ADDX GO Market Morning Wrap - 5th Feb

Stock Market

Key Events

• After hours, $AMD  reported Q4 revenue of $7.66 billion, exceeding forecasts of $7.53 billion and showing improved YoY growth. Q1 revenue is projected between $6.8 billion and $7.4 billion, with a midpoint of $7.1 billion—above the $7.04 billion estimate. Initially, AMD's stock jumped over 5% but quickly reversed, dropping over 10% as investors processed the report. As of the latest update, shares were down nearly 9%, with record data center revenue still missing market expectations.
• Alphabet $GOOGL  saw Q4 revenue grow 12% YoY, its slowest pace in over a year. Google Cloud revenue rose 30%, beating expectations but slowing. Digital ad and search revenues increased 11% and 13%, respectively, exceeding forecasts. However, capital expenditures surged 30% YoY, 8% above estimates. Alphabet plans $75 billion in spending this year, 30% higher than projected. Shares fell over 9% after hours.
• $SNAP , the parent company of Snapchat, exceeded Q4 revenue expectations and provided an optimistic outlook for the current quarter, suggesting that its advertising business turnaround is gaining traction. Shares initially soared more than 13% after hours before settling at a gain of over 5%.
• General Motors $GM announced that its autonomous vehicle subsidiary, Cruise, will cut approximately 50% of its workforce. The move follows the company’s decision to halt its robotaxi services and shift operational resources toward broader business objectives. The layoffs also extend to senior executives.
• Former New York Fed President Bill Dudley expressed deeper concerns over the impact of Trump’s trade policies than he initially expected. Dudley had predicted Trump would significantly raise tariffs, increasing the overall rate from 3% to 10%. However, the recent announcement of 25% tariffs on Canada and Mexico and 10% on China has exceeded his expectations. Trump has indicated he is prepared to escalate measures if retaliatory actions are taken, with Europe likely the next target.
• China’s State Council Tariff Commission announced that starting February 10, 2025, it will impose additional tariffs of 10% or 15% on certain U.S. imports in response to U.S. trade policies.
• U.S. President Donald Trump stated that his administration is in discussions with Congress and teachers’ unions regarding education reforms. The Trump administration is reportedly considering signing an executive order this month to dismantle the Department of Education, a move aligned with Elon Musk and his allies' broader push to reduce federal agencies and cut government staff.
• Goldman Sachs noted the rise of DeepSeek, signaling a shift in AI from hardware to software. This trend challenges U.S. dominance and creates opportunities for global markets, particularly Chinese tech stocks. The firm recommends overweighting Chinese AI-focused tech companies, as A-shares increase investments in AI software.

Forex

Key Events

• U.S. December JOLTS job openings fell to 7.6 million, a three-month low and the second-lowest level since the pandemic. The figure significantly missed expectations of 8 million, signaling economic softening. The weak data weighed on Treasury yields and the dollar, while pushing gold to new highs.
• Morgan Stanley no longer expects the Federal Reserve to cut rates in March, now forecasting a June rate cut. The bank cited Trump’s faster-than-expected tariff hikes, which could stall disinflationary progress.

Cryptocurrency

Key Events

• The New York Times reported that the SEC is scaling back its enforcement efforts in the cryptocurrency sector.
• White House crypto policy chief SACKS stated that the administration is exploring the feasibility of Bitcoin reserves as part of its financial strategy.