To The Moon

Last Week's Recap

The US Market - A crazy volatile week

• The stock market saw massive losses Monday in AI hardware-related stocks amid fears that the AI model from China's DeepSeek will reduce the need for data centers, power and more. However, the $.SPX(.SPX)$ and $.IXIC(.IXIC)$ pared weekly losses, while the Dow Jones moved toward record highs.

• After tumbling 3.07% on Monday, the Nasdaq ended Friday with a weekly loss of 1.6%. The S&P 500 and blue-chip Dow finished the week 1% lower and 0.3% higher, respectively.

• The three major averages also posted monthly gains, with the $.SPX(.SPX)$ rising 2.7% and the Nasdaq advancing 1.6%. The Dow outperformed during the period, jumping 4.7%.

• The Federal Reserve held its key interest rate steady on Wednesday, confirming that policy is in a holding pattern after three straight rate cuts. There's no need to cut now that job gains have firmed up and the Fed waits for clarity on the Trump agenda, Fed chief Jerome Powell indicated.

• Friday’s release of the December PCE — the Federal Reserve’s preferred inflation gauge — showed the data marked an acceleration from the prior month’s rate of 2.4%, raising some concerns that inflation remains sticky. Excluding food and energy, core PCE also increased 0.2% monthly and 2.8% on an annual basis.

• On Saturday, Trump signed an order imposing 25% tariffs on imports from Mexico and Canada, as well as a 10% duty on China. Investors have no details about the percent, whether they’re temporary or permanent, or what reaction you might get from Canada or Mexico or China.

The US Sectors & Stocks - NVDA plunged 16%

• The tech sector was the worst performing S&P sector last week, as Monday’s big sell-off was sparked by developments out of China’s DeepSeek artificial intelligence startup. $NVIDIA(NVDA)$, which plunged nearly 17% on Monday, posted a weekly loss of roughly 16%. Same as other semiconductor stocks, the $VanEck Semiconductor ETF(SMH)$ lost nearly 7% for the week.

• Financial sector continued to outperform, as $Goldman Sachs(GS)$ 、 $JPMorgan Chase(JPM)$ and $Morgan Stanley(MS)$ traded at all- time high. Meanwhile, payments giants $Visa(V)$ and Mastercard (MA) hit new highs.

• $Tesla Motors(TSLA)$ shares are volatile sharply, both of its EPS and revenue missed expectations. However, Musk on the earnings said that unsupervised full self-driving will come to Texas in June, with robotaxi tests in many cities by year end. Musk noted that 2025 as maybe the most important year in Tesla's history.

• $Apple(AAPL)$ climbed 6% for the week, almost as a defensive selector during Monday's sell-off. The iPhone maker topped its fiscal Q1 results on the top and bottom line. iPhone revenue declined nearly 1% year over year, with sales especially weak in China. However, the company’s strong services revenue helped offset weaker-than-expected iPhone sales.

• $Microsoft(MSFT)$ reported fiscal Q2 EPS and revenue were better-than-expected. But the Azure cloud infrastructure business grew 31%, slightly below the expectation of 33%, while Microsoft guided lower for current-quarter revenue, blaming currency headwinds. It said its AI business has surpassed an annual revenue run rate of $13 billion, up 175% year over year. Microsoft stock price tumbled more than 6%.

• $Meta Platforms, Inc.(META)$ earnings rose 50% while revenue climbed 21% to $48.38 billion, both beating. But revenue guidance was light while the company sees a big rise in expenses. In the prior week, Meta guided 2025 capital spending well above views. Meta stock rose strongly to a new record high.

• $IBM(IBM)$ stock jumped roughly 14% on earnings beat. The venerable tech giant signaling a strong 2025, citing strong demand for new AI projects.

• $Twilio(TWLO)$ jumped 20% after the company achieved positive operating income on a GAAP basis for Q4, a first for the company. The company also issued an upbeat long-term profit forecast and said it its board approved a new $2 billion stock buyback program.

• $Atlassian Corporation PLC(TEAM)$ surged more than 15% to a new high after it reported fiscal Q2 earnings that topped Wall Street estimates. Revenue guidance for Q3 also was better than forecasts. "By infusing (artificial intelligence) throughout our world-class cloud platform, we're empowering all teams to accelerate collaboration and unlock organizational knowledge." said CEO Mike Cannon-Brookes.

Hong Kong Market - $HSI(HSI)$ rallied 0.8%

• Hong Kong stocks rose in the holiday-shortened week, on speculation global funds will switch from expensive US tech companies after Chinese start-up DeepSeek sparked a sell-off on Wall Street with its popular low-cost artificial intelligence (AI) model. The Hang Seng Index (HSI) advanced 0.8% for the week.

Singapore Market - $STI.SI(STI.SI)$ rose 1.4%

• Singapore shares tracked regional gains in the holiday-shortened week. The benchmark Straits Times Index (STI) rose 1.4% to 3,855.82.

• Singapore's Manufactured Products Price Index (SMPPI) rose 5.8% month-on-month in December 2024, accelerating from a 1.6% increase in November, driven by higher prices in electrical machinery and other non-oil categories. Meanwhile, Singapore's Import Price Index fell 3.6% year on year in December 2024, extending the 6.0% drop in the preceding month. The Export Price Index also slipped 3.1% year on year in December, following a 5.2% decrease in the previous month.

• The United States is looking into whether Chinese AI company DeepSeek got around US export restrictions by buying Nvidia chips through companies in Singapore, Bloomberg reported on Friday (Jan 31), citing sources.

Australian Market - $S&P/ASX 200(XJO.AU)$ was up 1.5%

• The ASX 200 index was up 1.5% last week, with strong expectations that the Reserve Bank would cut interest rates in February helping to push shares higher.

• Australian CPI slowed to 0.2% in the three months through December, lower than market consensus of 0.3%. Over 12 months, CPI cooled to 2.4% from 2.8%, also better than analysts' expectations of 2.5%.

The Week Ahead

Macro Factors - Tariff reaction will be at the forefront

US Market Insights (Feb 3-7): Trump Tariffs and Retaliation May Unnerve the Stock Market

• The latest jobs data and a heavy slate of fourth-quarter earnings reports will be this week’s highlights. Tariff reaction will be at the forefront of the market narrative in the week ahead. While forecasts on the full economic impact of tariffs vary across Wall Street, the levies are widely expected to negatively hit U.S. growth and place upward pressure on inflation.

• Friday’s scheduled release of the January jobs report could show whether the labor market continues to strengthen. Economists are expecting growth of 165,000 nonfarm payrolls and an unchanged unemployment rate of 4.1%. A strong labor market was one of the factors the Fed cited in its decision to keep interest rates unchanged following its most recent meeting.

• Following last week’s decision on interest rates, market participants are also expected to hear from several Fed officials, including Atlanta Fed President Raphael Bostic, Chicago Fed President Austan Goolsbee, and San Francisco Fed President Mary Daly.

Read more >>

Earnings

• The corporate earnings season will reach its halfway point with the busiest week of the reporting period.More than 100 S&P 500 companies are slated to post their latest quarterly reports.

• Earnings from tech, media, and pharmaceutical firms could be in the spotlight the week, with Google parent Alphabet (GOOG, GOOGL) and Amazon (AMZN) set to report, along with Disney (DIS) and weight-loss drugmakers Novo Nordisk (NVO) and Eli Lilly (LLY).

• So far, about 180 S&P 500 members have reported fourth-quarter earnings. Of those, 77% have topped analyst expectations. That’s above the 10-year average beat rate of 75%, according to FactSet.

Amazon Q4 Earnings Preview: AI and AWS Continue to Drive Growth Momentum

• Google Q4 Earnings Preview: Capex in Focus as LLMs Power Search, Cloud