Investment sectors face strain following quarterly reports: Daimler Truck, Porsche, and Microsoft encounter scrutiny
Hey there! Let's dive into the ongoing corporate earnings season. Starting today, we're geared up for some crucial financial reports from various bigwigs. Tonight, tech colossus Microsoft kicks things off, but let's not forget the pressure mounting on the DAX and Wall Street.
European investors are hesitant to invest, despite hints of a quick economic recovery. On Tuesday, the DAX dropped 0.2 percent to 15,076 points, while the EuroStoxx50 stood firm at 4,150 points. The DJI, the main U.S. index, wasn't immune to the red either.
Though economic indicators suggest lesser downturn than anticipated, we're not entirely out of the woods yet. The purchasing managers' index in the eurozone spiked provisionally in January to 50.2 points, surpassing the expansion mark of 50. However, a recession in Germany, the eurozone's heaviest economy, still hasn't been ruled out. Phil Smith, an economist at S&P Global, warned of caution. He noted that while the much-feared recession hasn't materialized yet, the effects of interest rate hikes might take more than a year to be felt in the real economy.
Several heavyweights like software titan Microsoft, pharmaceutical powerhouse Johnson & Johnson, defense giants Lockheed Martin and Raytheon Technologies, and industrial conglomerate General Electric are expected to share their quarterly figures. Unfortunately, China's stock exchanges are closed due to the New Year holiday.
On Tuesday, U.S. stock markets were pulled down by disappointing corporate results. The DJI, the index of blue-chip stocks, plummeted 0.6 percent to 33,445 points. The broader S&P 500 and the tech-centered Nasdaq each lost 0.5 percent, reaching 4,002 and 11,303 points, respectively. Economist Peter Cardillo of brokerage firm Spartan Capital Securities remarked that earnings would dictate the market's direction, and Tuesday presented a mixed session.
Shares of 3M dived about 6.2 percent following reports of declining revenues in the last quarter. Johnson & Johnson edged down 0.9 percent despite surprise earnings, as they anticipated business disruptions in the first half of 2025 due to surging COVID-19 cases in China. Conversely, Raytheon Technologies soared as much as 13.1 percent due to impressive quarterly results. However, Verizon lost 1.68 percent despite posting good numbers.
In the evening trading, Daimler Truck shares recorded the highest gains with a surge of 3.13 percent, followed by Munich Re and Hannover Re with gains of 1.66 percent and 1.76 percent, respectively. On the flip side, Sartorius lost the most with a drop of 4.52 percent, followed by Zalando with a dip of 2.26 percent and Porsche AG with a loss of 2.11 percent.
(Sidenote: Johnson & Johnson's Q1 2025 earnings exceeded expectations, reaching $2.77 adjusted EPS and $21.89B revenue. They also raised their full-year sales guidance to $91.0B-$91.8B, maintaining their EPS guidance at $10.50-$10.70.)
- Despite a potential quick economic recovery hinted by economic indicators, European investors remain cautious about investing in the eurozone.
- The Dow Jones Industrial Average (DJI), a main U.S. index, also witnessed a dip during the ongoing downturn.
- Phil Smith, an economist at S&P Global, has warned of caution, suggesting that the effects of interest rate hikes might take over a year to be felt in the real economy.
- This stock market season, several heavyweights like Microsoft, Johnson & Johnson, Lockheed Martin, Raytheon Technologies, and General Electric are expected to share their quarterly earnings.
- In personal-finance news, shares of 3M dropped due to declining revenues in the last quarter, while Raytheon Technologies soared due to impressive quarterly results.
- In General-news and sports, shares of Daimler Truck recorded the highest gains during evening trading, while Sartorius lost the most, and Zalando and Porsche AG also experienced losses.
