In today’s Markets Daily India, we look at risks to corporate earnings from pricey crude, why oil exploration firms may outperform, and the rising clout of domestic funds. https://t.co/S644g7zprA ...

Core Viewpoint - US stock futures are showing slight increases as investors prepare for a week filled with significant policy decisions and corporate earnings reports [1] Group 1: Market Overview - Investors are closely monitoring several notable companies in anticipation of their performance before and after Monday's trading session [1] Group 2: Federal Reserve - The Federal Reserve's upcoming decisions are a focal point for market participants, influencing investor sentiment and stock futures [1]

Japan’s equity rally built on strong corporate earnings is beginning to look vulnerable as the escalating conflict in Iran pushes crude oil prices higher, stoking concern that rising energy costs could erode profits https://t.co/seLeaP3pB6 ...

Group 1: SATS Ltd - SATS Ltd reported an 8.0% year-on-year increase in revenue to S$1.6 billion for the third quarter of fiscal 2026, with net profit attributable to shareholders rising 20.4% to S$84.7 million, driven by operating leverage and improved EBITDA margins from 17.3% to 18.1% [3][4] - The Gateway Services segment was a key contributor, with revenue increasing 10.0% to S$1.3 billion, supported by a record-breaking 2.55 million tonnes of cargo processed, despite a 6.9% dip in the Americas due to tariff impacts [4] - The group reported a healthy nine-month free cash flow of S$369.9 million and held S$620.1 million in cash against S$2.4 billion in borrowings, indicating a return to capital discipline [5] Group 2: Wilmar International - Wilmar International achieved a 4.5% year-on-year rise in FY2025 revenue to US$70.4 billion, with net profit attributable to owners climbing 20.6% to US$1.4 billion, supported by higher sales volumes and stronger palm-related prices [6] - Core net profit, excluding one-off items, grew by 9.7% to US$1.3 billion, while free cash flow improved significantly to US$1.3 billion from negative US$200 million a year ago [7] - The balance sheet showed marginal improvement with net gearing easing to 0.91 times, although management declared a lower total dividend of S$0.14 for the year, reflecting a cautious outlook amid trade tariffs and geopolitical shifts [8]

Market Outlook - Wall Street's average target for the S&P 500 is projected to be 10% higher by December's close, maintaining the same outlook as at the beginning of the year despite potential headwinds [1][10] - Strategists have kept their allocation weightings unchanged, indicating continued optimism based on expectations for above-average US economic growth and corporate earnings [1][10] Geopolitical Impact - The ongoing conflict with Iran has raised concerns, with analysts suggesting that elevated oil prices could threaten global economic stability and corporate earnings [3][10] - Despite geopolitical tensions, firms like Morgan Stanley and Piper Sandler maintain a constructive view on equities, viewing any market pullback related to Iran as a buying opportunity [3][10] Investor Sentiment - Equity sentiment has remained bullish throughout the year, although some analysts express concern over investor complacency, suggesting that a correction could lead to significant losses for many [9][14] - The latest earnings season showed S&P 500 firms grew profits by 13%, exceeding expectations, yet this did not translate into positive market movement, as the index fell 1.7% during the reporting cycle [11][14] Private Credit Market - Blue Owl Capital has halted redemptions and begun selling loans to raise cash, indicating rising borrower stress and higher interest costs are straining the private credit market [12][14] - The tightening of lending conditions and potential defaults in the private credit sector could negatively impact corporate earnings, particularly in more leveraged industries [12][14]

Market Overview - Major indices showed a lackluster performance, with the Dow Jones increasing by 0.03 percent, while the Nasdaq and S&P 500 fell by 1.18 percent and 0.54 percent, respectively [1] Company Performance Applied Optoelectronics Inc. (NASDAQ:AAOI) - Share prices dropped by 7.62 percent to close at $53.69, as investors took profits after a five-day gain [4] - The company narrowed its net loss by 80 percent to $38.2 million from $186.7 million in 2024, with total revenues soaring by 83 percent to $455.7 million from $249 million [4] - In Q4, net loss shrank by 98 percent to $2.02 million from $119.7 million, and total revenues increased by 33.9 percent to $134.27 million from $100.27 million [5] - The CEO expressed optimism about entering 2026, expecting Q1 revenues to grow by 50 to 66 percent to a range of $150 million to $165 million [6] Fermi Inc. (NASDAQ:FRMI) - Share prices fell by 7.97 percent to finish at $10.85, as investors engaged in profit-taking after a 31-percent jump in the previous two trading days [8] - The stock's recent surge was supported by an analyst's maintained "buy" recommendation, despite a lowered price target from $37 to $35 [8] - Ongoing class action lawsuits allege misinformation regarding tenant demand for the 11-GW Project Matador, including risks related to funding commitments [9] - The company raised up to $500 million from the debt market for Project Matador, which aims to deliver an initial 2.3 GW of power [10]

Group 1 - The core driver of market returns in the long term is earnings growth, while in the short term, multiple expansion or contraction plays a significant role [1][3]. - The S&P 500 Index return decomposition shows that over the long term, earnings growth (represented by grey bars) dominates compared to dividends and multiple expansion [2]. - Earnings estimates for 2026 have increased by 12% for emerging markets since last summer, with Japan and TSX also experiencing positive revisions [4]. Group 2 - Japan, emerging markets, and TSX are identified as the best-performing markets for 2026, although there is less enthusiasm for TSX due to its earnings growth being primarily driven by the materials sector, particularly gold [4]. - The U.S. market has seen positive earnings revisions in the technology sector, which has been underperforming recently [6]. - Overall, the global earnings growth trend is positive, contributing to market resilience despite recent headline challenges [7].

Market Overview - Ten stocks experienced significant gains on Tuesday, reflecting a broader market trend as investors adjusted their portfolios ahead of corporate earnings releases [1] - Major indices on Wall Street closed positively, with the Nasdaq rising by 1.04%, the S&P 500 increasing by 0.77%, and the Dow Jones up by 0.76% [1] Stock Performances - Eos Energy Enterprises Inc. (NASDAQ:EOSE) saw a 10.60% increase, closing at $11.48, as traders repositioned ahead of its earnings report scheduled for February 26 [4] - Eos Energy expects full-year revenues between $150 million and $160 million, aligning with the lower end of its previous forecast [5] - Eos has advanced automation at its Turtle Creek facility, with 88% of its bipolar lines in commercial production, aiming for an annualized production rate of 2 GWh by the end of 2025 [6] - Figma Inc. (NYSE:FIG) increased by 10.83% to $27.43, driven by Ark Invest's acquisition of 338,299 shares for $8.7 million [7] - Figma reported a 70.8% increase in net loss attributable to shareholders, totaling $1.25 billion, while revenues grew by 41% to $1.055 billion [8] - In Q4, Figma's net loss was $226 million, a shift from a $33.07 million net income the previous year, with revenues rising by 40% to $303.78 million [8] - Figma anticipates full-year 2026 revenues between $1.366 billion and $1.374 billion, indicating a 30% growth at the midpoint, with Q1 projections of $315 million to $317 million, reflecting a 38% year-on-year growth [10]

Market Sentiment - US stocks have been experiencing a prolonged period of volatility, with a notable shift in investor sentiment as the number of bears has surpassed bulls for the first time since November [1] - A Deutsche Bank measure indicates that discretionary equity positioning is now underweight, suggesting a cautious approach among investors [1] Investment Strategy - The current market conditions, characterized by a "rare combination of pessimism and strong breadth," are viewed positively for US equities, leading to an overweight allocation by some strategists [2] - Investors are increasingly rotating from large-cap tech stocks into smaller, riskier stocks, as well as sectors like energy, materials, and consumer staples [3] Performance Metrics - The S&P 500 index is down 0.8% from its recent high set on October 28, with a 2% decline from that level as of Monday [3] - The Russell 2000 Index and an equal-weight version of the S&P 500 have both increased by at least 5.2% this year, indicating a shift in investment focus [3] Earnings Outlook - Corporate earnings are showing positive growth, with S&P 500 companies expected to report a 13% increase in profits for the fourth quarter, surpassing the anticipated growth of just under 9% [5]

Core Viewpoint - Investor appetite was boosted by strong corporate earnings and acquisition initiatives, leading to significant stock gains, with three stocks reaching new record highs [1] Group 1: Stock Performance - Ten stocks experienced strong gains on Wednesday, with the Nasdaq leading at a 0.78% increase, followed by the S&P 500 at 0.56% and the Dow Jones at 0.26% [1] - Constellium SE (NYSE:CSTM) reached a decade high, climbing to $27.25 during intra-day trading before closing up 9.44% at $25.62 [4] - Cushman & Wakefield Ltd. (NYSE:CWK) saw a bounce back of 9.98%, finishing at $13.56 as investors anticipated upcoming earnings results [8] Group 2: Constellium SE (CSTM) Financials - Constellium SE reported a net profit of $275 million for the last year, a significant increase from $60 million in 2024, with revenues rising 15% to $8.4 billion [5] - In Q4, Constellium SE achieved a net income of $113 million, reversing a $47 million loss from the previous year, with revenues surging 28% to $2.2 billion [6] - Shipments for Constellium SE totaled 1.5 million metric tons for the year, a 4% increase, while Q4 shipments reached 365,000 metric tons, marking an 11% jump year-on-year [5][6] Group 3: Cushman & Wakefield Ltd. (CWK) Outlook - Cushman & Wakefield provided a robust growth outlook for 2025, with adjusted earnings per share expected to increase by 30 to 35%, up from a previous estimate of 25 to 35% [9] - The company appointed Bryan Doyle as the new COO for the Americas Capital Markets, tasked with overseeing operational strategy and execution [10]