Good Morning!
On Thursday, January 16, the S&P 500 closed at 5,937.34, down 0.21%. The NASDAQ fell by 0.89%, finishing at 19,338.29 points, while the Dow Jones Industrial Average was flat (-0.16%) closing at 43,153.13. Meanwhile, the Russell 2000 was up 0.15%, ending the trading session at 2,266.79.
UnitedHealth Group saw its stock tumble after reporting weaker revenue for the latest quarter, driven by higher medical costs. Tesla also faced challenges, with its stock falling on news of discounts on its Cybertruck model. Global markets saw gains in Europe and Asia, with Taiwan Semiconductor reporting a 57% jump in profit for the last quarter.
Crypto Highlights
Bitcoin (BTC): Closed yesterday at $100,117, down 0.34%.
Ethereum (ETH): Slid 3.31%, reaching $3,311 per coin.
Ripple (XRP): Surged 7.16%, trading at $3.27 per coin.
Yesterday's Earnings
UnitedHealth ($UNH): UnitedHealth Group shares took a hit after the healthcare giant's revenue fell short of expectations, despite posting higher-than-expected profits. The company reported an increase in medical costs, impacting its medical cost ratio.
Bank of America ($BAC): Bank of America exceeded profit and revenue estimates, driven by strong investment banking and interest income. The company's fourth-quarter profit more than doubled, with revenue jumping 15% on rising fees from investment banking and asset management.
Morgan Stanley ($MS): Morgan Stanley's earnings soared past analyst estimates, with profits reaching $2.22 per share. The company reported a 26% increase in revenue, driven by strong investment banking revenue. Morgan Stanley also increased its provision for credit losses.
Upcoming Earnings Today
Truist Financial Corp ($TFC): Truist Financial Corporation is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for Q3 2024. The consensus estimate for quarterly earnings is $0.87 per share, with revenues expected to be $5.01 billion.
Schlumberger ($SLB): Wall Street analysts predict Schlumberger will post quarterly earnings of $0.90 per share, reflecting an increase of 4.7% compared to the same period last year. Revenues are forecasted to be $9.18 billion.
Fastenal ($FAST): Fastenal is expected to report quarterly earnings of $0.48 per share, indicating a year-over-year increase of 4.4%. Revenues are expected to be $1.85 billion.
Headlines
America’s Wealthiest Gain $1.5 Trillion During Biden's Term Despite Oligarchy Concerns
The wealthiest Americans, led by tech giants like Elon Musk, Larry Ellison, and Mark Zuckerberg, saw their fortunes soar by over $1.5 trillion during President Joe Biden’s administration, according to the Bloomberg Billionaires Index. The top 0.1% of U.S. earners collectively gained more than $6 trillion in wealth over the last four years, fueled by booming tech industries and surging market valuations. This period marked a record concentration of wealth in the hands of America’s elite.
Despite these gains, Biden warned in his farewell address of the dangers posed by an emerging “oligarchy” and a “tech industrial complex,” which he argued threaten the foundations of U.S. democracy.
Israel Delays Vote on Gaza Ceasefire Amid Last-Minute Disputes
Israeli Prime Minister Benjamin Netanyahu delayed a planned cabinet vote on the Gaza ceasefire deal, originally set for Thursday, citing Hamas's attempts to modify the agreement. Hamas reportedly sought to include additional prisoners in the release list, prompting Netanyahu to state that the cabinet would not convene until all terms were accepted.
TSMC Reports Record Q4 Profit on Robust AI Chip Demand
Taiwan Semiconductor Manufacturing Company (TSMC) announced record-breaking fourth-quarter results, driven by surging demand for AI chips and advanced processors used in high-performance computing and 5G applications. Revenue for the quarter rose 38.8% year-over-year to NT$868.46 billion ($26.36 billion), exceeding the NT$850.08 billion expected. Net income soared 57% to a record NT$374.68 billion, surpassing estimates of NT$366.61 billion.
TSMC’s high-performance computing division, responsible for AI and 5G products, contributed 53% of total revenue, up 19% from the prior quarter. Wendell Huang, TSMC's CFO, highlighted that revenue from AI accelerators nearly tripled in 2024 and is expected to double in 2025 as AI adoption expands.
NVIDIA’s Rubin AI Architecture to Launch Ahead of Schedule in H2 2025
NVIDIA’s next-gen Rubin AI architecture is set to debut six months early in the second half of 2025, thanks to SK hynix accelerating its HBM4 memory development. HBM4, with speeds up to 6.4 Gbps and 24–32 Gb layers, integrates memory and logic semiconductors into a single package, enhancing performance and power efficiency. NVIDIA will exclusively access HBM4 before market-wide availability, enabling Rubin GPUs to launch ahead of competing solutions.
Built on TSMC’s 3nm process and CoWoS-L packaging, Rubin focuses on exceptional performance-per-watt to address rising power demands in AI computing. Mass production is expected by Q4 2025, giving NVIDIA a significant advantage over rivals whose equivalent solutions are slated to arrive much later, positioning Rubin to dominate the AI sector.
Biden Passes TikTok Ban Enforcement to Trump Administration
As President Biden prepares to leave office, his administration has deferred enforcement of the looming TikTok ban to President-elect Donald Trump. The federal law requires ByteDance, TikTok’s Beijing-based parent company, to divest its stake in the app by January 19 or face a nationwide shutdown. TikTok and ByteDance have appealed to the Supreme Court, arguing that the law violates First Amendment rights, but the court is expected to side with the government, citing national security concerns. The Biden administration confirmed it would not enforce the deadline, leaving the issue to the incoming administration.
Trump is reportedly considering an executive order to delay enforcement by 60–90 days, aiming to negotiate a resolution that addresses national security concerns while keeping TikTok operational.
American Express Settles DOJ Fraud and Marketing Allegations for $230 Million
American Express has agreed to pay approximately $230 million to settle allegations of deceptive marketing and resolve a Department of Justice (DOJ) wire fraud investigation. The settlement includes over $138 million tied to a non-prosecution agreement with federal prosecutors in Brooklyn for allegedly providing inaccurate tax advice on wire products marketed in 2018 and 2019. These products were falsely promoted as offering tax-deductible fees and tax-free rewards points for small- and mid-sized businesses.
An additional $108.7 million addresses civil claims that American Express deceptively marketed credit cards to small businesses between 2014 and 2017. Allegations include misrepresenting rewards, fees, and credit check practices, as well as submitting falsified financial information.
Anduril Industries to Build Massive Advanced Manufacturing Facility in Ohio, Adding 4,000 Jobs
Defense contractor Anduril Industries is set to construct a 5 million-square-foot advanced manufacturing facility in central Ohio, creating 4,000 jobs, state officials announced Thursday. The facility, dubbed "Arsenal 1," will occupy a 500-acre site near Rickenbacker International Airport in Pickaway County, southeast of Columbus. The plant will focus on producing military drones and autonomous air vehicles, with operations expected to commence in July 2026. Ohio Governor Mike DeWine hailed the project as the state's largest job creation and payroll initiative to date, emphasizing Ohio’s rich aerospace legacy and its growing role as a hub for high-tech manufacturing.
The new facility bolsters Ohio’s emerging “silicon corridor,” joining major projects like Intel's $20 billion chip factory and Honda’s $3.5 billion battery plant. Anduril aims to use advanced software and production technologies to "hyperscale" U.S. military manufacturing capabilities. The project will receive significant support, including a job creation tax credit, $70 million from the All Ohio Future Fund, and additional incentives from JobsOhio.
Energy Department Approves $22.9 Billion in Loans to Modernize U.S. Power Grids
In one of its final moves, the Biden administration's Energy Department announced $22.9 billion in loan guarantees to support eight utilities in modernizing power grids, increasing renewable energy use, and passing savings to customers. These guarantees, part of the Inflation Reduction Act’s $250 billion loan authority, aim to lower emissions and air pollution by funding projects such as upgrading transmission lines and deploying renewable energy infrastructure.
The loans target utilities serving over 14.7 million people across 12 states. Highlights include $9 billion for Michigan’s DTE Electric and Gas to install solar, wind, and battery storage and reduce methane leaks. In the Pacific Northwest, PacifiCorp will receive $3.52 billion to construct 700 miles of new transmission lines across Idaho, Oregon, and Utah, enabling greater integration of wind and solar power.
DOE Approves $1.66 Billion Loan Guarantee for Plug Power’s Clean Hydrogen Initiative
The U.S. Department of Energy (DOE) has announced a $1.66 billion loan guarantee to Plug Power Inc. to construct up to six facilities across the United States to produce clean hydrogen using innovative electrolyzer technology. This initiative, part of the Biden administration's clean energy agenda, supports the development of a nationwide hydrogen fueling network aimed at reducing greenhouse gas emissions and fostering a robust clean energy economy. The facilities are expected to cut emissions by 84% compared to conventional hydrogen production methods and supply hydrogen fuel for various sectors, including material handling and transportation.
Plug Power’s electrolyzer technology, produced at its gigafactory in Rochester, NY, will enable the efficient and modular production of hydrogen-powered by renewable energy. The project is set to create up to 200 construction jobs and at least 50 full-time roles per facility while supporting the Biden administration's Justice40 Initiative to benefit disadvantaged communities.
