Stock Market Recap: Highlights from Friday Close

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•  17 Jan 2025
 

The stock market closed the week with mixed sentiment, but there were several key developments worth noting. As we look ahead to next week, the major earnings reports that came in today provided with insights into the current state of the financial and tech sectors, fueling both optimism and caution.

Citizens Financial Group ($CFG) delivered a strong fourth-quarter performance, beating Wall Street estimates with earnings surpassing expectations by 2.41%. The bank's solid fee income growth and lower expenses were key drivers, though lower net interest income (NII) and reduced loan and deposit balances pose challenges. This has sparked some debate over the company's prospects, with some analysts arguing that there may be better options elsewhere. Nonetheless, Citizens Financial Group remains a prominent player in the banking sector, and its declared dividend of $0.42 per share reflects confidence in its financial position.

Meanwhile, in the semiconductor sector, Intel ($INTC) was one of the day’s biggest movers. The stock rose sharply amid takeover speculation, with rumors circulating about a potential acquisition of the chip giant. Intel's shares gained around 8%, marking a notable rebound after a tough year. However, the underlying fundamentals remain a point of concern, especially after Intel’s recent struggles. While the speculation about a buyout provided a temporary boost, investors should proceed with caution, considering the company's 54% drop over the past 12 months.

Schlumberger ($SLB) also stood out today after delivering a strong earnings report that topped estimates, posting better-than-expected profits driven by robust growth in North America. The oilfield services giant posted revenue of $9.28 billion, beating analysts’ consensus, and its non-GAAP earnings per share exceeded expectations by $0.02. Additionally, Schlumberger raised its dividend by 3.6%, which underscores its confidence in its ability to generate consistent cash flow. However, a slowdown in Latin America revenue and broader challenges in the energy sector may limit the stock’s upside potential, even with today’s positive report.

The financial sector also showed some resilience, with State Street ($STT) and Truist Financial ($TFC) both reporting strong earnings. State Street's revenue and earnings beat expectations, driven by higher fee income and strong performance in its asset management business. However, the stock faced some pressure as the company’s net interest income (NII) growth slowed, and its CET1 ratio dipped. Truist Financial reported a profitable fourth quarter, reversing its previous year’s losses. With strong performance in investment banking and trading income, Truist’s results were a reminder of the robust financials in this sector, though higher expenses remain a concern.

Looking at the broader market, the NASDAQ surged more than 300 points, driven by tech stocks like Intel and Tesla. The broader S&P 500 also climbed 1%, reflecting a surge in investor risk appetite. The market seems to be in a cautious rally mode as we close out the week, driven by solid earnings reports but tempered by concerns over slowing growth in certain sectors. With several earnings reports still pending, including major players like Schlumberger and Truist, the market will likely continue to react to key data and speculation over the next few weeks.