Daily Market Recap – Thursday February 6, 2025
U.S. equities closed mixed in a relatively quiet session, with the S&P 500 finishing near its best levels after trading in a narrow range. The Dow declined 0.28%, while the S&P 500 and Nasdaq gained 0.36% and 0.51%, respectively. The Russell 2000 underperformed, down 0.39%.
Sector & Stock Performance
Winners: Big tech was mostly higher, with NVDA extending gains, while travel/tourism (HLT), exchanges (ICE), tobacco (PM), banks, and China tech outperformed.
Laggards: Managed care, hospitals, MedTech, life insurance (MET, AFL), semis (ARM, QCOM), homebuilders, energy, and ag chemicals struggled.
Macro Highlights
The session was uneventful on the macro front, with no major updates on tariffs. Markets are awaiting further clarity on a potential Trump-Xi call, while concerns about the execution of Trump’s domestic policy priorities have been rising. Treasury Secretary Bessent reiterated his focus on the 10-year yield and restated support for China tariffs and permanent tax cuts.
Economic data was mixed:
Initial jobless claims ticked higher.
Q4 productivity exceeded expectations, but unit labor cost growth was softer.
The BoE cut rates by 25bps as expected, but revised down its 2025 growth forecast while raising inflation projections.
Earnings & Flows
With nearly 60% of the S&P 500 having reported, the blended earnings growth rate now stands at +15.5%, a 200bps improvement from last week. Beat rates remain strong, with 78% of companies surpassing EPS estimates and aggregate earnings surprises at +6.8%.
Notable themes from today’s reports:
Tech: ARM and QCOM posted disappointing results, but not enough to alter broader sector sentiment. SWKS slid on iPhone content loss, while RBLX tumbled on weak DAUs and bookings.
Retail & Consumer: RL, TPR, and PTON outperformed, with strong guidance and cost-saving initiatives.
Healthcare: Mixed results—LLY was in line with its pre-announcement, but MOH missed due to higher costs, and ALGN flagged FX headwinds.
Industrials: HON and BDX declined following spinoff announcements.
Notable Gainers
FNMA (+14.6%) – Boosted by reports that new HUD Secretary Scott Turner prioritizes privatizing the GSEs.
TPR (+12.0%) – Strong quarterly beat with improved guidance; Coach brand outperformed.
PTON (+12.0%) – Solid cost savings and raised guidance for FY EBITDA and free cash flow.
COHR (+11.5%) – Better-than-expected results with strong Datacom and Telecom performance.
PM (+11.0%) – Outperformed on robust pricing and volume mix in combustible tobacco.
Notable Decliners
SWKS (-24.7%) – Hit hard on iPhone content reduction and an upcoming CEO transition.
HII (-18.3%) – Weak Newport News results and below-consensus FY25 guidance.
HP (-16.5%) – Missed Q4 expectations and provided weak 2025 EBITDA guidance.
SYM (-15.9%) – Disclosed SEC subpoena, weak revenue guidance overshadowed gross margin strength.
PI (-15.2%) – Q1 guidance disappointed, citing geopolitical risks and supply chain shifts.
Looking Ahead
Friday’s key reports include nonfarm payrolls (expected +170K vs. December’s 256K), unemployment rate (seen steady at 4.1%), and average hourly earnings (+0.3% m/m expected). The University of Michigan consumer sentiment survey will also be released.
Investment Takeaways:
Markets remain resilient despite mixed earnings results, with broad strength in consumer and travel names offsetting weakness in semiconductors, healthcare, and autos. The continued rally in big tech, led by NVDA, suggests investors are still favoring AI-driven growth stories, though selective weakness in ARM and QCOM highlights valuation concerns and cyclical headwinds. Meanwhile, heavy retail inflows continue to support risk appetite, reinforcing the broader momentum trade. Treasury yields remain in focus, with the long end showing some weakness after this week’s bull flattening move. We will be closely watching Friday’s nonfarm payrolls report for further clues on labor market strength and potential Fed policy implications.