EUROPEAN OPEN: ADS GY tops expectations, launches EUR 1bln buyback; UHR SW profits sink amid China and US challenges; BN FP recalls infant baby formula; ELUXB SS warns on tariffs; SAP GY downgraded

• EUROPEAN OPEN: European equities have started flat/mixed following the negative risk tone amid reports that President Trump is said to be preparing to nominate Kevin Warsh as the next Fed Chair (a pick who is considered not as dovish as some other picks). The USD rose alongside Tsy yields; Trump is expected to announce his pick on Friday morning. In metals, overnight, the LME delayed the start of trading by about one hour on Friday because of a technical problem; electronic trading eventually began at 10:00am Hong Kong time. Gold declined after its first drop in nearly two weeks as the USD strengthened following reports that Trump is preparing to nominate Warsh. Separately, Bloomberg reports that Asian investors are channelling record sums into gold ETFs, prompting concerns that the recent gold rally may be peaking; precious metals ETFs in the region saw USD 7.1bln of net inflows in January, led by China-listed funds. Copper fell from a record after a volatile week, as Chinese investors retreated, the USD strengthened, and amid a LME glitch which disrupted trading; 3mth futures dropped to about USD 13k/ton having peaked above USD 14.5k/ton recently, though prices are still on course for a strong weekly gain. Bitcoin fell to a two-month low overnight as sentiment weakened, and investors withdrew funds from exchange-traded products, with about USD 1.5bln of bullish positions liquidated in 24hrs. Oil pulled back after a three-day rally as broader markets turned risk-off, though concern over Trump’s escalating threats against Iran is keeping traders cautious; Brent fell below USD 70/bbl, last trading around USD 68/bbl, while WTI slipped toward USD 64/bbl amid a stronger USD. On the trade front, Trump warned the UK and Canada against pursuing new business deals with China after their leaders visited Beijing this month; he said such moves were dangerous. Today's highlight will be the expected Trump announcement on the next Fed Chair.
• STOCK SPECIFICS: In tech, Apple (AAPL) shares ended the extended US trading session around flat, having initially rose after profit and revenue beat expectations, driven by exceptionally strong demand for the latest iPhone models that delivered the company’s best iPhone sales growth in over four years; it also announced that it had acquired Israeli audio AI startup Q.ai, and while terms were undisclosed, reports suggest the deal valued Q.ai at about USD 1.6bln. SanDisk (SNDK) shares jumped over 20% in extended trading after it delivered a large earnings beat and raised guidance, citing exceptionally strong demand for memory and storage products from AI customers. Amazon (AMZN) is in talks to invest up to USD 50bln in OpenAI, which is said to be seeking up to USD 100bln in new capital. In consumer sectors, Adidas (ADS GY) said it will launch a share buyback of up to EUR 1bln in 2026 after record 2025 sales, which rose 4.8% to EUR 24.8bln. Q4 sales increased 1.9% to EUR 6.076bln (exp. 5.96bln), while operating profit rose 54% to EUR 2.06bln (vs 1.33bln Y/Y); execs cited robust fundamentals and a healthy balance sheet, and said it will issue guidance in March. Mercedes (MBG GY) is proceeding with robotaxi plan with Nvidia (NVDA). Swatch Group (UHR SW) said 2025 operating profit fell 56% to CHF 135mln, missing estimates, as China weakness and US tariffs hurt demand; Sales declined 1.3% to CHF 6.3bln (exp. 6.15bln), with the watchmaker citing softer China performance and lower exports to the US; for FY26, it sees “substantial growth for all price segments”. Danone (BN FP) recalled at least three batches of Aptamil baby formula in Germany, withdrawing products made between May-August 2025 due to possible cereulide toxin contamination. Electrolux (ELUXB SS) Q4 operating profit SEK 1.52bln (exp. 1.18bln); it warned higher tariffs could raise costs and dampen North American demand in 2026, and expects external factors to be significantly negative; it proposed no dividend for 2025. Of note for Just Eat (JET LN), Grubhub will remove delivery and service fees on restaurant orders above USD 50 as it seeks to attract customers from DoorDash (DASH) and Uber (UBER). In financials, Visa (V) reported earnings that beat expectations, driven by stronger holiday spending that lifted payment volumes. CaixaBank (CABK SM) reported FY25 net profit +1.8% to EUR 5.89bln (vs 5.78bln Y/Y), delivering 17.5% return on tangible equity. The bank cut its bad loan ratio to a record 2.1%, raised its dividend +15% to EUR 0.50/shr, and topped targets under its 2025–2027 strategic plan. In industrials, Panama’s Supreme Court ruled unconstitutional a port contract held by CK Hutchison (CKHUY), citing audit irregularities; the decision complicates a proposed sale to a BlackRock (BLK)-led consortium amid US-China tensions. Signify (LIGHT NA) launched a EUR 180mln cost-cutting drive and a broad business review after reporting weaker than expected results; FY sales and adj. EBITA were both below consensus; it also paused share buybacks, and said it expects challenging conditions this year. In notable broker updates, SAP (SAP GY) was downgraded at Citizens JMP; Pandora (PNDRA DC) was downgraded at SEB.

TODAY'S AGENDA:

• DAY AHEAD: US President Trump is expected to announce his pick for Fed Chair, an announcement that could come in the US morning, according to reports on Thursday; the latest reporting suggests he is likely to pick former Fed Governor Warsh. In Europe, Germany's unemployed are expected to rise 4k in January (vs 3k in December). Flash German growth stats for Q4 are expected to show annualised growth of 0.3% Y/Y (unch). In the morning, regional German CPI metrics are due, before the national data is published in the afternoon (CPI inflation is expected to rise to 2.0% Y/Y from 1.8%). The North American day sees the release of US PPI for December (headline seen rising +0.2% M/M vs the prior 0.2%; core PPI is seen at 2.9% Y/Y from 3.0% prior). Elsewhere, the Chicago PMI is due. Canada GDP figures for December are expected to show growth of 0.2% M/M (prev. 0.1%). In energy, Baker Hughes will publish its weekly rig count statistics. On the speakers' front, we may see an update from Fed Governors Miran and Warsh following their dovish dissent at this week's FOMC; elsewhere, Fed Governor Bowman (voter, dove) and Fed's Musalem (2028 voter, hawk) are due to give policy remarks. In other central banks, ECB's supervisory policymakers Buch and Machado are due. Notable US corporates reporting today include: Exxon Mobil (XOM), Chevron (CVX), American Express (AXP), Verizon Communications (VZ).