Let us begin with corporate earnings. The quarterly reporting season is in full swing and, as has been the case for several quarters now, it is triggering astonishing price moves. When I write explanatory pieces on the subject, I tend to remind readers that a stock’s post-results performance is not merely a question of beating or missing targets. That is truer than ever. One must factor in comparables, prevailing market trends, the narrative skill of management and a whole array of data points and circumstances, some rational, others less so. At present, investors are inclined to trample anything that fails to match their expectations to the letter, with little mercy. At times, they even set it ablaze, just to ensure their disappointment is clearly visible. Unity, Lyft, Mattel, Astera, Zillow and Dassault Systèmes all shed more than 15% yesterday following their results. Viewed more positively, this can be seen as a reset after past excesses. There is rather less complacency than before in certain corners of the market. When you have been generously valued, sometimes exceedingly so, because your sales and earnings growth trajectory was extraordinary in the literal sense, it is only logical that valuations adjust downwards once that ceases to be the case.

The second theme is the AI lottery. Investor nerves have frayed in recent weeks because two fundamental questions remain unanswered. First, are the hundreds of billions being poured into AI simply being squandered? And second, who will ultimately prevail? I am speaking solely in economic terms, as finance has little patience for where all this may lead humanity at large. The core wager remains that today’s investments will underpin tomorrow’s prosperity, which is broadly logical, and that one must participate to avoid being excluded from that future bounty. Having first extolled the AI "picks and shovels" merchants and then the major platforms, whose valuations are now at their zenith, investors turned their sights on the secondary beneficiaries, such as utilities and raw materials suppliers. They are now hunting the collateral losers. Will AI destroy insurers, software publishers, the video games industry and wealth managers? Or will it reshape these well-oiled ecosystems, and if so, to what extent? The market lies in wait for the release of the slightest supposedly revolutionary AI application to crucify entire segments. More measured voices tend to point out that change unfolds more slowly than expected. Even so, periods of technological and societal upheaval invariably produce winners and losers. Finance is simply impatient to see the masks fall.

I shall conclude with my third point, which is almost a haven of calm by comparison. Interest rate levels remain the constant backdrop to markets, particularly in the United States. Yesterday, the US Bureau of Labor Statistics published a rather curious employment report, after postponing the release by a few days. US job creation in January exceeded expectations, at 130,000 against forecasts of 65,000, with the unemployment rate falling to 4.3% and wage growth remaining brisk. In theory, this should have reduced the probability of rate cuts and pushed bond yields higher, as it undermines the scenario of economic deterioration forcing the Federal Reserve to ease policy. Strictly speaking, that is partly what occurred: yields edged up and rate-cut bets were pushed modestly further out into the year. Yet equity markets did not despair. The explanation lies in the detail of the employment figures. The annual revisions, customary with the January release, effectively wiped out most of the gains of the past three years outside the public sector, leisure and hospitality, and private health and education, ING notes. In other words, swathes of industry, finance, technology and retail are shedding jobs. The momentum is therefore highly concentrated, while leading indicators such as declining job openings and weaker hiring intentions point to a marked cooling of the labour market. What conclusion should be drawn? That the labour market is not as robust as yesterday’s headline payroll figure suggests. Investors can therefore continue to hope for several rate cuts this year, a conviction that provides fuel for the equity rally. January’s inflation reading, due tomorrow, will complete the forward-looking picture for monetary policy.

The three forces outlined above resulted yesterday in relatively modest headline moves for Western indices, even though pronounced swings were evident in numerous individual stocks. In the United States, the S&P 500 closed unchanged, suggesting a zero-sum session. The Stoxx Europe 600 quietly notched a fresh intraday record at 623.49 points, up 0.4%, but managed to retain only a 0.1% gain by the close. In Paris, the CAC 40 fell 0.18%, weighed down by a bruising for its former software champion, Dassault Systèmes, which slumped 21% after yet another earnings disappointment. The group dragged SAP SE, down 5.2%, in its wake, contributing to a 0.5% decline in the DAX. Dassault Systèmes’ malaise, which now resembles a chronic illness, has fed into the broader narrative of AI eventually supplanting the software publishing ecosystem. That storyline is hotly disputed by some specialists, yet it currently represents a powerful headwind.

Today’s session will be dominated by a flood of corporate earnings, to which I shall return shortly. On the geopolitical front, the US House of Representatives dealt Donald Trump a rebuff by voting to repeal the tariffs imposed on Canada. The President of the United States is unlikely to sign the bill, effectively wielding a veto. Earlier, rumours had circulated that he was considering withdrawing the United States from the USMCA trade agreement with Mexico and Canada. Meanwhile, oil markets remain tense after The Wall Street Journal reported that the Pentagon is preparing to deploy a second carrier strike group to the Middle East. Pressure persists on cryptocurrencies after US platform BlockFills suspended client deposits and withdrawals following the recent price slump. Bitcoin has nevertheless stabilised around USD 67,000.

In Asia-Pacific, Hong Kong and India are edging lower, while other markets are extending their upward run. The Nikkei is flat in Tokyo, while the Kospi in South Korea rose up 3.1%. Gains are moderate in Australia, up 0.3%. European leading indicators are pointing higher, although the impact of today’s numerous earnings releases on specific indices must be taken into account.

Today's economic highlights:

Today's agenda includes: Fed Logan's speech in the United States; in the United Kingdom, the RICS House Price Balance, Industrial Production, GDP MoM, Manufacturing Production, GDP 3-Month Avg, GDP Growth Rate QoQ Prel, Goods Trade Balance Non-EU, GDP Growth Rate YoY Prel, Goods Trade Balance, and Business Investment QoQ Prel; the IEA Oil Market Report in France; in the United States, Initial Jobless Claims and Existing Home Sales. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$5,060.89
  • Crude Oil (BRENT): US$69.51
  • United States 10 years: 4.18%
  • BITCOIN: US$66,959.5

In corporate news:

  • BP plc: Expanded its US EV charging network with seven new sites and aims to invest $1 billion in EV infrastructure by 2030.
  • Yellow Cake: Raised approximately $110 million through a capital increase via ABO.
  • Picton Property Income: Confirmed interest from LondonMetric Property in a potential acquisition as part of its strategic review.
  • NatWest Group: Announced plans to redeem $1 billion of senior notes due in 2027.
  • Mitchells & Butlers: Confirmed that Emma Harris will take up the role of CFO on 20 April.
  • Oxford BioMedica: Stated that EQT must announce its intention regarding an offer by 25 February 2026.
  • Siemens AG: Raised its forecasts.
  • Mercedes: Published cautious guidance for 2026.
  • Anheuser-Busch InBev: Reported a less pronounced decline in fourth-quarter volumes than expected.
  • Adyen: Posted revenue of €1.27 billion in the second half.
  • Deutsche Boerse: Reported a 4% drop in fourth-quarter earnings and forecast growth for 2026. The group also signed an agreement to acquire the remaining 20% of ISS STOXX for €1.1 billion.
  • Carl Zeiss: Reported results below expectations.
  • Banque Cantonale Vaudoise: Posted lower earnings.
  • Montea: Reported EPRA earnings for 2025 of €4.90 per share.
  • Novo Nordisk: Plans to market its flagship weight-loss drug, Wegovy, in vials, according to Bloomberg.
  • BMW: Recalled hundreds of thousands of vehicles worldwide due to a fire risk.
  • Salvatore Ferragamo: Denied rumours of a change in artistic direction.
  • Eni: Secured an offshore exploration licence in Libya.
  • Starbucks: Signed with Adyen to manage in-store payments at around 940 outlets across Europe.
  • WiseSat: The WISeKey subsidiary plans to launch its 21st low-Earth-orbit satellite with SpaceX from California in March 2026.
  • Hochtief: Won a contract to build a research centre in Kiel.
  • Equinix: Shares rose 8% after hours following quarterly results.
  • Curtiss-Wright: Shares gained 6% after hours following quarterly results.
  • Motorola: Shares rose 2% after hours following quarterly results.
  • Rollins: Shares fell 13% after hours following quarterly results.
  • Cisco: Shares declined 7.6% after hours following quarterly results.
  • Tyler: Shares fell 7% after hours following quarterly results.
  • AppLovin: Shares declined 6% after hours following quarterly results.
  • Pershing Square: Bill Ackman’s fund remains heavily exposed to Meta, which is launching construction of a $10 billion data centre in Indiana to bolster its artificial intelligence capabilities.
  • Apple: Its latest attempt to roll out a new version of Siri is facing obstacles, according to Bloomberg.
  • AbbVie: Is suing the US Department of Health and Human Services over Botox pricing.
  • Baker Hughes: Is considering the sale of Waygate for $1.5 billion, according to Bloomberg.
  • Nu Holdings: Announced a $4.2 billion investment plan for its Mexican operations through to 2030.

See more news from UK listed companies here

Analyst Recommendations:

  • Astrazeneca Plc: Landesbank Baden-Wuerttemberg maintains its buy recommendation and raises the target price from GBX 14000 to GBX 16000.
  • Renishaw Plc: Barclays maintains its underweight recommendation and raises the target price from GBP 36.50 to GBP 38.40.
  • Glencore Plc: NOAH Capital Markets maintains its buy recommendation and raises the target price from ZAR 167.43 to ZAR 211.04.
  • Pan African Resources Plc: NOAH Capital Markets maintains its buy recommendation and reduces the target price from ZAR 73.29 to ZAR 68.26.
  • Anglo American Plc: NOAH Capital Markets maintains its buy recommendation and raises the target price from ZAR 775.41 to ZAR 1065.80.
  • Barclays Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 5.70 to GBP 5.90.
  • Flutter Entertainment Plc: Goldman Sachs maintains its buy recommendation and reduces the target price from GBX 22300 to GBX 19700.
  • M&G Plc: Morgan Stanley maintains its equalwt recommendation and reduces the target price from GBX 285 to GBX 280.
  • Lonza Group Ag: Rothschild & Co Redburn maintains its buy recommendation and raises the target price from CHF 670 to CHF 685.
  • Commerzbank Ag: Landesbank Baden-Wuerttemberg maintains its hold recommendation and raises the target price from EUR 33 to EUR 34.50.