Good Morning!
On Tuesday, February 14, the S&P 500 closed at 6,111.15, up 0.13% from the previous trading session. The NASDAQ was down 0.24%, finishing at 20,041.26. The Dow Jones Industrial Average dipped 0.13% closing at 44,556.34. Meanwhile, the Russell 2000 was up 0.38%, ending the session at 2,290.35.
Crypto Highlights
Bitcoin (BTC): Currently trading at $97,329, up 1.77% over the past 24 hours.
Ethereum (ETH): Up 3.79%, now trading at $2,736 per coin.
Solana (SOL): Up 5.34%, currently trading at $201.64.
Ripple (XRP): Soared 12.15% in the last 24 hours, now trading at $2.74 per coin.
Headline
Trump Signs Reciprocal Tariffs Plan, Raising Economic Uncertainty
President Donald Trump signed a proclamation on Thursday implementing reciprocal tariffs on U.S. trading partners, aiming to match the import tax rates that other countries impose on American goods. The move, which Trump framed as a measure to "level the playing field", could escalate trade tensions with allies and rivals alike, potentially triggering retaliatory tariffs that could disrupt global markets.
The tariff rates will be determined in the coming weeks, factoring in value-added taxes, industrial subsidies, regulations, and currency manipulation by foreign nations. However, the plan is already facing criticism from economists and industry leaders, who warn that it could lead to higher consumer prices and stifle economic growth.
China Imposes Export Controls on Five Critical Minerals, Threatening Global Supply Chains
China has announced new export restrictions on tungsten, tellurium, bismuth, indium, and molybdenum, citing national security concerns. The move, which requires special export licenses, is expected to disrupt global supply chains in industries including defense, renewable energy, semiconductors, and aerospace, as China dominates global production of these materials. Previous restrictions on gallium, germanium, and antimony in 2023 and 2024 led to sharp price increases and severe shortages, signaling potential economic fallout from this latest policy.
The timing of the restrictions follows the U.S. imposition of a 10% tariff on Chinese imports, raising concerns about retaliatory trade measures. The United States, heavily reliant on Chinese tungsten, stopped domestic mining in 2015 and now faces supply chain vulnerabilities. Alternative suppliers like Vietnam, Russia, Bolivia, and Rwanda exist but may struggle to meet demand, potentially driving up prices and production costs for critical industries. Additionally, China has banned the export of refining technology for these materials, further complicating efforts to secure independent supply chains.
China’s Tungsten Export Curbs Send Shockwaves Through Industry
China’s recent export controls on tungsten have sent shockwaves through global supply chains, leaving defense and manufacturing industries scrambling for alternatives. China dominates 80% of global tungsten production, a critical material used in armor-piercing munitions, chip manufacturing, and aerospace components. The Trump administration’s tariffs on Chinese goods appear to have triggered Beijing’s retaliation, with experts warning that further tightening of restrictions could worsen supply shortages. North America’s Almonty Industries CEO Lewis Black said customers are in a "state of disbelief," while investors have driven up Almonty’s stock by 41% amid fears of supply scarcity.
The U.S., which hasn’t mined tungsten since 2015, is now racing to develop domestic sources. Nevada-based Guardian Metal Resources is advancing its Pilot Mountain project, but production is at least three years away. Meanwhile, Almonty is set to open a new mine in South Korea within two months to help offset China’s supply squeeze. The market expects tungsten prices to surge, similar to previous spikes in gallium, germanium, and antimony, as China leverages its control over critical minerals in the ongoing U.S.-China trade conflict.
Retail Sales Plunge 0.9% in January, Raising Growth Concerns
U.S. retail sales fell sharply by 0.9% in January, far exceeding expectations for a modest 0.2% decline, according to a Commerce Department report on Friday. This drop follows an upwardly revised 0.7% gain in December and signals potential economic weakness in the first quarter. Excluding autos, sales dipped 0.4%, while a key "control" measure—which factors directly into GDP calculations—fell 0.8%. The steepest declines were seen in sporting goods (-4.6%), online sales (-1.9%), and auto purchases (-2.8%), though gas stations and restaurants posted modest gains of 0.9%.
The weak retail numbers come amid stubborn inflation, with the consumer price index rising 0.5% in January and 3% annually. Import prices also surged 0.3%, marking the largest monthly increase since April 2024, driven by fuel costs (+3.2%).
U.S. Producer Prices Rise Amid Inflation Concerns, Labor Market Holds Steady
U.S. producer prices increased 0.4% in January, signaling persistent inflationary pressures and reinforcing expectations that the Federal Reserve will delay interest rate cuts until at least the second half of the year. The Producer Price Index (PPI) rose 3.5% year-over-year, with energy costs surging 1.7% and food prices jumping 1.1%, largely due to a 44% spike in egg prices amid an avian flu outbreak. While core inflation measures suggested a more moderate increase than initially expected, economists warn that Trump’s tariffs on imports and mass deportation policies could drive costs higher by disrupting labor markets and supply chains.
Despite inflation concerns, the labor market remains stable, with jobless claims dropping to 213,000, indicating low layoffs and steady hiring. The unemployment rate held at 4.0%, and nonfarm payrolls increased by 143,000 jobs in January. However, economists caution that businesses are taking a "wait-and-see" approach due to uncertainty over supply chains and pricing volatility.
Senate Confirms Robert F. Kennedy Jr. as Health Secretary in Narrow Vote
The Senate voted 52-48 to confirm Robert F. Kennedy Jr. as Secretary of Health and Human Services (HHS), despite concerns over his anti-vaccine activism. Senate Minority Leader Mitch McConnell was the sole Republican to oppose the nomination, citing Kennedy’s history of promoting conspiracy theories that could further erode trust in public health institutions. However, Kennedy managed to win over key GOP senators, ensuring his confirmation in Trump’s latest Cabinet victory.
Sworn in by Supreme Court Justice Neil Gorsuch, Kennedy praised Trump as a “hero” and pledged to implement historic reforms in health care. In a striking rebuke of U.S. foreign aid programs, he called USAID—an agency founded by his uncle, President John F. Kennedy—“a sinister propagator of totalitarianism and war.” As head of HHS, Kennedy will oversee a $1.7 trillion agency responsible for pandemic preparedness, Medicare and Medicaid, and vaccine and pharmaceutical oversight, positioning him at the center of major health policy decisions.
China’s Bank Lending Hits Record High Amid Economic Stimulus Efforts
China's new bank loans surged to a record 5.13 trillion yuan ($706.4 billion) in January, exceeding expectations as the central bank moved to support the economy amid rising U.S. trade tensions. This figure, more than quadrupling December’s lending, reflects Beijing's push for stimulus to counter weak domestic demand and external pressures from Trump’s new 10% tariffs on Chinese imports. However, despite the record loan issuance, year-on-year lending growth fell to its lowest level on record, signaling persistent economic caution among businesses and consumers.
The People’s Bank of China (PBOC) has pledged further monetary easing, including potential interest rate and reserve requirement ratio (RRR) cuts, to sustain Beijing’s 5% growth target for 2025. Analysts expect additional policy measures at the upcoming March parliamentary meeting, with government bond issuance playing a key role in supporting credit growth. While Beijing has imposed counter-tariffs of up to 15% on U.S. goods, its response has been measured, fueling hopes for potential trade negotiations in the coming months.
Trump Sparks European Fury Over 'Appeasement' Talks With Putin
European leaders have reacted with alarm and anger to President Donald Trump’s unilateral peace negotiations with Russia, fearing they could result in major concessions to Vladimir Putin at Ukraine’s expense. In capitals across Brussels, Berlin, Paris, and London, officials warned that Trump’s rejection of NATO membership for Ukraine, his ban on U.S. troop involvement, and his refusal to support Kyiv’s goal of reclaiming lost territory amount to "appeasement"—a term laden with historical significance. EU foreign policy chief Kaja Kallas and UK Prime Minister Keir Starmer both insisted that any settlement must include Ukraine at the negotiating table, while U.S. Defense Secretary Pete Hegseth sought to reassure allies that Kyiv would be involved in the talks.
The divide between Trump and Europe comes amid broader geopolitical tensions, with European governments having committed over €241 billion in aid to Ukraine, compared to €119 billion from the U.S. Some leaders, like Hungary’s Viktor Orbán, mocked European objections, calling their continued support for Kyiv “worthless statements.” European diplomats privately fear that Trump may negotiate poorly and give away too much to Russia, further weakening NATO and destabilizing Europe’s security.
Taiwan Pledges U.S. Investment and Chip Talks Amid Trump’s Criticism
Taiwan’s President Lai Ching-te vowed to address Donald Trump’s concerns over the semiconductor industry by increasing U.S. investments and trade, as well as holding discussions with the U.S. on chip policy. Trump recently criticized Taiwan for dominating semiconductor production and expressed a desire to restore American manufacturing. Lai emphasized the importance of global cooperation in semiconductor supply chains and proposed a "democratic supply chain" for AI chips, strengthening ties among allied nations. Taiwan Semiconductor Manufacturing Co. (TSMC) has already committed $65 billion to new chip factories in Arizona, a project initiated during Trump's first term.
Additionally, Lai pledged to increase Taiwan’s defense spending from 2.5% to 3% of GDP, addressing Trump's past criticism of Taiwan’s military preparedness amid rising threats from China. Despite growing U.S.-Taiwan security cooperation, tensions remain over Taiwan’s trade surplus with the U.S., which surged 83% last year, fueled by semiconductor exports. Taiwan’s government is also navigating budget disputes with its opposition-led parliament, which has resisted certain defense funding proposals.
Trump Administration Expands Layoffs, Targeting Probationary Federal Workers
The Trump administration accelerated federal workforce reductions on Thursday, instructing agencies to terminate most of an estimated 200,000 probationary employees. The Office of Personnel Management (OPM) led the charge, citing the probationary period as a non-guarantee of permanent employment. Major layoffs were reported across several agencies, including the Department of Veterans Affairs, the Consumer Financial Protection Bureau, and the General Services Administration, with thousands of employees receiving termination notices. These dismissals come on the heels of Trump’s executive order for “large-scale” staffing reductions, giving Elon Musk’s Department of Government Efficiency increased control over future hiring and federal agency restructuring.
Arm Stock Surges on Reported Chip Deal With Meta
Shares of Arm Holdings (ARM) jumped over 6% on Thursday following reports that the company is developing its own custom-designed chips, with Meta Platforms (META) set to be one of its first major customers. The new chip, expected to be unveiled as early as this summer, marks a strategic shift for Arm, which has traditionally focused on designing and licensing technology rather than manufacturing its own hardware.
Nvidia Cuts Stake in Arm, Invests in China’s WeRide Amid AI Expansion
Nvidia (NVDA) has reduced its stake in British chip firm Arm Holdings (ARM) by 44%, selling down to 1.1 million shares valued at approximately $181 million as of Thursday’s close, according to a regulatory filing. The AI chip giant also exited its holdings in Serve Robotics and SoundHound AI, while disclosing a new position in China’s self-driving startup WeRide (WRD.O), which sent WeRide’s stock soaring 76%.
Nvidia’s investment in WeRide, a Chinese autonomous vehicle company that relies on its AI chips and software, aligns with its long-term AI and mobility strategy. The firm also acquired 1.2 million shares in AI cloud company Nebius Group (NBIS.O), pushing its stock up 8%.
RTX Faces Continued Delays in Delivering Navy’s Standard Missile-6
RTX Corp. is still struggling to meet production targets for the Standard Missile-6 (SM-6), the U.S. Navy’s primary air-defense missile designed to counter China’s DF-21D “carrier killer” missile. According to the Pentagon’s Defense Contract Management Agency, supplier challenges have led to significant delays, pushing the $1 billion contract for 625 missiles a year behind schedule. While RTX has made progress in addressing past manufacturing issues, deliveries remain below expectations, with the rocket motor supply chain cited as a major bottleneck.
Despite these setbacks, the Navy awarded RTX a new $333 million contract last month to produce more SM-6 missiles, which cost $4.8 million each. The missile has been actively used, with at least 80 fired in Red Sea operations against Iran-backed Houthi rebels. Aerojet Rocketdyne, now owned by L3 Harris Technologies, supplies the motors and has invested heavily to improve production capacity, cutting late deliveries by more than half. Meanwhile, Defense Secretary Pete Hegseth has vowed to address lethality issues in military procurement, though the SM-6 program’s struggles highlight ongoing challenges in Pentagon weapons production.
Goldman Sachs Expands Crypto Holdings, Surpassing $2 Billion in Bitcoin and Ethereum ETFs
Goldman Sachs has significantly increased its exposure to cryptocurrencies, reporting $2.05 billion in Bitcoin and Ethereum ETF holdings at the end of 2024, according to a recent SEC filing. The investment bank holds $1.3 billion in BlackRock’s Bitcoin ETF shares and $300 million in Fidelity’s, alongside $500 million split equally between BlackRock and Fidelity’s Ethereum ETFs. This marks a 50% surge from the previous quarter, when its crypto ETF holdings totaled $720 million. Additionally, Goldman disclosed $700 million in Bitcoin ETF options, including a $500 million bet on Bitcoin’s price increase and a $160 million hedge against a decline.
The firm’s growing crypto investments reflect institutional investors’ increasing appetite for digital assets, particularly following the U.S. approval of spot Bitcoin ETFs in January 2024. Other major financial players, including Morgan Stanley, Wells Fargo, and Renaissance Technologies, have also moved into crypto ETFs, alongside the Wisconsin state pension fund, which invested nearly $100 million. With over $40 billion poured into spot Bitcoin ETFs and $3.2 billion into Ether ETFs, analysts see Goldman’s moves as a signal of deep-pocketed investors becoming more sophisticated in crypto markets, further legitimizing digital assets on Wall Street.
Yesterday's Earnings
Applied Materials (AMAT): Actual EPS: $2.38 (Beat by 4.39%), Expected EPS: $2.28, Actual Revenue: $7.17B (Beat by 0.28%), Expected Revenue: $7.15B, Market Cap: $139.91B
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: $131.03B
Palo Alto Networks (PANW): Actual EPS: $0.81 (Beat by 3.85%), Expected EPS: $0.78, Actual Revenue: $2.26B (Beat by 0.89%), Expected Revenue: $2.24B, Market Cap: $125.79B
Airbnb (ABNB): Actual EPS: $0.73 (Beat by 23.99%), Expected EPS: $0.59, Actual Revenue: $2.48B (Beat by 2.06%), Expected Revenue: $2.43B, Market Cap: $101.13B
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: $95.20B
Motorola (MSI): Actual EPS: $4.04 (Beat by 4.12%), Expected EPS: $3.88, Actual Revenue: $3.01B (Beat by 0.67%), Expected Revenue: $2.99B, Market Cap: $74.03B
Republic Services (RSG): Actual EPS: $1.58 (Beat by 12.06%), Expected EPS: $1.41, Actual Revenue: $4.05B (Miss by 0.74%), Expected Revenue: $4.08B, Market Cap: $72.16B
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: $71.58B
Digital (DLR): Actual EPS: $0.51 (Beat by 88.89%), Expected EPS: $0.27, Actual Revenue: $1.44B (Miss by 1.37%), Expected Revenue: $1.46B, Market Cap: $55.70B
Howmet (HWM): Actual EPS: $0.77 (Beat by 6.94%), Expected EPS: $0.72, Actual Revenue: $1.89B (Beat by 0.53%), Expected Revenue: $1.88B, Market Cap: $53.42B
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: $44.48B
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: $43.56B
Ingersoll Rand (IR): Actual EPS: $0.84 (Miss by 1.29%), Expected EPS: $0.85, Actual Revenue: $1.9B (Miss by 1.55%), Expected Revenue: $1.93B, Market Cap: $35.20B
DexCom (DXCM): Actual EPS: $0.45 (Miss by 13.46%), Expected EPS: $0.52, Actual Revenue: $1.11B (Beat by 0.91%), Expected Revenue: $1.1B, Market Cap: $34.95B
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: $28.11B
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: $27.13B
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: $26.72B
GoDaddy Inc (GDDY): Actual EPS: $1.36 (Miss by 4.90%), Expected EPS: $1.43, Actual Revenue: $1.19B (Beat by 0.85%), Expected Revenue: $1.18B, Market Cap: $26.06B
Ameren (AEE): Actual EPS: $0.77 (Miss by 4.94%), Expected EPS: $0.81, Actual Revenue: $1.94B (Beat by 1.04%), Expected Revenue: $1.92B, Market Cap: $26.05B
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: $25.03B
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: $16.32B
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: $16.05B
DaVita (DVA): Actual EPS: $2.24 (Beat by 5.16%), Expected EPS: $2.13, Actual Revenue: $3.3B (Beat by 1.23%), Expected Revenue: $3.26B, Market Cap: $12.71B
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: $12.31B
Wynn Resorts (WYNN): Actual EPS: $2.42 (Beat by 81.95%), Expected EPS: $1.33, Actual Revenue: $1.84B (Beat by 3.37%), Expected Revenue: $1.78B, Market Cap: $9.63B
Federal Realty (FRT): Actual EPS: $0.75 (Beat by 1.35%), Expected EPS: $0.74, Actual Revenue: $311.44M (Beat by 0.05%), Expected Revenue: $311.27M, Market Cap: $9.07B
Earnings Today
Coca-Cola European (CCEP): Expected EPS: $0.91, Actual Revenue: $5.25B (Miss by 0.94%), Expected Revenue: $5.3B, Market Cap: $39.02B
Moderna (MRNA): Actual EPS: -$2.91 (Miss by 6.59%), Expected EPS: -$2.73, Actual Revenue: $966M (Miss by 2.96%), Expected Revenue: $995.44M, Market Cap: $12.96B
