Wall Street Indexes Hugged Flatline, European Markets Dropped, China's Tech Rally Faltered

Alexander Garcia
19 Feb, 2025
Miami

Wall Street indexes wavered around the flatline, and the S&P 500 index scaled a new intraday record high. 

The S&P 500 index declined 0.02%, and the Nasdaq Composite fell 0.01%, amid a lack of catalysts as investors reviewed a fresh batch of earnings. 

Investors reacted to the latest results from Toll Brothers, Expeditors International, Cadence Design Systems, Arista Network, and Toro Corp. 

Amid a busy season of earnings, on Thursday investors are looking forward to results from Carvana, Garmin, Wix.com, Walmart, Alibaba Group, Copart, Booking.com, and Akamai Technologies.  

Investors have overlooked brewing tariff flip-flops and rising geopolitical tension, and they have remained focused on the positive macroeconomic backdrop and positive outlook for corporate earnings.

Moreover, investors are still factoring in as many as three or four rate cuts in 2025, despite the latest blip in a rebound in inflation. 

U.S. housing starts slumped on a monthly basis in January and fell a little on an annual basis. 

Housing starts declined to a seasonally adjusted 1.366 million, a decline of 9.8% from the previous month's revised 1.51 million and 0.4% below from last year's 1.376 million.

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.2% to 6,117.90, the Nasdaq Composite edged down 0.2% to 19,993.24, and the Russell 2000 index was down 0.7% to 2,274.85.

The yield on 2-year Treasury notes edged lower to 4.31%, 10-year Treasury notes increased to 4.57%, and 30-year Treasury bonds climbed to 4.80%.

WTI crude oil increased $1.03 to $72.86 a barrel, and natural gas prices edged higher by $0.16 to $4.18 a thermal unit.

Gold increased by $0.73 to 2,934.62 an ounce, and silver edged down by $0.25 to $32.64.

The dollar index, which weighs the US currency against a basket of foreign currencies, increased 0.08 to 107.14 and traded at a two-year high.

 

Stock Movers

Capital One Financial increased 1.3% to $205.51, and Discover Financial edged up 0.4% to $196.55, and the two companies won approvals from their shareholders for their merger plan. 

Bumble Inc. plunged 20% to $6.47 after the online dating site's forward-looking guidance disappointed some investors. 

Toll Brothers dropped 6% to $114.49, and the luxury home builder reported weaker-than-expected fiscal first quarter results.

Nikola Corp. plunged 49% to $0.39, and the electric vehicle maker filed for Chapter 11 bankruptcy protection from creditors. 

 

Eurozone Bond Yields Advanced Fourth Consecutive Day, UK Inflation Accelerated In January 

Stock market indexes turned sharply lower in the European Union amid growing tariff threats and economic uncertainty. 

Benchmark indexes in Frankfurt and Paris eased from the highs in the previous session, and market enthusiasm waned after bond yields advanced for the fourth consecutive session. 

Investors were on the backfoot after the U.S. stepped up tariff threats, and the Trump administration reiterated imposing additional "reciprocal tariffs" covering all imports. 

The noise of tariffs, or import taxes, has weighed on the market for the last three weeks, as the incoming U.S. presidential administration stakes out a negotiating position with the European Union and adds pressure to buy LNG gas and other agricultural products from U.S. suppliers. 

The U.K.'s consumer price inflation accelerated to 3.0% in January from 2.5% in December, the Office of National Statistics reported Wednesday. 

The rebound in inflation was the fastest since March 2024, driven in large part by the increase in transportation costs and select food items. 

 

Europe Indexes and Yields

The DAX index decreased by 0.8% to 22,673.01, the CAC-40 index edged lower 0.8% to 8,139.37, and the FTSE 100 index declined by 0.5% to 8,725.49.

The yield on 10-year German bonds inched higher to 2.53%, French bonds increased to 3.19%, the UK gilts moved up to 4.61%, and Italian bonds edged higher to 3.58%.

The euro decreased to $1.04; the British pound was higher at $1.26; and the U.S. dollar was higher and traded at 90.45 Swiss cents.

Brent crude increased $0.51 to $76.32 a barrel, and the Dutch TTF natural gas was lower by €0.49 to €49.38 per MWh.

 

Europe Stock Movers

HSBC Holdings plc decreased 0.3% to 895.40 pence, and the Hong Kong- and London-based financial service provider reported a 2% increase in profit in 2024.

Net income advanced 2.2% to $22.9 billion from $22.4 billion, and diluted earnings per share edged up a fraction to $1.25.

The company announced a new $2 billion stock repurchase plan after completing a $9 billion buyback in 2023.

The company said it plans to pay a cash dividend of 36 U.S. cents for the fourth quarter, increasing its total payout to 87 U.S. cents in the year, compared to 61 U.S. cents in 2023. 

BAE Systems plc increased 1.3% to 1,354.0 pence after the defense company reported strong 2024 results. 

Glencore PLC dropped 7.5% to 328.60 pence, and the mining company reported a decline in earnings in 2024.

Philips NV plunged 10.5% to €24.26 after the Dutch medical device maker reported larger-than-expected losses in 2024.

MTU Aero Engines AG decreased 6.3% to €325.0, and the German engine maker said net income in the fourth quarter decreased to €143 million from €215 million a year ago.

 

China Tech Rally Hits Valuation Wall, Home Prices Extended Losses In January 

Stock market indexes in China and Hong Kong struggled to make headway after the artificial intelligence euphoria-driven rally faltered. 

The Hang Seng index decreased 0.3%, and the CSI 300 index edged higher in volatile trading.

Tech stocks focused Hang Seng Tech index hovered near a five-year high after Baidu reported a 2% decline in annual revenue. 

Investors feared that the latest rally over the last five weeks may have run out of steam after valuations surged to a five-month high. 

Market participants bid up tech stocks in the hope that the affordable, artificial intelligence-driven chatbot Deep Seek could spark another wave of earnings growth for the leading tech companies. 

However, Alibaba Group and Baidu Inc, the two main components of the tech index turned lower, sapping the market sentiment. 

Moreover, property developers remained in focus after home prices continued to decline in January. 

New home prices in first-tier cities declined 3.4% from a year ago in January, the National Bureau of Statistics said on Wednesday. 

The prices in four main cities—Beijing, Shanghai, Shenzhen, and Guangzhou—fell at a slower pace from the fall of 3.8% in December.

Prices in the second- and third-tier cities decreased at a 5% and 6% annual pace, respectively.

Existing home prices in the top-tier cities declined 5.6%  in January, and fell 7.6% in second-tier and 8.2% in third-tier cities. 

 

China Indexes and Stocks

The Hang Seng index decreased 0.3% to 22,911.93, and the mainland China-focused CSI 300 index jumped 0.7% to 3,940.16.

Baidu Inc. declined 2% to HK $88.35 after the search engine company reported weaker-than-expected 2024 results.

Revenue declined to RMB 19.34 billion from RMB 20.80 billion, net income increased to RMB 5.19 billion from RMB 2.60 billion, and earnings per diluted share rose to RMB 1.78 from 85 cents a year ago.

The company returned $356 million to shareholders in the quarter, bringing total repurchases to over $1 billion in 2024.

The company’s core business struggled, with online marketing revenue declining 7% from the same quarter last year, despite diversification efforts.

External ERNIE API calls marked a 178% increase, signaling a growing enterprise adoption.

China Vanke rose 2.4% to HK $5.93, Longfor Group Holdings advanced 0.8% to HK $10.20, and Sun Hung Kai Properties gained 0.4% to HK $70.80.

HSBC Holdings plc increased 1.2% to HK $88.40, and the Hong Kong and London-based financial service provider reported a 2% increase in profit in 2024.

Net income advanced 2.2% to $22.9 billion from $22.4 billion, and diluted earnings per share edged up a fraction to $1.25.

The company announced a new $2 billion stock repurchase plan after completing a $9 billion buyback in 2023.

The company said it plans to pay a cash dividend of 36 U.S. cents for the fourth quarter, increasing its total payout to 87 U.S. cents in the year, compared to 61 U.S. cents in 2023.