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General market commentary
U.S. equity markets closed higher on Wednesday, driven by a rally in technology shares. The S&P 500 gained 0.6%, while the Nasdaq rose nearly 1.3%. Netflix shares surged over 9.5% after reporting record subscriber growth in the fourth quarter and announcing price increases in several markets, including the U.S. and Canada. Oracle shares jumped 7% following President Donald Trump’s announcement of a $500 billion private-sector investment in AI infrastructure, involving Oracle, OpenAI, and SoftBank. The Dow advanced 0.3%, while the S&P 500 reached a new intraday high, buoyed by strong tech earnings.
Procter & Gamble shares climbed nearly 2% after exceeding second-quarter expectations for sales and profit, while Johnson & Johnson slipped 2% despite better-than-expected quarterly results. Halliburton fell 3.5%, citing expectations of flat or slightly lower revenues due to weaker activity in North America and Mexico. Investors remained watchful of trade and inflation concerns after President Trump signaled potential tariffs on imports from China, Mexico, Canada, and the EU starting February 1. Meanwhile, bond yields rose, with the 10-year U.S. Treasury yield reaching 4.6%.
Latest market and economic update
Most Asian equity markets rose on Thursday, with Japan's Nikkei 225 and China's CSI 300 gaining on optimism around a potential Bank of Japan rate hike and fresh government support for Chinese shares. However, South Korea's KOSPI lagged, dropping 0.9% on weak GDP data and profit-taking in technology shares.
U.S. equity futures were steady on Thursday, signaling a flat market open as investors awaited fresh earnings reports and initial jobless claims data.
European equities closed higher on Wednesday, with the STOXX 600 rising 0.4%, driven by strong performances in the technology and industrial sectors, notably Adidas, Siemens Energy, and Munich Re. Despite concerns over potential new tariffs from President Trump, European markets remained resilient, boosted by solid corporate earnings and expectations of further interest rate cuts from the European Central Bank.
The US dollar index held steady around 108.2 on Thursday as investors awaited clarity on President Trump's policy plans and next week's Federal Reserve meeting. The euro remained stable against the dollar, with EUR/USD trading at 1.0412.
Oil prices edged lower as traders anticipated higher U.S. production under President Trump, whose energy policies include ramping up output and rolling back climate curbs to counter inflation. While cold weather and sanctions on Russia provided some support, concerns over U.S. inventory builds and weaker demand from China added pressure.
The China Securities Regulatory Commission announced measures to bolster struggling equity markets, including encouraging insurers to channel CNY 100 billion into A-shares during H1 2025 and allocating 30% of annual new premiums to equities. Additional steps include urging mutual funds to grow their A-share holdings by 10% annually and expanding pension investments in listed companies.
Equities on the move
The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:
Samsung unveiled its Galaxy S25 series, featuring Google’s AI-powered Gemini engine and upgraded Bixby assistant, aiming to revitalise sales amid stiff competition from Apple and Chinese rivals. Despite keeping prices unchanged, Samsung faces challenges differentiating its AI features and boosting its chip business, as it opted for Qualcomm’s processors over its in-house Exynos for the new models.
Procter & Gamble exceeded quarterly sales and profit estimates, driven by increased demand for products like dish soaps and toilet paper in the US, while its China market showed signs of recovery. Despite a flat pricing environment, the company plans to offset potential tariff impacts through productivity improvements and supply chain adjustments, with new product launches expected to drive future growth.
Johnson & Johnson exceeded quarterly expectations with a 19% rise in global cancer drug sales, led by Darzalex, despite challenges from Stelara biosimilars and significant currency headwinds. The company forecasts up to $91.7 billion in 2025 sales, driven by innovative product launches and strategic acquisitions.
GE Vernova's fourth-quarter results missed analyst expectations, reporting earnings per share of $1.73, below the $2.37 consensus, and revenue of $10.56 billion, slightly under the projected $10.7 billion. Despite this, the company anticipates 2025 revenue between $36 billion and $37 billion, with adjusted free cash flow expected to range from $2 billion to $2.5 billion.
Electronic Arts' shares dropped over 11% in afterhours trading on Wednesday after the company revised its Q3 and full-year bookings guidance downward, citing weaker-than-expected demand for EA Sports FC and Dragon Age. The revised net bookings for Q3 are now projected at $2.22 billion, and the full-year forecast has been reduced to between $7 billion and $7.15 billion.
Siemens Energy shares rose nearly 10% on Wednesday after the company’s supervisory board chair, Joe Kaeser, highlighted the potential benefits from President Trump’s $500 billion investment plan in AI infrastructure. Kaeser noted that the surge in demand for energy solutions, particularly for data centres powering AI, places Siemens Energy in a prime position to capitalise on the next decade of growth in the U.S. market
Puma reported a 2024 net profit of €282 million, down from €305 million in 2023, missing expectations due to higher interest payments and non-controlling interests. The company announced a cost-cutting programme aimed at improving profitability, targeting an EBIT margin of 8.5% by 2027, while its fourth-quarter sales grew by 9.8% in currency-adjusted terms.
Schaeffler AG's shares dropped sharply after the company warned its full-year income margin would fall below guidance, with the 2024 margin expected to be 4.5%, down from 7.3% in 2023. The warning was attributed to weak performance in its bearings and industrial solutions unit, as well as sluggishness at its Vitesco Technologies division.
Analysts have upgraded Netflix's shares following its strong Q4 performance, with Rosenblatt Securities raising their rating to "buy" and setting a price target of $1,494. Canaccord Genuity upgraded their rating to "buy" from "hold," with a price target of $1,150, while Barclays improved their rating to "equal weight" and set a target of $900, citing robust subscriber growth and a promising content slate for 2025.
Barclays expressed caution over Apple, citing weaker iPhone SE4 sales, AI adoption challenges, and risks from competition in China, leading to a reduced price target. In contrast, Wedbush remained optimistic, viewing the recent sell-off as a buying opportunity and highlighting Apple’s strong services revenue and AI-driven growth potential.
TD Cowen remains positive on LVMH’s long-term growth prospects, raising its price target to €800 from €700, citing the company’s strong brand execution, significant marketing budget, and diversification. Despite short-term challenges, particularly in its Fashion & Leather Goods segment, analysts expect a recovery in 2025 driven by innovation, cultural relevance, and growth in key brands like Tiffany & Co.
Morgan Stanley maintains an "Equal Weight" rating on ASML with a €680 price target, noting that investor sentiment is split between optimism and caution. The bank expects Q4 results to align with ASML’s 2025 revenue guidance but cautions that uncertainty around growth prospects for 2026 could keep the share price range-bound until clearer catalysts emerge
Jefferies has raised its price target for Airbus to €190, driven by strong aircraft sales and favourable currency exchange rates, while increasing Rolls-Royce’s target by 23% to 800p due to positive momentum and improving market sentiment. Despite the positive outlook for both companies, the brokerage remains cautious about defence equities amid geopolitical uncertainties and budget concerns in the UK and US.
Barclays downgraded STMicroelectronics to “underweight” due to concerns about its significant exposure to the Chinese market, escalating trade restrictions, and challenges related to semiconductor self-sufficiency in China. The bank also highlighted weak demand in the automotive and industrial sectors, as well as issues with high channel inventory and limited traction in AI server power applications, prompting a revision of the price target to €20.
Roth MKM downgraded Reddit’s rating to Neutral from Buy, raising the price target to $195 due to a more balanced risk-reward outlook at current valuations. Despite strong recent performance, the firm anticipates decelerating revenue growth and margin pressures, though it highlights potential growth drivers such as new ad formats and AI-related deals.
Standard Chartered forecasts Bitcoin reaching $200,000 and Ethereum $10,000 by 2025, advising clients to buy the dip despite short-term challenges, while BlackRock CEO Larry Fink predicts Bitcoin could rise to $700,000 if adoption increases. Fink highlighted Bitcoin’s potential as a hedge against currency debasement and political instability, with BlackRock suggesting a 2% portfolio allocation due to its role as a store of value and payment system.
Upcoming data and events
Key economic releases today include the Consumer Confidence index in Europe and Initial Jobless Claims in the US, alongside various bond auctions in Germany and France. On the earnings front, notable reports are expected from Alcoa Corporation, Intuitive Surgical and General Electric, with around 157 companies scheduled to announce their results across both the US and Europe.
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