Market Performance Overview

The stock market showed a positive trend, although index performance was mixed due to declines in major stocks. The Nasdaq Composite ended 0.2% higher after fluctuating around the unchanged mark for most of the session. The S&P 500 gained 0.4%, and the Dow Jones Industrial Average rose 0.7%.

Notable Stock Movements

• Alphabet (GOOG, Financial): Shares fell 6.9% to $193.30 after earnings results failed to meet investor expectations, compounded by a $75 billion capital expenditure plan for 2025. This decline followed a recent peak of over $204 just five days earlier.
• Apple (AAPL, Financial): A Bloomberg report about a potential Chinese probe into its App Store fees and policies led to a 0.1% decline to $232.47. Despite initially trading down as much as 1.9%, shares recovered significantly.
• Walt Disney (DIS, Financial): The stock dropped 2.4% to $110.54 after reporting a decrease in Disney+ subscribers.

Market Breadth and Sector Performance

Despite challenges, market breadth was positive, with advancers outnumbering decliners by nearly a 2-to-1 ratio on both the NYSE and the Nasdaq. The equal-weighted S&P 500 increased by 0.5%, and eight out of the 11 S&P 500 sectors closed higher.

Interest Rates and Economic Data

The decline in market rates supported an upward bias in equities. The 10-year yield decreased by nine basis points to 4.42%, and the 2-year yield dropped by four basis points to 4.18%. The bond market rally was driven by weaker-than-expected Services PMI readings for January from China, Europe, and the U.S., raising growth concerns.

Treasury Market and Geopolitical Factors

The bond market rally persisted despite the U.S. Treasury's announcement to increase this month's 10-, 20-, and 30-year auction sizes by $3 billion each. Buying in the Treasury market was also fueled by geopolitical uncertainty after President Trump's comments about the U.S. taking over the Gaza Strip during a press conference with Israeli Prime Minister Netanyahu. However, economic data seemed more impactful than geopolitical worries, as oil prices remained stable. WTI crude oil futures settled below the 50-day moving average at $71.11 per barrel, the lowest level this year.

Year-to-Date Index Performance

• Dow Jones Industrial Average: +5.5% YTD
• S&P Midcap 400: +4.1% YTD
• Russell 2000: +3.9% YTD
• S&P 500: +3.1% YTD
• Nasdaq Composite: +2.0% YTD

Economic Data Review

• The December Trade Balance Report showed a widening deficit to $98.4 billion from a downwardly revised $78.9 billion in November. December exports were $7.1 billion less than November, while imports increased by $12.4 billion.
• The January S&P Global US Services PMI was finalized at 52.9, slightly up from 52.8 prior. The ISM Services PMI decreased to 52.8% in January from a revised 54.0% in December, indicating slower expansion in the services sector.

Upcoming Economic Data

Market participants will receive the following data on Thursday:

• 8:30 ET: Preliminary Q4 Productivity and Unit Labor Costs, Weekly Initial Claims, and Continuing Claims
• 10:30 ET: Weekly natural gas inventories

Global Markets and Commodities

• Europe: DAX +0.2%, FTSE +0.6%, CAC -0.2%
• Asia: Nikkei +0.1%, Hang Seng -0.9%, Shanghai -0.6%
• Commodities: Crude Oil -1.65 @ 71.11, Nat Gas +0.10 @ 3.35, Gold +18.90 @ 2893.80, Silver -0.09 @ 32.95, Copper +0.07 @ 4.44

GOOG,AAPL,DIS

Guru Stock Picks

Ken Fisher has made the following transactions:

• Reduce in SITC by 7.81%
• Sold out in IYT
• Add in SONY by 5.18%
• New position in MSTR

Today's News

MicroStrategy (MSTR) reported a Q4 Non-GAAP EPS of -$3.20, with revenue of $120.7M missing expectations by $2.03M. Despite a 48.4% increase in subscription services revenues, product support and other services revenues declined by 10.8% and 20.8% respectively. The company revised its annual BTC Yield target to a minimum of 15% for 2025 and announced new KPIs aimed at achieving a $10 billion "BTC $ Gain" target.

Uber Technologies (UBER, Financial) shares dropped significantly due to disappointing FY25 outlook and currency risks, particularly in Argentina, Mexico, and Brazil. Despite strong fundamentals and growth, the company acknowledged that top-line results would be impacted by currency fluctuations, although a natural hedge exists as drivers and merchants are paid in local currencies.

Ford (F, Financial) posted a Q4 Non-GAAP EPS of $0.39, surpassing expectations, with revenue of $48.2B. The company anticipates adjusted EBIT between $7.0 billion and $8.5 billion for the full year, despite potential market headwinds. Ford's shares fell by 4% following the announcement.

Alphabet (GOOG, Financial) saw a 7% decline, impacting the Nasdaq, as the company faced investor scrutiny over its performance. The Information Technology sector, however, gained strength, offsetting the decline in Communications Services, which includes Alphabet.

The Walt Disney Company (DIS, Financial) reported strong Q1 2025 performance, driven by box office success and increased streaming profitability. CEO Bob Iger highlighted technological advancements for Disney+ and ESPN's streaming integration, while maintaining a positive outlook for the Experiences segment.

Qualcomm (QCOM, Financial) exceeded expectations with a Q1 Non-GAAP EPS of $3.41 and revenue of $11.67B, driven by a 20% increase in QCT revenue. The company provided Q2 guidance with revenue expected between $10.2B and $11.0B, maintaining a strong growth trajectory.

Ares Capital Corporation (ARCC, Financial) announced leadership changes with Kort Schnabel taking over as CEO. The company reported a record NAV per share of $19.89, marking the eighth consecutive quarter of NAV growth, and a GAAP net income of $0.55 per share for Q4 2024.

Arm Holdings (ARM, Financial) reported a Q3 Non-GAAP EPS of $0.39, surpassing expectations, with a 19.3% revenue increase. However, shares fell by 2.89% amidst ongoing market volatility.

Blue Bird (BLBD, Financial) delivered a Q1 Non-GAAP EPS of $0.92, exceeding expectations, with revenue slightly down year-over-year but still beating forecasts by $5.69M.

BigBear.ai (BBAI, Financial) secured a contract from the Department of Defense to advance its Virtual Anticipation Network prototype, aiming to enhance media assessments related to national security.

Google (GOOG, Financial) announced it would no longer set hiring targets for workforce representation, citing a shift in its diversity, equity, and inclusion strategies.

Canadian cannabis stocks, including Canopy Growth (CGC, Financial) and Tilray Brands (TLRY, Financial), surged following Aurora Cannabis's (ACB) better-than-expected Q3 fiscal 2025 revenue, marking significant gains across the sector.

Omega Healthcare Investors (OHI) reported a Q4 FFO of $0.74, beating estimates, with a 16.7% revenue increase, and provided a positive outlook for 2025.

Johnson Controls (JCI) saw a 15% increase in stock price after reporting strong Q1 earnings and appointing a new CEO, Joakim Weidemanis, forecasting further growth in 2025.

Coherent (COHR) reported a robust FQ2 Non-GAAP EPS of $0.95, with a 27.4% increase in revenue, and provided an optimistic outlook for the third quarter of fiscal 2025.

Fiserv (FI) achieved a 15% increase in adjusted EPS for Q4 2024, driven by strong organic revenue growth and strategic global expansions, while introducing new products like CashFlow Central.

Rexford Industrial Realty (REXR) reported Q4 FFO in line with expectations, with a 15.4% revenue increase, and issued guidance for 2025, maintaining steady growth.

GeneDX (WGS) faced a 4% decline following a short report, though analysts defended the company, suggesting the report lacked understanding and presented a buying opportunity.

Digital Turbine (APPS) reported a FQ3 Non-GAAP EPS of $0.13, with shares soaring by 31.76% following a revenue beat and raised annual guidance.

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