To The Moon

After opening the session on a downbeat note following an underwhelming earnings report from Google parent Alphabet (GOOGL), stocks found some momentum later in the day, bolstered in part by semiconductor giant Nvidia (NVDA) and other artificial intelligence (AI) players.

The stock market showed a positive trend, although index performance was mixed due to declines in major stocks. S&P 500 gained 0.39%, NASDAQ also gained 0.19% after it was playing with an unchanged mark for most of the session, the DJIA has the largest gain of 0.71%.

Despite challenges, market breadth was positive, with advancers outnumbering decliners by nearly a 2-to-1 ratio on both the NYSE and the Nasdaq.

Trade Balance Report Show Widening Deficit

We saw the December Trade Balance Report giving a widening deficit to $98.4 billion from a downwardly revised $78.9 billion in November. December exports were $7.1 billion less than November, while imports increased by $12.4 billion.

January S&P Global US Services PMI came in slightly higher at 52.9 compared to the previous figure of 52.8. The ISM Services PMI show a decrease to 52.8% in January compared to a revised 54.0% in December, this indicate that there is slower expansion in the services sector.

We will be expecting the Preliminary Q4 Productivity and Unit Labor Costs, Weekly Initial Claims, and Continuing Claims at 8.30am ET and the Weekly natural gas inventories at 10.30am ET.

S&P 500 Three Sectors Dragged By Major Stock Decline

The equal-weighted S&P 500 increased by 0.5%, and eight out of the 11 S&P 500 sectors closed higher. The other three sector was dragged down by some of the major stocks performance after their earnings.

$Alphabet(GOOGL)$ shares fell 7.29% after earnings results failed to meet investor expectations, compounded by a $75 billion capital expenditure plan for 2025. This decline followed a recent peak of over $204 just five days earlier. Walt Disney (DIS) also dropped by 2.4% after reporting a decrease in Disney+ subscribers.

These has caused the communication services to lose 2.79%, making it the biggest lagger among the sectors.

Note Yield Down But Support A Positive and Upward Bias For Equities

The decline in market rates supported an upward bias in equities. The 10-year yield decreased by nine basis points to 4.42%, and the 2-year yield dropped by four basis points to 4.18%. The bond market rally was driven by weaker-than-expected Services PMI readings for January from China, Europe, and the U.S., raising growth concerns.

The bond market rally persisted despite the U.S. Treasury's announcement to increase this month's 10-, 20-, and 30-year auction sizes by $3 billion each. Buying in the Treasury market was also fueled by geopolitical uncertainty after President Trump's comments about the U.S. taking over the Gaza Strip during a press conference with Israeli Prime Minister Netanyahu.

Stocks To Watch

MicroStrategy (MSTR) reported a Q4 Non-GAAP EPS of -$3.20, with revenue of $120.7M missing expectations by $2.03M. Despite a 48.4% increase in subscription services revenues, product support and other services revenues declined by 10.8% and 20.8% respectively. The company revised its annual BTC Yield target to a minimum of 15% for 2025 and announced new KPIs aimed at achieving a $10 billion "BTC $ Gain" target.

$Ford(F)$ posted a Q4 Non-GAAP EPS of $0.39, surpassing expectations, with revenue of $48.2B. The company anticipates adjusted EBIT between $7.0 billion and $8.5 billion for the full year, despite potential market headwinds. Ford's shares fell by 4% following the announcement.

Alphabet (GOOG) saw a 7% decline, impacting the Nasdaq, as the company faced investor scrutiny over its performance. The Information Technology sector, however, gained strength, offsetting the decline in Communications Services, which includes Alphabet.

The Walt Disney Company (DIS) reported strong Q1 2025 performance, driven by box office success and increased streaming profitability. CEO Bob Iger highlighted technological advancements for Disney+ and ESPN's streaming integration, while maintaining a positive outlook for the Experiences segment.

$Qualcomm(QCOM)$ exceeded expectations with a Q1 Non-GAAP EPS of $3.41 and revenue of $11.67B, driven by a 20% increase in QCT revenue. The company provided Q2 guidance with revenue expected between $10.2B and $11.0B, maintaining a strong growth trajectory.

$ARM Holdings(ARM)$ reported a Q3 Non-GAAP EPS of $0.39, surpassing expectations, with a 19.3% revenue increase. However, shares fell by 2.89% amidst ongoing market volatility.

I would be expecting ARM to recover after the ongoing market volatility start to subside, as we can see that the VIX is showing signs of decline, hence I believe this volatility should be going away soon.

What we can expect from ARM would be another new upside trend if it can hold out the defense level at around $153, because if we looked at the past trading, as long as ARM bulls managed to create a nice daily uptrend above the $154 level, we could be seeing a nice upside movement.

I am glad that I have gotten into ARM during the sell-off in August 2024, and it was a good price target.

$BigBear.ai Holdings(BBAI)$ secured a contract from the Department of Defense to advance its Virtual Anticipation Network prototype, aiming to enhance media assessments related to national security.

Google (GOOG) announced it would no longer set hiring targets for workforce representation, citing a shift in its diversity, equity, and inclusion strategies.

Canadian cannabis stocks, including Canopy Growth (CGC) and Tilray Brands (TLRY), surged following Aurora Cannabis's (ACB) better-than-expected Q3 fiscal 2025 revenue, marking significant gains across the sector.

Summary

I would think that market would be in a stronger positive trend as the volatility began to subside following some strong showing from big semiconductor names, though we have seen ARM dropping after its earnings, but I believe there would be some nice recovery to watch today (06 Feb) for ARM.

We are also expecting another big tech names earnings, Amazon after market close today, this should give us an overview of how the mag 7 would be performing moving forward.

Appreciate if you could share your thoughts in the comment section whether you think market can continue in a positive trend stronger as volatility potentially set to decline.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.