Wednesday, February 12, 2025

Market indexes fought back courageously today, after sinking an hour before the opening bell on hotter-than-expected Consumer Price Index (CPI) numbers. Although it demonstrates a stronger economy than most analysts had predicted we’d be in by this time, higher CPI is an inflationary metric — not good for interest rates nor the price of eggs coming down.

The Dow, which had been down more than -400 points to start the trading session, finished down -225 points. The S&P 500 closed -16 points, but the Nasdaq actually gained +6 points on the day. The small-cap Russell 2000 came in -19 points. Considering where we were to start the session, we’ll take it.

Fed Chair Powell Returns to Capitol Hill

Testimony continued for Fed Chair Jerome Powell today, appearing before the House Financial Services Committee after meeting with the Senate Banking Committee yesterday. Basically, he had the same message for lawmakers: the economy is solid, and the Fed doesn’t need to be in any rush to lower rates. Today’s higher CPI report bears Powell out, and even President Trump, who repeatedly pounds the table about lower interest rates, did not personally attack Powell after his appearance.

Earnings Reports After Today’s Close: CSCO, MGM, APP

Cisco Systems CSCO, which never misses on earnings, reported another beat in fiscal Q2 after Wednesday’s closing bell. Earnings of 94 cents per share outpaced the Zacks consensus by 3 cents per share, on $14.0 billion in quarterly revenues which improved on the projected $13.87 billion. Guidance for next quarter and the full fiscal year was very strong as well, pushing up estimates for both earnings and sales. Shares of CSCO are up more than +6% in the after-market.

Check out the updated Zacks Earnings Calendar here.

MGM Resorts International MGM is posting an even stronger +8.5% in gains following its Q4 results this afternoon: earnings of 45 cents per share easily swept past the 32 cents analysts were looking for, on revenues of $4.35 billion — ahead of the expected $4.28 billion. Vegas Strip and Regional Ops were flat for the quarter, but MGM China grew +28% year over year. Casino, Food & Beverage and Entertainment all gained in the quarter, while Rooms were down.

AppLovin APP continued its incredible run over the past year with a very strong report for its Q4 in the late market, with earnings of $1.73 per share versus $1.34 in the Zacks consensus on revenues of $1.37 billion, which surged ahead of $1.27 billion anticipated. It’s the seventh-straight earnings beat for the mobile tech growth company, and shares are up another +20% in the after-hours, adding to their outrageous +700% gains from this time last year.

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