THIS IS HORIZONS: MIDDLE EAST AND AFRICA. OUR TOP STORIES THIS MORNING. MARKETS CHEER THE FED CUTS RATES BY A QUARTER POINT AS JEROME POWELL TAPS THE U.S. ECONOMY’S RESILIENCE.BUT PRESIDENT TRUMP THINKS THE CUT IS NOT ENOUGH. THE DOLLAR SUFFERS ITS WORST DAY IN NEARLY THREE MONTHS AS THE FED CHAIR HIGHLIGHTS LABOR MARKET RISKS WHILE DOWNPLAYING INFLATION CONCERNS. AND ESCALATING TENSIONS, U.S. FORCES INTERCEPT AND SEIZE A SANCTIONED OIL TANKER OFF THE COAST OF VENEZUELA.A MOVE THAT COULD MAKE IT MUCH HARDER ...

Group 1 - Oracle shares fell 11% in premarket trading following disappointing quarterly results [1] - The company's revenue for the quarter was reported at $16.06 billion, below the expected $16.21 billion [1] - Despite strong demand for artificial intelligence infrastructure, Oracle's performance did not meet market expectations [1] Group 2 - The decline in Oracle's stock negatively impacted other AI-related companies [2] - Nvidia's shares decreased by 1.5%, while Micron fell by 1.4% [2] - Other tech companies such as Microsoft, Coreweave, and AMD also experienced declines of 0.9%, 3%, and 1.3% respectively [2]

Core Insights - A decline in Oracle's shares has shifted investor attention towards the sustainability of the AI-driven market boom, negatively impacting markets in Asia and Europe [1] Company Impact - Oracle's share slump has raised concerns about the long-term viability of the AI-led growth trend [1] Market Reaction - The downturn in Oracle's stock has contributed to a broader decline in market performance across Asia and Europe [1]

Core Insights - Prada is launching a limited-edition collection of sandals in India, drawing inspiration from traditional Indian footwear [1] - Each pair of sandals will be priced at approximately 800 euros, equivalent to about 930 US dollars [1] Company Summary - The initiative reflects Prada's strategy to incorporate local cultural elements into its product offerings, enhancing brand appeal in diverse markets [1] - Lorenzo Bertelli, a senior executive at Prada, is overseeing this project, indicating the company's commitment to expanding its presence in India [1] Industry Summary - The luxury footwear market is increasingly focusing on regional inspirations to attract local consumers, suggesting a trend towards cultural integration in product design [1] - The pricing strategy of 800 euros per pair positions the sandals within the premium segment of the market, targeting affluent consumers [1]

>> GOOD MORNING. THIS IS BLOOMBERG DAYBREAK: EUROPE. HAPPY THURSDAY. I’M TOM MACKENZIE IN LONDON. THE STORIES THAT SET YOUR AGENDA. ASIA TECH STOCKS SELL OFF WHILE U.S. AND EUROPEAN FUTURES SLUMP AS DISAPPOINTING EARNINGS FROM A.I. BELLWETHER ORACLE UPEND POSITIVE SENTIMENT FOLLOWING ANOTHER FED CUT. UKRAINE SENDS A REVISED PEACE PLAN TO WASHINGTON AS PRESIDENT TRUMP SAYS STRONG WORDS WERE EXCHANGED IN A PHONE CALL WITH EUROPEAN LEADERS. PLUS THE U.S. SEIZES AN OIL TANKER OFF THE COAST OF VENEZUELA FURTHER ...

A market party after the Fed’s policy decision came to an abrupt halt within hours as a plunge in Oracle’s shares reawakened concerns over tech-stock valuations. Now investors are left to ponder whether they will still get a Christmas rally https://t.co/zcC9pjOwaf ...

Core Viewpoint - Oracle's shares opened nearly 12% lower in Frankfurt, reflecting a decline in U.S. after-hours trading due to the company's sales and profit forecast falling short of analyst expectations [1] Group 1 - Oracle's forecast for sales and profit did not meet analyst estimates, leading to a significant drop in share price [1]

Core Insights - Oracle's stock has recently declined despite exceeding earnings expectations, primarily due to missing revenue targets and raising capital expenditure guidance to $50 billion for fiscal year 2026, up from $21 billion in fiscal 2025, focusing on AI infrastructure [2][3][15] Financial Performance - Oracle reported a 10.2% average annual revenue growth over the past three years, compared to 5.5% for the S&P 500 [12] - The company achieved a 14.2% revenue growth over the last twelve months, increasing from $51.2 billion to $58.3 billion [12] - In the most recent quarter, Oracle experienced a 14% year-over-year growth, reaching $16.1 billion [12] Profitability Metrics - Oracle generated $19 billion in operating income and $15 billion in net income over the previous four quarters, showcasing strong profitability [7] - The company's margins are significantly higher than those of most firms, indicating effective revenue conversion into profits [7] Valuation Concerns - Oracle's price-to-sales (P/S) ratio is 9.3x, compared to 3.2x for the S&P 500, and its price-to-earnings (P/E) ratio stands at 36.7x against the market's 23.4x, suggesting a premium valuation [5][15] - The high valuation raises concerns about the sustainability of growth, as it assumes significant future performance [15] Capital Structure - Oracle has $106 billion in debt against a market capitalization of $570 billion, resulting in a debt-to-equity ratio of 19%, which is slightly better than the S&P 500's 20.4% [8] - The company retains $19 billion in cash against total assets of $180 billion, giving it an 11% cash-to-assets ratio, which is higher than the market average of 7% [8] Market Resilience - Oracle has shown resilience during market stress, with historical performance indicating it typically recovers faster than the broader market after downturns [10][13] - The company experienced declines during past crises but managed to bounce back to pre-crisis levels, demonstrating its ability to withstand economic challenges [13] Investment Outlook - Despite strong growth and profitability metrics, the current high valuation limits potential upside in the near-to-mid term, making it a challenging investment at present prices [14][15] - For investors seeking exposure to strong companies without the risks associated with high valuations, diversified portfolios targeting quality at reasonable prices may offer a more favorable risk-reward scenario [16]

Core Viewpoint - Oracle Corporation reported earnings per share of $2.26, surpassing estimates, but its revenue of $16.06 billion fell short of expectations, leading to a decline in share price [1][2] Financial Performance - Earnings per share were $2.26, exceeding the estimated $1.63 [1] - Revenue was reported at $16.06 billion, below the expected $16.86 billion [1] Market Reaction - The revenue miss resulted in a share price drop of over 6% in after-hours trading [2] - Concerns regarding AI infrastructure spending and high debt levels contributed to the stock's decline [2] Debt and Valuation Metrics - Oracle's debt-to-equity ratio is approximately 4.36, indicating a high level of debt relative to equity [2] - The price-to-earnings (P/E) ratio is about 50.72, and the price-to-sales ratio is around 10.61, suggesting high valuation relative to earnings and sales [2] - The enterprise value to sales ratio is approximately 12.22, and the enterprise value to operating cash flow ratio stands at about 33.50, indicating high valuation relative to sales and cash flow [3] Liquidity and Profitability - The current ratio is approximately 0.62, suggesting potential liquidity challenges in meeting short-term obligations [3] - An earnings yield of about 1.97% reflects the company's profitability relative to its share price [3]

Core Insights - Oracle has secured new agreements with AI companies Nvidia and Meta, contributing to a record backlog of $523 billion, but its fiscal second-quarter revenue of $16.06 billion fell short of analysts' expectations despite a 14% year-over-year increase [2][3] - The stock price of Oracle dropped 11% in after-hours trading following the earnings report, reflecting ongoing investor concerns about the sustainability of demand for its AI offerings and reliance on a few major customers in the AI sector [3][4] - Oracle's forecast for adjusted earnings per share for the third quarter is between $1.70 and $1.74, aligning with analysts' estimates, and it anticipates revenue growth of 19% to 21%, which exceeds projections [5] Stock Performance - As of the close on Wednesday, Oracle's shares have decreased approximately 35% from their September highs, although they remain up about 33% year-to-date, significantly lower than the 100% gain observed in September [6]