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Thursday, February 20

Noteworthy macro moves today: USD/CNH -0.5%. US Dollar Index -0.4%. Copper +1.4%. Noteworthy US mega-cap moves today: Walmart Inc (WMT) -6.8%. 

Recent economic data releases have shown mixed signals regarding the U.S. economy, with initial jobless claims rising to 219,000 for the week ending February 15th, exceeding expectations of a decrease to 215,000. Additionally, the Philadelphia Fed Manufacturing Index fell significantly from January's reading of 44.3 down to just 18.1 in February—indicating slower growth in manufacturing activity despite remaining above zero.

In currency markets and equity indices, movements are notable as well; specifically, there has been weakness in major currencies against a backdrop of tariff concerns raised by President Trump who confirmed plans for new tariffs on imports including automobiles and pharmaceuticals set to take effect soon. This uncertainty is contributing pressure on global equities while gold prices continue their upward trend towards record highs amid safe-haven demand.

Furthermore, central bank commentary remains influential: Federal Reserve officials expressed caution about potential inflationary pressures stemming from trade policies during recent meeting minutes which may affect future interest rate decisions amidst ongoing discussions around monetary policy adjustments within other large economies like Japan where speculation grows over possible rate hikes following positive GDP reports.

iShares China Large-Cap ETF (FXI) [+1.9%]
The iShares China Large-Cap ETF (FXI) has experienced a price increase of 1.9% since Wednesday. The People's Bank of China (PBoC) has maintained its Loan Prime Rates at 3.10% for one-year and 3.60% for five-year terms, aligning with market expectations amid ongoing trade tensions due to U.S. tariff announcements. Alibaba Group reported fiscal third-quarter revenue growth that surpassed analyst expectations, positively influencing sentiment towards Chinese equities. Additionally, the central bank announced measures to enhance financing channels for private enterprises, aiming to support their development and stimulate consumption. Social media discussions noted a hint from Trump about a potential deal with China, contributing to recent price movements. Among FXI's holdings, JD.com and other companies showed notable performance, with JD set to release its financial results on March 6, 2025. The USD/CNH movement also contributed positively to FXI's performance.

VanEck Gold Miners ETF (GDX) [+1.1%]
Gold prices have surged to record highs, reaching approximately 2,955 per ounce, driven by safe-haven demand amid inflation fears and global trade tensions following U.S. President Donald Trump's announcement of plans to impose tariffs on various imports. This backdrop has positively impacted the VanEck Gold Miners ETF (GDX), which has seen a daily return of nearly 1%. Social media discussions highlight that GDX formed a Golden Cross for the first time since April, a technical event historically associated with significant price increases. Additionally, the ETF's top contributors include AU, NEM, AEM, GOLD, and WPM, reflecting strong performance from these holdings amidst rising gold prices. Meanwhile, the AUD/USD currency pair has increased, suggesting a broader market movement that may also be influencing GDX's recent performance.

BABA | +11.0% | +296.5B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd reported robust financial results for its fourth quarter, with earnings per share at 2.93, surpassing the analyst consensus estimate of 2.66. Revenue reached 38.38 billion, exceeding expectations of 38.19 billion and reflecting a year-over-year increase of 4.67%. The company saw notable growth in customer management revenue from Taobao and Tmall, which rose by 9%, while cloud revenue increased by 13%, bolstered by a consistent triple-digit growth in AI-related product revenue for the sixth consecutive quarter. Additionally, social media highlighted that mainland Chinese investors raised their ownership in Alibaba to a record level, adding a net 106 million shares over the past week. Following the earnings announcement, BABA shares experienced a premarket increase of approximately 10%.

WMT | -7.9% | -61.1B
Walmart Inc | Consumer Staples Merchandise Retail
Walmart Inc. reported Q4 FY25 adjusted earnings per share (EPS) of 0.66, surpassing the consensus estimate of 0.64, with revenues reaching 180.55 billion, exceeding expectations of 180.01 billion. Despite these strong quarterly results, the company provided a disappointing outlook for FY26, projecting adjusted EPS between 2.50 and 2.60, below the FactSet estimate of 2.77. For Q1 FY26, Walmart anticipates adjusted EPS of 0.57 to 0.58, against an estimate of 0.64. Following this guidance, shares are trading lower by approximately 7.84% in premarket activity. Additionally, Walmart announced a dividend increase from 0.21 to 0.235 per share. Social media discussions have highlighted concerns over future growth, particularly in light of potential tariffs from Mexico and Canada, which could impact profitability.

BAX | +7.4% | +1.3B
Baxter International Inc | Health Care Equipment
Baxter International Inc. reinstated its overweight rating and set a price target of 39, following the announcement of its Q4 2024 adjusted earnings per share (EPS) of 0.58, which surpassed the consensus estimate of 0.52. Q4 sales reached 2.75 billion, exceeding expectations of 2.67 billion. The company also projected a sales growth of 4%-5% on an operational basis for 2025. For Q1 2025, Baxter guided an adjusted EPS range of 0.47 to 0.50, with anticipated sales growth of 3%-4% on a reported basis and approximately 4% operationally. Following the release of these results, Baxter's stock experienced a notable increase of around 10%. Additionally, the company reported actual Q4 EPS at 0.77 and revenues at 2.8 billion, both higher than expected figures. For FY2025, Baxter set EPS guidance at 2.45-2.55 and revenue guidance at 11.2 billion-11.3 billion.

BMRN | +7.6% | +1.0B
Biomarin Pharmaceutical Inc | Biotechnology
Biomarin Pharmaceutical Inc. shares are trading higher following the release of its Q4 financial results, which exceeded expectations. The company reported an adjusted EPS of 0.92, surpassing the analyst estimate of 0.73, and revenues of 747 million, compared to the expected 712.5 million, reflecting a year-over-year revenue increase of 16%. For FY2025, Biomarin projected adjusted EPS between 4.20 and 4.40 and total revenues of 3.1 billion to 3.2 billion, both above consensus estimates. B of A Securities maintained a Buy rating on the stock and raised the price target from 99 to 103. Additionally, Roctavian sales for Q4 were reported at 11 million, with Voxzogo sales reaching 208 million in the same period. Following the earnings announcement, shares rose significantly shortly thereafter.

LYG | +7.0% | +14.7B
Lloyds Banking Group PLC | Diversified Banks
Lloyds Banking Group PLC reported its fourth-quarter results, revealing a net income of GBP 4.38 billion, an increase from GBP 4.23 billion year-over-year. However, earnings per share (EPS) decreased to 1.0 pence from 1.7 pence last year. The statutory profit after tax for the full year declined to GBP 4.5 billion from GBP 5.5 billion, with net interest income down 7% to GBP 12.8 billion. The bank anticipates an underlying net interest income of GBP 13.5 billion for 2025 and has maintained its guidance for 2026, targeting a cost-to-income ratio below 50% and a return on tangible equity exceeding 15%. Lloyds declared a final dividend of 2.11 pence per share, raising the total for the year to 3.17 pence, and announced a share buyback program of up to GBP 1.7 billion. Social media discussions have highlighted these financial results and forecasts, particularly the statutory pretax profit of GBP 824 million, which fell short of estimates.

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