Samsung posts bumper Q4 results

General market commentary

Equity markets delivered a mixed performance on Wednesday, with leadership diverging across indices and sectors. The Nasdaq edged higher, supported by gains in technology and communication services, while the Dow Jones Industrial Average and the S&P 500 retreated after briefly touching record highs. The Dow fell nearly 1%, weighed down by sharp declines in utilities, industrials, materials, financials and energy, reflecting a more defensive tone amid heightened geopolitical tensions and falling oil prices. In contrast, healthcare and select tech names provided pockets of resilience, highlighting the uneven nature of the session.

Despite the near-term volatility, the broader market backdrop remains constructive. Early-year performance points to a pro-cyclical rotation, with small-cap shares and value styles outperforming large-cap and growth peers, suggesting investors are positioning for a broader earnings recovery beyond mega-cap technology. Falling bond yields also provided some support to risk assets, even as markets remained cautious ahead of key US labour-market data that could shape expectations for Federal Reserve policy in the months ahead.

Latest market and economic update

Asian equities mostly declined this morning, following Wall Street’s weaker close, with Japan, Hong Kong and mainland China under pressure as profit-taking set in. South Korea outperformed, with the KOSPI hitting a record high, driven by strong gains in Samsung Electronics and SK Hynix after upbeat semiconductor earnings forecasts.

U.S. equity index futures were little changed after hours, signalling a flat open as investors awaited key labour data. S&P 500 futures inched up, Nasdaq futures remained flat and Dow futures rose slightly. Defense shares surged 2–7% in after-hours trading following President Trump’s proposal of a $1.5 trillion 2027 defence budget, reversing earlier losses.

European equities closed marginally lower yesterday as markets paused after recent strong gains, with the STOXX 50 and STOXX 600 edging down from record highs. Banks led the declines, including ING, BBVA and Deutsche Boerse, while the defence sector outperformed amid rising geopolitical tensions, with Rheinmetall, Leonardo and Thales posting notable gains.

The US dollar held firm early morning, with the dollar index steady near 98.7, supported by resilient US data and expectations the Fed will keep rates unchanged. The dollar strengthened notably against the euro, which slipped to around 1.1678, pressured by signs of easing inflation and weaker economic momentum in the eurozone.

Oil prices rose modestly in Asia, retracing recent losses as traders weighed geopolitical risks and supply data. Brent climbed to about $60.24 a barrel and WTI to around $56.17, supported by a bigger-than-expected draw in US crude stocks and continued Russia–Ukraine tensions, but gains were capped by concerns that Venezuelan production increases could add to a looming oversupply.

The U.S. seized a Russian-flagged tanker carrying Venezuelan oil after a two-week Atlantic pursuit, marking a rare action against a Russian vessel. The operation, involving special forces and the Coast Guard, occurred near Iceland without confrontation. Separately, another Venezuela-linked tanker was intercepted, part of Washington’s ongoing effort to block Venezuelan oil exports.

U.S. job openings fell to a 14-month low in November, with hiring slowing amid trade policy uncertainty and AI adoption, while layoffs remained low. Small businesses saw mixed trends, with retail and construction hiring up. The labour market shows structural challenges, keeping the Federal Reserve likely to maintain interest rates in January.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Samsung Electronics forecast a fourth-quarter operating profit of 20 trillion won, well above expectations and more than triple last year’s 6.49 trillion won, driven by surging memory chip prices from AI demand. Sales are expected to rise to 93 trillion won, with the company highlighting strong AI-driven demand and a focus on high-margin memory chips.

Intel has revealed new laptops at Consumer Electronics Show featuring its Core Ultra Series 3 “Panther Lake” processors, made with its advanced 18A technology. These chips offer faster performance for AI, gaming, and longer battery life, and will be used in over 200 PC models. Intel will also bring the processors to handheld devices, industrial, and embedded applications.

JPMorgan Chase will replace Goldman Sachs as the issuer of the Apple Card, bringing over $20 billion in balances to its platform and strengthening its credit card franchise. The deal, subject to regulatory approval and expected to close in about two years, marks Goldman’s exit from consumer banking, with modest Q4 earnings impacts.

Shares of major landlords and asset managers fell after President Trump announced a ban on large corporations buying single-family homes to restore individual homeownership. The move hit institutional landlords while boosting mortgage lenders, as investors anticipated more opportunities for traditional buyers and a shift away from all-cash corporate purchases.

U.S. President Donald Trump said defence companies should not pay dividends or conduct share buybacks until they fix delays and maintenance issues in military equipment production. He criticised high executive pay and called for investment in new, modern factories, capping executive pay at $5 million until production improves.

Chevron is in talks with the US government to expand its licence to operate in Venezuela so it can boost crude exports to its own refineries and sell to other buyers, as Washington and Caracas push a deal to supply up to 50 million barrels of Venezuelan oil to the United States. The expanded licence would build on Chevron’s current sanction-exempt authorisation.

Arm has launched a new “Physical AI” division to expand into robotics, reorganising operations into Cloud and AI, Edge, and Physical AI, which includes automotive. Announced at the Consumer Electronics Show, the move supports CEO Rene Haas’s growth strategy as Arm seeks to capitalise on rising demand for robotics and advanced automation technologies.

Qualcomm is in talks with Samsung Electronics for contract manufacturing of two-nanometre chips, with design work already complete for near-term commercialisation. Samsung, among other foundries, is being considered. Its co-CEO said recent supply deals, including a $16.5 billion Tesla agreement, have positioned the loss-making foundry business for significant growth.

Eli Lilly will acquire autoimmune drug developer Ventyx Biosciences for $1.2 billion in cash, paying $14 per share. The deal expands Lilly’s pipeline beyond diabetes and weight-loss drugs, adding treatments for inflammatory bowel disease, immunity, cardiometabolic and neurodegenerative conditions. The acquisition is expected to close in the first half of 2026.

Thyssenkrupp is reportedly in talks with Jindal Steel over a phased takeover of its steel division. Discussions are ongoing, though details and timelines remain unclear. The deal would mark a significant strategic shift for the German industrial group, which has been restructuring its business portfolio in recent years.

Warner Bros Discovery rejected Paramount Skydance’s revised $108.4 billion hostile bid, citing heavy debt and high execution risk, and reaffirmed support for Netflix’s $82.7 billion offer. The board said Paramount’s proposal would create the largest leveraged buyout ever and threaten deal certainty, keeping Warner Bros on track with Netflix’s better-financed agreement.

Anthropic is in talks to raise $10 billion at a $350 billion valuation, nearly doubling its worth in four months. Led by GIC and Coatue, and supported by Microsoft and NVIDIA, the AI firm will purchase $30 billion in cloud compute. Focused on safety and reliability, it aims to break even by 2028, ahead of rivals, with a potential IPO in late 2026.

Wolfe Research downgraded Bank of America, JPMorgan, U.S. Bancorp, and M&T Bank to Peer Perform, citing stretched valuations and fewer catalysts after 2025 gains. The firm now favours capital markets, retail brokers, and alternative asset managers, with top 2026 picks Wells Fargo, Morgan Stanley, LPL Financial, Evercore, and Carlyle for earnings leverage and growth potential.

UBS raised Micron’s price target to $400 from $300 after positive investor meetings, highlighting DRAM’s growing strategic role in AI and severe supply shortages. EPS forecasts were lifted for 2026 and 2027, with management noting slow capacity expansion. UBS sees memory shifting from a commodity to a strategic asset, supporting a durable upcycle.

Jefferies recommends buying Uber, saying recent share weakness over autonomous vehicle (AV) competition is overblown. Waymo and Tesla’s AV expansion will have minimal impact on growth through 2027. Uber’s 160 million users and AV partnerships position it to benefit from the sector, while valuation has returned to last year’s lows.

Baird downgraded Deckers Outdoor and Crocs to Neutral after strong rallies reduced near-term upside, while highlighting Under Armour as a short-term bullish trade through May. Despite 2025 underperformance, the firm expects improving earnings momentum in 2026, with attractive valuations. On Holding, VF Corp, and Nike are preferred higher-beta opportunities for the year.

Bernstein raised its 2026 gold target to $4,180/oz, citing central bank buying, ETF inflows, and expected Fed rate cuts. Gold has shown unusual strength despite rising real rates, supported by safe-haven demand and currency concerns. While upside may be limited by slower central bank purchases, the firm maintains an Outperform rating on Barrick.

Upcoming data and events

Key U.S. economic releases on Thursday include December Challenger Job Cuts, preliminary Q3 Unit Labour Costs and Nonfarm Productivity, October trade data, weekly jobless claims, used car prices, wholesale inventories, EIA natural gas stocks, December consumer inflation expectations, Treasury bill auctions, mortgage rates, consumer credit, and the Fed balance sheet.

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