Key TakeawaysUS Q4 GDP growth slowed sharply to 1.4%, missing the consensus estimate of 2.8% and marking a significant deceleration from the previous quarter's 4.4%.The Core PCE Price Index rose 3.0% year-over-year in December, coming in hotter than the 2.9% forecast and complicating the Federal Reserve's path toward interest rate cuts.US Equity Futures turned negative following the data release, with Nasdaq 100 Futures leading the decline with a 0.4% drop as investors weighed stagflationary signals.Nvidia ...

Economic Data - The U.S. consumer prices rose by +0.2% month-over-month in January, which is weaker than the expected +0.3% and marks the smallest gain since July [1] - Year-over-year headline inflation decreased to +2.4% in January from +2.7% in December, also below the expected +2.5% [1] - The core CPI, excluding food and fuel prices, increased by +0.3% month-over-month and +2.5% year-over-year in January, aligning with expectations [1] Market Performance - Wall Street's major equity averages closed mixed, with software stocks like CrowdStrike Holdings rising over +4% and ServiceNow gaining more than +3% [2] - Cryptocurrency-exposed stocks surged after Bitcoin's price rose over +4%, with Coinbase Global jumping over +16% [2] - Applied Materials advanced over +8% after reporting better-than-expected FQ1 results and issuing strong FQ2 guidance [2] - Constellation Brands slumped more than -8% after announcing a CEO succession [2] Federal Reserve Insights - The CPI report is not expected to change the Fed's near-term outlook, with potential for further easing later this year contingent on a convincing decline in inflation [6] - Chicago Fed President indicated that interest rates could be lowered if inflation trends towards the 2% target, but currently, it remains around 3% [6] - U.S. rate futures indicate a 92.2% chance of no rate change and a 7.8% chance of a 25 basis point rate cut at the March Fed meeting [7] Corporate Earnings and Reports - Notable companies reporting earnings this week include Walmart, Palo Alto Networks, and Booking Holdings, among others [11] - Quarterly 13F filings from major investors like Berkshire Hathaway are expected to provide insights into fourth-quarter portfolio changes [11] Global Market Trends - The Euro Stoxx 50 Index is attempting to stabilize after volatility due to AI concerns, with utilities and healthcare stocks advancing [13] - The U.K. unemployment rate rose to 5.2%, and Germany's annual inflation rate increased to 2.1% in January [14] - Japan's Nikkei 225 Index closed lower amid profit-taking and concerns over AI disruption, while Japan's bond market saw increased demand [16][17]

Core Viewpoint - The rapid advancement of artificial intelligence (AI) is creating significant risks for companies with high levels of corporate debt, as the timeline for adaptation has drastically shortened [1][2]. Group 1: Impact of AI on Corporate Debt - AI is transitioning from labs to businesses faster than anticipated, which poses a threat to companies that are not prepared, especially those with substantial debt [2][4]. - Traditional credit market assumptions, which allow borrowers several years to adjust to competition and technological changes, are becoming obsolete as AI compresses this timeline to 18 months or less [3][4]. Group 2: Financial Projections and Risks - UBS estimates that approximately $3.5 trillion in leveraged loans and private credit could be affected by this rapid disruption, with many borrowers having weaker balance sheets and higher debt loads [6]. - In UBS's baseline scenario, defaults could reach between $75 billion to $120 billion by the end of the year, with default rates potentially climbing to 2.5% for leveraged loans and up to 4% for private credit [6]. - If the pace of disruption accelerates, defaults could potentially double, leading to a significant repricing of risk across the entire credit market [7].

Core Viewpoint - Riot Platforms is experiencing significant attention from investors due to its substantial Bitcoin holdings and the volatility in Bitcoin prices, which directly impacts its stock performance [1][2]. Group 1: Financial Performance and Earnings - Riot Platforms holds over 18,000 Bitcoin, valued at more than $1.2 billion, which is a critical asset influencing its market position [1]. - The company is set to release its Q4 earnings and full-year financial results on February 24, which is anticipated to be a significant event for investors [4]. - There is ongoing speculation regarding the company's transition from a Bitcoin miner to a data center and AI infrastructure provider, with mixed market sentiment about this shift [5]. Group 2: Strategic Developments - Riot has entered into a land purchase and lease agreement for approximately 200 acres in Texas with Advanced Micro Devices (AMD), which could enhance its long-term earnings potential [6]. - This partnership with AMD is expected to support Riot's high-performance computing needs and may positively influence investor perceptions of the company's future earnings and EBITDA guidance [6]. Group 3: Market Sentiment - Investors are currently adopting a relatively bullish outlook on Riot Platforms as it approaches its upcoming financial report, despite the broader market weakness in AI-related stocks [7].

Group 1 - Walmart is set to release its quarterly earnings report, the first under new CEO John Furner, after recently achieving a market capitalization of $1 trillion, making it the first big box store to reach that size [1] - In its last report, Walmart posted a 4.2% increase in comparable sales and raised its full-year sales forecast, indicating strong performance [1] - Other companies expected to report earnings this week include John Deere, Analog Devices, Palo Alto Networks, Carvana, and DoorDash, with John Deere facing lower-than-expected annual net income due to difficult market conditions [1][1] Group 2 - The PCE inflation report for December is scheduled for release, which is closely monitored by the Federal Reserve and could influence interest rate decisions [1] - The GDP report for Q4 will provide insights into economic growth, following a strong Q3 growth revision of 4.4% [1] - New home sales and housing starts data for November and December, along with pending home sales for January, will be released, offering indicators for the housing market [1]

Group 1 - Elon Musk has been ranked No. 1 on Forbes' 2026 list of America's greatest living innovators, surpassing notable figures like Jeff Bezos and Bill Gates [1][2] - Musk is recognized for his role in building or scaling five multibillion-dollar companies across various sectors, including Tesla, SpaceX, Neuralink, xAI, and The Boring Company [2][3] - Jeff Bezos is ranked No. 2 for his impact on retail and cloud computing, while Bill Gates and George Lucas follow in third and fourth place, respectively [3][4] Group 2 - Musk's current net worth is approximately $684 billion, making him the world's richest person according to the Bloomberg Billionaires Index [5] - SpaceX is focusing on establishing a base on the moon as a priority before sending humans to Mars [5] - Blue Origin, led by Jeff Bezos, has paused its space tourism flights to concentrate on developing a lunar lander for NASA [6]

Market Overview - Overseas stock markets are lower, with the Euro Stoxx 50 down by -0.40%, China's Shanghai Composite down -1.26%, and Japan's Nikkei Stock 225 down -1.21% [1] - The markets are pricing in a 10% chance for a -25 basis point rate cut at the next policy meeting on March 17-18 [1] Earnings Reports - Q4 earnings season shows positive results, with 76% of the 358 S&P 500 companies that have reported beating expectations [2] - S&P earnings growth is expected to increase by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [2] - Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to rise by +4.6% [2] Inflation Data - US January CPI rose +2.4% year-over-year, weaker than the expected +2.5% and the smallest increase in 7 months [3] - January core CPI rose +2.5% year-over-year, matching expectations and marking the smallest increase in 4.75 years [3] Stock Movements - Stocks initially moved lower, with the S&P 500 and Nasdaq 100 hitting 1-week lows due to concerns over AI disrupting various sectors [4] - Stock indexes recovered from early losses, with a rebound in chip makers leading the market, particularly Applied Materials which jumped +10% after reporting stronger-than-expected Q1 adjusted EPS [5][9] - Cryptocurrency-exposed stocks are climbing, with Bitcoin up more than +4% and Coinbase Global up more than +14% [10] Sector Performance - Metal companies are under pressure due to reports of the Trump administration working to narrow tariffs on steel and aluminum products, with Century Aluminum down more than -6% [11] - Rivian Automotive is up more than +19% after reporting Q4 revenue of $1.29 billion, exceeding consensus expectations [12] - Arista Networks is up more than +5% after reporting Q4 revenue of $2.49 billion, better than consensus [13] - Airbnb is up more than +4% after reporting Q4 gross booking value of $20.4 billion, exceeding expectations [14] Company Forecasts - DraftKings is down more than -12% after forecasting full-year revenue of $6.5 billion to $6.9 billion, below consensus [15] - Expedia Group is down more than -5% despite better-than-expected Q4 earnings, as AI poses a long-term risk for the online travel industry [16]

Corporate Earnings and Market Reactions - Corporate earnings continue to attract investor attention, with notable results from companies like Restaurant Brands, Birkenstock, Howmet Aerospace, and Exelon [9] - AI-driven disruption is impacting companies, leading markets to penalize sectors perceived to face increased competition [9][10] - Software shares have been declining, with brokerage firms also reporting losses [10] Company-Specific Developments - AppLovin shares fell by 4.8% after disappointing fourth-quarter results, losing nearly a third of their value in the first six weeks of the year due to rising competition [6][10] - Cisco shares dropped 8% in premarket trading after reporting a quarterly adjusted gross margin that fell below expectations [6][10] - Applied Materials shares decreased by 1% following a $252 million settlement with the U.S. Department of Commerce for illegally exporting chipmaking equipment to China [8][10] Trade Relations - The U.S. and China may extend their trade truce for up to a year, with a meeting between President Trump and President Xi Jinping anticipated in early April [7][10] - The U.S. House of Representatives has narrowly supported a measure disapproving of Trump's tariffs on Canada, aiming to terminate the use of a national emergency for imposing punitive trade measures [7][10]

Market Performance - The S&P 500 rose 1.97%, marking its best day since May, while the Nasdaq Composite surged 2.18% on Friday, despite a sell-off in many tech stocks [1][3] - The Dow Jones Industrial Average reached 50,000 for the first time, although the S&P 500 is up less than 1% for the year, indicating a more nuanced market performance [7] Company Developments - Amazon's stock fell 5.58% after announcing a $200 billion spending plan, primarily for its Amazon Web Services division, leading to a 12% decline in its stock since Monday and a loss of over $310 billion in market value [1][2] - Microsoft and Meta also faced significant stock declines after announcing hundreds of billions in planned AI spending, contributing to a collective market value loss of nearly $1 trillion among Amazon, Microsoft, Meta, and Alphabet over five days [2][3] Sector Insights - Industrial and energy sectors performed well, with companies like Caterpillar benefiting from expected high demand for data centers [3][4] - Nvidia's shares rose nearly 8%, with the company now valued at over $4.5 trillion, as its CEO defended the sector's spending in response to high demand for AI applications [4] Investor Sentiment - The announcement by AI developer Anthropic about advanced AI capabilities triggered panic among investors in software and data analysis sectors, leading to heavy selling [5][6] - Small and medium stocks outperformed larger peers, with the Russell 2000 index soaring almost 4% [9]

Market Overview - U.S. equity markets are facing challenges due to a tech-led sell-off and cautious premarket activity, with a focus on corporate earnings and economic data [1] - The Nasdaq Composite, Dow Jones Industrial Average, and S&P 500 have all entered negative territory for 2026, with the S&P 500 dropping to 6790 points, reflecting a 0.12% decline from the previous session [6] Premarket Trading and Futures Movements - U.S. stock futures showed mixed results, with initial declines influenced by the technology sector and Amazon's earnings miss, but later rebounded slightly [2] - Nasdaq 100 futures fell by 0.37% initially but gained 0.35% later, while S&P 500 futures dropped 0.16% before rising 0.29% [2] Corporate Earnings Impact - Amazon's shares fell between 8% and 11% in premarket trading following a fourth-quarter earnings report that included a higher-than-expected capital expenditure guidance of approximately $200 billion for 2026, primarily for AI projects [3] - Alphabet's shares dropped 4% despite exceeding earnings expectations, attributed to concerns over heavy spending plans projected between $175 billion and $185 billion for 2026 [12] Treasury Yields - U.S. Treasury yields increased, with the 10-year yield rising to 4.20%, the 30-year yield climbing to 4.86%, and the 2-year yield increasing to 3.49% [4] Notable Movers - Gen Digital surged by 10.97%, FactSet Research Systems rose by 5.17%, and Coinbase Global gained 4.28% in premarket trading [5] - Molina Healthcare experienced a significant decline of 33.10%, while Centene dropped by 10.12% [5] Upcoming Economic Events - The U.S. Non-Farm Payrolls report and unemployment rate, typically a major market mover, has been postponed due to a federal government shutdown [8] - Federal Reserve officials are scheduled to speak, providing insights into economic outlook and monetary policy, with a focus on potential future rate decisions [9] Sector Recommendations - Analysts suggest focusing on companies with durable demand and strong balance sheets in sectors like aerospace, defense, gold, energy, and cybersecurity amidst market uncertainty, highlighting Howmet Aerospace and Chevron as potential opportunities [15]