These 8 Items Are Shaping the Stock Market and Our Holdings Wednesday
ASML and TI point to robust AI and data-center demand, more layoffs, China and Nvidia are just some of what's influencing the market today.
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These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, following the S&P 500 notching a new all-time high Tuesday, U.S. equity futures point to all major market indexes moving higher when the market opens.
1. ASML Holding NV (ASML) shares soared to the highest ever after orders in the fourth quarter far exceeded analysts’ expectations, and the Dutch semiconductor equipment maker announced job cuts to boost efficiency. Bookings in the fourth quarter were a record €13.2 billion ($15.8 billion), as artificial intelligence fueled demand for its most sophisticated equipment… That compares with an average analyst estimate of €6.85 billion (Bloomberg)
2. Texas Instruments Inc. (TXN) gave a robust forecast for the first quarter, indicating that demand for industrial equipment and vehicles is recovering from a rough patch. (Bloomberg)
Good to hear, but TI’s comments about demand from data center and communications equipment were far more interesting given the Pro Portfolio’s holdings. TI’s data center revenue soared 64% year over year, while communications equipment climbed 20% on the same basis.
Combining ASML and TI’s comments paints a bullish picture for our chip holdings.
3. China has approved purchases of Nvidia’s (NVDA) popular H200 artificial-intelligence chip for the first time, giving authorization to several of Nvidia’s Chinese customers… (WSJ)
Obviously, good news for our shares of Nvidia and expectations are that the first approval will cover “several hundred thousand H200 chips” worth around $10 billion.
4. Amazon (AMZN) 2.63% increase; green up pointing triangle.com said it would cut around 16,000 corporate employees, the latest step in the technology giant’s efforts to slim down its workforce. The first round of cuts in October led to around 14,000 white-collar employees receiving pink slips. (WSJ)
While expected, this adds to the growing list of companies announcing headcount reductions. United Parcel Service (UPS) announced it would eliminate 30,000 jobs, Pinterest (PINS) said it would lay off nearly 15% of its workforce, and Citigroup (C) is slated to announce layoffs in the coming months. We’ll continue to track these announcements, but headlines like this and the uncertainty they bring are likely to keep impacting how and where consumers spend. We see that as good news for our positions in TJX (TJX) and Costco (COST) .
5. The Fed delivers its latest policy decision at 2 PM ET today with a presser by Fed Chair Powell to follow. “A decision to hold rates steady this month is likely to garner broad support from policymakers following a series of contentious cuts. While the majority of officials agreed in those instances to backstop a weakening labor market, another group of policymakers pushed for the focus to remain on elevated inflation.” (Bloomberg)
We see this as a non-event given recent data, and while Powell may touch on recent layoff announcements, he’s likely to reiterate the Fed will remain data dependent. We should expect comments from President Trump about Powell “being too late,” but it’s hard to argue with the recent core PCE data.
6. Congress faces a deadline Friday night to pass a package of spending bills or face a government shutdown. The bills can’t pass without the support of Democrats, and Senate Minority Leader Chuck Schumer (D., N.Y.) is digging in. In an unexpected plot twist, Trump and other Republicans are suddenly talking nice-ish about working with Democrats and trying to cut a deal. (WSJ)
Polymarket shows a 75% chance of a government shutdown on Saturday.
We will continue to monitor this, but our view is that given developments in Minneapolis, a shutdown would be a bad look for the Republicans. If we get a shutdown, the question will be one of duration and how that impacts government spending.
7. Economic data today per TipRanks: MBA Mortgage Applications (Weekly), EIA Crude Oil Inventories (Weekly), FOMC Decision (2 PM ET), Powell Presser (2:30 PM ET).
8. Companies reporting today per TipRanks: ASML (ASML) , AT&T (T) , Corning (GLW) , Elevance Health (ELV) , GE Verona (GEV) , General Dynamics (GD) , Starbucks (SBUX) , VF Corp. (VFC) , Celestica (CLS) , IBM (IBM) , Lam Research (LRCX) , Las Vegas Sands (LVS) , Meta (META) , Microsoft (MSFT) , ServiceNow (NOW) , Tesla (TSLA) , United Rentals (URI) .
At the time of publication, TheStreet Pro Portfolio was long NVDA, AMZN, META, MSFT, NOW, TJX, COST and URI.
