- Bull Street
- Posts
- 📈 Ford's Reality Check
📈 Ford's Reality Check
AMD $4.9B deal for ZT Systems faces EU hurdle, Alphabet stock prices gets analyst rework, Qualcomm tops estimates, Capri Holdings stock slides, Ford beats earnings expectations
Evelio Silvera
February 06, 2025
In partnership with
Good morning.
⚡ The Fast Five → AMD $4.9B deal for ZT Systems faces EU hurdle, Alphabet stock prices gets analyst rework, Qualcomm tops estimates, Capri Holdings stock slides, Ford beats earnings expectations
🔎 Market Trends → Wall St ends higher as investors digest earnings, rate cut prospects; US Futures Edge Higher After Strong Session
And now…
⏱️ Your 5-minute briefing for Thursday, February 6, 2025:
MARKET BRIEF
Before the Open
As of market close 02/05/2025.
Pre-Market
| 
|
Fear & Greed
Markets in Review
Markets Climb as Investors Weigh Economic Growth and Earnings
The Dow gained 0.7% to 44,873.3, while the S&P 500 rose 0.4% to 6,061.5. The Nasdaq inched up 0.2% to 19,692.3, with tech stocks showing mixed results. Real estate led sector gains, while communication services lagged.
The Big Picture:
Private-sector job growth exceeded expectations in January, signaling resilience in the labor market, according to ADP (ADP). Wage growth, a key inflation metric, remained stable.
Meanwhile, growth in the services sector cooled, with businesses citing tariff concerns. Despite trade uncertainties, Jefferies believes tariffs will have a minimal impact on profit margins, offset by deregulation and tax cuts.
The trade deficit widened 25% in December, with the 2024 shortfall reaching $918 billion. China escalated the tariff battle, but Trump paused new levies on Mexico and Canada, offering a temporary reprieve for supply chains.
The 10-year Treasury yield fell 8.9 basis points to 4.42%, while the 2-year dipped 2.7 basis points to 4.19%. WTI crude oil slid 2.1% to $71.17 per barrel.
Market Movers:
Johnson Controls (JCI) surged 11%, topping the S&P 500, after raising its 2025 earnings outlook and announcing a new CEO.
Amgen (AMGN) climbed 6.5%, leading the Dow, after strong quarterly results reassured investors.
Alphabet (GOOG) tumbled 7.3%, its worst drop in a year, as Q4 revenue missed estimates, raising concerns over ad growth.
AMD (AMD) fell 6.3%, among the Nasdaq’s worst, after forecasting a revenue decline and weaker data center sales.
What They’re Saying:
"If inflation flares up in 2025, the Fed will have to determine if it’s overheating or tariff-driven—that distinction will shape its next move," said Chicago Fed President Austan Goolsbee.
WHAT WE’RE WATCHING
Events
Today: Department of Labor - Unemployment Claims - 8:30am
Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.
Earnings Reports
Today: Amazon, Philip Morris, Hilton Worldwide, Roblox, Kenvue, Eli Lilly and Company, AstraZeneca, Cloudflare
Tomorrow: Flowers Foods, Newell Brands, Frontier Airlines, Canopy Growth, Cboe Global Markets, Plains All American,
MARKET BRIEF
Leading News
Ford's Reality Check: Legacy Automaker Signals EV Growing Pains Ahead
Why it matters:
Ford's ($F) latest earnings beat shows traditional auto still has muscle, but its cautious 2025 outlook reveals the costly complexities of navigating the EV transition — a critical bellwether for legacy manufacturers retooling for the future.
Zoom Out:
The Blue Oval delivered record revenue of $185 billion in 2024, with its bread-and-butter ICE and fleet divisions carrying the load. But like a sports car hitting a patch of black ice, Ford's EV unit skidded to a $5.08 billion loss — highlighting the capital-intensive nature of the great automotive transformation.
CEO Jim Farley's "prudent" 2025 guidance suggests a company playing defense, with projected earnings of $7-8.5 billion representing a ~25% potential decline from 2024. This conservative stance might actually be refreshing in an era when many EV pure-plays have been overpromising and underdelivering.
Key Insights:
Traditional strength persists: Ford Pro (fleet) and Blue (ICE) divisions generated $14.3 billion in combined earnings, demonstrating the cash-generating power of legacy operations
EV reality check: The $5B+ projected Model e losses for 2025 reflect the sobering truth about EV profitability timelines — even for established manufacturers
Quality focus pays: Management's $1 billion commitment to reducing warranty costs signals adult supervision in the room
Market Pulse:
"Given the pause in the current tariff situation... we are not choosing to take any actions at this time" - CFO Sherry House, displaying measured confidence amid policy uncertainties
Bull’s Take:
Ford's conservative guidance and focus on operational excellence could set up positive surprises later in 2025. For patient investors, the current valuation might offer an attractive entry point into a company balancing profitable legacy operations with necessary future investments.
Headlines
SoftBank Nears Deal to Acquire Chip Designer Ampere (link)
Analysts rework Alphabet stock price targets after earnings shock (link)
AMD's $4.9 bln ZT Systems deal faces EU antitrust decision by March 12 (link)
Qualcomm tops estimates for earnings and revenue on strong smartphone demand (link)
Capri Holdings stock slides on Q3 miss, weak outlook (link)
Amazon's cloud business faces crucial test after rivals Microsoft, Google stumble (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to consultingcmdy
Today’s Fastest Growing Company Might Surprise You
🚨 No, it's not the publicly traded tech giant you might expect… Meet $MODE, the disruptor turning phones into potential income generators.
Mode saw 32,481% revenue growth, ranking them the #1 software company on Deloitte’s 2023 fastest-growing companies list.
📲 They’re pioneering "Privatized Universal Basic Income" powered by technology — not government, and their EarnPhone, has already helped consumers earn over $325M!
Their pre-IPO offering is live at just $0.26/share – don’t miss it.