Good Morning!
On Tuesday, February 18, the S&P 500 closed at 6,129.58, up 0.13% from the previous trading session. The NASDAQ was down 0.24%, finishing at 20,041.26. The Dow Jones Industrial Average was flat (-0.07%) closing at 44,556.34. Meanwhile, the Russell 2000 was down 0.38%, ending the session at 2,290.35.
Crypto Highlights
Bitcoin (BTC): Currently trading at $95,865, up 0.38% over the past 24 hours.
Ethereum (ETH): Flat, now trading at $2,687 per coin.
Solana (SOL): Up 1.13%, currently trading at $168.85.
Ripple (XRP): Up 0.42% in the last 24 hours, now trading at $2.58 per coin.
Headline
Trump Proposes 25% Tariffs on Autos, Chips, and Pharmaceuticals
Former President Donald Trump has announced plans to impose 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with a formal decision expected by April 2. These tariffs, which would expand the ongoing trade war, come on the heels of previously announced 25% duties on steel and aluminum set to take effect in March. Trump indicated that the new levies could increase further over the next year but suggested that companies would have time to establish U.S. manufacturing facilities to avoid them. The proposed tariffs would significantly impact European automakers like Volkswagen and Asian manufacturers such as Hyundai, which account for a substantial portion of U.S. vehicle imports.
The global economic repercussions of these tariffs could be significant, particularly for countries with strong auto and semiconductor exports to the U.S., including Mexico, South Korea, and Malaysia. Japan, a major auto exporter, has already raised concerns with the White House, while industry analysts warn that these measures could erode profit margins and disrupt supply chains. The announcement triggered a market reaction, with stocks of major U.S. automakers like General Motors and Ford declining amid fears of escalating trade tensions.
Trump Suggests Ukraine Is to Blame for War, Signals Possible Meeting With Putin
Former U.S. President Donald Trump has suggested that Ukraine is responsible for the war with Russia, stating that Kyiv "should have never started it" and could have made a deal to prevent the conflict. Speaking at his Mar-a-Lago estate after U.S. and Russian officials met in Saudi Arabia for peace talks that excluded Ukraine, Trump defended the decision to leave Kyiv out of negotiations. He expressed confidence in his ability to end the war, claiming the talks led by U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov had been productive. Trump also indicated he would "probably" meet Russian President Vladimir Putin later this month, reinforcing concerns about his approach to the conflict.
Trump's remarks aligned with a Russian narrative that downplays its role in launching the largest war in Europe since World War II. He also criticized Ukrainian President Volodymyr Zelenskyy, falsely claiming that his approval rating was just 4% and questioning why elections had not been held. However, a December poll by the Kyiv International Institute of Sociology showed that 52% of Ukrainians still trust Zelenskyy. While Trump framed his comments as a broader call for democratic accountability, his rhetoric and willingness to engage directly with Russia without Ukraine's participation have drawn backlash.
European Leaders Scramble to Recalibrate After Trump Sides With Russia
European leaders gathered in Paris for an emergency meeting on Wednesday as they struggled to respond to former U.S. President Donald Trump’s latest remarks blaming Ukraine for the war and signaling a shift in American foreign policy. French President Emmanuel Macron convened the meeting just days after a similar summit, underscoring growing alarm over Trump’s abrupt pivot away from traditional alliances. His administration’s decision to exclude Ukraine and European nations from peace talks with Russia—held in Riyadh—has heightened fears that the U.S. is abandoning its role as a security guarantor in Europe.
Trump’s comments, in which he stated that Ukraine “should have never started” the war and could have made a deal, have been widely condemned across Europe. Critics likened the situation to past diplomatic betrayals, such as the 1938 Munich Agreement and the post-World War II division of Europe. Eastern and Central European nations, particularly Poland and the Baltic states, fear that Trump’s embrace of Russian narratives could embolden further aggression. European leaders are now discussing ways to bolster their own defense capabilities, including increased military spending and potential joint funding mechanisms. However, analysts warn that while European leaders may express urgency, real action will depend on whether they are willing to prioritize security over domestic economic and social policies.
Trump Expands White House Control Over Independent Agencies With New Order
Former President Donald Trump signed an executive order on Tuesday aimed at increasing White House oversight of independent regulatory agencies. The order, titled Ensuring Accountability for All Agencies, mandates that agencies such as the Securities and Exchange Commission, the Federal Trade Commission, and the Federal Communications Commission submit proposed regulations for White House review. It also grants the Office of Management and Budget (OMB), led by Russell Vought, the authority to scrutinize agency spending to ensure alignment with presidential priorities. The order argues that these agencies exercise substantial executive power without sufficient presidential oversight, a claim likely to fuel debates over the balance of power in government. The move is part of Trump’s broader effort to consolidate executive authority and reduce the influence of unelected officials within the federal bureaucracy. In recent weeks, he has dismissed multiple inspectors general and agency heads appointed by the previous administration.
Senate Republicans Advance Budget Bill to Fund Trump’s Mass Deportations and Border Wall
Senate Republicans pushed forward a $340 billion budget bill on Tuesday, prioritizing mass deportations, border security, and defense spending as part of former President Donald Trump’s legislative agenda. The bill, which passed a procedural vote along party lines (50-47), includes $175 billion for border enforcement—funding deportation operations and the construction of Trump’s long-promised border wall—as well as a $150 billion boost to the Pentagon and $20 billion for the Coast Guard. While Trump had called for a broader $4.5 trillion package that included major tax cuts, Senate Republicans opted to address those measures separately in a future bill.
Trump Signs Executive Order to Expand IVF Access and Lower Costs
Former President Donald Trump signed an executive order on Tuesday aimed at expanding access to in vitro fertilization (IVF) and reducing its costs. The order directs the White House domestic policy team to submit recommendations within 90 days on how to protect IVF access and lower out-of-pocket expenses for patients. Trump emphasized that his administration seeks to eliminate unnecessary regulatory barriers to make IVF treatment "drastically more affordable." While he did not specify funding mechanisms, he previously pledged that either the government or insurance providers would cover the cost of IVF treatments.
BlackRock Halts Corporate Meetings Amid SEC Crackdown on ESG
BlackRock has temporarily suspended meetings with companies involved in shareholder disputes following new guidance from the U.S. Securities and Exchange Commission (SEC). The SEC's recent rule change has heightened scrutiny on large asset managers engaging with corporations, expanding the conditions under which they must file a more detailed 13-D form instead of the less burdensome 13-G. Previously, fund managers owning over 5% of a company were considered “passive investors” when addressing issues like executive compensation and environmental policies. Now, their influence could be reclassified as activist behavior, making engagement with companies more legally complex.
The new SEC guidance, widely viewed as a move against environmental, social, and governance (ESG) investing, has significant implications for fund managers such as BlackRock, Vanguard, and State Street, which collectively hold major stakes in most U.S. corporations. Critics argue that the change will make it harder for institutional investors to advocate for corporate governance improvements, including climate disclosures and board diversity.
Super Micro Computer Stock Surges 13% on Strong Earnings Report
Super Micro Computer (SMCI) saw a 13% surge in its stock price following a strong earnings report, alleviating concerns about a potential Nasdaq delisting. Despite an "underweight" rating from JPMorgan analysts, investors remained bullish as the company reassured them about its delayed annual filing and set an ambitious revenue target of $40 billion for fiscal 2026. The firm must submit its overdue report to the SEC by February 25 to avoid delisting, and CEO Charles Liang expressed confidence in meeting this deadline.
The San Jose-based company, a major player in AI hardware, has experienced a volatile 2024. It gained traction as a key reseller of Nvidia’s GPUs, fueling optimism about its role in the AI industry. However, it faced scrutiny in September when Hindenburg Research accused it of accounting irregularities and sanctions evasion, leading to the resignation of its auditor, Ernst & Young.
HSBC Targets $1.8 Billion in Cost Savings Under New CEO
HSBC announced on Wednesday that it will cut $1.8 billion in costs over the next two years as part of a restructuring effort led by new CEO Georges Elhedery. The bank, which posted a better-than-expected pre-tax profit of $32.3 billion for 2024, is focusing on boosting efficiency and sharpening its focus on Asia, where it generates the majority of its earnings. As part of the revamp, HSBC plans to trim personnel expenses by 8% and achieve $300 million in cost reductions in 2025, with a total annualized cost base reduction of $1.5 billion by the end of 2026. The bank also announced a $2 billion share buyback, to be completed before its next earnings report.
HSBC’s wealth and personal banking division remained its strongest performer, generating $12.2 billion in pre-tax profit, a 5.2% increase from the previous year. Its global banking and markets division saw an even greater rise, with a nearly 27% jump to $7.1 billion. Despite ongoing volatility in interest rate policies across global markets, HSBC set a target of mid-teens return on tangible equity from 2025 to 2027. Elhedery has already taken aggressive steps to reshape the bank, cutting senior management ranks and reorganizing operations along East-West lines. These changes include a major retrenchment in investment banking in Europe and the Americas, accelerating HSBC’s pivot toward Asia.
Ford Cuts Middle Manager Stock Bonuses to Reduce Costs and Improve Performance
Ford Motor Company is eliminating stock bonuses for about half of its middle managers as part of CEO Jim Farley’s push to cut costs and enhance performance. The automaker, struggling with inefficiencies in both its electric and fuel-powered vehicle divisions, informed employees of the decision in a recent company briefing. Senior managers will determine which employees receive the stock awards, typically distributed in March. A Ford spokesperson emphasized that the move aligns with the company’s focus on fostering a high-performance culture and rewarding contributions to business success.
The decision comes as Ford faces increasing competition from U.S. rivals, Chinese automakers, and Tesla, while also dealing with potential trade policy disruptions under former President Donald Trump. Ford’s stock has dropped 23% over the past year, in contrast to General Motors’ 23% gain, which analysts attribute to GM’s lower costs and higher profits. Some employees see the stock award reduction as a strategy to encourage voluntary departures, while analysts suggest it reflects Ford’s need to improve profitability.
Exxon's Fourth Floating Oil Production Facility Sets Sail for Guyana
Exxon Mobil’s fourth floating production storage and offloading (FPSO) vessel, One Guyana, has departed from Singapore and is en route to Guyana, where it will support the country’s rapidly growing offshore oil industry. Built by SBM Offshore, the vessel has a production capacity of 250,000 barrels per day (bpd) and is expected to help Exxon’s consortium increase total output to 940,000 bpd later this year. Exxon’s Vice President for Deepwater, Hunter Farris, announced the departure at Guyana’s Energy Conference in Georgetown, marking another milestone in the company’s expansion in the region.
The One Guyana FPSO is part of Exxon’s broader strategy to enhance oil production in Guyana, where it produced an average of 616,000 bpd in 2024 following upgrades to existing facilities. Two additional FPSO vessels are expected to arrive in the next two years, further solidifying Guyana’s role as a major player in global oil production. The vessel’s journey began on Tuesday, passing through the Malacca Strait as it makes its way to South America, where it will contribute to Exxon’s ambitious offshore development plans.
Ant Group Expands Into China's Humanoid Robot Industry
Ant Group, the Alibaba-affiliated fintech giant, is entering China’s rapidly growing humanoid robot industry, signaling the sector’s increasing appeal among major tech firms. The company has begun hiring for humanoid robot development through its subsidiary, Shanghai Ant Lingbo Technology, which was established in late 2024 with a registered capital of 100 million yuan ($13.73 million). This move aligns with China’s broader strategy to promote humanoid robots as a key driver of economic growth and technological advancement, particularly in competition with the United States.
Pfizer Faces Potential Risks from European Tariffs, CEO Warns
Pfizer CEO Albert Bourla has acknowledged that the pharmaceutical giant could be vulnerable if former President Donald Trump imposes tariffs on the European Union, where the company operates at least 10 manufacturing plants. Speaking at an industry conference in Washington, Bourla noted that while current tariffs on China, Mexico, and Canada have not impacted Pfizer, potential levies on European imports could create challenges. The company is closely monitoring the situation as it awaits further details on the scope of the proposed trade measures.
Historically, pharmaceuticals have been exempt from tariffs due to their critical role in healthcare, but Trump has previously suggested imposing import duties to boost domestic manufacturing. Despite its European footprint, Pfizer also maintains a significant U.S. presence, with 14 manufacturing plants. While Bourla did not specify how tariffs might affect Pfizer’s operations, the company’s stock remained largely unchanged following his remarks.
Yesterday's Earnings
Arista Networks (ANET): Actual EPS: $0.65 (Beat by 14.04%), Expected EPS: $0.57, Actual Revenue: $1.93B (Beat by 1.58%), Expected Revenue: $1.9B, Market Cap: $128.76B
Medtronic (MDT): Actual EPS: $1.39 (Beat by 2.21%), Expected EPS: $1.36, Actual Revenue: $8.29B (Miss by 0.48%), Expected Revenue: $8.33B, Market Cap: $110.49B
Constellation Energy (CEG): Actual EPS: $2.44 (Beat by 21.39%), Expected EPS: $2.01, Actual Revenue: $5.38B (Miss by 1.82%), Expected Revenue: $5.48B, Market Cap: $99.26B
Cadence Design (CDNS): Actual EPS: $1.88 (Beat by 3.30%), Expected EPS: $1.82, Actual Revenue: $1.36B (Beat by 0.74%), Expected Revenue: $1.35B, Market Cap: $73.16B
Occidental (OXY): Actual EPS: $0.80 (Beat by 9.59%), Expected EPS: $0.73, Actual Revenue: $6.84B (Miss by 2.00%), Expected Revenue: $6.98B, Market Cap: $48.68B
Entergy (ETR): Actual EPS: $0.66 (Beat by 4.76%), Expected EPS: $0.63, Actual Revenue: $3.01B (Miss by 7.10%), Expected Revenue: $3.24B, Market Cap: $37.32B
Vulcan Materials (VMC): Actual EPS: $2.17 (Beat by 21.91%), Expected EPS: $1.78, Actual Revenue: $1.85B (Beat by 2.21%), Expected Revenue: $1.81B, Market Cap: $35.16B
EQT (EQT): Actual EPS: $0.69 (Beat by 38.00%), Expected EPS: $0.50, Actual Revenue: $1.63B (Miss by 9.44%), Expected Revenue: $1.8B, Market Cap: $32.88B
CoStar (CSGP): Actual EPS: $0.15 (Miss by 31.79%), Expected EPS: $0.22, Actual Revenue: $709M (Beat by 1.43%), Expected Revenue: $698.89M, Market Cap: $32.42B
Devon Energy (DVN): Actual EPS: $1.16 (Beat by 18.37%), Expected EPS: $0.98, Actual Revenue: $4.4B (Beat by 5.52%), Expected Revenue: $4.17B, Market Cap: $25.25B
IFF (IFF): Actual EPS: $0.97 (Beat by 18.29%), Expected EPS: $0.82, Actual Revenue: $2.8B (Beat by 4.08%), Expected Revenue: $2.69B, Market Cap: $21.19B
Genuine Parts (GPC): Actual EPS: $1.61 (Miss by 1.83%), Expected EPS: $1.64, Actual Revenue: $5.77B (Beat by 0.70%), Expected Revenue: $5.73B, Market Cap: $16.90B
Expeditors Washington (EXPD): Actual EPS: $1.68 (Beat by 19.15%), Expected EPS: $1.41, Actual Revenue: $2.95B (Beat by 6.12%), Expected Revenue: $2.78B, Market Cap: $16.37B
Allegion PLC (ALLE): Actual EPS: $1.86 (Beat by 6.29%), Expected EPS: $1.75, Actual Revenue: $945.6M (Beat by 0.79%), Expected Revenue: $938.17M, Market Cap: $10.83B
Celanese (CE): Actual EPS: $1.45 (Beat by 16.00%), Expected EPS: $1.25, Actual Revenue: $2.37B (Miss by 0.84%), Expected Revenue: $2.39B, Market Cap: $6.02B
Earnings Today
Analog Devices (ADI): Actual EPS: $1.63 (Beat by 5.84%), Expected EPS: $1.54, Actual Revenue: $2.42B (Beat by 2.54%), Expected Revenue: $2.36B, Market Cap: $111.48B
Garmin (GRMN): Actual EPS: $2.41 (Beat by 26.18%), Expected EPS: $1.91, Actual Revenue: $1.82B (Beat by 10.30%), Expected Revenue: $1.65B, Market Cap: $46.09B
ANSYS (ANSS): Expected EPS: $4.03, Expected Revenue: $871.72M, Market Cap: $29.11B
Trimble (TRMB): Actual EPS: $0.89 (Beat by 1.14%), Expected EPS: $0.88, Actual Revenue: $983.4M (Beat by 3.88%), Expected Revenue: $946.62M, Market Cap: $18.69B
CF Industries (CF): Expected EPS: $1.61, Expected Revenue: $1.52B, Market Cap: $14.56B
Nordson (NDSN): Expected EPS: $2.09, Expected Revenue: $639.4M, Market Cap: $12.35B
Host Hotels & Resorts (HST): Expected EPS: $0.1261, Expected Revenue: $1.37B, Market Cap: $11.78B
Charles River Laboratories (CRL): Actual EPS: $2.66 (Beat by 4.72%), Expected EPS: $2.54, Actual Revenue: $1B (Beat by 1.51%), Expected Revenue: $985.18M, Market Cap: $8.16B
