Morning in New York: statistics and corporate news will determine the trading vector

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Today will be published the JOLTS data for December, postponed due to the shutdown, which will clarify the dynamics of labor demand. There will also be released statistics of initial applications for unemployment benefits for the week to January 31 (consensus: 213,000, previous value: 209,000). This report will be an important indicator of the stability of the labor market.

Member of the Board of Governors of the Federal Reserve System Lisa Cook said that in the current environment the priority for the regulator remains the early return of inflation to the 2% target and maintaining confidence in monetary policy. According to her, in the absence of an unexpected deterioration in the labor market, the main risks will be associated with inflation. That is why the regulator made a pause in rate cuts at the last FOMC meeting.

Prior to the main session, Linde (LIN), ConocoPhillips (COP), Bristol-Myers Squibb (BMY), KKR & Co (KKR), ICE (ICE) and Cummins (CMI) will report financial results for the latest quarter. Amazon (AMZN), Strategy (MSTR), Iren Ltd. (IREN), Bloom Energy (BE), Reddit (RDDT), Roblox (RBLX) and Microchip (MCHP) will release results after the market close.

Futures on American stock indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming trades as neutral with increased volatility. We focus on the S&P 500 fluctuations in the range of 6830-6930 points (from -0.7% to +0.7% to the closing level of the previous session).

- Alphabet (GOOGL) reported fourth-quarter EPS of $2.82 with consensus of $2.63 and revenue of $113.8 billion with average guidance of $111.4 billion. The corporation's sales grew nearly 18% YoY, with net income up within 30% YoY. Cloud business remains the main growth driver. Google Cloud revenue increased by almost 48% YoY, significantly exceeding market-wide expectations. The volume of contract backlog more than doubled, reaching $240 bln, which confirms the steady demand for AI infrastructure. The advertising division's performance was mixed. Its total revenue grew 13.5% YoY, but YouTube's revenue came in below consensus, which management attributed to a high base effect in the run-up to the 2024 election. GOOGL's post-market quotes were pressured by the announcement of a plan to more than double capital expenditures in 2026 to $175-185 bln. Investments will be used to expand AI computing capacity, develop Google DeepMind and support demand for cloud services. The investment community is concerned that such an aggressive investment program could put pressure on the corporation's free cash flow and profitability in the short term, despite the continued strong fundamental business dynamics and accelerating development of the AI ecosystem.

- Qualcomm 's (QCOM) adjusted EPS and revenue for the latest quarter came in at $3.5 (consensus: $3.40) and $12.25 billion (+5% YoY), respectively. However, company quotes reacted negatively to the report. Investors were disappointed by the cautious revenue forecast in the range of $10.2-11 bln at the average market guidance of $11.02 bln. The company factored in expectations of pressure from supply constraints on memory chips. The growth of automotive segment revenues by 15% YoY to $1.1 bln and of IoT solutions by 9% YoY confirms strategic diversification, but high dependence on the smartphone market causes restraint in the valuation of the issuer's shares.

- Coherent (COHR) reported Q2 FY 2026 adjusted EPS of $1.29 with consensus of $1.21, and a 17% YoY increase in revenue to $1.69 billion, which was also above estimates. Strong demand from AI data centers and optical infrastructure remained the key growth driver. The guideline for the current quarter is for revenue to rise to $1.7-1.84 billion and EPS to $1.28-1.48. Management noted that capacity expansion and the move to 6-inch wafers should support the scalability of the business and the gradual approach to its long-term margin target of 42%.

- Snap (SNAP) stock is rising on the premarket, reacting to the release of financial results for the fourth quarter. The company's adjusted EPS amounted to $0.03, while the forecasts included a loss of the same size. Revenue climbed 10% YoY to $1.72 billion, slightly beating average expectations. Haydens for the current quarter expects revenue in the range of $1.5-1.53 bln, slightly below consensus. A $500m buyback program was announced. Management noted the effect of a strategic turnaround on earnings growth, highlighting accelerated monetization through Snapchat+ subscriptions and higher margin ad formats.

On February 4, most U.S. stock indices ended in the negative under the influence of the ongoing correction in the technology sector and AI segment. S&P 500 decreased by 0.51%, Nasdaq 100 fell by 1.77%, Russell 2000 lost 0.9%, only Dow Jones added 0.53%.

Energy companies (XLE: +3.1%) were the leaders of growth, as well as the day before. The list of outsiders was headed by the technology sector (XLK: -2.79%).

Shares of the "Magnificent Seven" ended trading mostly in the negative amid renewed concerns about the prospects of AI. Apple (AAPL: +2.6%) and Microsoft (MSFT: +0.72%) showed positive dynamics.

The ISM Services Business Activity Index for January, as a month earlier, amounted to 53.8 points, matching the consensus. This confirms the positive trend in the largest segment of the US economy. At the same time, the components of new orders and employment declined, although they remained above the 50-point threshold, indicating a moderate cooling of demand.

Pressure on quotes was exerted by ADP data on the number of new job openings in the private sector, which amounted to 22,000 with forecasts of 45,000. Steady growth in employment is observed in the education and health care sectors, while in professional and business services the indicator is declining. The U.S. Ministry of Finance left the parameters of debt auctions unchanged.

- Silicon Laboratories (SLAB: +48.9%) will be acquired by Texas Instruments (TXN: -1.02%) for $7.5 billion, or $231 per share, which implies a premium of about 70% to the previous day's closing price. The transaction is expected to be completed in the first half of 2027.

- Fortive (FTV: +10.6%) beat expectations on quarterly revenue, EPS and operating margin despite moderate pressure on gross margin. An additional positive was the FY 2026 earnings guideline, which came in above consensus.

- Eli Lilly 's (LLY: +10.3%) fourth quarter earnings and revenues exceeded average market expectations. A significant contribution to these results was the growth in sales of Mounjaro and Zepbound in the U.S., which allowed management to present a guidance for fiscal 2026 above market-wide forecasts.

- Old Dominion Freight Line (ODFL: +9.9%) reported earnings per share better than consensus. Investors viewed positively the improvement in operating leverage due to tight cost control, as well as management's comments on the gradual strengthening of demand in recent months amid a still challenging operating environment.

- Uber Technologies (UBER: -5.2%) gave a cautious EBITDA outlook for the current quarter, although its Gross Bookings in the Mobility and Delivery segments were above expectations. The market also reacted negatively to the ongoing risks associated with competition from autonomous transportation providers.

- Boston Scientific's (BSX: -17.6%) profit for the quarter beat forecasts, but its operating margin fell short of average market expectations. This and weaker-than-expected results in the Electrophysiology segment, as well as a conservative guideline for fiscal 2026, reinforced the market's negative reaction.

This article was AI-translated and verified by a human editor