EUROPEAN OPEN: GOOG, QCOM, ARM lower after earnings; MAERSKB DC said Red Sea reopening weighs on freight rates; SHEL LN misses profit expectations; BNP FP tops profit estimates; PNDORA DC pauses buybacks amid volatile silver prices

STOCK SPECIFICS: In tech, Qualcomm (QCOM) shares fell over 10% in extended US trading after management warned that a global memory shortage would weigh on near-term guidance, despite stronger-than-expected quarterly earnings. Arm Holdings (ARM) shares fell over 8% in extended trading as licensing revenue missed expectations, guidance only slightly beat forecasts, and a weak outlook from key customer Qualcomm heightened concerns around smartphone exposure amid memory shortages. In communications, Alphabet (GOOG) shares fell 2.2% in extended trading after it forecast sharply higher 2026 capital spending than expected, reviving investor concerns about the scale and payback of its AI investment plans. Vodafone (VOD LN) reported slower-than-expected growth in its largest market Germany, despite adding 1&1 AG as a wholesale customer; Q3 organic service revenue +0.7% (exp. 1.02%), revenue EUR 8.5bln (exp. 8.52bln). BT (BT/ LN) lost fewer broadband customers than expected as price cuts and network investment helped; Openreach lost 210k in Q3 (exp. -239k). In industrials, Maersk (MAERSKB DC) said it expects 2026 EBITDA of USD 4.5-7bln (exp. 5.8bln; down from USD 9.53bln in 2025), as reopening of the Red Sea weighs on freight rates; it said it will focus on cost discipline). Maersk assumes that the Red Sea reopens gradually in 2026. In materials, ArcelorMittal (MT NA) said earnings will benefit from stronger European protectionism after the EU proposed doubling tariffs to 50% on steel imports above a reduced quota; the measures are expected to support profits when the new import regime takes effect in July, MT said; it expects global (ex-China) apparent steel demand to grow by +2% in FY 2026, and sees steel production and shipments increasing across all regions. Rio Tinto (RIO LN) and Glencore (GLEN LN) face a looming deadline on a proposed USD 260bln merger, with talks stalled over valuation and governance, FT reports; Rio wants its chair and CEO retained, while Glencore seeks a premium. In energy, Shell (SHEL LN) missed profit expectations as lower crude prices, weak oil trading and a struggling chemicals business offset slightly higher output; Q4 EPS 0.57 (exp. 0.63), Q4 adj. net income -11% to USD 3.26bln (exp. 3.51bln); total oil and gas production increased +2% Y/Y mainly due to ramp-up in Canada; LNG liquefaction volumes +7% Y/Y due to lower maintenance across the portfolio, and LNG Canada ramp-up; maintained a USD 3.5bln quarterly share buyback. In financials, BNP Paribas (BNP FP) reported stronger-than-expected Q4 profit, and raised some mid-term targets. Net income for the three months through December was EUR 2.97bln (exp. 2.86bln), revenue EUR 13.1bln (exp. 12.9bln). Reaffirmed its 2024-26 targets, and upgraded its FY28 view. BBVA (BBVA SM) reported Q4 profit in line with estimates, as higher lending income offset weaker fees and commissions. Net income +4.1% to EUR 2.53bln (exp. 2.54bln), while revenue increased 5.1%, driven by higher interest income. In consumer, Pandora (PNDORA DC) warned sales will slow and said it will pause share buybacks while cutting exposure to volatile silver prices; the jeweller forecast organic sales growth of -1% to +2% (exp. +3.9%), marking a potential first drop since the pandemic. Volvo Cars (VOLCARB SS) reported a sharp drop in Q4 operating profit (SEK 1.8bln vs SEK 5.6bln Y/Y) due to tariffs, weak demand, pricing pressure and the end of US EV incentives; however, it said that its turnaround plan remains on track. Volkswagen (VOW3 GY) employees in Tennessee secured a 20% across-the-board pay rise under a tentative agreement with the UAW union; the deal covers about 3,000 workers at the Chattanooga plant and includes improvements to healthcare, safety and job security, subject to member ratification. In healthcare, Siemens Healthineers (SHL GY) reported Q1 operating profit above expectations, with adj. EBIT of EUR 809mln (exp. 784mln); revenue was EUR 5.40bln (exp. 5.45bln) amid currency headwinds and weaker China diagnostics demand. In notable broker updates, Atlas Copco (ATCOA SS) was downgraded at Goldman Sachs; Equinor (EQNR NO) was upgraded at Pareto Securities, but downgraded at BofA; Peab (PEABB SS) was upgraded at SEB; Subsea 7 (SUBC SS) was downgraded at Danske; Beazley (BEZ LN) was downgraded by Morgan Stanley and Jefferies.

TODAY’S AGENDA:

DAY AHEAD: Policy announcements are due from the BoE and the ECB (previews below). Banxico and the CNB are also due to deliver policy announcements today. In Europe, construction PMI data will be released. Eurozone retail sales are seen easing to 1.6% Y/Y in December from 2.3%. The US day sees the release of weekly initial jobless claims (212k expected vs a prior 209k), continuing claims (exp. 1.85mln vs prior 1.827mln), Challenger job cuts (expected 43k from 35.6k), Revelio’s labour market data for January, ,while the BLS' rescheduled December JOLTS data will be published today. Speakers include BoE’s Bailey (post-meeting press conference), ECB’s Lagarde (post-meeting press conference), Fed’s Bostic (non-voter, hawk, retiring), BoC’s Macklem. In supply, Spain will sell EUR 5-6bln of 2029, 2033, 2035, as well as EUR 0.25-0.75bln of 2033 linkers; France will sell EUR 11.5-13.5bln of 2035, 2035, 2042 and 2049 debt. Notable US companies reporting today include: Amazon (AMZN), ConocoPhillips (COP), Bristol-Myers Squibb (BMY). In energy, the EIA will publish its weekly natgas inventory stats.
PREVIEW - BOE POLICY ANNOUNCEMENT (12:00GMT/07:00EST): The BoE is widely expected to keep the Bank Rate unchanged at 3.75%. Attention will focus on the vote split, with traders views’ ranging between 7-2 or 6-3 (with dissent likely from Dhingra and Taylor, and potentially Ramsden), and on forward guidance, with the “gradual downward path” language likely retained. February’s forecasts will include the first formal assessment of the November Budget, which is expected to lower the near-term CPI outlook, though measures may be seen as inflationary further out. In December, the MPC voted 5-4 to cut, a hawkish surprise given recent CPI data. Pantheon Macroeconomics sees risks skewed hawkish, while Morgan Stanley sees scope for a subtle dovish tilt linked to the labour market.
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PREVIEW - ECB POLICY ANNOUNCEMENT (13:15GMT/08:15EST): The ECB is expected to keep policy unchanged, maintaining the deposit rate at 2.00%. Recent data broadly align with ECB projections, supporting a steady stance. Inflation fell below the 2% target in January, largely due to base effects, while GDP remains above forecasts and PMIs are mixed but still expansionary. Attention will centre on commentary regarding the stronger Euro currency, higher gas prices and geopolitical/trade uncertainty. As no new projections will be published, any adjustment to the outlook may come through the statement or President Lagarde’s press conference. Further ahead, Goldman Sachs expects rates to remain steady for the foreseeable future, while Morgan Stanley sees a possible June cut if the Euro strengthens further and growth deteriorates.
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PREVIEW - BANXICO POLICY ANNOUNCEMENT (19:00GMT/14:00EST): Banxico is expected to adopt a cautious stance at its February policy meeting. Minutes from its December confab point to support for a pause, with policymakers flagging trade uncertainty, new import tariffs and higher special taxes as near-term inflation risks, despite viewing their impact as largely temporary. Core inflation remains above target, while headline inflation has eased. Although December’s 25bps cut to 7.00% was justified by inflation progress, weak growth and a strong MXN, several argued for a wait-and-see approach. Analysts increasingly see a hold as the slightly more likely outcome, as the bank assesses whether these tax, tariff and wage shocks generate second-round effects, before resuming easing.