Newsquawk Daily US Equity Opening News - Apple sees downgrades; MMM, SCHW, PLD beat on earnings; VST gains after fire burns out

TODAY'S AGENDA:

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  DAY AHEAD: The UK will announce of the size of its new index-linked gilt maturing 2035. On the ags front, the global dairy trade data results will be released (last time, the GDT Price Index fell by -1.4% to USD 4,029, while Whole Milk Powder prices fell by -2.1% to USD 3,804). Today's US corporate earnings include NFLX, UAL, STX, COF, and ZION.


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  BROKER MOVES: GM upgraded at Deutsche; AAPL downgraded at Jefferies and Loop Capital. For the full list, please click here.
  

EQUITY NEWS:

NOTE: On account of the US market holiday on Monday, today’s briefing recaps equity news that has been out since the close on Friday.

ENERGY

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  US Energy - President Donald Trump has initiated a major overhaul of US energy policy, focusing on increasing fossil fuel production and rolling back Biden-era climate policies; his directives cover a wide range of sectors, from oil fields to renewable energy and consumer products. It follows weekend reports that Trump plans moves to facilitate new oil and gas development on federal lands. It also comes amid reports that Asian buyers of fossil fuels, including those from South Korea, Taiwan, and Vietnam, were increasing imports of US oil and gas to address trade tensions and appease incoming President Trump, who has threatened tariffs on nations with trade surpluses. And elsewhere, Trump reiterated his demand that the EU increase imports of US oil and gas to avoid tariffs, stating that the US would impose tariffs unless the EU buys more American energy. Trump also said that the US will likely cease purchasing oil from Venezuela, citing the country’s ample domestic oil supply. On the US SPR, Trump announced plans to refill the reserve to full capacity, following its depletion under President Biden; he emphasised lowering prices and boosting energy exports. On wind energy, Trump’s energy policies will end leasing to massive wind farms that degrade our natural landscapes and fail to serve American energy consumers.


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  Tanker Backlog - A backlog of tankers is forming at Russia’s Kozmino oil port due to US sanctions, which target 161 oil tankers, traders, and vessel insurers. The disruption has caused oil futures to rise as the market reacts to the supply impact, BBG reports.


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  BP (BP) - Restarted the Alpha platform at Azerbaijan’s Shah Deniz gas deposit after an unplanned outage. The platform, which exports gas to Europe, is expected to reach normal production levels in a few days. The Bravo platform remained unaffected.


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  Kinder Morgan (KMI) - On January 20th, announced the immediate suspension of truck operations at Galena Park Terminal and Galena Park West Chemical Plant, along with halting marine activity at Galena Park and Pasadena terminals.


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  Chevron (CVX) - The US FTC announced on Friday it approved a consent order to resolve antitrust issues concerning the company's USD 53bln takeover of Hess.


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  Eni (ENI IM) - A spokesperson said that the Devil’s Tower production was undergoing statutory scheduled maintenance activities, expected to last around 3 weeks.

MATERIALS

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  Metal Prices - On Monday and Tuesday, metal prices came under pressure after President Trump announced plans to likely impose tariffs of up to 25% on goods from Mexico and Canada by February 1st. The move raised concerns over trade, although no immediate tariffs were applied to China.


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  Aluminium - The Albanese Labor Government has announced an AUD 2bln investment in Australia’s aluminium industry. The new Green Aluminium Production Credit will support smelters transitioning to renewable electricity, with eligibility for support based on clean aluminium production over 10 years. Elsewhere, Bloomberg reports that Australia’s major iron ore export port, Port Hedland, resumed operations after Severe Tropical Cyclone Sean moved away from the Pilbara region; other ports, including Dampier and Cape Preston West, reopened by midday, while Ashburton and Varanus Island remain closed.


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  China Steel - China’s steel production remained above 1bln tons in 2024, but with domestic demand declining, further production cuts are expected, Bloomberg reports. Unprofitable mills will face consolidation as the property market crisis and economic shifts persist.


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  China Coal - China’s record coal purchases in 2024 were largely driven by increased imports from Australia and Mongolia, while Russian shipments declined. With demand now stabilising, Mongolia could expand its share of the Chinese market, at Russia’s expense, Bloomberg reports.


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  BHP Group (BHP) - Reported a 17% increase in Q2 copper production, reaching 510,700 metric tons, with a 33% increase at its Escondida mine in Chile, offsetting a stagnation in iron ore production due to softening demand and disruptions at South Australian projects. Reported Q2 iron ore production at 73.1mln and projects FY25 production guidance for WAIO, BMA, NSWEC, and Samarco in the upper half of the guidance range. It added that elevated Nickel West costs are expected, with a suspension review planned by February 2027.


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  Barrick Gold (GOLD) - Exploring the sale of its 50% stake in the Zaldivar copper mine in Chile, focusing on larger, more profitable projects. The company has appointed advisors and reached out to potential buyers. Barrick jointly owns the Zaldivar mine with Antofagasta (ANFGF).

INDUSTRIALS

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  3M Co (MMM) Q4 2024 (USD): EPS 1.68 (exp. 1.66), Revenue 5.8bln (exp. 5.78bln). Guidance: FY25 revenue view 24.02bln (exp. 23.6bln); FY25 EPS seen between 7.60-7.90 (exp. 7.74). Commentary: Q4 capped a year of strong results as we returned to positive organic revenue growth in the full year; Says it is carrying the momentum forward, confident in FY25. Buybacks: Targeting USD 1.5bln of buybacks in FY25.


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  WillScot (WSC) - Has fielded takeover interest from several private-equity firms, according to Semafor.


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  Spirit AeroSystems (SPR) - Projects net revenues of USD 8.56bln in 2025 (exp. 7.77bln), USD 9.55bln in 2026 (exp. 9.12bln), and USD 10.02bln annually for 2027-2028. Meanwhile, a stockholder filed a lawsuit on January 15th in New York, alleging the company’s proxy statement/prospectus omitted material information.


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  Deutsche Lufthansa (DLAKY) - Finalised its 41% stake in ITA Airways, following approval from the European Commission and other international authorities. The Italian Ministry of Economy and Finance retains the remaining 59%, and the investment begins with a capital increase of EUR 325mln.


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  Redwire Corp. (RDW) - Set to acquire Edge Autonomy for USD 925mln, consisting of USD 150mln in cash and USD 775mln in Redwire stock.


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  Lockheed Martin (LMT) - Awarded USD 280.4mln US Navy contract for combat systems engineering efforts related to the modernisation and new capabilities of Canadian Royal Navy ships operating AEGIS. Also awarded USD 118.4mln US Air Force contract modification for Three-Dimensional Expeditionary Long-Range Radar, bringing the total contract value to USD 471.6mln.

TECH

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  AI Regulation - President Trump rescinded the Biden admin’s executive order on AI, halting regulations on safety and transparency for AI developers. The move cancels the creation of the US AI Safety Institute and its associated guidelines.


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  Apple (AAPL) - Reduced prices for some iPhone models in China to below CNY 6,000 following the Chinese government’s subsidy announcement, with the move aimed at boosting consumer demand, and helping to address competition from more affordable local smartphone brands. Elsewhere, Bloomberg reports that Apple’s iPhone sales in China fell by 18.2% in the December quarter, marking a significant decline in its largest market after the US. The report cites data from Counterpoint Research. Huawei overtook Apple to become the top seller, with Apple dropping to third place, contributing to a 5% global drop in iPhone sales. Meanwhile, Jefferies downgraded AAPL shares to 'Underperform' from 'Hold' citing weak iPhone sales and the general consumer electronics market; AI outlook is "subdued" and industry checks suggest Apple's advanced packaging roadmap for the iPhone may face a delay. Separately, Loop Capital downgraded Apple to a 'Hold' from 'Buy' and Morgan Stanley replaced Apple as its Top Pick with Seagate (STX).
  


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  Nvidia (NVDA) - Said that new US rules on advanced computing integrated circuits, published on January 16th, will not impact its operations or sales to China, as it is an approved IC designer and complies with the required technical verification measures. Separately, Nvidia's CEO reaffirmed ongoing partnerships with Chinese firms, vowing to continue cooperation with Chinese firms, highlighting 25 years of collaboration and optimism about the Chinese market.


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  TSMC (TSM) - CFO Wendell Huang expressed confidence that US CHIPS Act funding will continue under President-elect Trump, CNBC reports. Despite past criticism of Taiwan’s role in the US chip industry, the USD 6.6bln funding is expected to proceed as Arizona projects meet milestones. Separately, a 6.4-magnitude earthquake near Chiayi, Taiwan, disrupted TSMC’s advanced chip production hub in Tainan, Nikkei reports. Workers returned hours later; post-earthquake structural inspections have been completed at all sites, confirming that the structures are safe and operations are gradually resuming.


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  Broadcom (AVGO) - Initially planned four VMware bundles but added a fifth after customer backlash over changes to the software licensing model, FT reports. This move follows Broadcom’s strategy to streamline VMware’s offerings post-acquisition.


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  OpenAI - CEO said it will launch its new reasoning AI model, o3 mini, within weeks, following user feedback. The model aims to outperform predecessors and rivals in solving complex problems, alongside updates to ChatGPT.


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  Xiaomi (XIACY), Nio (NIO) - Chinese tech circles speculate that Xiaomi may acquire EV maker NIO, DigiTimes reports. The move could help NIO advance in battery swapping technology and broaden its operational scope, while Xiaomi could benefit from improved charging infrastructure and expand its presence in the electric vehicle market.


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  Advent Technologies (ADN) - Close to acquiring Ginko International’s mainland Chinese operations for over USD 1.1bln, Bloomberg reports. The deal, involving the contact lens maker backed by EQT AB, is nearing finalisation, with an agreement expected shortly.


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  Intel (INTC) - Intel Foundry has added Trusted Semiconductor Solutions and Reliable MicroSystems as new customers in the third phase of the Rapid Assured Microelectronics Prototypes - Commercial (RAMP-C) programme, aimed at strengthening US defence capabilities, DigiTimes reports.


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  GlobalFoundries (GFS) - Plans to invest USD 575mln in an advanced packaging and photonics centre at its New York facility, aiming to enhance domestic production, packaging, and testing capabilities in the semiconductor sector, DigiTimes reports.


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  Cognizant (CTSH) - Announced a multi-year extension of their strategic partnership, which started in 2017. This renewed agreement will focus on leveraging cutting-edge technology to enhance McDonald's staff enablement, customer experience, and operational efficiency.


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  Arm Holdings (ARM) - Reports on Arm’s internal discussions suggest potential significant increases in licensing fees for its Armv9 architecture and possible chip development plans, which have raised concerns among mobile SoC makers, DigiTimes said.


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  MicroStrategy (MSTR) - Acquired 11k Bitcoins for USD 1.1bln from 13th-20th January 2025.

COMMUNICATIONS

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  ByteDance - TikTok resumed service in the US after President-elect Donald Trump pledged to delay a law banning the app, allowing time for a deal, BBC reports. The Chinese-owned platform had briefly gone dark when the law, backed by Congress, took effect on Sunday. President-elect Donald Trump told NBS that he will likely grant TikTok a 90-day reprieve from a potential US ban, to allow a deal that would give the US a 50% stake in a joint venture with TikTok’s current or new owners. Speaking on Monday, Trump said that if a TikTok deal is made, the US should receive half of the company; if not, TikTok would be worthless; he also floated the idea of universal tariffs on businesses dealing with the US but noted it not yet a decision and threatened tariffs on China if a deal is rejected. Separately, Perplexity AI has reportedly bid to merge with TikTok US and ByteDance, aiming to create a new entity that includes capital partners; the structure allows ByteDance’s investors to retain stakes. Perplexity believes its merger proposal, rather than a sale, makes it viable.


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  Meta Platforms (META) - Instagram announced a new app called “Edits,” designed for mobile video creators. It offers a suite of creative tools, including higher-quality camera features, collaboration options, and performance insights, with iOS preorders available now. Also, Meta is offering creators with large TikTok following bonuses ranging from USD 10k-50k per month to post videos on Instagram Reels before other platforms. Meanwhile, Meta will continue to use its fact-checkers outside of the US "for now", and plans to see how its Community Notes system works in the US before deciding.


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  Comcast (CMCSA) - Said that Universal’s Wicked has earned over USD 700mln globally, with USD 460.6mln domestically and USD 240.4mln internationally. The film, now on Premium VOD, had a record-breaking USD 70mln in its first week. The sequel will be released on November 21st, 2025.


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  Nexstar Media (NXST), Altice USA (ATUS) - Cos. have reached a partnership agreement, restoring all Nexstar programming to Altice USA’s Optimum TV customers. The companies did not disclose specific terms of the deal.


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  Telefonica (TEF) - Chairman Alvarez-Pallete has been fired, replaced by Marc Murtra, FT reports. Due to some shareholders wanting a new stage in leadership. The move follows Saudi’s STC taking a stake.


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  Roku (ROKU) - Initiated with an 'Outperform' at JMP Securities arguing the Co. is well positioned to benefit from the USD 166bln of linear TV advertising spend shifting to connected TV and has multiple catalysts that can drive upward revisions in estimates over the coming quarters.


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  Star Entertainment (ECHEY) - Star Entertainment Group’s viability is in question as it struggles to raise capital, citing the limited ability to secure AUD 150mln in subordinated debt, crucial for accessing an additional AUD 100mln loan, according to BBG.

FINANCIALS

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  US Regulators - President Trump appointed Travis Hill, former FDIC vice chairman, as the acting head of the FDIC. Hill, a Republican, had previously criticised the policies of the outgoing FDIC chair Martin Gruenberg. Trump also appointed Caroline Pham as acting chair of the CFTC, with her appointment confirmed by the commission’s five members.


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  Morgan Stanley (MS) - Increasing bonuses for its senior Asia bankers by up to 40% in 2025, following a boost in revenue, BBG reports. On average, the bank has raised bonuses for senior ranks by high-teens percentages to compensate for lower payouts in 2023.


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  JPMorgan (JPM) - Executive Erdoes said US banks under President Trump are "in the beginning of go-mode" and "animal spirits are alive", via FT citing Davos remarks; adding, it is "hopeful" that his regulatory approach would boost the US economy.


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  Banco Santander SA (SAN) - Reconsidering its UK presence, exploring a potential exit due to lower returns and high costs, FT reports. The review follows a court ruling on mis-sold car loans, with no imminent decision, despite a profit drop in 2024.


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  Citigroup (C) - Faces EUR 59mln lawsuit from Alcimos, alleging misleading advice during a failed 2018 IPO attempt, FT reports. Alcimos claims Citi’s inaccurate feedback led to missed fees, while Citi denies misrepresentation and argues there was insufficient investor interest.


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  KeyCorp (KEY) Q4 2024 (USD): Adj. EPS 0.38 (exp. 0.32), net interest income 1.06bln (exp. 1.04bln), net charge-offs 114mln (exp. 103.5mln), provision for credit losses 39mln (exp. 100.3mln). Guidance: FY25 NII +20% Y/Y and lower end net charge-offs +40-45bps.


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  Bank of America (BAC) - Granting stock awards to employees earning up to USD 500,000 annually, supplementing their year-end incentive compensation.


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  Fifth Third Bancorp (FITB) Q4 2024 (USD): EPS 0.85 (exp. 0.88), net interest income FTE 1.44bln (exp. 1.44bln), NIM 2.97% (exp. 2.87%). Sees FY NII down 2-4%.


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  Commerzbank AG (CRZBY) - Considering job cuts, potentially in the low thousands, and relocating certain roles outside Germany as part of a strategic update to be presented on February 13th, FT reports. The bank has yet to comment on the matter.


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  US Regional Banks - Rising US Treasury yields, particularly the 10yr yield, have strained regional banks by increasing CRE distress, Bloomberg reports. The risk of default for office loans is growing, exacerbated by the higher cost of credit, leading to a decline in smaller bank shares.


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  Insignia Financial (IOOFF) - Granted CC Capital Partners limited access to its accounts in an effort to encourage a higher offer for the Australian wealth manager, though no guarantee exists that this will lead to a binding offer.


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  Goldman Sachs (GS) - Named a group of new leaders for trading and banking units; Gnodde to become VC and names three heads each for equities, FICC, and banking.

CONSUMER DISCRETIONARY

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  DR Horton (DHI) Q4 2024 (USD): EPS 2.61 (exp. 2.36), Revenue 7.6bln (exp. 7.08bln). Guidance: FY Revenue view 36-37.5bln (exp. 37.16bln). Outlook FY25 homes closed by homebuilding operations of 90-92k homes.


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  US EV Subsidies - President Trump ordered the elimination of the EV mandate as part of a broader executive order aimed at undoing regulations on automotive pollution and fuel-economy standards. He also targets subsidies and market distortions that favour EVs.


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  Tesla (TSLA) - A Tesla reportedly in autopilot mode crashed into “The Mellow SF” plant store in San Francisco’s Mission District, according to local press. The driver attempted to disengage autopilot but mistakenly accelerated. Tesla’s autopilot system has faced scrutiny following prior accidents and lawsuits.


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  General Motors (GM) - The EEOC has filed a lawsuit against General Motors and UAW, alleging age discrimination. The lawsuit claims GM’s collective bargaining agreement, since 2019, reduced disability payments for workers aged 66 and older receiving Social Security Retirement benefits. Additionally, shares were upgraded to 'Buy' from 'Hold' at Deutsche Bank, citing recent strategic moves in China and Cruise. Ahead, the note GM significantly outperformed Ford (F) in 2024, and 2025 could be "directionally similar".


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  BYD Company (BYDDY) - BYD India launched its SEALION 7 Pure Performance eSUV at the Bharat Mobility Global Expo 2025. Co. also showcased the SEALION 6, Super Plug-in Hybrid EV, and Yangwang U8. Elsewhere, Bloomberg reports that BYD’s reliance on supply chain financing has hidden its rising debt, with net debt reaching CNY 27.7bln by mid-2024, according to GMT Research; Co. has been described as “addicted” to this financing method.


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  European Automakers - European new car sales rose 0.9% in 2024; in December, Renault’s (RNLSY) European market share surpassed Stellantis (STLA) for the first time since Jan 2021. Also of note for Renault, the automaker appointed Duncan Minto as CFO. Separately, the FT reports that Europe is set for an EV sales resurgence, with over 160 models to be delivered to the market; however, executives have cautioned that profits could fall due to discounting and regulatory costs.


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  Mercedes-Benz (MBGYY) - CEO urged the EU to welcome Chinese carmakers in Europe to resolve EV tariff disputes, advocating for a level playing field and cautioning against further protectionism in trade negotiations with China, FT reports.


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  Nissan (NSANY) - Reportedly considering cutting 6,700 jobs in its manufacturing division, which forms part of the 9,000 global job cuts it had previously announced, according to Nikkei.


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  Starbucks (SBUX) - CEO outlined plans to transform the Co. by focusing on the in-store experience and enhancing operational efficiency, including job eliminations and restructuring support teams globally to reduce complexity, improve accountability, and streamline operations. However, in-store teams will not be affected. Updates about the changes are expected by March.


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  Amazon (AMZN) - Paused its commercial drone deliveries in Texas and Arizona after two MK30 models crashed in rainy conditions, Bloomberg reports. The suspension will last until software repairs are made, marking another setback for the programme, which has faced delays since its 2013 announcement.


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  McDonald’s (MCD) - Director John Mulligan announced his retirement from the Board, effective at the 2025 Annual Shareholders’ Meeting. The decision was not due to any disagreement regarding Cos. operations, policies, or practices.


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  JD.com (JD) - JPMorgan placed JD.com on “Positive Catalyst Watch” ahead of its Q4 report, citing upside risk to estimates and 2025 guidance. The firm expects revenue growth to surpass expectations due to trade-in policies and resilient margins, maintaining an Overweight rating with a USD 50 price target.


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  MGM Resorts (MGM) - BetMGM secured an exclusive online casino rights partnership with Fremantle, obtaining intellectual property for “The Price is Right” and “Family Feud” for various casino games.


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  Chewy (CHWY) - CEO Sumit Singh sold 114,130 shares on January 15th at USD 37.696/shr.

HEALTHCARE

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  Medtronic (MDT) - Appointed Thierry Pieton as CFO.


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  Walgreens (WBA) - US DoJ filed a nationwide lawsuit alleging Walgreens knowingly filed millions of prescriptions that lacked a legitimate medical purpose. Walgreens dispensed millions of unlawful prescriptions; and could face up to USD 81k fine for each prescription.


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  World Health Organisation - President Trump signed an executive order to withdraw the US from WHO, citing the demand for disproportionate financial contributions. The move could significantly impact WHO’s funding, as the US is one of its largest contributors.


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  Weight-Loss Drugs - A six-year study of GLP-1 weight-loss drugs, including Ozempic (NVO), found a 12% lower risk of Alzheimer’s but increased risks for arthritis, pancreatic, and kidney disorders, FT reports.


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  China Healthcare - China’s senior doctors have raised concerns about the quality of domestic generic medicines, which have replaced Western drugs in hospitals, Bloomberg reports. They claim the generics may not match the efficacy or side effects of international brands, risking distrust among doctors and patients.


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  Moderna (MRNA) - US Department of Health and Human Services awarded USD 590mln to Moderna to advance mRNA-based pandemic influenza vaccines, improve preparedness for emerging diseases, and support phase 1 and 3 clinical studies targeting various influenza subtypes.


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  AstraZeneca (AZN) - Datroway has been approved by the FDA for treating HR-positive, HER2-negative metastatic breast cancer patients who have previously undergone endocrine and chemotherapy. The approval is based on TROPION-Breast01 Phase III trial results.


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  Steris (STE) - Announced trial against Isomedix Operations, its subsidiary, ended in a mistrial, with a schedule of the case for a re-trial to occur at a later date; Isomedix intends to continue to defend itself against allegations regarding ethylene oxide operations and emissions from the Waukegan, Illinois facility during 2005 to 2008.


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  Stryker (SYK), Inari Medical (NARI) - Cos. filed HSR paperwork with US FTC and DOJ; Stryker launches a cash tender offer to acquire Inari Medical for USD 80/shr; offer ends on February 18th, unless extended, with the deal expected to close by Q1 2025.


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  Tempus AI (TEM) - Shares saw gains following reports that Nancy Pelosi bought 50 call options on the stock on January 14th with a strike price of USD 20 and an expiration date of January 16, 2026. This purchase was valued between USD 50,001-100,00.

UTILITIES

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  Vistra (VST) - Firefighters confirmed on Monday that a fire that started burning on Thursday was out.

REAL ESTATE

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  Prologis (PLD) Q4 2024 (USD): Adj. EPS 1.37 (exp. 0.64), Revenue 2.2bln (exp. 1.96bln). FY25 core FFO view, excluding net promote income per diluted share, USD 5.70-5.86.

CONSUMER STAPLES

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  Costco (COST) - Teamsters representing 18,000 Costco workers voted to authorise a nationwide strike, citing stalled contract negotiations. Talks resumed on January 20th, with the current agreement expiring on January 31st; Teamsters has authorised a strike if no agreement is reached by January 31st.

21 Jan 2025 - 13:56- EquitiesGeopolitical- Source: Newsquawk