ASML, the Dutch company that makes the machines chipmakers need to produce advanced semiconductors, reported quarterly bookings of €13.2 billion—more than double what analysts expected. The company also announced a €12 billion stock buyback and said revenue from its most advanced equipment should rise significantly in 2026.The guidance is good news for the chip sector and the AI infrastructure story more broadly. We’ve mentioned several times since earnings season began that the investors weren’t looking at ...

Still-elevated inflation and a labor market that has weakened but not collapsed are the main reasons the Federal Reserve is widely expected to wrap up its two-day meeting Wednesday with a hold on the U.S. policy rate. ...

U.S. Treasury Yields Little Changed Ahead of Fed MeetingCONCLUDED[Stock Market News From Jan. 28, 2026: S&P 500 Breaks Win Streak]Last Updated:---16 hours ago# U.S. Treasury Yields Little Changed Ahead of Fed MeetingByEmese Bartha, Dow Jones NewswiresU.S. Treasury yields were little changed in Asian trade, ahead of the Federal Reserve's rate decision later in the day.The Fed is expected to leave the policy rate unchanged. "A swirl of mixed data [is] making it tough to gauge how much U.S inflation is easing, ...

Nasdaq futures popped, leading Wall Street stocks higher on Wednesday as investors braced for the Federal Reserve’s latest policy decision and potentially pivotal earnings from megacap tech giants. Contracts on the tech-heavy Nasdaq 100 (NQ=F) climbed about 0,8%, while those on the Dow Jones Industrial Average (YM=F) hovered just above the flat line. S&P 500 futures (ES=F) rose 0.3%, eyeing another record on the heels of an all-time closing high. Attention now turns to Wednesday’s Fed announcement, the ...

Financial Data and Key Metrics Changes - Fully diluted earnings per share was $1.39, a 63% increase year-over-year and a 16% increase from the previous quarter [3] - Net interest margin improved for the seventh consecutive quarter, up 15 basis points to 2.61% [3] - Return on common equity improved to 15% [3] - Net income for the quarter was $60.9 million, an increase of $7.6 million from the previous quarter [12] Business Line Data and Key Metrics Changes - Loans and deposits both grew modestly in the quarter, with non-interest-bearing demand deposits growing 6.6% on a linked basis [3] - Consumer loans represent 57% of total loans, approximately $8 billion, with 86% consisting of residential mortgage and home equity loans [8] - Commercial lending portfolio totals $6.1 billion, representing 43% of total loans, with 73% secured by real estate [8] Market Data and Key Metrics Changes - Bank of Hawaii continues to lead in deposit market share in Hawaii, with market share growth advancing another 40 basis points in 2025 [4] - The average quarterly mix shift of deposits was $25 million compared to $340 million in 2024, indicating a shift from non-interest-bearing to higher-cost deposits [13] Company Strategy and Development Direction - The company aims to leverage its unique core Hawaii market and dominant brand position to create superior risk-adjusted returns [4] - The focus remains on improving customer service and expanding market share, with a strong emphasis on both consumer and commercial segments [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth of non-interest-bearing deposits, although they expect growth rates to moderate from the current quarter's 6% [25] - The outlook for loan growth in 2026 is projected to be mid-single digits, with expectations for improved pipelines in both consumer and commercial lending [29][54] Other Important Information - The company reported a provision for credit losses of $2.5 million, unchanged from the linked quarter, resulting in a coverage ratio of 1.04% [19] - Capital ratios remained above regulatory thresholds, with Tier 1 capital at 14.5% and total risk-based capital at 15.5% [20] Q&A Session Summary Question: Non-interest-bearing deposit growth - Management noted a 6% increase in non-interest-bearing deposits, attributing it to a balanced contribution from business segments, but expects growth to moderate [25] Question: Loan pipeline outlook - Management indicated a positive outlook for loan pipelines, with expectations for mid-single-digit growth in 2026 [29][54] Question: Margin update - Management confirmed that the margin target of near 290 is an end-of-year goal, not a fourth-quarter average [33] Question: Special mention and classified balances - Special mention balances at the end of the fourth quarter were $63.4 million, down from the previous year, indicating strong credit quality [39] Question: Fee income opportunities - Management highlighted growth in wealth management fees and a strong pipeline, with expectations for continued growth [75]

Market Overview - U.S. equity index futures are retreating as investors prepare for a significant week with the anticipated FOMC hold and a busy corporate earnings schedule; the S&P 500, Nasdaq 100, Dow 30, and Russell 2000 all posted modest weekly declines [1] - Treasury yields are edging lower, with market pricing indicating a near certainty of a hold in the upcoming FOMC meeting and potential rate cuts starting in July [1] Company Performance - Nvidia shares rose by 1.6% following news of CEO Jensen Huang's planned visit to China and reports that Chinese tech firms can prepare orders for H200 chips [2] - Intel shares plummeted by 17%, marking its worst day since 2024 due to weak earnings guidance [2] - Capital One shares fell by 7.6% after a $5.15 billion acquisition of Brex and a fourth-quarter earnings miss [2] - Clorox shares increased by 1.1% after agreeing to acquire Gojo Industries for $2.25 billion and reaffirming its 2026 outlook [2] - Booz Allen Hamilton shares jumped by 6.8% after raising its first-quarter earnings forecast [2] - Fortinet shares rose by 5.2% following an upgrade to buy by TD Cowen [2] - Ericsson shares surged by 8.9% after beating profit expectations and announcing a 15 billion krona share buyback program [2] Commodity Insights - Gold prices surpassed $5,000 for the first time as investors sought safety, with silver also rallying and briefly breaching $109 [3] - Oil prices (WTI) rose to $61 amid heightened tensions in the Middle East and a slight increase in the U.S. oil rig count [3] Currency and Central Bank Updates - The U.S. Dollar Index fell into the 96s, reaching lows not seen since September, with significant losses against the Japanese yen due to intervention risks [4] - The European Central Bank's Kocher noted that trade threats raise economic risks but cautioned against pre-emptively adjusting policy [5] - Bank of England's Greene indicated that the decline in wage growth has likely run its course, with forward indicators raising concerns [5] - Bank of Japan's Governor Ueda held rates steady but suggested a potential rate hike could occur in three months [5] Client Sentiment and Market Trends - Client sentiment in the S&P has shifted to extreme long at 78%, with notable increases in long sentiment for the Dow and Russell [6] - Commodities saw heavy buying in gold and silver, with gold sentiment climbing to 77% after breaching $5,000 [6] - Shifts in FX sentiment included a move from majority long to majority short in EUR/USD and a shift to majority buy in USD/JPY [6] Economic Data and Upcoming Events - U.S. preliminary manufacturing PMI improved to 51.9, while services held at 52.5, missing forecasts; consumer sentiment improved to 56.4 [8] - Upcoming economic data includes U.S. housing price data, FOMC policy announcement, and earnings from major companies like UnitedHealth, Microsoft, and Apple [9]

Core Insights - Small-cap ETFs are experiencing renewed investor interest after a period of outflows, indicating potential investment opportunities ahead [1][2] - The shift in investor sentiment is attributed to favorable monetary and fiscal conditions for smaller companies, with historical data showing small-caps outperform large-caps by 6% in the year following Federal Reserve rate cuts [3] - Valuation metrics indicate that small-caps are trading at a 12% discount to their pre-pandemic five-year average and are 36% below large-caps on a relative basis, suggesting a buying opportunity [4] Investment Themes - Active ETFs have seen significant growth, collecting a record $580 billion in 2025, while active mutual funds faced $640 billion in outflows [5] - Over the past decade, active ETFs have gained $1.2 trillion in assets, contrasting with active mutual funds that lost nearly $4 trillion [5] - In 2025, 47% of active fixed income managers outperformed their benchmarks, compared to only 32% of active equity managers, highlighting the stronger performance of fixed income [6] Diversification Trends - The case for diversification has strengthened, as multiple asset classes delivered positive returns in 2025, marking the first time since 2019 that stocks, bonds, and commodities all outperformed cash [7] - A notable 76% of countries in the MSCI ACWI index outperformed the U.S., the highest percentage since 2009, indicating a shift in global investment dynamics [7] - The SPDR Bridgewater All Weather ETF (ALLW) is highlighted as a diversification option, with significant trading volume exceeding $10 million in 12 of the last 13 days [8]

Market Outlook - The current broadening of the market is expected to be durable, with a stronger economy favoring value and smaller stocks [2][3] - Anticipation of two more rate cuts is expected to benefit smaller stocks more than larger ones [3][4] Economic Indicators - Short-term interest rates are crucial for smaller stocks, while the 10-year bond rates are not expected to decline significantly [4] - Fiscal tailwinds are expected to support consumer spending, contributing to a strong economic outlook heading into 2026 [5][6] Stock Valuation - Smaller and value stocks may face valuation ceilings compared to high-growth stocks, but lower price-to-earnings (PE) ratios can still yield good returns with modest growth [6][7] - Companies with a PE of 15 can achieve substantial returns even with growth at nominal GDP levels, unlike those with higher PE ratios [7] AI Integration - The current year is seen as pivotal for AI adoption, with only 15-20% of firms having fully integrated AI to reduce costs [8] - Moderate incorporation of AI techniques could lead to profit margins rising by 2-3 percentage points across firms [11] Labor Market Implications - The unemployment rate remains low, allowing job seekers to find employment despite potential job displacement from AI [10] - Historical trends suggest that new job opportunities typically arise even as technology evolves, though the speed of this transition remains uncertain [9]

Financial Data and Key Metrics Changes - The company reported earnings of $69.3 million, or $0.90 per share, for the fourth quarter, with an adjusted EPS of $0.94 after accounting for one-time software write-downs [7][25] - The annualized return on assets (ROA) was 78 basis points, adjusted for the software write-down, it was approximately 81 basis points [9] - Net interest margin (NIM) expanded to 3.06%, up from 3% in the previous quarter and 22 basis points year-over-year [8][26] - Total deposits increased by $735 million during the quarter and $1.5 billion for the year [20] Business Line Data and Key Metrics Changes - Core loans grew by $769 million in the fourth quarter, with commercial real estate (CRE) loans up by $276 million and commercial and industrial (C&I) loans up by $474 million [21] - Non-interest income increased by $30 million quarter-over-quarter and year-over-year, despite a decline in leasing income [28] - The company experienced a decline in criticized and classified loans, with non-performing loans (NPLs) down slightly [12][28] Market Data and Key Metrics Changes - The company noted that the cost of deposits decreased by 21 basis points to 2.10% at year-end, down from 2.31% at the end of September [11] - The loan-to-deposit ratio finished the quarter at 82.7% [21] - The commercial real estate portfolio grew by 9%, with a total exposure of $6.8 billion, representing 28% of total loans [23] Company Strategy and Development Direction - The company aims to maintain a balanced growth strategy, focusing on core loan growth of about 6% while managing residential and other loans to shrink by about 8% [18] - The board authorized an additional $200 million share buyback, indicating a commitment to returning capital to shareholders while maintaining a target capital ratio in line with peers [13][14] - The company plans to continue investing in existing markets, particularly in Atlanta, Texas, and North Carolina, while expanding its footprint in Tampa [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, noting that despite geopolitical risks, the economy is performing well [31][32] - The company anticipates two Fed rate cuts in the upcoming year, with a hedged balance sheet to mitigate risks associated with interest rate fluctuations [32] - The guidance for the next year remains consistent with previous expectations, with a focus on maintaining growth in deposits and net interest income [18][30] Other Important Information - The company reported a tangible book value per share of $40.14, reflecting a 10% year-over-year growth [13] - Non-interest expenses increased by $6.6 million from the prior quarter, primarily due to a capitalized software charge and employee compensation expenses [29] Q&A Session Summary Question: What drove the fourth quarter non-interest-bearing deposit growth? - Management noted that every business line contributed to deposit growth, with small business, middle market, and corporate sectors performing well, while the title business saw a seasonal decline [34] Question: Can you walk through the loan and deposit beta assumptions? - The company expects to maintain an 80% beta for deposits, similar to past performance, with floating rate loans being a significant portion of their portfolio [36][41] Question: How do you balance buybacks with capital levels? - Management indicated a flexible approach to buybacks, taking advantage of market volatility while ensuring capital levels remain aligned with peer ratios [39] Question: What is the outlook for commercial real estate growth? - The company plans to grow CRE mid-single digits while maintaining a balanced portfolio across various asset classes [44] Question: Can you provide insights on the recent fraud incident? - A $10 million loan was written off due to fraud, with management indicating that such incidents are hard to predict but overall credit quality remains stable [12][50]

Market Overview - Asian stocks advanced, driven by a resurgence in the artificial intelligence sector, with MSCI's Asia-Pacific index outside Japan up 0.5% and near a record high [2] - Wall Street saw gains in technology and financial stocks, with Nasdaq futures up 0.22% and S&P 500 futures up 0.15% [3] - The dollar remained near a six-week high following positive US economic data, leading to reduced expectations for rate cuts [5][6] Technology Sector - Strong results from Taiwanese chipmaker TSMC revitalized interest in AI stocks, providing reassurance to investors amid previous doubts about capital expenditure in AI [4] - The US and Taiwan reached a trade deal that reduces tariffs on semiconductor exports and encourages investment in the US technology sector, potentially straining US-China relations [2] Currency and Economic Indicators - The dollar index stood at 99.36, close to its highest level since December 2, with a growing consensus that the Federal Reserve may not cut rates in April [6][7] - The yen strengthened slightly to 158.48 per dollar, although it remained near an 18-month low, influenced by speculation of a potential snap election in Japan [7][8] Oil and Precious Metals - Oil prices showed signs of recovery after a significant drop, with Brent futures up 0.11% at $63.83 per barrel and US crude up 0.2% at $59.31 per barrel [10] - Gold prices fell 0.16% to $4,607.50 per ounce, reflecting a broader decline in safe-haven assets [10]