EUROPEAN OPEN: MSFT down post-earnings; SAP GY cloud revenue misses expectations; STM FP tops expectations; DBK GY had profitable 2025; ROG SW sees profit growth; HMB SS tops Q4 expectations

• EUROPEAN OPEN: European equities opened generally higher, though the Dax is in the red after disappointing earnings from SAP; APAC stocks were mostly subdued with sentiment in the region clouded following a lack of fireworks at the FOMC, while top- and bottom-line earnings beats from the likes of Meta, Microsoft and Tesla also failed to spur the broader risk appetite. The FOMC kept rates unchanged at 3.50-3.75% in a 10–2 vote (Waller and Miran both called for a 25bps reduction; Miran had previously voted for a 50bps cut in December), signalling data dependence; statement language was upgraded on growth and labour market stability, little changed on inflation. Chair Powell said policy is appropriate, near neutral, and future decisions will be made meeting by meeting, offering little by way of guidance on the future path for rates. Powell avoided questions around his plans after his term ends in May, as well as on the Governor Cook legal case, which Powell said may be the Fed's most important legal case in history. Overnight, Indonesian stocks suffered their worst two-day rout since 1998 after MSCI warned of a possible market downgrade; the Jakarta Composite Index fell as much as 10%, triggering a trading halt, amid concerns over transparency and limited free float; analysts say a downgrade could trigger billions of dollars’ worth of outflows. The USD on Wednesday saw its biggest one-day gain since November after US Treasury Secretary Bessent backed a strong currency, ending a weeklong slide; gains held after the FOMC kept rates unchanged, and gave little by way of new guidance on the rate trajectory. However, the Greenback resumed downside overnight, with reports stating debasement fears were outweighing Bessent’s support. Gold surged above USD 5,500/oz, extending a nine-day rally driven by thin liquidity, a weaker USD and investor flight from bonds and currencies, while silver also hit a fresh record amid debasement fears. Oil rose for a third day after President Trump Wednesday warned Iran to make a nuclear deal or face military strikes, reviving Middle East disruption concerns; Brent climbed above USD 68/bbl, while WTI was near USD 64/bbl.
• STOCK SPECIFICS: In tech, Microsoft (MSFT) shares finished extended trading with losses of over 5% following Q2 results, where traders focused on slowing cloud growth and lighter than expected operating margin guidance despite earnings and revenue beating forecasts. Samsung Electronics (005930 KS) reported record Q4 results, as AI-driven memory demand lifted earnings, with operating profit exceeding KRW 20tln and revenue reaching about KRW 93.8tln; the memory business drove growth despite rising costs, while smartphone profits fell. IBM (IBM) shares rose over 8% in afterhours trading following a Q4 beat and it issued a slightly a better-than-expected outlook, supported by strong software and infrastructure performance and a newly approved dividend. SAP (SAP GY) sees cloud revenue growth as customers accelerate their switch away from legacy technology ahead of a servicing deadline; reported Q4 adj. operating profit of EUR 2.83bln (exp. 2.75bln), Q4 revenue EUR 9.68bln (exp. 9.7bln), Q4 cloud revenue EUR 5.6bln (exp. 5.64bln) with exec noting resilient enterprise demand; announced a new two-year share buyback of up to EUR 10bln. Nokia (NOKIA FH) saw a slightly lower than expected profit in Q4, adj. profit and revenues were in line, while execs see strong demand in network infrastructure. STMicroelectronics (STM FP) sees Q1 revenue of USD 3.04bln (exp. 2.92bln) after consumer electronics demand showed signs of recovery late last year; it reported Q4 revenue of EUR 3.33bln (exp. 3.28bln), with strength in Personal Electronics and modest upside in CECP and Industrial offsetting weaker-than-expected Automotive, while Q4 revenues returned to Y/Y growth. CEO highlighted improving Y/Y momentum. In communications, Meta Platforms (META) shares rose 7.4% in extended trading after it beat expectations, and issued stronger-than-expected sales guidance, citing robust advertising demand continuing into the new year. Universal Music (UMG NA) acquired a minority stake in Stationhead, a social listening app; terms were not disclosed. In financials, Deutsche Bank (DBK GY) saw a profitable year, boosted by higher trading income, and announced a new share buyback; Q4 net income EUR 1.3bln (prev. 1.6bln Y/Y), Q4 revenue EUR 7.73bln (exp. 7.64bln), FICC revenue rose 6% Y/Y to EUR 2bln (exp. 1.94bln); FY25 Revenue EUR 32.1bln (exp. 31.9bln); announced a EUR 1bln share buyback. ING (INGA NA) reported quarterly profit above estimates and raised its 2027 profit guidance, saying it expects a return on tangible equity of more than 15%. Lloyds (LLOY LN) upgraded 2026 guidance after 2025 statutory pre-tax profit rose 12% to GBP 6.6bln; expects return on tangible equity above 16% in 2026; dividend was lifted +15%. In healthcare, Sanofi (SAN FP) posted higher-than-expected quarterly profit, helped by sales of Dupixent, and plans a EUR 1bln share buyback. Roche (ROG SW) said profit growth will again outpace sales this year, with EPS ex-items seen rising by a high single-digits, and sales growing in the mid-single-digits, despite weaker-than-expected results for its Vabysmo eye. In consumer, H&M (HMB SS) reported higher than expected Q4 operating profit of SEK 6.36bln (exp. 5.53bln), on 2% organic sales growth; operating margin rose to 10.7% (from 7.4%), while sales in December and January were expected to fall 2%. Remy Cointreau (RCO FP) Q3 sales returned to growth, rising 2.8% organically to EUR 245.8mln, topping expectations, driven by improved US demand; Cognac sales rose 3.2% to EUR 150.2mln; Remy backed FY guidance despite weakness in China. In autos, Tesla (TSLA) shares finished extended trading with gains of over 2% after it beat Q4 EPS estimates, and announced its planned Optimus robot production before end-2026; investors looked through revenues falling for the first time amid boycotts linked to Elon Musk’s political ties, tougher competition from Chinese rivals and the removal of electric vehicle subsidies, which together weighed on sales and profits. Continental (CON GY) said tariffs are expected to result in a low double-digit million EUR net burden in Q4 and gross tariff impact for H2 seen in the high-double-digit million EUR range. Toyota Motor (TM) retained its position as the world’s biggest carmaker for a sixth year, widening its lead over Volkswagen (VOW3 GY); Toyota's global sales rose 4.6% to 11.3mln vehicles, while production climbed 5.7%; Volkswagen’s sales fell 0.5%. Nissan Motor (NSANY) December global sales fell 6.7% Y/Y to 272.8k units. Elsewhere, UK 2025 car production fell to the lowest since 1956 after a cyberattack shut Jaguar Land Rover and US tariffs hurt automakers. Output dropped 8% to 717,371 vehicles, according to the Society of Motor Manufacturers and Traders. In industrials, EasyJet (EZJ LN) Q1 revenue rose +11% Y/Y to GBP 2.2bln; passenger revenue increased +9% to GBP 1.4bln, stronger performance Y/Y. In materials, Antofagasta (ANTO LN) said FY 2025 copper production declined while gold output increased. Glencore (GLEN LN) 2025 copper production from own sources totalled 851.6kt, with H2 output over 500kt; for 2026, it expects copper production of 810–870kt. In energy, TotalEnergies (TTE FP) is formally restarting the USD 20bln Mozambique LNG project, Noticias reports.

TODAY'S AGENDA:

• DAY AHEAD: In Europe, the Riksbank is expected to hold rates unchanged at 1.75%. SARB is expected to keep rates at 6.75%. Elsewhere, the CBRT's meeting minutes from its January confab are due. Eurozone money supply and loans data are due in the morning, and then sentiment indicators for January. Stateside, US initial jobless claims for the week of 24th January are expected at 205k from 200k, while continuing claims (17th January week, coinciding with the BLS' traditional survey window for the January jobs report) are seen at 1.86mln from 1.849mln. The Chicago Fed's Labour Market Indicators are also out today. Final unit labour costs data for Q3 are also due. Trade stats from the US for November, and elsewhere, factory orders for November. In supply, Italy will sell EUR 6-6.5bln of 2031 and 2036, as well as EUR 1.5-2.0bln of 2035 CCTeus; the US Treasury will auction USD 44bln of 7yr notes. Notable US corporates reporting today include: Apple (AAPL), Visa (V), Mastercard (MA), Caterpillar (CAT), Thermo Fisher Scientific (TMO), Blackstone (BX), KLA (KLAC), Honeywell International (HON), Lockheed Martin (LMT), Parker-Hannifin (PH), Comcast (CMCSA), Altria (MO).