Market Overview

The stock market experienced mixed trading throughout the session, with major indices fluctuating above and below their previous closing levels. This lack of clear direction was due to the absence of strong conviction from either buyers or sellers. However, a late surge in buying, particularly in mega-cap stocks, helped the S&P 500 and Nasdaq Composite close near their highs. Apple (AAPL) was a key beneficiary, recovering from a 0.9% decline to close up 0.3% at 233.22. The afternoon climb was not driven by any specific news but rather an ongoing tendency to buy on weakness, coupled with short-covering activity.

Market Breadth and Notable Movers

Despite the late buying surge, market breadth remained negative at the close. Decliners slightly outnumbered advancers at the NYSE, and the ratio was 11-to-10 at the Nasdaq. Significant price movements were largely seen in stocks that reported earnings.- Qualcomm (QCOM) fell 3.7% to 169.32, sparking selling interest in other semiconductor stocks. - Ford Motor (F, Financial) dropped 7.5% to 9.26, and Skyworks Solutions (SWKS) plummeted 24.7% to 65.60, both hitting new 52-week lows due to earnings results.On the positive side, several stocks reached new 52-week highs: - Tapestry (TPR) surged 12.0% to 82.20. - Ralph Lauren (RL) increased 9.7% to 273.14. - Phillip Morris (PM, Financial) climbed 11.0% to 145.32. - Hershey (HSY) rose 4.4% to 152.34.

Bond Market and Economic Data

The bond market saw the 10-year yield settle two basis points higher at 4.44%, while the 2-year yield increased by three basis points to 4.21%.

Year-to-Date Performance

- Dow Jones Industrial Average: +5.2% - S&P Midcap 400: +4.1% - Russell 2000: +3.5% - S&P 500: +3.4% - Nasdaq Composite: +2.5%

Economic Data Review

- Q4 Productivity-Preliminary: 1.2% (consensus 0.8%), with a prior revision to 2.3% from 2.2%. - Q4 Unit Labor Costs-Preliminary: 3.0% (consensus 2.6%), with a prior revision to 0.5% from 0.8%.The key takeaway is the rise in productivity, which may help alleviate inflation pressures. The current business cycle's annualized productivity growth rate of 1.8% exceeds the previous cycle's 1.5%.- Weekly Initial Claims: 219K (consensus 213K), with a prior revision to 208K from 207K. - Weekly Continuing Claims: 1.886 million, with a prior revision to 1.850 million from 1.858 million.The report indicates no significant increase in initial jobless claims, suggesting a stable labor market despite a slowdown in hiring activity.

Upcoming Economic Data

- 8:30 ET: January Nonfarm Payrolls (consensus 155,000; prior 256,000), Nonfarm Private Payrolls (consensus 163,000; prior 223,000), Average Hourly Earnings (consensus 0.3%; prior 0.3%), Unemployment Rate (consensus 4.1%; prior 4.1%), and Average Workweek (consensus 34.3; prior 34.3). - 10:00 ET: Preliminary February University of Michigan Consumer Sentiment (consensus 71.3; prior 71.1) and December Wholesale Inventories (consensus -0.5%; prior -0.2%). - 15:00 ET: December Consumer Credit (consensus $13.4 billion; prior -$7.5 billion).

International Markets and Commodities

- Europe: DAX +1.5%, FTSE +1.2%, CAC +1.5% - Asia: Nikkei +0.6%, Hang Seng +1.4%, Shanghai +1.3%

Commodities

- Crude Oil: -0.67 @ 70.44 - Natural Gas: +0.06 @ 3.41 - Gold: -17.10 @ 2876.70 - Silver: -0.28 @ 32.67 - Copper: +0.01 @ 4.45

AAPL,QCOM,F,SWKS,TPR,RL,PM,HSY

Today's News

Amazon (AMZN) reported impressive Q4 results, with GAAP EPS of $1.86 surpassing expectations by $0.38. The company's revenue reached $187.79 billion, marking a 10.5% year-over-year increase. Notably, the AWS segment saw a 19% growth in sales, contributing significantly to an operating income jump from $13.2 billion to $21.2 billion. The North America segment also showed robust performance with a 10% sales increase to $115.6 billion. Amazon's guidance for Q1 2025 projects net sales between $151.0 billion and $155.5 billion.

Honeywell International (HON, Financial) announced a major restructuring plan to separate its automation and aerospace businesses by 2026, creating three standalone companies. This strategic move aims to enhance operational independence and strategic focus. The company reported record backlog levels of $35.3 billion in Q4, with an 11% year-over-year increase. Honeywell's recent $17 billion deal with Bombardier highlights a significant growth opportunity in avionics and satellite communications.

Philip Morris International (PM, Financial) achieved record earnings in Q4 2024, with a notable 14% growth in adjusted diluted EPS to $1.55. The company's smoke-free product segment, including IQOS and ZYN, showed strong demand, particularly in Japan and Europe, despite regulatory challenges. Smoke-free products now account for 40% of PMI's total net revenues, underscoring the company's transformation journey.

Ford Motors (F, Financial) faced a challenging trading session due to its conservative FY2 outlook, which highlighted ongoing losses in its EV unit. Despite strong commercial and hybrid sales, the company is grappling with tariffs on Mexico and Canada, which could impact profitability. Ford's focus on expanding its EV segment continues to be a point of concern amid competitive pressures.

e.l.f. Beauty (ELF, Financial) saw a significant drop in shares, down 17.52%, after revising its fiscal 2025 outlook due to softer January trends. While the company reported a 31.1% year-over-year revenue increase, it lowered its net sales growth expectations to 27-28%, down from a previous 28-30% forecast. This cautious approach reflects the company's response to changing market conditions.

Macom Technology (MTSI, Financial) reported a strong fiscal first quarter, with revenue rising 38.8% year-over-year to $218.1 million. The company's adjusted EPS also increased by 36.2% to $0.79, surpassing analyst expectations. Macom's positive outlook for the second quarter, with projected revenue between $227M and $233M, further underscores its growth trajectory.

Affirm (AFRM, Financial) posted a significant earnings beat for FQ2, with GAAP EPS of $0.23 exceeding expectations by $0.40. Revenue surged 46.6% year-over-year to $866.38 million. The company's financial outlook for the fiscal year remains strong, with projected revenue between $3.13 billion and $3.19 billion, indicating continued momentum in its business operations.

CloudFlare (NET, Financial) delivered solid Q4 results, with a 26.9% year-over-year revenue increase to $459.9 million. The company's strong fundamentals justify its premium valuation, as it continues to show early signs of reacceleration in its growth metrics. CloudFlare's focus on expanding its product offerings remains a key driver of its market position.

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