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NEWS
Don't Think About It

The Federal Open Market Committee did not change the target Federal Funds rates today, leaving them at 4.25%-4.5%. Though the committee warned uncertainty has increased. New risks for higher unemployment and inflation are dimming the economic outlook. Fed Chair Jerome Powell took the stage later and said they were still waiting to see what happens next.

Oh, and Trump’s frequent commentary on the Fed’s work? It’s not something they consider, he said, and it does not affect his job at all. Yeesh. Looks like it’s up to Scott Bessent to save the day, though he downplayed his Friday Switzerland trip to start U.S.-China trade talks. Bessent did say adviser Peter Navarro would not be there, thankfully. 👀

Today's issue covers ARM + AMC both beat but fell, Alphabet is looking jealous of them Apples, and more. 📰

Here’s the S&P 500 heatmap. 7 of 11 sectors closed green, with technology (+1%) leading and materials (-0.55%) lagging.

And here are the closing prices: 

STOCKS
A Tale Of Two Earnings 🎞️ 

Arm, a British chip design licensing firm, posted an earnings beat and included positive guidance for their current quarter and year. That is, it would have been great news if the Trump Administration had not announced this afternoon they would redo Biden’s chip trade restrictions.

Arm posted an EPS of $0.55, beating the FactSet $0.52 estimate, on revenue of $1.24 vs. estimates for $1.23B.

Trump plans to rescind Biden-era AI chip curbs, aiming to revise semiconductor trade restrictions that faced opposition from tech firms and foreign governments. Nvidia shares climbed 3.6% on the news, while the Philadelphia Semiconductor Index gained 2.1%. Maybe Arm was the odd one out.

Arm said in its report that it achieved record-breaking results in Q4, delivering record revenue and crossing the $1 billion revenue milestone for the first time in its history. Record royalty revenue brought in $600 million for the quarter. Based on that, they expected $4 billion in revenue this year.

Theater chain AMC came in at the other end of the spectrum. The theater posted an adjusted loss of ($0.58), better than an expected loss of ($0.59).

CEO Adam Aron said their revenue beat of $862.5M vs. $837.48M estimates was great considering the box office season. He called it the worst butts in seats quarter for the movie business since 1996, besides during Covid.

The firm’s net loss of $(202.1) million was worse than last year’s $(163.5) million loss in the same quarter. Aron said the current quarter has already shown improved ticket sales. 🙏 

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