February 2nd - The Week Ahead

In partnership with Cognitive Credit

This week, Cognitive Credit - the leading provider of fundamental data in credit markets - added coverage of US & European Leveraged Loans to our offering.

Alongside our High Yield and Investment Grade bond data, it means we are now the only credit data & analytics provider offering US & European coverage of these markets in one centralized service.

Unlike other data providers, automation and technology is at the heart of what we do. Our proprietary tech identifies, extracts and structures fundamental data from official earnings reports within minutes of release. The result is comprehensive financial models of greater accuracy, delivered faster - all developed specifically for credit investors.

Our Leveraged Loan coverage includes:

• 750+ issuers in the US and Europe

• New issues delivered within 6 hours

• Models updated within 15 minutes of earnings release

• Historical data back 5-10 years on average

• Private coverage available on a bilateral basis

To find out how this data can transform your credit research, go here:

The Week Ahead Of Us 🔍

Welcome back!

In our headlines, we’ll get into the tariffs that have ROCKED futures over the weekend. The dollar is rising, but futures are tanking, with the S&P down -1.6% and Nasdaq down -2.2%.

Here’s a look at earnings this week.

• Monday: Alibaba, Palantir

• Tuesday: Alphabet, Merck, PepsiCo, AMD, Amgen, Pfizer, KKR, Spotify, Apollo, PayPal, Chipotle, Mondelez International, Transdigm, Snap, Lumen

• Wednesday: Disney, Qualcomm, Arm, Boston Scientific, Uber, MicroStrategy

• Thursday: Amazon, Eli Lilly, Linde, Philip Morris International, Honeywell, ConocoPhillips, Bristol-Myers Squibb, Fortinet, Hershey

Here’s a look at economic data this week.

• Monday: S&P final U.S. manufacturing PMI, Construction spending (0.3%)

• Tuesday: Job openings (8.1MM), Facory orders (-0.7%)

• Wednesday: U.S. trade deficit (-$95B), ISM services (54.4%)

• Thursday: Initial jobless claims (213K)

• Friday: U.S. employment report (175K), U.S. unemployment rate (4.1%), U.S. hourly wages (0.3%, 3.7% y/y), Consumer sentiment (71.8)

Earnings Corner 📜 

Trending Up 📈 

Apple (AAPL) reported earnings that beat estimates, with revenue of $124.3B up 3.9% y/y (vs. $124.12B expected) and EPS of $2.40 (vs. $2.35 expected). iPhone sales of $69.14B disappointed expectations of $71.03B, with mgmt. noting that transactions were stronger in countries where Apple Intelligence has been rolled out. China was not one of these countries, and sales fell 11.1% y/y. However, services revenue of $23.12B bolstered the top line, showing 14% growth y/y. Mgmt. projected 6% revenue growth in Q2, close to what the company saw in December. The stock was up 0.9% at Friday’s close

Payments processors Visa (V) and Mastercard (MA) reported earnings that beat estimates. Robust holiday spending, a strong labor market, and wage growth drove transactions on both platforms, with Visa’s gross dollar volumes up 9% y/y and Mastercard’s up 12%. Cross border transactions were an additional highlight, with volumes rising 16% and 20%. Visa stock was up 1.67% and Mastercard was up 0.5% at Friday’s close

Trending Down 📉 

Comcast (CMCSA) reported earnings that beat estimates. However, the company lost 139K broadband customers – far more than the 100K projected by mgmt. Subscriptions to Comcast’s Peacock streaming network were also disappointing, as they remained flat quarterly at 36MM (vs. 37.56MM projected). The stock was down 10.4% at Friday’s close

Two American oil & gas super-majors reported this week, with Exxon Mobil (XOM) beating estimates, while Chevron (CVX) fell short. Both companies sold record volumes, with Exxon’s production up 16% y/y, and Chevron’s output up 7%. However, both companies also took a hit to profitability, as Exxon’s earnings were down 33% y/y, and Chevron’s down 40%. This deterioration has occurred gradually over the last year as oil prices have sunk (9% y/y). Exxon stock was down 2.5% and Chevron was down 4.6% at Friday’s close

Blackstone (BX) reported earnings that beat estimates. Reduced interest rates, a resurgence in dealmaking, President Trump’s election, and increased economic certainty all boosted the alternative asset manager’s core business. Fee-related earnings rose 76% y/y to a record $1.84B, while distributable earnings increased 56%. Mgmt. also expects the commercial real estate market – a core business segment for BX – to continue to stabilize. The stock was down 5.9% at Friday’s close

Intel (INTC) reported earnings that beat estimates, with revenue of $14.26B down 7% y/y (vs. $13.81B expected) and EPS of $0.13 (vs. $0.12 expected). The firm’s interim co-leaders spoke on the earnings call – the first since CEO Pat Gelsinger’s December resignation. The company announced it will not be selling its newest AI processor due to negative industry feedback and released disappointing Q1 revenue guidance of $11.7B-$12.7B (vs. $12.87B expected). The stock was down 4% at Friday’s close

Southwest Airlines (LUV) reported earnings that beat estimates. In the wake of seating surpluses last summer, Southwest and other airlines have cut capacity, boosting ticket prices and profitability. Mgmt. projected unit revenue (RASM) growth of 5%-7% (vs. 2.62% expected), indicating increased pricing power. The stock was down 3.6% at Friday’s close

Today’s Headlines 🍿 

• Trump’s first round of tariffs are live: Canadian goods now face a 25% tariff, although oil tariffs will be at a 10% rate. Meanwhile, Mexico will face a blanket 25% tariff. Lastly, Chinese goods have been slapped with a 10% tariff

  • So what’s getting more expensive? For Mexico, imports include fruits, vegetables, beer, liquor, and electronics, while for Canada, potatoes, grains, lumber, and steel are key imports

  • The auto sector in particular is going to get rocked, with estimates that car prices will rise by $3,000

  • Canada has vowed a counter 25% tariff, while Mexico and China are working on retaliatory measures

  • While these tariffs may just end up being a negotiating tactic, it’s clear prices will shoot higher due to the inflationary impacts of tariffs

  • Morgan Stanley estimated that following the tariffs, a recession in Mexico becomes the base case. MS also stated that U.S. inflation could rise by 0.3%-0.6% over the next 3-4 months, and U.S. GDP could decrease by -0.7% to -1.1% over the next 3-4 quarters, driving real GDP growth in the mid 1% range. Other Analysts warn the U.S. growth will decrease due to trade parties doing less business with us

  • Part of Trump’s rationale for tariffs is protect U.S. manufacturers and workers, focus on production in the U.S., reduce trade deficits, and increase U.S. tariff revenue