U.S. retail sales took an unexpected nosedive in January, dropping 0.9% after a festive 0.7% rise in December. The Commerce Department's Census Bureau, the bearer of this chilly news, suggests that the drop might be due to consumers preferring to stay cozy indoors rather than braving the cold to buy a new car. Economists had predicted a modest 0.1% dip, but clearly, the weather had other plans. California wildfires also caused consumers to stay away from stores. Some experts also argue that this decline is just a case of retail karma after four months of strong sales.

U.S. stock index futures showed remained flat after the release of January's retail sales data. While this might sound like bad news for the economy, it's actually a silver lining for monetary policy enthusiasts. Why? Because it gives the Federal Reserve a reason to consider rate cuts. 

This morning, I found myself staring into the abyss of a blank page, teetering on the brink of writer's block. In a moment of desperation, I turned to my trusty "excel sheet of shame," a list of emergency topics designed to rescue me in times of creative drought. Line four caught my eye: "check historical events for today's date." Ah, February 14th—Valentine's Day. Not exactly a natural fit for finance, but then I remembered YouTube. On February 14, 2005, three enterprising individuals—Chad Hurley, Steve Chen, and Jawed Karim—launched YouTube, initially envisioned as a video dating site. Fast forward to 2006, and they sold it to Google for a cool $1.65 billion. Not a bad deal for Google, considering YouTube's current valuation hovers around $200 billion. I say "hovers" because analysts' estimates of YouTube's worth vary wildly. Now, at 20 years old, YouTube has evolved far beyond its original concept. In a recent announcement, its CEO revealed that more people now watch YouTube on their TV screens than on mobile devices or PCs. Globally, viewers consume 1 billion hours of YouTube content daily on their televisions. To put that in perspective, that's about 1,141 centuries' worth of viewing time. This staggering figure underscores YouTube's significant contribution to Alphabet's success. So, happy 20th birthday, YouTube. You've come a long way from your video dating roots, and in doing so, you've become an integral part of the digital landscape—and a financial powerhouse to boot.

But you were here to hear about the stock market. If I was struggling this morning, it's because I don't really know what to write about this market, which keeps going up despite the little red flags. Investors see the glass as half full in everything, and that's good because the alternative would be quite depressing. Take, for instance, the European markets' recent rally. It was fueled by hopes of an end to the war in Ukraine, even though Ukrainian and European leaders are feeling sidelined and voicing their concerns. The Ukrainians are worried that the Trump-style diplomacy might leave them without a say and potentially cost them some territories they aim to reclaim. Meanwhile, the Europeans are grumbling about being left out of negotiations, except when it's time to foot the bill.

Two other events yesterday illustrated the theory of the glass half full: First, US producer prices came in hotter than expected. However, a closer look at the numbers suggests that the Fed's favorite inflation gauge, the PCE index, might deliver some good news in a couple of weeks. Meanwhile, Donald Trump made headlines by signing an executive order for tariffs on global imports. The catch? These tariffs won't kick in right away. Investors, ever the optimists, chose to focus on the silver linings of these otherwise concerning developments. This upbeat sentiment propelled Wall Street to new heights, with the S&P 500 rising by 1% and the Nasdaq 100 climbing 1.4%. It seems that in the world of finance, even a half-empty glass can be seen as half-full.

A word about customs duties. The United States is giving itself a few weeks to adjust the level of reciprocity to be applied to each country. Donald Trump specifically cited Japan, South Korea and Europe as trading partners who abuse American largesse. In Europe, it is VAT that seems to be the focus of criticism from the White House. Trump has also targeted Taiwan, promising to reclaim the microchip market that was wrongfully stolen from the United States. Washington has hinted that it will probably be April before the administration is in a position to announce more specific details. The President has announced many other things since yesterday evening, which I will not mention all to avoid unreasonably prolonging this column. I have nevertheless noted that he has floated the idea of a meeting with the leaders of Russia and China to discuss a halving of their respective military spending.

The most eagerly awaited events of the day - a series of US statistics in the afternoon and the start of the Munich Security Conference, which has suddenly changed from a fairly polite diplomatic meeting to a summit with high stakes, in which Russia could finally participate thanks to pressure from the United States.

In Asia Pacific this morning, Chinese technology stocks continued to rise, boosting the Hang Seng, which is up 3.7%. The Hong Kong index has just had five consecutive weeks in the green, a first since 2022. It is less favorable in Japan (-0.8%), India (-0.5%) and especially Taiwan (-1.7%). South Korea (+0.3%) and Australia (+0.2%) are doing better. The European indices are mixed, with the Stoxx Europe 600 remaining flat.

Today's economic highlights: 

Retail sales, capacity utilization and industrial production are on the calendar, as well as business inventories. See the full calendar here.

  • Dollar: EUR 0.9543 GBP: 0.7941
  • Gold: $2,927
  • Crude Oil (BRENT): $75.69 WTI: $71.78
  • Rate United States 10 years: 4.53%
  • BITCOIN: $96,660

In corporate news:

  • Meta platforms: The company has increased its quarterly dividend by 5% to 52.5 cents, announced a capital expenditure of $60-$65 billion primarily for AI and data centers, settled a data privacy lawsuit for $725 million, and secured Arm Holdings as a customer for its new chip. This is amidst a broader rise in tech stocks and regulatory developments in India.
  • Airbnb: Reported better-than-expected Q4 earnings and revenue, with a profit increase and higher gross booking value. However, it lowered its Q1 2026 revenue forecast due to foreign exchange headwinds and tough year-over-year comparisons, while also announcing expansion plans and investments in new markets.
  • Tesla: Elon Musk, amidst various high-profile activities, met with India's Prime Minister Narendra Modi to discuss technology and space cooperation, faced legal challenges with his government cost-cutting team, and dealt with concerns over Tesla's self-driving software following a crash. This all occurred against the backdrop of significant downsizing of U.S. government employees led by President Donald Trump and Musk.
  • Applied materials: Reported a 12% increase in non-GAAP EPS for Q1 2024-25 with revenues growing by 7% to $7.17 billion, beating expectations. However, its revenue forecast fell short of market estimates due to tighter U.S. export restrictions on chipmaking technology to China.
  • Palo alto networks: Exceeded Q2 expectations with higher EPS and revenue, driven by AI investments and robust cybersecurity demand. This led to an increased annual revenue forecast and the appointment of two new board members.
  • Air lease corporation: Experienced a 3.7% drop in quarterly revenue due to aircraft delivery delays, despite beating FactSet revenue and EPS estimates for Q4. It anticipates rising lease rates and aircraft valuations amid a commercial plane shortfall, with an executive suggesting room for a third major planemaker alongside Boeing and Airbus.
  • Twilio: Airbnb reported a profit, Roku exceeded revenue expectations, and Twilio, despite a revenue increase and beating EPS estimates in Q4, saw its shares fall after hours. The company provided an adjusted EPS forecast of $0.88 to $0.93 for Q1.
  • Moderna: Reported a larger-than-expected quarterly loss, with a Q4 loss per share of $2.91, missing estimates. However, revenue of $966M surpassed expectations, attributed to reduced manufacturing as demand for its COVID-19 vaccine wanes, though it maintained its 2025 revenue outlook.
  • Federal realty investment trust: Reported a Q4 FFO of $1.73, matching FactSet estimates, and announced Q1 and fiscal year 2025 adjusted EPS ranges of $3.00-$3.12. Q4 revenue was at $311.4M, aligning with expectations.

Analyst Recommendations:

  • Airbnb: Baird upgrades to outperform from neutral with a price target raised from USD 140 to USD 175.
  • Amd: Daiwa Securities downgrades to outperform from buy with a price target reduced from USD 170 to USD 130.
  • Bill Holdings: Zacks downgrades to neutral from outperform with a price target reduced from USD 71 to USD 64.
  • Brixmor Property Group: Jefferies upgrades to buy from hold with a target price raised from USD 28 to USD 33.
  • Carrier Global Corporation: Mizuho Securities upgrades to outperform from neutral with a target price of USD 78.
  • Datadog: Wells Fargo downgrades to equalweight from overweight with a target price reduced from USD 152 to USD 140.
  • Fmc Corporation: Redburn Atlantic downgrades to neutral from buy with a target price reduced from USD 78 to USD 49.
  • Informatica: RBC Capital downgrades to sector perform from outperform with a price target reduced from USD 35 to USD 19.
  • Pg&E Corporation: Morgan Stanley downgrades to underweight from equal weight with a target price reduced from USD 20 to USD 16.50.
  • Warner Music Group: Citi upgrades to buy from neutral with a price target raised from USD 34 to USD 42.
  • Zoom Communications: CITIC Securities Co Ltd upgrades to buy from dropped coverage with a target price of USD 104.
  • Albemarle Corporation: Mirae Asset Securities maintains its buy recommendation and reduces the target price from USD 146 to USD 110.
  • Applovin Corporation: SPDB International Holdings Ltd maintains its buy recommendation with a price target raised from USD 394 to USD 535.
  • Avis Budget Group: Jefferies maintains its buy recommendation and reduces the target price from USD 140 to USD 105.
  • Bruker Corporation: TD Cowen maintains its hold recommendation with a price target reduced from USD 70 to USD 55.
  • Coinbase Global: JP Morgan maintains its neutral recommendation and raises the target price from USD 264 to USD 344.
  • Cvs Health Corporation: RBC Capital maintains its outperform recommendation and raises the target price from USD 58 to USD 74.
  • Cyberark Software: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 330 to USD 440.
  • Draftkings: BMO Capital Markets maintains its outperform recommendation and raises the target price from USD 52 to USD 70.
  • Edison International: Morgan Stanley maintains its underweight recommendation and reduces the target price from USD 71 to USD 48.
  • Palo alto networks: D.A. Davidson maintains its buy recommendation and reduces the target price from USD 435 to USD 225.
  • Pbf Energy: Wells Fargo maintains its equalweight recommendation and reduces the target price from USD 34 to USD 25.
  • Procore Technologies: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 90 to USD 110.
  • Roku: Guggenheim maintains its buy recommendation and raises the target price from USD 90 to USD 115.
  • Spotify Technology: Citigroup maintains a neutral recommendation with a price target raised from USD 540 to USD 720.
  • The Trade Desk: HSBC maintains its buy recommendation with a price target reduced from USD 140 to USD 110.
  • Twilio: Bernstein maintains its market perform recommendation with a price target raised from USD 82 to USD 119.