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The Week Ahead Of Us 🔍 |
Welcome back! |
With President Trump back in the White House, Wall Street is bracing for dramatic changes. While, tariff pressures were thought to have cooled off for now, right as we were about to press send, it was announced that Trump is eyeing February 1st as the date he'll impose 25% tariffs on Mexico and Canada. U.S. futures were 50bps higher 20 minutes ago, but are now in the red. 📉 |
Here's a look at earnings this week. |
Tuesday: Netflix, Johnson & Johnson, Charles Schwab, 3M, Capital One, United Airlines Wednesday: P&G, Abbott Laboratories, Progressive, GE Vernova, Discover, Textron, Ally Financial Thursday: Intuitive Surgical, GE Aerospace, Texas Instruments, Union Pacific, American Airlines Friday: American Express, Verizon, NextEra Energy
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Here's a look at economic data this week. |
Wednesday: U.S. leading economic indicators (0.1%) Thursday: Initial jobless claims (215K) Friday: Existing home sales (4.2MM), Consumer sentiment (73.2), S&P flash U.S. services PMI, S&P flash U.S. manufacturing PMI
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Earnings Corner 📜 |
Trending Up 📈 |
Taiwan Semiconductor Manufacturing Company (TSMC) reported earnings that beat estimates, with revenue of NT$868.46B up 38.8% y/y (vs. NT$850.08B expected) and net income of NT$374.68B (vs. NT$366.61B expected). Profits were up 57% y/y, hitting a record high, as the chip manufacturer continues to experience surging AI-related demand. TSMC's high-performance computing division, which sells chips for AI and 5G applications, accounted for 53% of sales. However, mgmt. warned that export controls to China under the Trump administration may present a headwind for the company. The stock was up 1% at Friday's close |
Bank of America (BAC) reported earnings that beat estimates. Profit more than doubled to $6.67B from Q4 last year, when the bank was hit with a $1.6B FDIC assessment related to the regional bank failures. Investment banking fees were up 44% to $1.65B (vs. 25% growth expected), while trading revenue rose in line with expectation. Net interest income was up 3% to $14.5B ($170B more than expected). The stock was down 2% at Friday's close |
Morgan Stanley (MS) reported earnings that beat estimates. Trading revenues were a bright spot for the bank, as the equities desk saw a 51% jump in revenue and fixed income saw a 35% increase ($650MM and $250MM more than projected). Investment banking fees were up 25% and wealth management revenue rose 13%. The stock was up 4% at Friday's close |
Truist (TFC) reported earnings that beat estimates, with stronger than expected NII and investment banking fee income. The stock was up 5.9% at Friday's close |
Schlumberger (SLB) reported earnings that beat estimates. The offshore oil drilling company raised its dividend and announced $2.3B of buybacks but also warned of potential oil oversupply. The stock was up 6.1% at Friday's close |
Trending Down 📉 |
UnitedHealth Group (UNH) reported earnings that missed estimates. Announcing more than a month after the murder of its CEO, Brian Thompson, the health insurance provider disclosed that its medical cost ratio (the percentage of premiums spent on care) rose to 85.5% (vs. 83.2% last year and 84.96% expected). Mgmt. affirmed its 2025 EPS forecast of $29.50-$30.00. The stock was down 6.5% at Friday's close |
PNC (PNC) reported earnings that beat estimates, with a 3% increase in net interest income. The stock was down 1.7% at Friday's close |
State Street (STT) reported earnings that beat estimates, with fee revenue up 13% y/y. The stock was down 2.8% at Friday's close |
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Today's Headlines 🍿 |
President Trump Round Two: It's official, Trump is back. I'm not sure we've seen a President launch crypto memecoins right before getting elected. Here's Trump's key executive orders thus far: Bringing federal workers back into the office Revoking Electric Vehicle related executive orders Halting the hiring of new IRS agents Ending birthright citizenship of illegal immigrants Reportedly preparing for ICE deportation operations starting tomorrow across Chicago, Washington DC, Philadelphia, Los Angeles, and Denver
DOGE's Vivek Ramaswamy will exiting the group as he readies a campaign for Governor of Ohio TikTok is alive (for 90 days): After a brief ban on Sunday, TikTok has restored access following Trump's pledge to restore it. While there's still 90 days until TikTok is officially banned, Trump might have a plan. Trump is angling for a deal where the United States takes a 50% ownership position in TikTok eToro is filing for a $5B IPO. While it's a far cry from the $10.4B SPAC they were planning, it's better than their last raise where they were valued at $3.5B. Goldman, Jefferies, and UBS are advising eToro. IPO activity is heating up, with Thoma Bravo owned cyber-security company, SailPoint, and Venture Global, an LNG exporter, also rumored to be nearing an IPO Goldman's David Solomon had a really interesting quote that could be bearish for Wall Street employment: "The work of drafting an S1 might have taken a six-person team two weeks to complete, but it can now be 95 per cent done by AI in minutes. The last 5 per cent now matters because the rest is now a commodity." Qorvo has seen activist investor Starboard take a 8% stake in the chip maker Whitney Wolfe Herd is back in charge at Bumble. Bumble's former Founder will return to the CEO position in March following the dating app's recent struggles. As many of you know, dating apps had a big bump during the covid era, but has since become a frustration for a lot of folks Venture Firms are investing in Accounting firms in a bet that they can leverage AI to make them more efficient. They're hoping they can roll up accounting firms and then automate a lot of the workflow so firms can take twice as many clients Zero Booms: Costo Teamsters approved a strike for 18,000 workers if a contract agreement is not met by January 31st Sesac, a music royalties company owned by Blackstone, that licenses from artists like Bob Dylan and Adele, has received ~$3B valuation interest from sponsors as such Apollo and Warburg Pincus Santander is considering exiting the UK retail banking market, due to lower returns in the UK and regulatory pressures. Barclays and HSBC may be eyeing these assets
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M&A Transactions💭 |
mParticle, developer of a customer data platform, was acquired for $300.0M by Rokt. Atlas Technology Group advised on the sale. |
KCA Deutag, operator of a drilling, engineering, and technology company, was acquired for $2.46B by Helmerich & Payne (NYS: HP). Moelis & Company and PJT Partners advised on the sale. |
K2-9b Group, developer of information security tools, was acquired for $400.0M by Softline (MISX: SOFL). EV/Revenue was 92.01x. |
Gatos Silver, a development and exploration company, was acquired for $969.94M by First Majestic Silver (TSE: AG). EV/EBITDA was 9.16x and EV/Net Income was 28.61x. TD Securities advised on the sale. |
Freetrade, develop of a mobile stock trading platform, reached a definitive agreement to be acquired for $165.77M by IG Group Holdings (LON: IGG). DAI Magister advised on the sale. |
Britvic, manufactures and sells nonalcoholic beverages, was acquired for $5.11B by Carlsberg (CSE: CARL B). EV/EBITDA was 14.35x and EV/Revenue was 2.12x. Europa Partners, J.P. Morgan, Morgan Stanley, and Goldman Sachs advised on the sale. |
Siete Family Foods, producer of grain-free food products, was acquired for $1.2B by Pepsico (NAS: PEP). EV/Revenue was 2.4x. Lazard advised on the sale. |
NDES, provider of computer-aided design and manufacturing services and a subsidiary of NTT Data Engineering Systems, was acquired for $431.0M by C&G System (TKS: 6633). |
Goldman Sachs Asset Management and Petershill Partners sold their stake in General Catalyst for $726.0M. |
Private Placement Transactions💭 |
Rokt, developer of e-commerce technology, raised $335.0M of venture funding led by Barrenjoey Capital Partners, Square Peg Capital, and Tiger Global Management at a pre-money valuation of $3.17B. |
Phantom, developer of a crypto wallet, raised $150.0M of Series C venture funding led by Paradigm and Sequoia Capital at a pre-money valuation of $2.85B. |
Artex Risk Solutions, provider of risk management and alternative risk services, raised $577.21M of venture funding from undisclosed investors. |
Instabase, developer of applied AI platform, raised $100.0M of Series D venture funding led by Qatar Investment Authority. |
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Odds of the Day 🍒 |
Prompt |
Kalshi traders expect Mark Carney to be the next Prime Minister of Canada, pricing in a 69% chance. |
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New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code "HYH". |
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Noteworthy Chart 🧭 |
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Meme Cleanser 😆 |
 | Trung Phan @TrungTPhan |  |
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Gary Gensler walking out of the SEC office for the last time after seeing Trump launch a memecoin that goes from $0 to $24B in 12 hours | |  | | | 3:56 PM • Jan 18, 2025 | | | | | | 4.24K Likes 369 Retweets | 57 Replies |
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 | High Yield Harry @HighyieldHarry | |
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"HR is here to help you" HR: | |  | | | 5:38 PM • Jan 18, 2025 | | | | | | 153 Likes 2 Retweets | 5 Replies |
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Finance Merch Referrals ☕️ |
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Until next time! |
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