Major US Indices Close Marginally Lower, Nasdaq Down 0.24%
The major averages closed marginally lower on the penultimate trading day of the year as markets contend with light year-end volumes and a pullback in heavyweight tech and AI names that stalled last week's strong rally. In Fed news, minutes from the latest FOMC meeting show that "most" on the committee have judged that further rate cuts would likely be appropriate if inflation declines over time as expected. In addition, FOMC members have generally judged that upside risks to inflation remained elevated and that downside risks to employment were elevated and had increased since the middle of 2025.Looking to commodities, gold edged higher following yesterday's sharp losses, while oil was fractionally lower ahead of the API crude numbers set for release this afternoon.Get caught up quickly on the top news and calls moving stocks with this Midday Fly By.1. STOCK NEWS:Meta PlatformsAI startup Manus, with the Wall Street Journal reporting that Meta is paying over $2B for the businessApplied Digitalits cloud computing business with Ekso BionicsOn24by Cvent for $8.10 per share in cashCiti'sboard approved a plan toAccording to, "most" on the FOMC have judged that further rate cuts would likely be appropriate if inflation declines over time as expected2. WALL STREET CALLS:ArgusBHP Groupto Buy on "firming" commodity pricesMereo BioPharmato Hold at JefferiesBenchmarkLindblad Expeditionswith a Buy on high growth visibilityStephensof Rubrik, Commvault, and AvePointwith Overweight ratings and Varonisat Equal Weight3. AROUND THE WEB:SMICintends to acquire the remaining 49% stake in unit SMNC for Y40.6B, or $5.79B, giving the company full control of the subsidiary,The U.S. government has granted Samsung Electronicsand SK Hynixan annual license to bring chip manufacturing equipment to their Chinese facilities for 2026,Power-hungry AI projects are benefiting Caterpillaras a range of customers looks to purchase the company's engines and generators,Softbankhas completed its $40B investment in OpenAI,Warner Bros. Discoveryplans to reject Paramount Skydance'sbid next week,4. MOVERS:Hycroft Miningincreases after filing aBoeinggains after being awarded afor the F-15 Israel Program and a ceiling $4.2B modification to a previously awarded Air Force contract for E-4B contractor logistic serviceEnergy Fuelsfalls after Roth Capital said shares of the companyTruth Medialower after Yorkville America launchedon the New York Stock Exchange5. EARNINGS/GUIDANCE:Ree Automotivereported, with EPS higher year-over-yearEtoiles CapitalreportedCemtrexreported, with revenue higher year-over-yearAMTD IDEA Groupreported, with CFO Xavier Zee commenting, "We are proud to deliver another half year of strong performance"INDEXES:The Dow fell 94.87, or 0.20%, to 48,367.06, the Nasdaq lost 55.27, or 0.24%, to 23,419.08, and the S&P 500 declined 9.50, or 0.14%, to 6,896.24.
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Meta's Q4 Earnings Expectations Rise
- Earnings Release Announcement: Meta is set to release its Q4 earnings after the market close on January 28, with expected earnings per share of $8.18, up from $8.02 in the previous year, indicating sustained profitability growth.
- Revenue Expectations Rise: Analysts forecast Meta's quarterly revenue to reach $58.41 billion, significantly up from $48.38 billion last year, highlighting the company's increasing competitiveness in the market.
- Consistent Outperformance: Meta has surpassed analyst revenue estimates for 13 consecutive quarters, reflecting strong performance in advertising and user growth, which further solidifies its market leadership.
- Analyst Rating Updates: Several analysts maintain positive ratings on Meta, with firms like Roth Capital and Keybanc keeping “Buy” or “Overweight” ratings despite price target reductions, indicating confidence in the company's future performance.
Barclays: Meta Leads Digital Advertising Market
- Advertising Momentum: Barclays raised Meta's price target from $770 to $800 while reaffirming an 'Overweight' stance, highlighting that over 30% revenue growth has alleviated investor concerns about rising costs.
- AI Strategy Benefits: UBS lifted its price target from $830 to $872, expecting measurable benefits from Meta's AI strategy to enhance earnings estimates for 2026 and 2027.
- Strong Financial Performance: Bank of America increased its price target from $810 to $885, noting that Meta's investment cycle is yielding tangible returns, with free cash flow projected to turn positive in 2026.
- Retail Sentiment Optimism: On Stocktwits, retail sentiment around Meta remains in 'extremely bullish' territory, with message volume shifting from 'high' to 'extremely high' within 24 hours.
