Preview of US Stock Market | The three major stock index futures show mixed movements, with PPI data set to be released tonight.

1. Before the US stock market opened on Thursday, the futures of the three major US stock indexes were mixed. As of the time of writing, the Dow Jones futures rose by 0.02%, the S&P 500 index futures fell by 0.09%, and the Nasdaq futures rose by 0.05%. 2. As of the time of writing, the German DAX index rose by 1.49%, the UK FTSE 100 index fell by 0.58%, the French CAC40 index rose by 1.24%, and the European Stoxx 50 index rose by 1.20%. 3. As of the time of writing, WTI crude oil fell by 1.26% to $70.47 per barrel. Brent crude oil fell by 1.13% to $74.33 per barrel. Market News The "hot" CPI in the US reignites inflation concerns, leading the market to reduce its expectations of interest rate cuts to only once this year. Due to higher than expected inflation in the US, bond traders are pushing back their bets on the next interest rate cut by the Federal Reserve to December. Interest rate swaps related to the Fed's future decisions have been repriced after the January CPI in the US exceeded analyst expectations. Previously, the market expected the Fed to cut rates before September. The new interest rate level implies only a 25 basis point cut this year. US Treasury prices plummeted, with yields on US Treasury securities of all maturities rising by at least 8 basis points. Earlier, the market had predicted a high probability of a rate cut in June and another cut before the end of the year, but now this expectation has been significantly delayed. Powell reiterates to Congress that the Fed is in no rush to lower interest rates, and inflation expectations remain relatively stable. Federal Reserve Chairman Powell said that the institution does not need to rush to adjust interest rates, indicating that officials will remain patient in deciding on rate cuts. Powell testified before the Senate Banking Committee on Tuesday, stating that "since our policy stance is far less restrictive than in the past and the economy remains strong, we do not need to rush to adjust our policy stance." He also said that Fed policy decisions may be affected by US trade policy. Recently announced tariffs, tax policies, and immigration policies by President Trump may further raise inflation and make the Fed's task more complex. The US government deficit is flashing red lights again! The budget deficit for the first four months of the fiscal year reached a record $840 billion, surpassing the peak of the pandemic. For the first four months of the fiscal year 2025 until January, the budget deficit of the US federal government expanded by 58% compared to the same period last year, with government revenue and expenditure both reaching record levels for the same period, increasing by 1% and 15% respectively. Government interest costs for the first four months were $392 billion, accounting for 16% of total expenditure; the budget deficit for January was $129 billion, the second-highest level after the peak during the COVID-19 pandemic, with government spending up 29% year-on-year and revenue up 7.5%. Market sentiment is optimistic, and the impact will be minimized if PPI exceeds expectations. Analyst Giuseppe Dellamotta said that the US PPI data for January will be released tonight, with market expectations for the annual rate at 3.2%, down from the previous 3.3%; and the monthly rate at 0.3%, up from the previous 0.2%. The core PPI annual rate is expected to be 3.3%, down from the previous 3.5%; and the monthly rate is expected to be 0.3%, up from the previous 0.0%. Due to the "January effect," especially due to headlines about tariffs and the optimistic Trump-Putin call, the market has somewhat forgiven the higher-than-expected CPI data yesterday. Tonight, we may also see the market downplay the potential for higher-than-expected PPI data. Putin and Trump spoke on the phone to discuss the situation in Ukraine and other issues. On February 12th local time, Russian President Putin and US President Trump spoke on the phone to discuss the situation in Ukraine and other issues. According to the Russian statement, Putin also supported an important view of Trump, that Moscow and Washington "it is time to cooperate." The two also discussed issues in the Middle East, the Iran nuclear issue, and bilateral economic relations between Russia and the US. The two leaders agreed to continue personal contacts, including organizing a meeting between the two. Putin invited Trump to visit Moscow and expressed willingness to host US officials in Russia to discuss mutual concerns, including the resolution of the Ukraine issue. Trump described the call as "long and productive" on social media on the 12th, stating that they discussed Ukraine, the Middle East, energy, artificial intelligence, the influence of the US dollar, and other topics. Stock News The global gaming craze helped Sony (SONY.US) increase PS5 sales by 15% and raise its fiscal year profit forecast. In the third quarter of the fiscal year ending December 2024, Sony sold 9.5 million PS5 units, an increase of over 15% compared to the previous year. At the same time, Sony's game software sales in that quarter increased by 7%, and network service sales increased by nearly 30%. The number of online subscribers for PS5 reached 129 million, setting a record far surpassing any previous generation of Sony PlayStation game consoles. This prompted Sony to raise its net profit forecast for the fiscal year by 10% to 1.08 trillion yen (about $70 billion), slightly higher than analyst expectations. Sony also raised its total revenue forecast for FY2024 by 4% to 13.2 trillion yen and raised its operating profit forecast for FY2024 by 2% to 1.335 trillion yen, both higher than analyst expectations. Barclays (BCS.US) trading department had an impressive performance in Q4, but profit prospects hit market confidence. Barclays' total revenue for the fourth quarter was 6.96 billion, a 24.3% increase year-on-year; net profit was 965 million, compared to a loss of 111 million in the same period last year; and earnings per share were 6.70 pence, compared to a loss of 0.70 pence per share in the previous year. Due to the volatility sparked by the election of US President Trump across various asset classes, the company's trading business achieved its best performance in at least a decade in the fourth quarter. Revenue in Barclays' UK retail division rose by 46% in the quarter to 2.62 billion; stock trading revenue soared by 40% to 604 million ($756 million); fixed income traders' net income rose to 934 million; and pre-tax profit increased to 1.7 billion, surpassing expectations. While this helped Barclays PLC Sponsored ADR achieve a 10.5% annual tangible return on equity, uncertainty about future profits has caused market confidence in the stock to waver.Investors feel disappointed when their performance does not an upward outlook.Motorcycle sales are hot, while car sales are cold. Honda (HMC.US) Q3 profits grew by 5%, slightly below expectations. Honda's operating profit for the three months ending on December 31 reached 397.3 billion yen (approximately $26 billion), slightly lower than analysts' average expectation of 407 billion yen. Net sales for the third quarter reached 5.5 trillion yen, surpassing the market's expectation of 5.4 trillion yen. Honda stated that its motorcycle business is strong, but its car sales in China and Japan were affected, while demand in the US remained stable. Looking ahead, Honda reaffirmed its forecast for full-year operating profit of 1.42 trillion yen. Nissan ends merger talks with Honda (HMC.US) and promises to collaborate. Nissan Motor Co., Ltd. Sponsored ADR and Honda Motor Co., Ltd. have officially terminated merger talks, abruptly ending a partnership that could have created one of the world's largest automakers. Although plans to merge the two brands under a holding company have been terminated, both companies stated on Thursday that they will continue to maintain a strategic partnership with Mitsubishi Motors and collaborate on internal development in battery, autonomous driving, software, and electric vehicle technology. Reddit (RDDT.US) Q4 performance exceeds expectations but is overshadowed by concerns over slowing user growth. The fourth-quarter financial report shows that Reddit's average daily active unique visitors during this period were 101.7 million, lower than analysts' average expectation of 103.8 million. The performance shows that Reddit's Q4 revenue increased by 71.3% year-on-year to $4.277 billion, surpassing the market's general expectation of $4.089 billion, with a GAAP EPS of $0.36, exceeding analysts' average expectation of $0.25. In addition, the revenue guidance for the next quarter is better than expected, with the company predicting quarterly revenue of $3.6 billion to $3.7 billion, with the midpoint of $3.65 billion surpassing analysts' average expectation of $3.603 billion. However, the unfavorable outlook for user growth metrics still worries the market. "AI Super Stock" AppLovin (APP.US) exceeds expectations across the board and announces the sale of its mobile game division. AppLovin announced revenue for the fourth quarter of 2024 that exceeded market expectations. For the quarter ending December 31, adjusted EPS was $1.73, while the market had expected $1.26. The total revenue for the quarter was $1.37 billion, a 44% year-on-year increase, far exceeding the expected $12.6 billion. Full-year revenue for 2024 was $4.7 billion, a 43% year-on-year increase. Looking ahead, AppLovin expects first-quarter revenue for 2025 to be between $1.355 billion and $1.385 billion, higher than the expected $1.32 billion. Over $1 billion of this revenue will come from its advertising division, as the company stated it is still in the early stages of strengthening its artificial intelligence model. Cryptocurrency trading surges, Robinhood (HOOD.US) Q4 revenue doubles. The company's revenue in the fourth quarter of last year increased by 115% year-on-year to $1.01 billion, exceeding the market's expectation of $9.41 billion. Cryptocurrency revenue increased by over 700% to $358 million, also exceeding market expectations. Robinhood has also achieved profitability for five consecutive quarters, with Q4 net profit increasing by over 10 times to $916 million, with EPS of $1.01. Robinhood expects adjusted operating expenses and equity incentives for this year to be between $20 billion and $21 billion. Corporate spending boosts performance! Cisco Systems, Inc. (CSCO.US) Q2 earnings exceed expectations. Cisco Systems, Inc. saw a 9% year-on-year increase in revenue to $14 billion, better than analysts' average expectation of $13.9 billion. This is the first year-on-year increase in sales for the company in a year. Adjusted EPS was $0.94, better than analysts' average expectation of $0.91. Deferred revenuea measure of future saleswas $27.8 billion, an 8% increase year-on-year. Important economic data and events forecast: 9:30 PM Beijing time: Initial jobless claims in the US for the week ending February 8th. 9:30 PM Beijing time: US PPI for January. 11:30 PM Beijing time: EIA natural gas inventories in the US for the week ending February 7th. 1:00 AM the next day Beijing time: ECB board member Lane's speech. 1:00 AM the next day Beijing time: 2027 FOMC voter and Atlanta Fed President Bostic's speech on the economic outlook. 6:05 AM the next day Beijing time: Fed Governor Waller's speech on stablecoins. Earnings preview: Friday morning: Applied Materials (AMAT.US), Airbnb, Inc. Class A (ABNB.US), Coinbase (COIN.US).