Market Update: Key Developments and Movers
Headlines
Dollar Surge Puts Pressure on Corporate Earnings
Berkshire Hathaway’s Latest Moves
European Defence Stocks Hit Record Highs
Southwest Airlines to Cut 15% of Workforce
BHP Lowers Dividends Amid Profit Decline
RBA Rate Cut Triggers Market Reaction
Market Movers
Stock | Ticker | Change | Last Price |
Udemy Inc | UDMY | ▲ 28.01% | 10.01 |
Airbnb Inc | ABNB | ▲ 14.45% | 161.42 |
Goodyear Tire | GT | ▲ 17.26% | 9.58 |
SoundHound AI | SOUN | ▼ -28.10% | 10.97 |
Key Market News
Buffett’s Bold Q4 Moves
Berkshire Hathaway made major portfolio adjustments in Q4 2024. The investment firm took a new position in Constellation Brands (parent company of Modelo), nearly doubled its stake in Domino’s, and trimmed positions in Bank of America and Citigroup. It also exited Ulta Beauty but held firm on its $75 billion Apple stake.
Buffett’s Strategy: The Oracle of Omaha continues to prioritise long-term value investing, capitalising on strong businesses with sustainable competitive advantages. His latest moves reflect a blend of opportunistic buys and risk management, particularly in the financial sector.
Chinese Tech Stocks in Focus
Alibaba and Baidu are leading a rally in Chinese tech stocks, driven by excitement around DeepSeek’s AI innovations. Investors are keenly watching earnings reports from both companies this week, particularly cloud growth and AI monetisation. Alibaba’s stock has already gained over 40% since January.
Baidu’s earnings report is due today, following a 7% drop ahead of the announcement. Key areas to watch include:
AI and cloud growth
Ad revenue performance
Competitive landscape against Tencent and other tech giants
Oil and Energy: Occidental Petroleum Earnings
Occidental Petroleum (OXY) is set to report Q4 earnings, with analysts looking for:
Production growth in Permian assets
Performance of OxyChem division
Potential upside amid market volatility
OXY is trading at a low valuation, and expectations are high for an earnings beat. Investors will be watching closely for signs of resilience in the energy sector.
Strong Dollar Puts Pressure on Corporate Earnings
The US dollar has been on a six-month surge, and multinational corporations are feeling the impact. Companies like Amazon and McDonald's have flagged foreign-exchange headwinds, while major tech firms like Apple and Microsoft have reported slower revenue growth due to currency conversion effects. Analysts warn that continued dollar strength could further hinder earnings performance, particularly for businesses with significant international exposure.
European Markets Surge on Defence Stocks
European markets hit new highs, driven by a 4.2% surge in aerospace and defence stocks.
Saab soared 16%
Germany’s Renk Group climbed 17.5%
Rheinmetall rose 14%
This rally comes as EU leaders discuss increased defence spending, a theme that continues to gain momentum across global markets.
Southwest Airlines Cuts 15% of Workforce
Southwest Airlines announced a 15% reduction in its corporate workforce, affecting 1,750 jobs. CEO Bob Jordan called the move “unprecedented,” as the airline aims to cut costs by $210 million this year and $300 million by 2026.
Stock Movement: Southwest Airlines (LUV) gained 1.17%, closing at $30.28.
RBA Rate Cut Triggers Market Reaction
The Reserve Bank of Australia (RBA) announced a 25-basis point rate cut, bringing the cash rate to 4.10%—its first easing since 2020. The decision was driven by:
Softening inflation trends
Labour market slowdown
Concerns over economic growth
The Aussie dollar strengthened, while the ASX 200 dropped 0.54% following the announcement.
BHP Cuts Dividend Amid Profit Decline
BHP Group reported a 23% drop in first-half profit to $5.08 billion, primarily due to weaker iron ore demand from China. In response, the mining giant cut its dividend to 50 cents per share—its lowest level in eight years.
CEO Mike Henry remains optimistic about long-term demand from key markets, including China, India, and the U.S.
Upcoming Market Events
Event | Time (GMT) | Impact |
UK Employment Data (Dec) | 07:00 AM | GBP Pairs |
German ZEW Economic Sentiment (Feb) | 10:00 AM | EUR Pairs |
Canada CPI (Jan) | 1:30 PM | CAD Pairs |
US Empire State Index (Feb) | 1:30 AM | USD Pairs |
Prices and figures quoted were correct at the time of writing.
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