Wed 4 Feb: After the Bell
AI Jitters Deepen as Tech Slides and Earnings Disappoint ...
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Good evening,
Investor sentiment remains firmly anchored to AI and software, but cracks are widening. The Nasdaq extended its decline, down 1.5% on the day and roughly 4% over the past week, as AI jitters rattled global tech stocks. Chipmakers came under renewed pressure, the IT sector sharply underperformed, and the MAGS ETF slid 3.7% over five sessions, while energy emerged as Wednesday’s best-performing sector and the Dow proved relatively resilient.
Earnings amplified the volatility: chip giant AMD plunged 17%, its worst session since 2017, despite beating Q4 revenues, as a cautious Q1 outlook disappointed investors amid lofty AI expectations. After the close, Alphabet beat estimates with shares edging 3% higher in extended trading, while Qualcomm sank 9%.
Across macro assets, the $ firmed mainly versus the ¥, crypto losses deepened with Bitcoin down 18% in seven sessions to $73,300, and core bond yields were little changed with the 10-year Treasury steady at 4.28%. In commodities, energy prices moved higher, copper fell 3%, and silver jumped 4.5%.
Earnings: → Mixed to poor today: Eli Lilly rallied 10% on blowout Q4 results and upbeat 2026 guidance fueled by Mounjaro/Zepbound demand outpacing rivals.
Novo Nordisk plunged 17%, confirming a grim 2026 sales outlook (-5-13% drop from US pricing pressures, Lilly competition, semaglutide generics), wiping out recent gains.
AbbVie (-3.5%), Uber (-5%), and Santander (-3.5%) also disappointed expectations; overall sentiment was negative for growth stocks amid pricing headwinds and softening demand signals.
Economics: → The US ADP Employment weekly change showed that private sector jobs rose by 22k, well below the ~46k forecast and down from the prior month’s 37k, a mild deceleration in job creation. The US ISM Services PMI for January held steady at 53.8, indicating continued expansion in the services sector.
→ €-zone’s headline inflation slowed to 1.7% YoY, marking the lowest rate since late 2024 and undershooting the ECB’s 2 % target. Core inflation also eased to about 2.2%, indicating softer underlying price pressures outside energy/food. This backdrop reinforces expectations that the ECB will hold interest rates steady in the near term.
Corporate Deals: → Texas Instruments (mcap $203bn) to acquire Texas-based wireless-technology company Silicon Labs (mcap $6.6bn) for $7.5bn ($231/share cash, including debt) in a semiconductor consolidation play targeting home, healthcare, and industrial IoT applications. The deal promises EPS accretion in year one and $450 million annual synergies within three years. Silicon shares jumped 49% today and is 55% higher YTD.
→ German consumer goods company Henkel AG (mcap €32bn) will acquire Netherlands-based speciality coatings firm Stahl for €2.1bn (including debt) from Wendel, expanding its adhesives business into high-growth coatings for home, healthcare, and industrial applications. The deal follows Henkel’s ATP Adhesive purchase, targeting €1.2bn net proceeds for Wendel and accelerated growth in adhesive technologies.
→ Zurich Insurance’s sweetened $11bn bid (up to 1,335 GBp/share) has won over UK insurer Beazley, whose board is now open to recommending it after prior rejections over undervaluation.
→ In IPOs, Connecticut-based hair loss company Veradermics priced its upsized IPO at $17 per share, raising $256mn, implying a fully diluted valuation of about $596mn. Shares more than doubled to $37.75 on their NYSE debut.
Day Ahead:
Monetary Policy → ECB (unch at 2.15% exp), BoE (unch at 3.75% exp), Banxico (unch at 7% exp). Data → €-zone retail sales, Germany factory orders. Earnings → Amazon, Shell, Unilever, BNP, BBVA, Conoco P, Linde, BMS.
See you tomorrow.
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