Good Morning!
On Wednesday, February 12, the S&P 500 closed at 6,051.97, up 0.44% from the previous trading session. The NASDAQ was up 1.08%, finishing at 19,649.95. The Dow Jones Industrial Average was flat closing at 44,368.56. Meanwhile, the Russell 2000 was up 0.24, ending the session at 2,255.89.
Crypto Highlights
Bitcoin (BTC): Currently trading at $96,025, up 0.62% over the past 24 hours.
Ethereum (ETH): Up 2.12%, now trading at $2,643 per coin.
Solana (SOL): Down 0.57%, currently trading at $191.29.
Ripple (XRP): Up 2.12% in the last 24 hours, now trading at $2.44 per coin.
Headlines
Trump Begins ‘Immediate’ Talks With Putin on Ukraine, Sparking Fears in Kyiv and Europe
President Donald Trump has initiated direct negotiations with Russian President Vladimir Putin over the war in Ukraine, alarming Kyiv and its European allies. The February 12th phone call between the two leaders took place without prior coordination with Ukraine, raising concerns that the U.S. may shift its stance on the conflict. Trump later stated that talks to end the war would begin "immediately" and hinted at a possible in-person meeting with Putin in Saudi Arabia.
10-Year Treasury Yield Falls Despite Hot Inflation Data
U.S. Treasury yields declined on Thursday, even after another inflation report showed higher-than-expected price pressures. The 10-year Treasury yield fell 8 basis points to 4.554%, while the 2-year Treasury yield dropped 4 basis points to 4.321%. This pullback comes despite a hotter-than-anticipated Producer Price Index (PPI) report, which showed a 0.4% increase in January, above the 0.3% forecast. However, some investors viewed the report as mixed, with signs of price easing in key components, such as a slowdown in the personal consumption segment.
The bond market had reacted sharply on Wednesday to the Consumer Price Index (CPI) report, which showed inflation at 3% year-over-year, higher than expected. However, traders now appear to be reassessing the inflation outlook, focusing on underlying data that suggests some moderation. Federal Reserve Chair Jerome Powell reiterated in his testimony before Congress that while inflation has improved, it has not yet reached the Fed’s 2% target.
Producer Prices Rise More Than Expected, but Inflation Outlook Softens
The producer price index (PPI) rose 0.4% in January, surpassing the 0.3% forecast, but underlying details of the report suggest inflationary pressures may be easing. Excluding food and energy, core PPI increased by 0.3%, in line with expectations. Notably, healthcare costs declined, with physician care dropping 0.5%, while domestic airfares and brokerage services also saw price decreases. Despite the headline increase, Wall Street interpreted the report as showing a more benign inflation outlook, pushing stock futures higher and Treasury yields lower.
The Federal Reserve, which prioritizes the personal consumption expenditures (PCE) index over PPI and CPI, will release its preferred inflation measure later this month. Citigroup estimates that core PCE will show a 0.22% monthly increase, down from 0.45% in December, bringing the annual inflation rate closer to 2.5%. However, inflation remains above the Fed’s 2% target, delaying expectations for interest rate cuts until the second half of 2025.
Trump’s ‘Buyout’ Falls Short as 75,000 Federal Workers Accept Offer
The Trump administration’s voluntary resignation program, aimed at significantly downsizing the federal workforce, fell short of expectations, with only 75,000 employees—about 3% of the 2.4 million civilian workforce—taking the deal. The administration had set a target of 5% to 10%, raising the likelihood of deeper layoffs as agencies brace for further cuts. The “Fork in the Road” program, modeled after a similar initiative Elon Musk introduced at Twitter (now X), allowed workers to resign in February while remaining on the federal payroll through September.
House Republicans Unveil Plan for $4.5 Trillion in Tax Cuts, Debt Ceiling Increase
House Republicans introduced a budget blueprint Wednesday that advances President Donald Trump’s top economic priorities, including $4.5 trillion in tax cuts and a $4 trillion increase in the debt ceiling to keep the U.S. government funded. The plan also seeks at least $1.5 trillion in spending cuts, with a goal of reaching $2 trillion in reductions over the next decade. While Republicans argue the package will fuel economic growth, tensions remain within the party over the scope of tax and spending measures.
The budget plan prioritizes defense and immigration enforcement, proposing a $100 billion boost for military spending and $90 billion for Homeland Security to support Trump’s mass deportation initiative. Meanwhile, it directs deep cuts to social programs, including $880 billion from healthcare programs like Medicaid, $330 billion from education, and $230 billion from agriculture.
UK Economy Grows 0.1% in Q4, Beating Expectations but Facing Slow 2025 Outlook
The UK economy recorded a modest 0.1% growth in the fourth quarter of 2024, surpassing economists’ expectations of a 0.1% contraction, according to preliminary data from the Office for National Statistics (ONS). Growth was primarily driven by the services and construction sectors, which expanded by 0.2% and 0.5%, respectively, while production declined by 0.8%. Monthly data showed a slight recovery in December, with a 0.4% expansion helping to lift the overall quarter. The British pound strengthened 0.4% against the dollar following the report.
Despite this small uptick, the broader economic outlook remains weak. The Bank of England recently cut interest rates to 4.5% and downgraded its 2025 growth forecast from 1.5% to 0.75%, citing high taxes, lingering effects of previous rate hikes, and sluggish global demand. Economists warn that further revisions could lower growth projections even further. Chancellor Rachel Reeves defended the government’s fiscal policy, arguing that tax increases are necessary to support public spending, but businesses fear that higher National Insurance contributions and minimum wage hikes could stifle investment and job creation.
Senators Propose Ending EV Tax Credits, Imposing $1,000 Fee for Road Repairs
A group of U.S. Senate Republicans has introduced legislation to eliminate the federal electric vehicle (EV) tax credit and impose a new $1,000 fee on EV purchases to fund road repairs. Led by Senator John Barrasso and backed by 14 other lawmakers, the bill would end the $7,500 tax credit for new EVs, the $4,000 credit for used EVs, and federal incentives for EV charging stations and leased vehicles. If enacted, these credits would expire within 30 days of the bill becoming law. Meanwhile, a separate bill, sponsored by Senator Deb Fischer, would introduce a one-time $1,000 fee at the point of sale to compensate for lost gasoline tax revenue, which traditionally funds road maintenance.
Proponents argue that EVs, which are heavier than gas-powered vehicles, contribute more to road wear without paying into the federal gas tax system. While some states already charge EV owners fees for road use, Congress has not raised the gas tax in over 30 years, leading to general fund transfers totaling $275 billion since 2008 to cover infrastructure costs. The proposed measures come amid broader efforts by the Trump administration to roll back Biden-era EV incentives, including freezing federal charging infrastructure funding and reversing stricter emissions regulations.
Elon Musk Threatens to Withdraw $100 Billion OpenAI Bid if It Remains a Nonprofit
Elon Musk has signaled he will abandon his nearly $100 billion bid for OpenAI if the company continues operating under its nonprofit structure. Musk, who co-founded OpenAI but later parted ways, initially led a group of investors offering $97.4 billion to acquire the company. However, in a court filing late Wednesday, he stated he would withdraw his bid if OpenAI’s board commits to maintaining its charitable mission and halting its transition into a for-profit entity.
Honda, Nissan, and Mitsubishi End Talks on Business Integration
Japanese automakers Honda, Nissan, and Mitsubishi announced Thursday that they are ending discussions on integrating their businesses, citing disagreements over the structure of the proposed collaboration. Nissan CEO Makoto Uchida revealed that the talks shifted from forming a joint holding company to making Nissan a subsidiary of Honda—a move he rejected, arguing it would not allow Nissan to reach its full potential. Meanwhile, Honda CEO Toshihiro Mibe expressed disappointment, stating that the proposed stock swap was intended to streamline decision-making but acknowledged that painful changes would have been necessary.
The decision, approved by the companies’ boards, ends months of speculation about the viability of the merger, which analysts had questioned due to overlapping product lineups and market strategies. Despite the breakdown, the automakers will continue collaborating on electric vehicles and autonomous driving technologies. Nissan, struggling financially, has reported plummeting profits and announced job cuts, while Honda remains in a stronger position.
US State Department Plans $400M Tesla Armored Vehicle Purchase Amid Musk’s Government Role
The U.S. Department of State is planning to spend $400 million on Tesla armored vehicles, raising potential conflicts of interest as Elon Musk—Tesla’s CEO—also leads efforts to cut government spending under President Donald Trump. A recently uncovered procurement forecast listed the purchase of "armored Tesla (production units)," likely referring to the Cybertruck, which Musk has claimed is bulletproof. The contract is expected to be awarded by the end of September.
Following reports of the planned purchase, the State Department modified its forecast, replacing "Tesla" with "armored electric vehicles," potentially signaling a broader bidding process. Musk acknowledged the report in a post on X, stating that Tesla may not receive the full $400 million, as other contractors could be involved in upgrading the vehicles.
Robinhood Shares Soar 17% as Q4 Crypto Revenue Surges 700%
Robinhood shares surged 17% in after-hours trading on February 12 after the company reported a record-setting Q4, driven largely by a 700% year-over-year increase in cryptocurrency revenue. The trading platform posted a net income of $916 million, exceeding industry expectations by over 9%, marking its fifth consecutive profitable quarter. Crypto-related revenues reached $358 million, accounting for more than half of Robinhood’s total transaction-based earnings, which rose 200% year-over-year to $672 million.
X Reaches $10 Million Settlement With Trump Over Twitter Suspension
Social media platform X, formerly known as Twitter, has agreed to pay President Donald Trump $10 million to settle a lawsuit over the nearly two-year suspension of his account following the January 6, 2021, Capitol riot. The lawsuit, originally filed in July 2021, claimed that the ban violated Trump’s First Amendment rights. A U.S. district judge dismissed the case in 2022, but Trump’s legal team had appealed, keeping the case active until the settlement was reached this week.
Apple to Integrate Alibaba’s AI Into iPhones in China, Chairman Joe Tsai Confirms
Apple has chosen Alibaba as its AI partner in China, marking a significant step in the company’s efforts to navigate China’s strict AI regulations. Alibaba Chairman Joe Tsai confirmed the partnership on Thursday at the World Governments Summit in Dubai, stating that Apple selected Alibaba’s AI after evaluating multiple companies. The news, first reported by The Information, led to a surge in Alibaba and Apple shares, with Alibaba’s Hong Kong-listed stock hitting its highest level since 2022 before slightly retreating.
Yesterday's Earnings
Coca-Cola (KO): Actual EPS: $0.55 (Beat by 5.77%), Expected EPS: $0.52, Actual Revenue: $11.5B (Beat by 7.48%), Expected Revenue: $10.7B, Market Cap: $291.37B
S&P Global (SPGI): Actual EPS: $3.77 (Beat by 12.20%), Expected EPS: $3.36, Actual Revenue: $3.59B (Beat by 4.66%), Expected Revenue: $3.43B, Market Cap: $163.00B
Gilead (GILD): Actual EPS: $1.90 (Beat by 11.11%), Expected EPS: $1.71, Actual Revenue: $7.6B (Beat by 6.15%), Expected Revenue: $7.16B, Market Cap: $130.28B
Welltower (WELL): Actual EPS: $0.19 (Miss by 53.66%), Expected EPS: $0.41, Actual Revenue: $2.25B (Beat by 6.13%), Expected Revenue: $2.12B, Market Cap: $90.38B
DoorDash (DASH): Actual EPS: $0.33 (Met Expectations), Expected EPS: $0.33, Actual Revenue: $2.87B (Beat by 1.06%), Expected Revenue: $2.84B, Market Cap: $83.17B
Marriott Int (MAR): Actual EPS: $2.45 (Beat by 3.38%), Expected EPS: $2.37, Actual Revenue: $6.43B (Beat by 0.94%), Expected Revenue: $6.37B, Market Cap: $79.79B
Ecolab (ECL): Actual EPS: $1.81 (Met Expectations), Expected EPS: $1.81, Actual Revenue: $4.01B (Beat by 0.25%), Expected Revenue: $4B, Market Cap: $72.90B
Carrier Global (CARR): Actual EPS: $0.54 (Beat by 10.20%), Expected EPS: $0.49, Actual Revenue: $5.15B (Miss by 2.28%), Expected Revenue: $5.27B, Market Cap: $56.00B
AIG (AIG): Actual EPS: $1.30 (Beat by 1.56%), Expected EPS: $1.28, Actual Revenue: $6.76B (Miss by 0.44%), Expected Revenue: $6.79B, Market Cap: $46.17B
Edwards Lifesciences (EW): Actual EPS: $0.59 (Beat by 7.27%), Expected EPS: $0.55, Actual Revenue: $1.39B (Beat by 2.21%), Expected Revenue: $1.36B, Market Cap: $44.26B
Fidelity National Info (FIS): Actual EPS: $1.40 (Beat by 2.94%), Expected EPS: $1.36, Actual Revenue: $2.6B (Miss by 1.14%), Expected Revenue: $2.63B, Market Cap: $39.39B
DuPont De Nemours (DD): Actual EPS: $1.13 (Beat by 14.14%), Expected EPS: $0.99, Actual Revenue: $3.09B (Beat by 0.32%), Expected Revenue: $3.08B, Market Cap: $33.90B
Humana (HUM): Actual EPS: -$2.16 (Miss by 1.41%), Expected EPS: -$2.13, Actual Revenue: $29.21B (Beat by 1.71%), Expected Revenue: $28.72B, Market Cap: $31.50B
Super Micro Computer (SMCI): Actual EPS: $0.58 (Miss by 92.85%), Expected EPS: $8.12, Actual Revenue: $5.65B (Miss by 18.71%), Expected Revenue: $6.95B, Market Cap: $24.28B
GlobalFoundries (GFS): Actual EPS: $0.46 (Beat by 2.22%), Expected EPS: $0.45, Actual Revenue: $1.83B (Met Expectations), Expected Revenue: $1.83B, Market Cap: $22.16B
Eversource Energy (ES): Actual EPS: $1.01 (Beat by 1.00%), Expected EPS: $1.00, Actual Revenue: $2.97B (Miss by 5.11%), Expected Revenue: $3.13B, Market Cap: $21.53B
Leidos (LDOS): Actual EPS: $2.37 (Beat by 4.87%), Expected EPS: $2.26, Actual Revenue: $4.37B (Beat by 5.81%), Expected Revenue: $4.13B, Market Cap: $17.85B
Masco (MAS): Actual EPS: $0.89 (Beat by 1.14%), Expected EPS: $0.88, Actual Revenue: $1.83B (Miss by 0.54%), Expected Revenue: $1.84B, Market Cap: $16.09B
Assurant (AIZ): Actual EPS: $5.54 (Beat by 61.52%), Expected EPS: $3.43, Actual Revenue: $3.1B (Beat by 0.98%), Expected Revenue: $3.07B, Market Cap: $10.97B
Earnings Today
Applied Materials (AMAT): Expected EPS: $2.28, Expected Revenue: $7.15B, Market Cap: $147.01B
Deere & Company (DE): Actual EPS: $3.19 (Beat by 2.24%), Expected EPS: $3.12, Actual Revenue: $8.51B (Beat by 10.52%), Expected Revenue: $7.7B, Market Cap: $129.79B
Palo Alto Networks (PANW): Expected EPS: $0.779, Expected Revenue: $2.24B, Market Cap: $129.77B
Moody’s (MCO): Actual EPS: $2.62 (Beat by 13.91%), Expected EPS: $2.30, Actual Revenue: $1.67B (Beat by 5.03%), Expected Revenue: $1.59B, Market Cap: $91.6B
Airbnb (ABNB): Expected EPS: $0.5869, Expected Revenue: $2.43B, Market Cap: $87.79B
Zoetis Inc (ZTS): Actual EPS: $1.40 (Beat by 1.45%), Expected EPS: $1.38, Actual Revenue: $2.32B (Met Expectations), Expected Revenue: $2.32B, Market Cap: $78.45B
Motorola (MSI): Expected EPS: $3.88, Expected Revenue: $2.99B, Market Cap: $78.32B
Republic Services (RSG): Expected EPS: $1.41, Expected Revenue: $4.08B, Market Cap: $69.99B
Digital (DLR): Expected EPS: $0.2694, Expected Revenue: $1.46B, Market Cap: $55.20B
American Electric Power (AEP): Actual EPS: $1.24 (Miss by 0.80%), Expected EPS: $1.25, Actual Revenue: $4.69B (Miss by 3.70%), Expected Revenue: $4.87B, Market Cap: $53.97B
Howmet (HWM): Actual EPS: $0.74 (Beat by 2.78%), Expected EPS: $0.72, Actual Revenue: $1.89B (Beat by 0.53%), Expected Revenue: $1.88B, Market Cap: $52.04B
Datadog (DDOG): Actual EPS: $0.49 (Beat by 13.95%), Expected EPS: $0.43, Actual Revenue: $737.7M (Beat by 3.29%), Expected Revenue: $714.24M, Market Cap: $45.84B
CBRE A (CBRE): Actual EPS: $2.32 (Beat by 4.50%), Expected EPS: $2.22, Actual Revenue: $10.4B (Beat by 1.56%), Expected Revenue: $10.24B, Market Cap: $42.31B
Ingersoll Rand (IR): Expected EPS: $0.8513, Expected Revenue: $1.93B, Market Cap: $36.82B
PG&E (PCG): Actual EPS: $0.31 (Miss by 3.75%), Expected EPS: $0.32, Actual Revenue: $6.63B (Miss by 7.79%), Expected Revenue: $7.19B, Market Cap: $34.91B
DexCom (DXCM): Expected EPS: $0.521, Expected Revenue: $1.1B, Market Cap: $32.76B
Iron Mountain (IRM): Actual EPS: $0.50 (Miss by 1.96%), Expected EPS: $0.51, Actual Revenue: $1.58B (Miss by 1.25%), Expected Revenue: $1.6B, Market Cap: $30.15B
GoDaddy Inc (GDDY): Expected EPS: $1.43, Expected Revenue: $1.18B, Market Cap: $29.14B
Global Payments (GPN): Actual EPS: $2.95 (Miss by 0.67%), Expected EPS: $2.97, Actual Revenue: $2.29B (Miss by 1.29%), Expected Revenue: $2.32B, Market Cap: $27.7B
Ameren (AEE): Expected EPS: $0.8122, Expected Revenue: $1.92B, Market Cap: $25.96B
DTE Energy (DTE): Actual EPS: $1.51 (Miss by 3.82%), Expected EPS: $1.57, Actual Revenue: $3.43B (Beat by 8.20%), Expected Revenue: $3.17B, Market Cap: $25.72B
PPL (PPL): Actual EPS: $0.34 (Miss by 7.51%), Expected EPS: $0.3676, Actual Revenue: $2.21B (Miss by 11.95%), Expected Revenue: $2.51B, Market Cap: $25.42B
West Pharmaceutical Services (WST): Actual EPS: $1.82 (Beat by 5.81%), Expected EPS: $1.72, Actual Revenue: $748.8M (Beat by 1.09%), Expected Revenue: $740.75M, Market Cap: $23.34B
FirstEnergy (FE): Expected EPS: $0.7133, Expected Revenue: $4.36B, Market Cap: $23.05B
Zebra (ZBRA): Actual EPS: $4.00 (Beat by 1.27%), Expected EPS: $3.95, Actual Revenue: $1.33B (Beat by 0.76%), Expected Revenue: $1.32B, Market Cap: $18.2B
DaVita (DVA): Expected EPS: $2.13, Expected Revenue: $3.26B, Market Cap: $14.1B
Molson Coors Brewing B (TAP): Actual EPS: $1.30 (Beat by 15.04%), Expected EPS: $1.13, Actual Revenue: $2.74B (Beat by 1.11%), Expected Revenue: $2.71B, Market Cap: $11.01B
Federal Realty (FRT): Expected EPS: $0.7424, Expected Revenue: $311.27M, Market Cap: $9.44B
Wynn Resorts (WYNN): Expected EPS: $1.33, Expected Revenue: $1.78B, Market Cap: $8.53B
