Good Morning!
On Thursday, February 6, the S&P 500 closed at 6,083.57, up 0.44% from the previous trading session. The NASDAQ was up slightly 0.55%, finishing at 19,791.99. The Dow Jones Industrial Average was down 0.26% to close at 44,747.63. Meanwhile, the Russell 2000 rose 0.66%, ending the session at 2,307.12.
Crypto Highlights
Bitcoin (BTC): Currently trading at $100,093, up 1.89% over the past 24 hours.
Ethereum (ETH): Up 1.25%, now trading at $2,783 per coin.
Solana (SOL): Up 3.51%, currently trading at $202.96.
Ripple (XRP): Soared 6.81% in the last 24 hours, now trading at $2.53 per coin.
Headlines
January Jobs Report: Unemployment Falls to 4%, Wages Rise More Than Expected
The U.S. labor market remained resilient in January, with the unemployment rate unexpectedly falling to 4%, its lowest level since May 2024. According to the Bureau of Labor Statistics, the economy added 143,000 jobs last month—below the 170,000 forecast but bolstered by upward revisions to December and November data, which added a combined 100,000 more jobs than previously reported.
Wages showed stronger-than-expected growth, rising 4.1% year-over-year, up from December’s 3.9% and surpassing economists' expectations of 3.8%. On a monthly basis, wages climbed 0.5%, reinforcing concerns about inflation. With the labor force participation rate inching up to 62.6%, analysts suggest that the data supports the Federal Reserve’s cautious approach to interest rate cuts.
U.S. Mortgage Rates Decline for Third Straight Week, Offering Some Relief
The average rate on a 30-year mortgage in the U.S. fell to 6.89% this week, marking its third consecutive weekly decline, according to Freddie Mac. While still elevated compared to historical lows, the drop provides slight relief for prospective homebuyers ahead of the busy spring market. The 15-year fixed-rate mortgage also saw a decline, falling to 6.05% from 6.12% last week. Despite these recent reductions, mortgage rates remain higher than a year ago and continue to be influenced by Federal Reserve policies and bond market fluctuations.
Ukraine Receives F-16s from Netherlands, First Mirage Jets from France
Ukraine has received its first batch of French Mirage 2000 fighter jets along with U.S.-made F-16s from the Netherlands, marking a significant boost to Kyiv’s air force as it continues to resist Russian aggression. Defense Minister Rustem Umerov confirmed the aircraft had arrived and would soon begin combat missions.
The Netherlands previously pledged 24 F-16s to Ukraine and is also supporting a pilot training center in Romania. France has supplied an undisclosed number of Mirage 2000 jets, adapted for air-to-ground strikes.
Trump Administration to Lay Off Nearly All of U.S. Aid Agency’s Staff
The Trump administration is drastically reducing the U.S. Agency for International Development (USAID) workforce from over 10,000 to approximately 290 employees. The affected positions include Foreign Service officers and contractors who have been placed on indefinite leave or had their contracts terminated. USAID officials were also informed that about 800 aid contracts were being canceled. The agency’s operations, which have played a key role in humanitarian and health initiatives worldwide, are expected to shrink significantly. Secretary of State Marco Rubio, who assumed control of USAID, cited insubordination within the agency as the reason for the cuts, while assuring that some exemptions would be granted to mitigate disruptions.
Trump Seeks to Close Carried Interest Tax Loophole
Donald Trump has renewed his push to eliminate the “carried interest” tax loophole, which benefits private equity and hedge fund managers. In a meeting with Republican leaders, Trump emphasized his commitment to closing this preferential tax treatment, which allows these financiers to have their profits taxed at lower capital gains rates instead of higher ordinary income rates.
Trump Administration Freezes EV Charger Funding, Stalling State Plans
The Trump administration has suspended billions in federal funding for electric vehicle (EV) chargers, including $71 million allocated to Washington state under the National Electric Vehicle Infrastructure (NEVI) program. The decision, part of a broader rollback of Biden-era initiatives, puts a halt to previously approved state plans for building charging networks along major highways like Interstate 5. In a letter to state officials, the U.S. Department of Transportation announced that all state plans under the NEVI program were rescinded, with new guidance expected in the spring. As a result, grant applications for the funds remain in limbo, and projects tied to the bipartisan infrastructure law signed by Joe Biden in 2021 face uncertainty.
In addition to the halted NEVI funds, about $21 million intended for truck charging and hydrogen refueling stations along I-5 remains on hold. While some EV-related funding, including $10 million for charger repairs, was still available, other federal grants—such as $53 million from the Environmental Protection Agency—were also temporarily frozen. State officials are now awaiting further clarity on whether funds for renewable energy projects, including a $156 million solar power grant, will be reinstated.
Source: Washinton State Standard
Porsche Reintroduces Combustion Engines Amid Weak EV Demand
Porsche is shifting its focus back to combustion engines and plug-in hybrid models after disappointing sales of its electric vehicles, particularly in China. The automaker announced it would invest €800 million in traditional and hybrid powertrains, acknowledging a slowdown in demand for fully electric models. This strategic pivot comes at a cost, with Porsche warning that its profit margins for 2025 are expected to drop to 10-12%, well below its long-term target of 20%. The news sent Porsche shares down 6% on Friday, while its holding company, Porsche SE, revised its anticipated writedown on its stake in the automaker to as much as €3.5 billion.
China Condemns U.S. "Coercion" After Panama Ends Infrastructure Agreement
China has strongly criticized the United States after Panama declined to renew a key infrastructure agreement under Beijing’s Belt and Road Initiative (BRI). Chinese Foreign Ministry spokesperson Lin Jian accused the U.S. of using "pressure and coercion" to undermine the BRI, which aims to strengthen China’s global influence through major infrastructure projects. The decision follows U.S. Secretary of State Marco Rubio’s warning to Panamanian President José Raúl Mulino that failure to reduce Chinese involvement in the canal could lead to U.S. retaliation. Mulino, however, has pushed back against pressure from Washington, refusing to discuss U.S. ownership of the vital trade waterway.
While Panama’s move is seen as aligning with U.S. interests, discussions continue about possibly revoking a no-bid 25-year contract held by Hong Kong-based Hutchison Ports for canal operations. An audit into the extension of this agreement is underway and could lead to a rebidding process. Meanwhile, Trump has expressed frustration over transit delays caused by drought-related water shortages in the canal, though these issues are unrelated to Chinese involvement. China maintains that its Belt and Road projects have benefited over 150 countries, including Panama, and urged the country to resist foreign pressure and prioritize long-term bilateral relations.
Temu Shifts to "Local" Products After Trump Ends Trade Loophole
Temu is promoting more "local" products in response to President Trump's reversal of a trade loophole that previously allowed Chinese firms to avoid U.S. taxes and customs duties. The Chinese-owned e-commerce giant has ramped up its marketing of items stored in U.S. warehouses, boasting ultra-fast shipping and low prices. This shift comes after Trump imposed a 10% tariff on Chinese imports and eliminated the "de minimis" rule, which had allowed packages under $800 to enter the U.S. duty-free. The rule had enabled Temu and rival Shein to rapidly expand in the U.S. by shipping directly from China at minimal costs.
Big Tech to Spend Over $300 Billion on AI in 2025 Amid Investor Concerns
The world’s largest tech companies are set to invest over $300 billion in artificial intelligence (AI) infrastructure in 2025, with Amazon, Meta, Microsoft, and Alphabet leading the charge despite investor worries over returns. Amazon has topped its rivals with a planned $100 billion-plus investment in AI-related data centers and computing power, while Microsoft and Alphabet are each committing around $75–$80 billion.
France and UAE Partner to Develop $30-$50 Billion AI Data Center
France and the United Arab Emirates have agreed to develop a 1-gigawatt artificial intelligence data center as part of a broader strategic AI partnership, with investments estimated between $30 billion and $50 billion. The agreement was signed during a meeting between French President Emmanuel Macron and UAE President Sheikh Mohamed bin Zayed Al Nahyan in Paris ahead of an upcoming global AI summit.
Researchers Build Open-Source Rival to OpenAI’s o1 Model for Under $50
AI researchers from Stanford and the University of Washington have successfully trained an AI "reasoning" model for less than $50 in cloud computing costs, challenging the dominance of major AI labs. Their model, s1, performs comparably to OpenAI’s o1 and DeepSeek’s R1 in math and coding tasks and is available on GitHub along with its training data and code.
The team used distillation—a process that extracts reasoning capabilities from another AI model—to fine-tune s1 from Google’s Gemini 2.0 Flash Thinking Experimental. Unlike large-scale reinforcement learning, this approach required only 1,000 carefully curated training examples and took under 30 minutes to complete using 16 Nvidia H100 GPUs. One researcher estimated he could rent the required compute power for just $20 today.
AMD Accelerates Instinct AI GPU Roadmap, Eyes Tens of Billions in Revenue
AMD has accelerated the release of its Instinct MI350 AI GPUs to mid-2025, citing strong customer demand and Intel's exit from the AI accelerator race. Built on CDNA 4 architecture with a 3nm process node and 288GB of HBM3E memory, the MI350 will compete directly with NVIDIA’s Blackwell GPUs. AMD expects significant traction, with deployments already secured from Microsoft, IBM, and Meta for its MI300X accelerators.
Looking ahead, AMD confirmed its MI400 series for 2026, featuring CDNA-next architecture and potentially HBM4 memory. The company aims to scale its AI data center business from $5 billion in 2024 to tens of billions in annual revenue, reinforcing its push into high-performance AI computing.
U.K. Orders Apple to Allow Government Access to Encrypted Cloud Data
The U.K. government has secretly ordered Apple to create a backdoor granting security officials unrestricted access to all encrypted user data stored in its cloud, according to sources familiar with the matter. The unprecedented demand, issued last month, would require Apple to provide global access to protected backups, undermining the company’s long-standing privacy commitments. Unlike previous requests for access to specific accounts, this order mandates a blanket capability to decrypt user data, raising significant privacy and security concerns.
If enforced, the move would mark a major setback for tech companies in their ongoing efforts to resist government surveillance overreach. Apple has historically opposed such measures, arguing that weakening encryption for one government would compromise security for all users. The U.K.’s directive also sets a concerning precedent for other democratic nations, potentially pressuring tech giants to grant authorities broader access to private communications.
Intel Data Center CPU Sales Plummet to Lowest Level in 13 Years
Intel’s data center CPU sales in 2024 hit their lowest point in over a decade, driven by fierce competition from AMD, shifting market dynamics favoring AI servers, and the transition to higher-core count models. According to analysts at SemiAnalysis, Intel’s unit sales fell 20% from 2011 levels and over 80% from their 2021 peak. While overall Data Center and AI (DCAI) revenue increased by $182 million year-over-year, Intel reported a 10% decline in server CPU shipments due to reduced demand and competitive pressures.
The market shift has been years in the making, with AMD’s 4th Gen EPYC processors offering up to 96 cores, significantly outpacing Intel’s Xeon lineup. The growing demand for AI servers, which require fewer CPUs but multiple GPUs, has further weakened Intel’s foothold. Despite the release of its Xeon 6 processors featuring up to 128 high-performance cores, Intel continues to struggle against broader industry trends.
Intel's Workforce Shrinks by 23,000 as Layoffs Continue
Intel’s ongoing job cuts have led to a reduction of 23,000 positions since 2022, far exceeding initial layoff projections. The semiconductor giant recently announced 58 additional layoffs at its Folsom, California, campus, adding to the over 1,000 jobs lost at the site since early 2023. Overall, Intel’s workforce declined by approximately 16,000 in 2024 alone.
The job cuts are part of Intel’s broader effort to trim $10 billion in costs in 2025 as it struggles against competitors like Nvidia. Despite a $900 million restructuring effort in 2024, the company’s revenue dropped to $53.1 billion, down from $54.2 billion in 2023. Its stock price also fell 60% over the past year.
Lockheed Martin Wins $23.5 Million Contract to Support Submarines
Lockheed Martin (LMT) has secured a $23.5 million contract from the U.S. Naval Sea Systems Command to provide engineering support for submarine electronic warfare systems. The work, set to be completed by February 2026, will be carried out in Syracuse, NY, with options for additional services on both newly constructed and in-service submarines.
With rising geopolitical tensions and increasing investments in advanced naval technologies, the global submarine market is projected to grow at a 7.6% CAGR through 2030, according to Mordor Intelligence. Lockheed Martin, a key player in submarine combat systems, stands to benefit from this trend, supporting the U.S. Navy’s fleet of 72 submarines across various classes.
BlackRock Increases Stake in Strategy to 5%, STRK Gains in Pre-Market Trading
BlackRock (BLK) has increased its ownership in Strategy (MSTR) to 5%, according to a recent Schedule 13G filing, marking a rise from its previous 4.09% stake as of September 30, 2024. This equates to approximately 11.2 million shares. The disclosure follows regulatory requirements for institutional investors holding over 5% of a publicly traded company without seeking control or influence.
Meanwhile, Strategy’s newly listed perpetual preferred stock (STRK) continues its upward momentum. After debuting on the Nasdaq with a 2% gain, STRK is up another 5% in pre-market trading, reflecting strong investor interest.
Honeywell to Split Into Three Companies Amid Investor Pressure
Honeywell announced plans on Thursday to break into three independent, publicly traded companies, a move driven by activist investor Elliott Management. The newly formed entities will include Honeywell Automation, focusing on mechanized solutions for factories and warehouses; Honeywell Aerospace, a dedicated aerospace supplier serving Boeing and Airbus; and Advanced Materials, a sustainability-focused specialty chemicals and materials company. The spin-offs are set to be completed between late 2025 and the second half of 2026, with Honeywell ensuring a tax-free transition for its shareholders.
The decision follows mounting pressure from Elliott Management, which took a $5 billion stake in the industrial giant, arguing that a split would unlock greater shareholder value. Honeywell’s stock had underperformed compared to the broader market, prompting renewed calls for structural change. This isn't the first time Honeywell has faced investor demands for a breakup—similar pressures emerged in 2017 but were successfully resisted.
U.S. Lawmakers Push to Ban DeepSeek AI from Government Devices
A bipartisan group of U.S. lawmakers is proposing a ban on Chinese AI startup DeepSeek’s chatbot for government use, citing national security risks. Representatives Darin LaHood (R-IL) and Josh Gottheimer (D-NJ) plan to introduce legislation on Friday that would prohibit the use of DeepSeek on official devices, requiring agencies to develop removal guidelines within 60 days. The move follows growing concerns over China’s AI advancements and echoes previous efforts to ban TikTok due to fears of data access by the Chinese government.
DeepSeek’s recent launch of its R1 model, a cost-effective AI system rivaling top U.S. models, has intensified worries that China is gaining ground in the AI race. Lawmakers argue that China’s cybersecurity laws could allow government access to user data, posing a significant threat to national security. The proposed ban aligns with similar restrictions imposed by Australia, Italy, and Taiwan.
Yesterday's Earnings
Amazon.com (AMZN): Actual EPS: $1.86 (Beat by 26.53%), Expected EPS: $1.47, Actual Revenue: $187.8B (Beat by 0.25%), Expected Revenue: $187.33B, Market Cap: $2.46T
Eli Lilly (LLY): Actual EPS: $5.32 (Beat by 0.38%), Expected EPS: $5.30, Actual Revenue: $13.53B (Miss by 1.81%), Expected Revenue: $13.78B, Market Cap: $791.34B
Philip Morris (PM): Actual EPS: $1.49 (Miss by 0.67%), Expected EPS: $1.50, Actual Revenue: $9.71B (Beat by 2.21%), Expected Revenue: $9.5B, Market Cap: $224.77B
AstraZeneca ADR (AZN): Actual EPS: $2.09 (Beat by 97.17%), Expected EPS: $1.06, Actual Revenue: $14.89B (Beat by 5.23%), Expected Revenue: $14.15B, Market Cap: $223.48B
Linde PLC (LIN): Actual EPS: $3.97 (Beat by 0.51%), Expected EPS: $3.95, Actual Revenue: $8.28B (Miss by 1.54%), Expected Revenue: $8.41B, Market Cap: $217.47B
Honeywell (HON): Actual EPS: $2.47 (Beat by 0.41%), Expected EPS: $2.46, Actual Revenue: $10.1B (Beat by 1.30%), Expected Revenue: $9.97B, Market Cap: $136.94B
ConocoPhillips (COP): Actual EPS: $1.98 (Beat by 10.61%), Expected EPS: $1.79, Actual Revenue: $14.7B (Beat by 3.01%), Expected Revenue: $14.27B, Market Cap: $127.17B
Bristol-Myers Squibb (BMY): Actual EPS: $1.67 (Beat by 13.61%), Expected EPS: $1.47, Actual Revenue: $12.34B (Beat by 6.94%), Expected Revenue: $11.54B, Market Cap: $115.65B
ICE (ICE): Actual EPS: $1.52 (Miss by 0.65%), Expected EPS: $1.53, Actual Revenue: $2.32B (Miss by 1.28%), Expected Revenue: $2.35B, Market Cap: $96.07B
Fortinet (FTNT): Actual EPS: $0.74 (Beat by 21.92%), Expected EPS: $0.61, Actual Revenue: $1.66B (Beat by 4.40%), Expected Revenue: $1.59B, Market Cap: $82.21B
Air Products (APD): Actual EPS: $2.86 (Beat by 0.35%), Expected EPS: $2.85, Actual Revenue: $2.93B (Miss by 1.01%), Expected Revenue: $2.96B, Market Cap: $69.84B
Becton Dickinson (BDX): Actual EPS: $3.43 (Beat by 14.71%), Expected EPS: $2.99, Actual Revenue: $5.17B (Beat by 1.17%), Expected Revenue: $5.11B, Market Cap: $66.45B
Hilton Worldwide (HLT): Actual EPS: $1.76 (Beat by 5.39%), Expected EPS: $1.67, Actual Revenue: $2.78B (Beat by 0.36%), Expected Revenue: $2.77B, Market Cap: $65.17B
Yum! Brands (YUM): Actual EPS: $1.61 (Met Expectations), Expected EPS: $1.61, Actual Revenue: $2.36B (Met Expectations), Expected Revenue: $2.36B, Market Cap: $40.08B
Xcel Energy (XEL): Actual EPS: $0.81 (Miss by 8.99%), Expected EPS: $0.89, Actual Revenue: $3.12B (Miss by 17.27%), Expected Revenue: $3.77B, Market Cap: $38.82B
IQVIA Holdings (IQV): Actual EPS: $3.12 (Beat by 0.32%), Expected EPS: $3.11, Actual Revenue: $3.96B (Beat by 0.76%), Expected Revenue: $3.93B, Market Cap: $38.34B
Kenvue (KVUE): Actual EPS: $0.26 (Miss by 16.13%), Expected EPS: $0.31, Actual Revenue: $3.7B (Miss by 6.33%), Expected Revenue: $3.95B, Market Cap: $37.96B
Take-Two (TTWO): Actual EPS: -$0.71 (Miss by 220.34%), Expected EPS: $0.59, Actual Revenue: $1.37B (Miss by 1.44%), Expected Revenue: $1.39B, Market Cap: $36.66B
Monolithic (MPWR): Actual EPS: $4.09 (Beat by 2.76%), Expected EPS: $3.98, Actual Revenue: $621.7M (Beat by 2.24%), Expected Revenue: $608.09M, Market Cap: $33.42B
Hershey Co (HSY): Actual EPS: $2.69 (Beat by 13.03%), Expected EPS: $2.38, Actual Revenue: $2.89B (Beat by 1.76%), Expected Revenue: $2.84B, Market Cap: $31.15B
Equifax (EFX): Actual EPS: $2.12 (Beat by 0.47%), Expected EPS: $2.11, Actual Revenue: $1.42B (Miss by 1.39%), Expected Revenue: $1.44B, Market Cap: $30.68B
Earnings Today
Fortive (FTV): Actual EPS: $1.17 (Beat by 4.46%), Expected EPS: $1.12, Actual Revenue: $1.62B (Miss by 0.61%), Expected Revenue: $1.63B, Market Cap: $27.51B
FirstEnergy (FE): Expected EPS: $0.7133, Expected Revenue: $4.36B, Market Cap: $23.06B
Cboe Global (CBOE): Expected EPS: $2.14, Expected Revenue: $527.51M, Market Cap: $22.10B
Kimco Realty (KIM): Actual EPS: $0.23 (Beat by 27.78%), Expected EPS: $0.18, Actual Revenue: $525.4M (Beat by 1.75%), Expected Revenue: $516.38M, Market Cap: $15.04B
