-- Crocs Stock Soared Nearly 20% on Thursday— What Investors Need to Know [Tech Sell-Off Sends Stocks Sharply Lower][It's So Cold Out You Can See It In Economic Statistics][Trump Expects Economic Miracle From New Fed Chair][Robinhood CEO: Prediction Markets 'Supercycle' Is Just Starting]- Top StoriesThe big move by Crocs shares today was the latest example of how volatile the stock can be after an earnings report.Linh Pham / Bloomberg / Getty ImagesClose### Key Takeaways- International and direct-to-consume ...

Core Viewpoint - ConocoPhillips is recognized as one of the best long-term low-risk stocks to buy, with a recent price target increase from Roth Capital Partners reflecting positive expectations for the company despite recent challenges [1][2]. Financial Performance - ConocoPhillips reported fourth-quarter results that fell short of Wall Street's profit expectations, primarily due to weaker crude prices, with an average realized price of $42.46 per barrel of oil equivalent, approximately 19% lower than the previous year [3][4]. - The company plans to reduce capital and operating costs by $1 billion in 2026, building on over $1 billion in annual synergies achieved in 2025 following the acquisition of Marathon Oil [3][4]. Production and Growth Outlook - Roth Capital Partners has set a new price objective of $112 for ConocoPhillips, up from $105, and maintains a Buy rating, anticipating modest production growth in 2027, with total volumes expected to increase by about 2% and oil production by around 1% [2]. - The company completed $3.2 billion in asset sales during 2025 and is on track to meet its $5 billion divestment goal by the end of 2026 as part of its business streamlining efforts [5]. Strategic Initiatives - ConocoPhillips is undergoing a broader restructuring, which includes a workforce reduction of approximately 20% to 25% to enhance operational efficiency [5].

Core Viewpoint - Asda is implementing significant cost-cutting measures due to a decline in its grocery market share, which has fallen to 11.4% during the festive period, marking a 22nd consecutive month of declining sales [7][8]. Group 1: Job Cuts and Outsourcing - Asda is at risk of losing hundreds of jobs in its warehouses as it outsources online delivery roles for its George fashion range to DHL, affecting 1,200 positions [1][2]. - The outsourcing will involve transferring warehouse staff to DHL under TUPE regulations, which protect their existing pay and benefits [7]. - Union representatives have expressed concerns that the decision may jeopardize jobs, as affected employees might not want to transition to the new roles [2][4]. Group 2: Financial Performance - Sales for Asda in the 12 weeks leading to December 28 were down 4.2%, making it the only major supermarket to experience a sales decline over Christmas [8]. - The company's grocery market share has reached a new low of 11.4%, indicating ongoing struggles in maintaining competitiveness [7]. Group 3: Company Restructuring - The changes are part of a broader effort by Asda's private equity owners, TDR Capital, to restructure the company into separate divisions, including George and Asda Express [9]. - Asda's executive chairman has stated that the reorganization is not intended as a precursor to selling off parts of the company [9].

Core Viewpoint - Volkswagen's Chief Executive Oliver Blume emphasized the importance of ongoing cost-cutting measures to maintain competitiveness in the face of industry-wide challenges [1] Company Summary - Volkswagen is recognized as Europe's largest carmaker [1] - The company is actively seeking strategies to navigate and adapt to current challenges within the automotive industry [1]

Market Overview - The market is positioning for a bullish trend in the S&P 500 and NASDAQ 100, driven by upcoming earnings from major tech companies [2][3] - The Federal Reserve meeting is anticipated to announce rate cuts and potentially halt quantitative tightening, which could benefit the financial sector [3] - Volatility is low, with the VIX below 16, indicating a less than 1% expected move in the S&P 500, suggesting bullish sentiment [4][5] Company Earnings UPS - UPS reported revenue of $21.4 billion, exceeding street expectations of $20.3 billion to $20.8 billion, with adjusted earnings per share at $1.74, surpassing the expected $1.30 [10][11] - The company raised its guidance, expecting holiday season volumes to double from November to January, benefiting from cost-cutting measures [12][13] - Domestic revenue declined by 2.6% year-over-year, while international revenue increased by 5.9% [13][15] United Healthcare (UNH) - UNH's adjusted earnings per share came in at $2.92, beating expectations of $2.79, with a medical loss ratio of 89.9% [17][18] - The company adjusted its 2025 earnings per share estimate upward to exceed $16.25, above the previous estimate and street expectations [19][20] - Concerns remain regarding federal probes into Medicare and Medicaid payments, which could impact future performance [21][22] Mergers and Acquisitions - A merger between Skyworks Solutions and Corvo is valued at approximately $22 billion, structured as a cash and stock deal [24][25] - Corvo shareholders will receive $32.50 in cash and 0.96 shares of Skyworks, resulting in Skyworks holding 63% of the new entity [25][26] - The merger aims to enhance competitiveness in the RF chip market, although there are concerns about potential monopolistic implications and competition from Apple's in-house chip production [26][28]

Core Insights - Intel's third-quarter earnings exceeded Wall Street expectations, driven by increased revenue and significant cost-cutting measures [1][2] - The company reported a net income of $4.1 billion, a notable recovery from previous quarterly losses [2][6] Financial Performance - Intel's quarterly revenue rose by $800 million to $13.7 billion, compared to $12.9 billion in the previous year [6] - The net income of $4.1 billion marks a significant turnaround from a loss of $16.6 billion in the same quarter last year [6] Strategic Investments - Intel added $20 billion to its balance sheet in the third quarter, largely due to three major investments [3] - Notable investments include $2 billion from SoftBank, a 10% equity stake from the U.S. government, and a $5 billion stake from Nvidia [4][5] - The company has received $5.7 billion of the planned $8.9 billion from the U.S. government [4] Operational Changes - CEO Lip-Bu Tan emphasized that the actions taken to strengthen the balance sheet provide greater operational flexibility [5] - The company also generated $5.2 billion from the sale of its stake in Altera and divested its stake in Mobileye [5] Foundry Business Focus - Despite the positive financial results, details regarding the future of Intel's foundry business remain limited [7] - The foundry business has faced challenges and has been a focus area for CEO Tan, who initiated layoffs in this segment [7] - The U.S. government's investment includes conditions that penalize Intel if it divests from its foundry business in the next five years [8]

Core Insights - The current earnings season has shown stronger-than-expected results, with S&P 500 earnings growth around 12.5%, slightly above the anticipated 11-12% [2][3] - Despite a generally neutral positioning among equity investors, discretionary investors have moved to an underweight stance, indicating a disconnect between earnings growth and investor sentiment [3][4] Earnings Growth - Over the past two years, S&P 500 earnings have fluctuated around an 11% growth rate, which aligns with historical averages outside of recessions [2] - The current earnings growth is primarily driven by a few sectors, with 90% of the growth attributed to a limited number of companies, suggesting a need for broader earnings improvement across the index [6] Investor Positioning - Discretionary investors have shifted to an underweight position, which contrasts with the double-digit earnings growth being reported [4][9] - The overall market positioning has moved to neutral, but concerns about cyclical risks remain prevalent among investors [8][9] Sector Performance - The analysis indicates a bullish outlook for cyclical sectors, including financials and consumer cyclicals, as these areas are expected to benefit from improving earnings [8] - The current earnings reports are not significantly driven by macroeconomic improvements but rather by company-specific strategies such as market share gains and cost-cutting measures [6][7]

Market Opportunity & Growth - The AI agent market is projected to be a trillion dollar market [1] - Industry anticipates that half of the workforce will be composed of AI agents in approximately 5 years [1] - The deployment of AI agents in enterprises is happening now and is highly relevant [4] Cost & Pricing Considerations - Token cost management is crucial to prevent expenses from spiraling out of control, encompassing LLM and compute costs, potentially including services like 11 labs or OCR [3] - Determining appropriate pricing for AI agents is essential to ensure payment aligns with the value delivered and that revenue exceeds costs [2] Value Demonstration & Payment - Showing the value delivered to end customers is critical, especially as agents often operate in the background, ensuring proper compensation for the work performed [4]

Cost Reduction & Efficiency - Lufthansa plans to cut 4,000 administrative jobs by 2030 to address being "too complicated" and "too bloated" [1][2] - The job cuts are aimed at improving processes through measures like automation [3] - The company's cost base has struggled to meet its targets, necessitating these cuts [3] - Increased use of AI is expected to lead to greater efficiency [7] Financial Targets & Strategy - Lufthansa aims for an adjusted operating margin of 8-10% by 2030 [5] - The company intends to maintain its dividend policy [5] - Fleet renewal is a key goal, with new aircraft like the Boeing 787 Dreamliner being introduced [5][6] Risks & Challenges - A pending pilot strike poses a significant risk to cost-saving efforts [4][5] - Delays in aircraft certification, such as for the Boeing 787 Dreamliner seats, have slowed down fleet renewal [6]

Group 1: Acquisition and Strategic Impact - United Parcel Service (UPS) has announced the withdrawal from the acquisition of Mexican firm Estafeta due to the inability to meet closing conditions, which was initially aimed at enhancing trade opportunities in Mexico and beyond [1][2] - The deal was part of UPS' "Better and Bolder" strategy to become a leading international small package and logistics provider, with expectations to close by the end of 2024 [2] Group 2: Financial Performance and Challenges - UPS is experiencing revenue weakness attributed to geopolitical uncertainty, higher inflation, and a decline in package volumes, leading to a 3.8% year-over-year decrease in average daily volumes in the first half of 2025 [4][5] - The company reported a 2.7% year-over-year revenue decline in the June quarter of 2025 and has refrained from providing revenue or operating profit guidance for 2025 [5][10] Group 3: Cost-Cutting Measures - In response to high labor costs and declining volumes, UPS is implementing cost-cutting measures, including offering buyouts to delivery drivers for the first time in its history and aiming to reduce its workforce by 20,000, approximately 4% of its global workforce [6][7] - UPS has also agreed to reduce business with its largest customer, Amazon, by more than 50% by June 2026, as Amazon was not considered a profitable customer [8] Group 4: Stock Performance and Valuation - UPS shares have declined over 30% year-to-date, underperforming compared to the Zacks Transportation—Air Freight and Cargo industry's 26.1% decline [9][10] - The current Zacks Consensus Estimate for UPS' 2025 adjusted earnings is $6.50 per share, reflecting a 15.8% year-over-year decline, with revenue estimates suggesting a 3.9% decline from 2024 [12] Group 5: Dividend Concerns - Despite an attractive valuation with a forward price-to-sales ratio of 0.81X, concerns arise regarding UPS' ability to sustain its dividend due to an elevated payout ratio of 87% and insufficient free cash flow to cover dividend payments in the first half of 2025 [13][17] - The company generated $742 million in free cash flow while paying out $2.7 billion in dividends during the same period [17]