The S&P 500 was poised for a muted open on Thursday following its best gain since the election. The 10-year Treasury yield inched higher after a decline on Wednesday, which was attributed to a cooler-than-expected consumer inflation report. In the latest economic data, December retail sales increased by 0.4% month over month, lower than the consensus estimate of 0.6%.
Strong earnings reported by major companies
Taiwan Semiconductor Manufacturing Co. (TSMC) exceeded fourth-quarter estimates, driven by robust demand for artificial intelligence chips. TSMC provided positive sales and capex guidance for the first quarter, which signals potential strength for the chip sector. This performance positively influenced Nvidia’s stock, which rose after breaking a five-session losing streak.
Bank of America reported a solid fourth quarter, achieving revenue of $25.5 billion, surpassing the expected $25.19 billion, and earnings per share (EPS) of 82 cents, exceeding the anticipated 77 cents. The bank’s net interest income (NII) also beat estimates, with investment banking fees rising 44%. BofA projected a year-over-year NII growth of 6% to 7% for 2025 while anticipating a non-interest expense increase of 2% to 3%.
Morgan Stanley continued the trend of strong bank earnings, with reported revenue of $16.22 billion, higher than the expected $15.03 billion, and EPS of $2.22, significantly above the projected $1.70. The firm also saw wealth management revenue exceed expectations with improved margins, in addition to strong performance in trading revenues and NII.
UnitedHealthcare, part of the Dow, reported a mixed quarter, with adjusted EPS surpassing analysts’ expectations by 10 cents, although sales fell short. The company noted a high medical loss ratio and reaffirmed its outlook for 2025.
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DuPont accelerated its timeline for spinning off its electronics business, now targeting November 1 for the separation into a public company. This segment includes semiconductor technologies. However, the original plan to separate into three entities has been revised to two, maintaining the water business under DuPont. The company reiterated its guidance for the fourth quarter and full year.
Advanced Micro Devices (AMD) received another downgrade, this time from Wolfe Research, which moved its rating to a hold-equivalent due to lower-than-expected revenue forecasts for data center graphics processing units (GPUs) this year. Wolfe now anticipates $7 billion in data center GPU sales, revised down from more than $10 billion.
Target reported a total sales increase of 2.8% for November and December combined, along with a 2% rise on a comparable basis. However, the retailer maintained its fourth quarter EPS guidance range of $1.85 to $2.45, leading to a decline in shares of more than 3%.
JPMorgan added Ollie’s Bargain Outlet to its analyst focus list following the stock’s recent decline, emphasizing the ongoing popularity of value-priced goods.
United Parcel Service (UPS) was upgraded to a buy rating at Bank of America, driven by expectations regarding the potential end of the freight recession in 2025.
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