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Real-time News
On February 25th, HP (HPQ.N) stated that its full-year earnings may reach the lower end of its previously forecast range due to tariffs and rising memory chip prices. The stock fell approximately 7% in after-hours trading after closing at $18.20 in New York. Over the past 12 months, the stock has fallen by 48%. HP and other device manufacturers are facing the dual challenges of rising memory chip prices and supply shortages as consumers buy new computers to replace outdated devices and acquire new AI capabilities. The company stated that the memory issue will persist throughout the fiscal year and may extend into the next. HP said it is raising product prices, working to bring in more suppliers, and adjusting some products to reduce memory demand. The company said today that it has made progress in these areas, including completing the certification of new suppliers. HP announced the launch of a multi-year cost-cutting plan aimed at saving the company $1 billion annually by 2028.February 25th - Traders in the US futures and options markets are increasingly betting that the Federal Reserve will continue to cut interest rates next year rather than raise them. The spread of the Covered Overnight Financing Rate (SOFR) futures, which is closely linked to Fed policy expectations, is inverting significantly – indicating that traders are beginning to anticipate a longer period of central bank easing. Previously, traders had been betting that the Fed would cut rates twice by 25 basis points before the end of this year and then resume rate hikes in 2027. However, the increasingly heated debate surrounding the impact of artificial intelligence on the labor market has prompted them to reassess this expectation. Jack McIntyre, portfolio manager at Brandywine Global, stated, "The question is how AI will cause inflation. The only aspect of AI that could potentially cause inflation is the construction of data centers and the associated energy demand." Meanwhile, in the spot market, traders lack confidence in how to allocate US Treasuries. JPMorgan Chases latest client survey (for the week ending February 23rd) shows that neutral positions have reached their highest level since the end of 2024.February 25th - New revisions to Japans corporate governance guidelines could release some of the $840 billion in cash held by listed companies and fuel a new wave of buying in the Japanese stock market. The Financial Services Agency (FSA) will submit draft rules to an expert panel on Thursday, requiring companies to verify the efficiency of their cash usage, with the aim of implementing this change this year. Despite significant improvements in corporate governance in recent years, Japanese companies still have a large amount of idle cash on their balance sheets. Investing these funds in higher-yielding projects could potentially enhance the attractiveness of the Japanese stock market to investors. Sho Nakazawa, equity strategist at Morgan Stanley Mitsubishi UFJ Securities, stated, "This revision will make it easier to anticipate increased allocations to growth sectors, as well as more stable growth in share buybacks and dividends," which in turn could lead to capital inflows from overseas investors. Analysts have long argued that excessive cash holdings by Japanese companies are one of the factors hindering improvements in return on equity (ROE), a key metric closely watched by stock investors, which has caused Japans ROE to lag behind its Western counterparts.February 25th - Rising tech stock prices boosted Wall Street, easing concerns about the potentially disruptive impact of artificial intelligence, and Asian stocks appeared poised to follow suit. Stock index futures signaled a strong open for Sydney, Tokyo, and Hong Kong markets. In the US, the Nasdaq 100 rose 1.1%, boosted by a rebound in software stocks, while the S&P 500 also climbed, supported by improved consumer confidence. Short-term bonds underperformed. Gold and crude oil prices fell. Traders are also closely watching Nvidias earnings report on Wednesday, expecting the chipmaker to significantly exceed expectations. Nvidias recent stock performance has been lackluster due to investor sell-offs of large-cap stocks. David Laut of Kerux Financial stated that this weeks earnings reports will either "ease" or "exacerbate" concerns about artificial intelligence. We wont get all the answers this week, but worried investors are eager for definitive information.Lucid Group (LCID.O): Capital expenditures are expected to be between $1.2 billion and $1.4 billion in 2026.
