Market update: Tuesday 4th February 2025

Markets Rally as Tariff Pause Eases Concerns

• Trump halts tariffs, but market caution lingers

• Commodities gain traction as an inflation hedge

• Big Pharma earnings to shape sector sentiment

• PayPal’s Q4 profit dips despite revenue growthPalantir surges 20% on strong AI-driven results

Market Movers

PLTR – Palantir Technologies ▲ 1.52% (83.74)

SMCI – Super Micro Computer ▼ 5.86% (26.85)

JBLU – JetBlue Airways ▼ 8.21% (6.04)

MRNA – Moderna Inc ▼ 7.28% (36.55)

News Highlights

Stocks Hit Hardest by Tariff Uncertainty

Markets exhaled as Trump negotiated a temporary halt to new tariffs. The 25% tariffs on Mexico and Canada, alongside a 10% levy on China, had rattled investors. Historically, tariff-driven inflation concerns bolster commodities as a hedge—perfect timing for our collaboration with WisdomTree’s Commodities Smart Portfolio.

Sectors hit hardest:

• China-focused ETFs slumped as uncertainty loomed over U.S. tariffs.
  

• Automakers (GM, Ford), retailers (Nike, Lululemon), and food chains (Chipotle) saw notable declines.
  

• Railway stocks and Chinese e-commerce (Temu) also suffered losses.
  

Goldman Sachs warns that tariffs could trim 5% off markets as supply chains and earnings take a hit.

What are tariffs?

Tariffs act as a tax on imports—governments use them to shield local industries or balance trade deficits. However, they also create market turbulence. Trump's latest tariff strategy has already disrupted key sectors, from automobiles to retail.

Big Pharma Braces for Earnings Reports

Major pharmaceutical firms Merck, Pfizer, and Amgen are set to release their quarterly earnings, with investors paying close attention.

• Merck is down 26% from its June peak
  

• Pfizer and Amgen have dropped 17% since July
  

Key concerns include patent expirations, rising competition, and ongoing drug pricing debates. These earnings could shape sentiment for the broader sector. Investors will be watching for guidance on upcoming drug pipelines and any signs of a market rebound.

Alphabet Gears Up for Earnings

Alphabet’s Q4 earnings are in focus, with investors tracking cloud growth and AI investments.

• Earnings forecast: $2.13 per share (+29.6% YoY)

• Revenue projection: $96.6 billion (+11.9%)

• Ad revenue estimate: $71.7 billion

• CapEx surge: +20.2% to $13.2 billion
  

Shares are testing key resistance at $200, with options markets pricing in a 6.7% post-earnings swing. Meanwhile, regulatory risks and TikTok’s uncertain future remain headwinds.

Movers & Shakers

TGI – Triumph Group Inc ▲ 33.94% (25.10)Triumph shares soared after news of an acquisition by Warburg Pincus and Berkshire Partners. Shareholders will receive $26 per share in cash, valuing the deal at approximately $3 billion.

OMI – Owens & Minor Inc ▼ 35.18% (9.23)Owens & Minor stock plummeted following weak preliminary results and a $310 million goodwill impairment charge. Q4 revenue of $2.67–$2.70 billion fell short of estimates.

PLTR – Palantir Technologies Inc ▲ 1.52% (83.74)Palantir stock surged over 20%, topping $100 per share after reporting strong earnings. Up 500% YoY, Palantir continues to benefit from AI-driven demand and rising global tech competition.

UBS – UBS Group AG ▼ 1.36% (34.94)UBS reported $770 million in Q4 net profit, missing expectations of $886.4 million. The Swiss bank also announced a $1 billion share buyback for early 2025 as part of cost-cutting efforts following its Credit Suisse acquisition.

What to Watch

Pfizer’s Earnings Outlook

Pfizer reports Q4 2024 earnings with revenue expected at $17.5 billion and EPS at $0.48. The company’s growth now hinges on non-COVID products and strategic acquisitions, as COVID-19 revenue stabilises. Patent expirations remain a hurdle, but Pfizer projects 6% annual revenue growth from 2025–2030.

PayPal’s Q4 Results Incoming

PayPal reports earnings on 4th February 2025, with analysts forecasting EPS of $1.13—a 24% YoY drop. However, revenue is still climbing (+3% to $8.27 billion). Despite lower profits, PayPal stock has jumped 44% in the past year, driven by innovations like ‘Fastlane’ checkout and major partnerships—including Amazon.

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