Morning Preview: January 23, 2025

Early Look

Thursday, January 23, 2025

Futures

Up/Down

%

Last

Dow

36.00

0.08%

44,389

S&P 500

-8.25

0.13%

6,112

Nasdaq

-105.50

0.48%

21,895

 

 

U.S. futures are inching lower after the S&P touched all-time highs Wednesday, advancing for the 6th time in 7 days as traders turn to US jobs data later on Thursday and await further news on President Donald Trump’s plans for sweeping trade tariffs. Nasdaq futures looking lower amid weakness in semiconductors (MU, NVDA) and semi equipment stocks (ASML, AMAT) after SK Hynix warned of steeper demand declines in commodity memory chips even as it forecast sales for its high-end semiconductors used in generative AI chipsets would more than double this year; said its 2025 capital expenditure would rise only slightly from last year. The S&P 500 index (SPX) closed just shy of record after topping 6,100 for the first time ever, while the Nasdaq rose +1.3% as investors also welcomed Donald Trump’s artificial-intelligence (AI) initiative to expand tech infrastructure in the U.S. The Nasdaq also benefitted from strong results out of Netflix (NFLX) as shares rose nearly 10%. Front-month gold futures dipped slightly after settling up 0.5% to $2,767.60 an ounce yesterday. Bitcoin prices slid another -2% below $102,000, down from highs above $109,000 earlier this week. In Asian markets, The Nikkei Index gained 312 points to 39,958, the Shanghai Index rose 16 points to 3,230 and the Hang Seng Index fell -78 points to 19,700. In Europe, the German DAX is higher by 63 points to 21,317, while the FTSE 100 slip-6 points to 8,539. Treasuries dipped, with US 10-year yields rising 2 bps to 4.63%. The yen inches higher with some help from a Nikkei report that said the Bank of Japan are set to raise rates on Friday.

 

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 37.13 points, or 0.61%, to 6,086.37.
  • The Dow Jones Industrial Average rose 130.92 points, or 0.30%, to 44,156.73.
  • The Nasdaq Composite gained 252.56 points, or 1.28%, to 20,009.34.
  • The Russell 2000 Index declined -14.24 points, or 0.61% to 2,303.73.

Economic Calendar for Today

  • 8:30 AM ET                  Weekly Jobless Claims…est. 220K
  • 8:30 AM ET                  Continuing Claims…est. 1.862M
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 11:00 AM ET                Kansas City Fed Manufacturing for January…prior (-5)
  • 11:00 AM ET                Weekly DOE Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AAL ALK AMAL AUB BANC DCOM ELV FCX GATX GE HFWA IBCP LYTS MKC NTRS ORI OSIS PPBI TCBI UNP VLY WTBA
  • Earnings After the Close: ASB BFST BY COLB CSX CUBI CVLG EBC EWBC FFBC GBCI ISRG MCB MSBI MYFW OCFC SLM SRCE SSB TXN USCB

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

0.32

75.76

Brent

0.33

79.33

Gold

-10.70

2,760.20

EUR/USD

0.0003

1.0409

JPY/USD

-0.06

156.47

10-Year Note

+0.31

4.631%

 

World News

  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 14 vs -15.2 last week. Bulls rise to 43.4% from 25.4%, Neutrals fall to 27.1% from 34%, Bears fall to 29.4% from 40.6%.

Sector News Breakdown

Consumer

  • Alaska Airlines (ALK) Q4 adj EPS $0.97 vs. est. $0.44; sees Q1 EPS adj loss (-$0.50-$0.70) vs. est. loss (-$0.72); forecast a smaller-than-expected loss for the current quarter, driven by strong holiday and corporate travel demand as well as improved pricing power.
  • McCormick (MKC) Q4 adj EPS $0.80 vs. est. $0.77; Q4 revs $1.8B vs. est. $1.77B; sees FY25 adjusted EPS $3.03-$3.08, vs. consensus $3.11 and sees FY25 revenue flat to up 2% (est. $6.86B).
  • Tesla (TSLA) will raise prices of all its cars in Canada from Feb. 1, according to notices on its Canadian website, with prices of Model 3 going up by as much as C$9,000 ($6,254.78). Model Y variants will see increases of up to C$4,000, while all versions of Model S and X will rise by C$4,000, according to the website.

Energy

  • Kinder Morgan (KMI) Q4 adj EPS $0.32 vs est. $0.33, adj EBITDA $2.063B vs est. $2.102B on revs $3.987B vs est. $4.179B; guides FY25 adj EPS $1.27 vs est. $1.34 and adj EBITDA $8.3B vs est. $8.311B.
  • New Fortress Energy (NFE) signs 20-year gas supply deal with Energiza for 478 mw power plant in San Juan, Puerto Rico, set to begin operations in 2028.

Financials

  • Banner Corp. (BANR) Q4 adj EPS $1.33 vs est. $1.21 on revs $160.1Mm vs est. $137.5Mm; Q4 net interest margin 3.82% vs. 3.83% last year.
  • Cadence Bank (CADE) Q4 EPS $0.70 vs est. $0.68 on interest revs $620.31Mm, NIM 3.38%.
  • Cathay General Bancorp (CATY) Q4 EPS $1.12 vs. est. $1.10; Q4 Net interest margin 3.07% vs. 3.27% y/y, but above 3.04% in Q3; Q4 Return on average assets 1.37% vs. 1.4% y/y and Return on average equity 11.2% vs. 12.2% y/y; Q4 Total deposits increased $360.8 million, or 1.9%, to $19.69 billion in 2024.
  • Cohen & Steers (CNS) Q4 adj EPS $0.78 vs est. $0.78 on revs $139.8Mm vs est. $137Mm; ending AUM $85.8B, avg AUM $89.4B.
  • Discover Financial (DFS) Q4 EPS $5.11 vs. est. $3.25; Q4 revs $4.75B vs. est. $4.46B; Q4 Provision for credit losses $1.2B, -37% y/y, and net charge-offs 4.64% vs. 4.11% y/y.
  • M&T Bank (MTB) authorizes a $4B share repurchase program.
  • National Bank Holdings (NBHC) Q4 adj EPS $0.86 vs est. $0.76 on NII $90.131Mm vs est. $89.32Mm.
  • RLI Corp. (RLI) Q4 EPS $0.41 vs. est. $0.52; Q4 revs $439.1M vs. est. $435.0M; said Q4 gross premiums written grew by 11%, surpassing $2 billion for the first time, with all three products contributing to this growth.
  • SL Green Realty (SLG) Q4 FFO/share $1.81 vs est. $1.47 on revs $245.9Mm vs est. $146.12Mm; announced that it has signed a 92,663-square-foot expansion lease with IBM (IBM) at One Madison Avenue, increasing IBM’s total footprint at the property to 362,092 square feet.

Healthcare

  • Activist investor Ananym Capital Management plans to nominate as many as half a dozen directors to the board at Henry Schein (HSIC), Reuters reported, arguing the dental and medical distributor needs to start searching for a new CEO, cut costs and optimize capital allocation, sources familiar with the matter said.
  • Elevance Health (ELV) Q4 adj EPS $3.84 vs. est. $3.86; Q4 revs $45B vs. est. $44.72B; raises quarterly dividend 5% to $1.71 per share; sees FY25 adjusted EPS $34.15-$34.85 vs. est. $34.86; benefit expense ratio was 92.4 percent in the fourth quarter, an increase of 320 basis points compared to the prior year period.

Industrials and Materials

  • Alcoa Inc. (AA) Q4 adj EPS $1.04 vs est. $0.97, adj EBITDA $677Mm vs est. $642.99Mm on revs $3.486B vs est. $3.339B; sees FY25 total Alumina segment production to range between 9.5 to 9.7M metric tons, a decrease from 2024 due to the curtailment of the Kwinana refinery.
  • AST SpaceMobile (ASTS) announces proposed private offering of $400.0M of convertible senior notes due 2032.
  • Blue Bird (BLBD) has appointed John Wyskiel to the position of President and CEO, effective February 17, 2025; will also join the Board of Directors on the same date.
  • CACI International (CACI) Q2 adj EPS $5.95 topped est. $5.21; Q2 revs were $2.09B vs. est. $2.03B; Ad adj net income was $134.2M vs. est. $117.4M; guides FY adj EPS $23.87-$24.76 vs. est. $23.91 and guides FY revs $8.45B-$8.65B vs. est. $8.53B.
  • GE Aerospace (GE) Q4 EPS $1.32 vs. est. $1.04; Q4 revs $10.81 vs. est. $9.47B; Q4 adjusted revenue $9.9B; plans to increase dividend 30%, subject to board approval; sees FY25 adjusted EPS $5.10-$5.45 vs. est. $5.26; sees FY25 adjusted revenue growth up low double digits and sees FY25 free cash flow $6.3B-$6.8B.
  • Hexcel Corp. (HXL) Q4 adj EPS $0.52, in-line with ests on revs $474M vs. est. $476.95M; said Q4 sales increased 6% in 2024, including 12% growth in our commercial aerospace business; guides FY25 adjusted EPS $2.05-$2.25, vs. consensus $2.30 and sees FY25 revenue $1.95B-$2.05B vs. est. $2.02B.
  • Knight-Swift Transport (KNX) Q4 adj EPS $0.36 vs. est. $0.33; Q4 revs $1.86B vs est. $1.88B; anticipates 2025 will be “a year of gradual recovery in market conditions that bridges to a more constructive 2026”; guides Q1 adj EPS $0.29-$0.33 vs. est. $0.30; sees truckload revenue seasonally down low-to mid-single-digit % sequentially in Q1, with op margins declining modestly sequentially in Q1 and tractor count down low single-digit % sequentially in Q1

Technology, Media & Telecom

  • SK Hynix (HXSCL) warned of steeper demand declines in commodity memory chips even as it forecast sales for its high-end semiconductors used in generative AI chipsets would more than double this year; said its 2025 capital expenditure would rise only slightly from last year
  • Shares of semiconductor equipment makers AMAT, ASML, LRCX, KLAC looking weaker in response to SK Hynix posting a modest capex spending plan for 2025; SK Hynix said it begun supply talks for 2026 for memory chips used in AI applications and expects better visibility in the first half about shipment plans for next year.
  • Electronic Arts (EA) forecasts FY net bookings $7B-$7.15B, down from prior view of $7.5B-$7.8B; sees Q3 net revs approx $1.883B vs est. $2.46B and EPS $1.11; sees Q3 net bookings approx $2.215B.
  • Guidewire Software Inc. (GWRE) will replace Arrowhead Pharmaceuticals Inc. (ARWR) in the S&P MidCap 400, and Arrowhead Pharmaceuticals will replace Barnes Group Inc. (B) in the S&P SmallCap 600 effective prior to the opening of trading on Monday, January 27. S&P 500 constituent Apollo Global Management Inc. (APO) is acquiring Barnes Group in a deal expected to be completed soon pending final conditions.
  • Plexus (PLXS) Q1 adj EPS $1.73 vs est. $1.59 on revs $976.12Mm vs. est. $982.22Mm; guides Q2 revs $960Mm-$1.0B vs est. $1.015B, adj op mgn 5.3-5.7% and adj EPS $1.46-1.61 vs est. $1.59 (watch shares of other EMS names on weaker guidance such as BHE, FLEX, JBL, SANM).
  • Britain launched an investigation into Apple (AAPL) and Google’s (GOOG) smartphone operating systems, app stores and browsers on Thursday.

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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.