings’ (CELH) downgraded to Hold from Buy at TD Cowen and cut tgt to $29 from $40 saying data shows decline in sales growth in the last four weeks vs growth recovery in the energy drink category.

Energy, Industrials and Materials

  • GE Vernova Inc. (GEV) shares fell after Q4 revs rose 5.1% y/y to $10.56B but missed ests $10.7B; wind orders sank 41.2% to $2.031 billion, citing lower onshore wind equipment. The results don’t include the impact of President Trump’s executive order signed on Monday that temporarily withdraws leasing for wind projects. Q4 power orders rose 20% to $6.55B and electrification orders jumped 118% to $4.79B.
  • Halliburton (HAL) Q4 adj EPS $0.70, in-line with ests and revs fell -2.2% y/y to $5.61B vs. est. $5.65B; says expects 2025 to be sequentially softer in North America.
  • Rocket Labs (RKLB) sets Feb. 4 for Kinéis launch, the fourth of five dedicated missions to deploy 25 IoT satellites, following a record 16 launches in 2024.
  • Textron (TXT) Q4 adj EPS $1.34 vs. est. $1.25; Q4 revs $3.61B vs. est. $3.82B; reports Q4 Aviation backlog of $7.8B at year-end 2024, up $676M from year-end 2023; sees FY25 adjusted EPS $6.00-$6.20, vs. consensus $6.31 and sees FY25 revenue $14.7B vs. consensus $14.76B.
  • United Airlines (UAL) Q4 adj EPS $3.26 vs est. $3.00 on revs $14.7B vs est. $14.397B; guides Q1 adj EPS $0.75-1.25 vs est. $0.54; says sees robust demand in Q1 as industry transformation well under way; guides FY adj EPS $11.50-13.50 vs est. $12.85; forecasts strong demand trends in Q1 with domestic rasm expected to turn solidly positive YoY, continued improvement in international RASM.
  • Watch Nuclear/energy stocks (SMR, CEG, VST, TLN, OKLO, NRG, CCJ) after the WSJ reported South Carolina to reboot giant Nuclear project to meet AI Demand. Santee Cooper is working with bankers to solicit interest in V.C. Summer station https://tinyurl.com/z46866xw

Financials

  • Capital One Financial (COF) Q4 adj EPS $3.09 vs. est. $2.80; Q4 revs rose 2% y/y to $10.2B, in-line with consensus $10.22B; Provision for credit losses increased $160M to $2.6B; Q4 net charge-offs of $2.9B; Net interest margin of 7.03 percent, a decrease of 8 basis points; Credit Card period-end loans increased $5.9 billion, or 4%.
  • Fulton Financial (FULT) Q4 EPS $0.36 vs est. $0.42 on NII $253.659Mm vs est. $250.85Mm, CET1 Capital ratio 10.6%, credit loss provision $16.725Mm.
  • Hancock Whitney (HWC) Q4 EPS $1.40 vs est. $1.28 on NII $276.3Mm, revs $165.2Mm vs est. $365.1Mm; NIM 3.41% CET1 ratio estimated 14.14%.
  • Interactive Brokers (IBKR) Q4 EPS $2.03 tops consensus $1.86 on revs $1.387B vs. est. $1.37B; Q4 customer accounts increased 30% to 3.34M, customer equity increased 33% to $568.2B, total DARTs2 increased 61% to 3.12M, customer credits increased 15% to $119.7B and customer margin loans increased 45% to $64.2B.
  • Nicolet Bancshares (NIC) Q4 EPS $2.19 vs est. $1.98 on NII $71.55Mm vs est. $69Mm, credit loss provision $1Mm.
  • Prosperity Bancshares, Inc. (PB) said its Board of Directors authorized a stock repurchase program under which the Company may repurchase up to 5%, or approximately 4.8M shares
  • Simmons First (SFNC) Q4 adj EPS $0.39 vs. est. $0.35; Q4 revs $208.5M vs. est. $208.67M; Q4 non-interest income $43.6M, credit loan provisions $13.3M and net interest income +164.9M.
  • Zions Bancorp (ZION) Q4 EPS $1.34 vs est. $1.26 on NII $627Mm vs est. $622.4Mm, NIM 3.05%.

Healthcare

  • Johnson & Johnson (JNJ) Q4 adj EPS $2.04 vs. consensus $2.02 and Q4 revenue rose 5.3% y/y to $22.52B vs. est. $22.45B; sees FY25 adjusted EPS $10.75-$10.95, vs. consensus $10.60; sees FY25 operational sales growth of 2.5%-3.5%; Quarterly sales of J&J’s cancer drugs rose 19% worldwide, driven by more than $3 billion for multiple myeloma treatment Darzalex.
  • Disc Medicine (IRON) announces $200M common stock offering.
  • Elevance Health (ELV) downgraded to Equal Weight from Overweight at Stephens and cut tgt to $440 from $520.

Technology, Media & Telecom

  • Netflix (NFLX) shares jumped as Q4 EPS $4.27 vs est. $4.20 on revs $10.25B vs est. $10.11B; streaming paid net adds 18.91Mm vs est. 9.6Mm; guides Q1 revs $10.42B vs est. $10.49B, EPS $5.58 vs est. $5.98; raises FY revs to $43.5-$44.5B vs est. $43.64B and op mgn 29%; approved incremental $15B repurchase program; says raising prices of standard plan with ads to $7.99, standard plan to $17.99 and premium plan to $24.99.
  • Seagate Technologies (STX) Q2 adj EPS $2.03 vs est. $1.88 on revs $2.325B vs est. $2.319B, gr mgn 34.9%, op mgn 21%; guides Q3 revs $1.95-2.25B vs est. $2.19B and adj EPS $1.50-1.90 vs est. $1.69.
  • Agilysys (AGYS) Q3 EPS $0.38 vs. est. $0.34; Q3 revs $69.6M vs. est. $73.2M; cuts FY25 revenue view to $273M from $280M-$285M (est. $281.9M) while affirms outlook for FY25 adjusted EBITDA expected to be 18% of revenue for the full fiscal year; said Most see continued impacts on wind down of heavy lift of significant development efforts related to large projects.
  • Progress Software (PRGS) Q4 adj EPS $1.33 vs. est. $1.22 and revs $215M vs. est. $211.3M; Q4 operating margin was 10%; forecasts Q1 adj. revs $232M-$238M vs. est. $235.7M and adj EPS $1.02-$1.08 vs. est. $1.44 and forecasts 2025 adj. revs $958M-$970M vs. est. $944.7M.
  • President Donald Trump said he is open to Elon Musk or Oracle (ORCL) Chairman Larry Ellison purchasing TikTok as part of a joint venture with the U.S. government – Bloomberg https://tinyurl.com/2w4e62c3
  • MrBeast, whose real name is Jimmy Donaldson and is the internet’s most-followed and highest-earning content creator, is part of a group of American investors assembled by Jesse Tinsley vying to buy TikTok’s U.S. business before a possible ban https://tinyurl.com/2s3px5fr

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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.