Morning Preview: January 21, 2025

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Early Look

Tuesday, January 21, 2025

Futures

Up/Down

%

Last

Dow

167.00

0.38%

43,862

S&P 500

21.25

0.35%

6,054

Nasdaq

91.00

0.42%

21,685

 

 

U.S. futures look to add to last week’s gains as President Trump takes office as 47th President of the United States and announces roughly 200 executive orders in his first day. Treasuries rallied as fears that Donald Trump’s policies will fuel inflation eased, after the US president refrained from imposing China-specific tariffs for now. Trump did make clear that historic new duties are coming saying, “we are thinking in terms of 25% on Mexico and Canada,” while signing a slew of executive orders in the Oval Office and added that they could happen soon. Donald J. Trump gave his inaugural address yesterday afternoon heralding “a golden age begins right now”. Trump overall kept a very serious tone covering the border, global developments, and the natural disasters that have plagued the country in the last few months and was firm that things will change starting today and quickly.

 

For last week, the Dow was up +3.69%, S&P 500 rose +2.91%, and the Nasdaq gained +2.45%. The Dow, S&P 500 posted their biggest weekly % gains since 1st week November and Nasdaq its biggest weekly % gain since 1st week December. Just how strong was the rally this week? @Jason Goepfert tweeted Friday “A week for the history books. The S&P 500 just strung together 5 straight days with more than 68% of its stocks advancing. That ties the record going back to 1928.” Bitcoin rose above $109,000 this weekend but has since pared gains back to around $104,000. In Asian markets, The Nikkei Index rose 125 points to 39,027, the Shanghai Index fell -1 point to 3,242, and the Hang Seng Index jumped 180 points to 20,106. In Europe, the German DAX is down -26 points to 20,963, while the FTSE 100 is flat at 8,520. Markets get ready for quarterly earnings to pick up this week with results expected from, DHI, KEY, MMM, NFLX, UAL, HAL, JNJ, KMI, PG, CSX, GE, TXN, AXP, LVS, VZ, among others.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 59.32 points, or 1.00%, to 5,996.66.
  • The Dow Jones Industrial Average rose 334.70 points, or 0.78%, to 43,487.83.
  • The Nasdaq Composite gained 58.74 points, or 0.30%, to 19,607.37.
  • The Russell 2000 Index advanced 9.09 points, or 0.40% to 2,275.88.

Economic Calendar for Today

  • 7:45 AM ET ICSC Weekly Retail Sales

Earnings Calendar:

  • Earnings Before the Open: CBU DHI FBK FITB FOR GNTY KEY MBWM MMM ONB PEBO PLD SCHW
  • Earnings After the Close: AGYS CASH COF FULT GSBC HWC IBKR NFLX PFNP PRGS RBB SFNC SMBK STX TRST UAL WTFC ZION

Other Key Events:

  • Barclays Global Macro and Inflation Conference, 1/20-1/22 in Miami, Fl
  • Barclays World Economic Forum, 1/20-1/24, in Switzerland
  • Goldman Sachs Global Strategy Conference 2025, 1/20-1/23 in London, Paris, Zurich
  • World Economic Forum (WEF) Annual Meeting 2025, 1/20-1/24, in Davos Switzerland

 

 

Macro

Up/Down

Last

Nymex

-1.97

75.91

Brent

-1.37

78.80

Gold

-16.6

2,732.10

EUR/USD

-0.0067

1.0347

JPY/USD

0.36

155.95

10-Year Note

-0.025

4.585%

 

World News

  • The European Central Bank (ECB) likely has room to continue lowering borrowing costs as inflation converges toward 2%, but must proceed carefully, Executive Board member Isabel Schnabel said this weekend.
  • Vivek Ramaswamy, who was tapped alongside Tesla CEO Elon Musk to run Trump’s “Department of Government Efficiency” is stepping down to run for governor of Ohio instead.
  • President Biden issued pre-emptive pardons for members of his family, including his three siblings, as well as pardons for retired Gen. Mark Milley, Dr. Anthony Fauci and members and staff of the House committee that investigated the Jan. 6, 2021, Capitol riot, as well as police officers who testified before the committee.

Sector News Breakdown

Consumer

  • Canoo (GOEV) said it filed for bankruptcy under Chapter 7 and will be liquidating its assets.
  • D.R. Horton (DHI) Q1 EPS $2.61 vs. est. $2.37; Q1 revs $7.6B vs. est. $7.08B; Q1 cancellation rate (cancelled sales orders divided by gross sales orders) for the first quarter of fiscal 2025 was 18% compared to 19% in the prior year quarter. The Company’s sales order backlog of homes under contract at December 31, 2024 decreased 21% to 11,003 homes and 21% in value to $4.3 billion compared to 13,965 homes and $5.4 billion at December 31, 2023.
  • Internation Game Technology (IGT) wins 10-year contract with Loterie Nationale to deliver world-class lottery and iLottery solutions in Luxembourg.
  • Walgreens (WBA) shares fell 10% after the US Justice Department sued the company for allegedly dispensing millions of unlawful prescriptions in violation of the Controlled Substances Act and then seeking reimbursement.
  • Smithfield Foods, Inc. (SFD) announced that the Company has commenced the roadshow for an underwritten initial public offering of 34,800,000 shares of its common stock. The initial public offering price is expected to be between $23.00 and $27.00 per share. The offering consists of 17,400,000 shares of common stock to be sold by the Company and 17,400,000 shares of common stock to be sold by the Company’s existing shareholder.

Energy, Industrials and Materials

  • Orsted (DOGEF) shares fell after announcing a 12.1 billion Danish kroner ($1.7 billion) write-down that the Danish wind power company said didn’t include the impact of an executive order signed by President Donald Trump. Orsted took a 4.3 billion kroner write-down from the rise in long-dated U.S. interest rates, a 3.5 billion kroner hit from the reduced valuation of its seabed leases off the coasts of New Jersey, Maryland and Delaware, and a 4.3 billion kroner impairment on delayed commissioning and higher-than-expected project costs for Sunrise Win.
  • Oil prices fall after President Donald Trump reiterated his plan to enact tariffs on Mexico and Canada, reigniting trade-war fears even as he held off from pledging levies on China. President Donald Trump also launched a sweeping overhaul of US energy policy hours after taking office on Monday.
  • UK power price hits two-year high as wind generation plummets; wind output is forecast to drop to lowest since September 2023; The government plans to rely more on wind for clean power.
  • 3M (MMM) guides FY adj EPS from continuing operations $7.60 to $7.90, vs. est. $7.79, guides FY adj total sales +0.5% to +1.5% and guides FY adj organic sales +2% to +3%.

Financials

  • Fifth Third (FITB) Q4 EPS $0.85 vs. est. $0.88; Q4 tangible book value per share $18.69 from $20.20 at previous quarter end; Q4 Net Interest Margin $2.97 from $2.90 at Q3.
  • KeyCorp (KEY) Q4 adjusted EPS $0.38 vs. est. $0.32; Q4 book value per share $14.21; on an adjusted basis, revenues were up 16% y/y and 11% sequentially. Net interest income was up 10% quarter-over-quarter and adjusted fees were up meaningfully versus comparable periods.
  • Prison Operators GEO Group (GEO) and CoreCivic (CXW) rise in premarket trading after President Donald Trump signed orders declaring illegal immigration at the U.S.-Mexico border a national emergency and targeting automatic citizenship for U.S.-born children of immigrants in the country illegally.
  • Deutsche Bank downgraded shares of single family for rent REITs and upgrading manufactured housing, and remaining selective in multifamily; AMH, INVH both downgraded from buy to hold and ELS, ESS upgraded to Buy.

Healthcare

  • CVS Health Corp. (CVS) and Cigna Group (CI) were sued by the FTC for failing to turn over documents requested by the antitrust and consumer protection agency about their role as drug middlemen.
  • Moderna (MRNA) was awarded an additional $590 million from the US government to accelerate development of pandemic influenza vaccines as health officials struggle to contain a dangerous strain of bird flu in dairy farms.

Technology, Media & Telecom

  • Apple (AAPL) downgraded to Underperform from Hold at Jefferies and lower forecasts driven by weak iPhone sales and the general CE market and reduced outlook for iPhone 17/18 due to slower AI uptake and commercialization. We expect AAPL to miss its rev growth guidance of 5% for 1QFY25 and guide to only LSD rev growth in 2QFY25, also below consensus; AI outlook is subdued and our industry checks suggesting its advanced. Apple was also downgraded to Hold from Buy at Loop Capital.
  • TikTok re-opened on Sunday after the US administration had allowed the blackout on Saturday night, as well as Trump expressing an interest to visit China within his for first 100 days.
  • California Representative Nancy Pelosi has disclosed new stock trades, which included seven investments involving artificial intelligence equities, on the Inauguration day of President-elect Donald Trump. According to recent filings shared on January 20, Pelosi made a total of nine trades, with the majority focused on AI-related stocks. The acquisitions include Nvidia Corporation (NVDA), Tempus AI, Inc. (TEM), Amazon (AMZN) and Alphabet Inc. (GOOGL). Additional trades involved Palo Alto Networks, Inc. (PANW) and a sale of Apple Inc. (AAPL) shares https://tinyurl.com/52b4cps8
  • U.S.-listed shares of Chinese companies rise overnight (BABA, BIDU, NTES, PDD, TME) as President Donald Trump holds off on China tariffs; Trump had threatened a 60% tariff on Chinese goods during his campaigns. Trump signs executive order to delay enforcement of ban on popular short-video app TikTok by 75 days but says he might impose tariffs on China if Beijing does not approve potential U.S. deal with TikTok.
  • Redwire Corp. (RDW) said it has signed a definitive agreement to acquire Edge Autonomy for $925M on a debt free, cash free basis.
  • Belgium has started a criminal probe into allegations Apple (AAPL) knowingly sourced “blood minerals” from the Democratic Republic of Congo, DRC, in what lawyers for the country have called a “massive laundering and greenwashing operation – Financial Times reports.
  • Seagate (STX) moved to top pick at Morgan Stanley; replaces Apple (AAPL).

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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