US OPEN: Markets Mixed ahead of Powell's Testimony

• US indices show modest declines (US2000 -0.90%, US100 -0.46%) while European markets post mixed results, with southern European indices like SPA35 (+0.25%) showing resilience
• Apple partnerships shift in China as the company teams with Alibaba for AI features
• Coca-Cola gains after strong Q4 results with 14% organic revenue growth and successful pricing strategy, contrasting with PepsiCo's cautious outlook
• Super Micro Computer drops ahead of crucial business update regarding delayed SEC filings
• Shopify gains after 31% revenue growth as Q1 free cash flow guidance disappoints investors, overshadowing strong GMV performance of $94.5B
• Ecolab gains on Q4 earnings beat ($1.81 EPS) and optimistic 2025 guidance, emerging as a bright spot in today's mixed market

Major US indices are showing moderate declines, with the US2000 falling -0.90% to 2277.4. The US100 drops -0.46% to 21734.73, while the US500 declines -0.30% to 6068.8, and the US30 slides -0.31% to 44447. The VIX fear gauge has increased modestly by +0.48% to 16.73, indicating relatively contained market anxiety. In contrast, Brazil's BRAComp shows resilience with a gain of +0.82% to 126776.

European markets are showing mixed performance, with a notable divergence between northern and southern European indices. The UK100 and AUT20 are in negative territory, dropping -0.32% to 8725.5 and -0.13% to 3901 respectively. However, several major continental indices are posting gains, including the SPA35 (+0.25% to 12759), DE40 (+0.03% to 22041.2), and EU50 (+0.10% to 5382.6). The VSTOXX, Europe's fear gauge, is up +0.59% to 17.08, suggesting relatively calm trading conditions. The Polish W20 is showing strength with a gain of +0.67% to 2535.6.

S&P 500 Sectors Show Mixed Performance. Source: Bloomberg Financial LP

Current volatility observed on Wall Street. Source: xStation 

The Nasdaq-100 index, represented by the US100 contract, is trading above key support levels: the 23.6% Fibonacci retracement level, which aligns with the early December high of 21,668, the 50-day SMA at 21,562, and the 38.2% Fibonacci retracement level. The 23.6% Fibonacci retracement level will act as support, having already proven to be a significant level in the last few trading days. Bears will target the 50-day SMA, aiming to break below the 38.2% Fibonacci retracement level. Bulls, on the other hand, will attempt to break the bearish divergence and close above the recent high at 22,020. The RSI has been in a sideways trend for two weeks, hovering near a zone that previously led to reversals. Meanwhile, the MACD remains tight but bullish. Source: xStation

Market News:

• Coca-Cola Surges on Strong Q4: Coca-Cola (KO.US) shares jump over 3% after beating Q4 expectations with $11.5B revenue and $0.55 EPS. The beverage giant reported impressive 14% organic revenue growth and 2% volume growth, outperforming rival PepsiCo. Management guides 5-6% organic revenue growth for 2025.
• Apple Partners with Alibaba on China AI: Apple (AAPL.US) has reportedly chosen Alibaba Group as its AI partner for the Chinese market, shifting away from initial collaboration with Baidu. The partnership aims to counter declining Chinese sales, which fell 11% in Q4 and represented 15% of Apple's total revenue. The companies have already submitted their co-developed AI features for regulatory approval.
• Ecolab Beats Expectations: Ecolab (ECL.US) rises 8% after reporting Q4 profit of $472.9M ($1.81 per share), exceeding analysts' estimates. The company issues optimistic 2025 guidance with full-year EPS projected at $7.42-$7.62, above consensus of $7.45.
• Shopify Slides on Cash Flow Concerns: Shopify stock gains 3% after strong Q4 revenue growth of 31% to $2.8B. Investors react negatively to Q1 free cash flow margin guidance in the mid-teens, overshadowing positive GMV growth of 24% to $94.5B.
• Super Micro Computer's Crucial Update: SMCI shares drop 5% ahead of its business update, as investors await clarity on delayed SEC filings and Q2 FY2025 performance. The company faces a February 25 deadline to file required documents with the SEC to maintain Nasdaq listing compliance.
• US-Germany Trade Tensions Rise: Germany's trade surplus with the US hit a record €70 billion in 2024, prompting concerns as President Trump implements new 25% steel and aluminum tariffs. German exports to the US reached €161.3B (+2.2% y/y), while imports declined 3.4% to €91.4B.

Other news coming from individual S&P 500 index companies. Source: Bloomberg Financial LP