Rocket stock falls on Trump’s Fed pick and PennyMac results

Investing.com -- U.S. stocks fell Friday, as investors digested the news that President Donald Trump has nominated Kevin Warsh to be the next Federal Reserve chairman along with more heavyweight corporate earnings.. 

At 09:45 ET (14:45 GMT), the Dow Jones Industrial Average fell 140 points, or 0.3%, the S&P 500 index dropped 22 points, or 0.3%, and the NASDAQ Composite slipped 90 points, or 0.4%.

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Warsh nominated for Fed chair role

Trump has nominated former Fed governor Kevin Warsh for the role of chairman of the Federal Reserve, potentially starting in May when the role is vacated by current chair, Jerome Powell.

In his post on Truth Social announcing Warsh’s nomination, Trump outlined the reasons why Warsh’s past experience will equip him to be a "GREAT" chairman.

"He has conducted extensive research in the field of Economics and Finance," Trump wrote, crediting Warsh for issuing an independent report to the Bank of England "proposing reforms in the conduct of Monetary Policy in the United Kingdom".

He also noted Warsh’s previous tenure in the Federal Reserve, last time as a member of the Fed’s board of governors between 2006 and 2011. 

Warsh -- who had lost out to current Chair Jerome Powell for the post in 2017 -- has largely aligned himself with Trump’s calls for lower rates in the past year, but was a long-time critic of the ultra-loose monetary policy pursued by the Fed since the financial crisis, including the central bank’s expanded balance sheet.

"Warsh is a net negative for markets given his extremely hawkish comments in the past about QE and his desire to implement a ’regime change’ at the Fed," said analysts at Vital Knowledge, with a note. "It’s not clear what exactly ’regime change’ means, but there has NOT been the same type of clamoring in markets for a wholesale, revolutionary shift in the Fed as there has been at the White House, and investors are nervous about too much tinkering."

This nomination is set to clear out a major point of uncertainty for Wall Street, as investors fret over the long-term trajectory of lending rates in the country.

But Warsh’s potential nomination also comes amid heightened concerns over the Fed’s independence, especially amid growing calls from the White House that the central bank cut rates aggressively. 

Additionally, Trump publicly endorsed a bipartisan spending deal negotiated by Senate Republicans and Democrats that would avert a looming government shutdown, posting support on Truth Social and urging cooperation.

The compromise would fund most federal agencies while leaving contentious immigration issues for further negotiation.

Reports said Democrat and Republican leaders had also agreed to the deal, although it remained unclear when Congress will vote on the matter. Lawmakers have until midnight, Friday, to release more spending for the federal government. 

Apple’s iPhone sales beat expectations

In the corporate sector, there are more earnings from the likes of Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), American Express (NYSE:AXP), Verizon (NYSE:VZ), Regeneron Pharmaceuticals (F:REGN) and Aon (NYSE:AON) due later in the session.

After the close Thursday, Apple (NASDAQ:AAPL) comfortably beat profit and revenue expectations for the holiday quarter, its fiscal first quarter, enjoying its best quarterly iPhone sales growth performance in over four years.

iPhone sales jumped 23.3% year-on-year to $85.27 billion, marking the biggest increase since the fourth quarter of 2021.

The tech giant also forecast higher-than-expected revenue growth of up to 16% for the March quarter, powered by strong demand for its iPhones and a sharp rebound in China and accelerating demand in India.

Still, Apple’s shares slipped over 1% lower as sales in other parts of the company were less positive.

Wearables and accessories, which include things like the Apple Watch and AirPods, fell by roughly 3%. Sales of Mac computers were down by just over 7%.

Elsewhere, Verizon (NYSE:VZ) stock rose after the telecoms giant reported fourth-quarter earnings and revenue that exceeded expectations, while providing an upbeat outlook for 2026 that signals the beginning of a strategic turnaround. 

SanDisk (NASDAQ:SNDK) shares surged after the storage-chip maker delivered a significant profit beat and raised guidance, as demand for data-center and AI-related memory products outpaced forecasts.

Chevron (NYSE:CVX) stock rose after its oil major’s fourth-quarter profits fell but came in ahead of estimates as it focused on cutting costs and making its operations more efficient to contend with lower crude prices throughout 2025.

Regeneron Pharmaceuticals (F:REGN) stock dropped after the U.S. drugmaker’s fourth-quarter earnings fell, even though it was helped by strong demand for its eczema treatment, Dupixent. 

Visa (NYSE:V) stock slipped lower despite the credit card company beating first-quarter earnings and revenue expectations, as some investors reacted to a shortfall in total transactions processed and persistent caution around broader consumer spending trends.

Gold falls sharply lower

Gold prices fell sharply Friday, retreating from record levels following the news that President Trump has nominated Warsh for the next Federal Reserve Chair later in the day.

Warsh s seen as less dovish than other potential candidates, and this resulted in the U.S. dollar bouncing, to the detriment of commodities denominated in the greenback. 

Spot gold slid 5.2% to $5,091.77 an ounce, after earlier briefly dropping below $5,000/oz, while gold futures for April fell 4.2% to $5,112.90/oz.  

That said, prices have risen more than 16% so far in January, heading for a sixth straight monthly gain and the largest monthly advance since 1982.

Other precious metals also cooled on Friday after logging wild swings this week. Spot silver slid 12% to $100.083/oz, tumbling from a Thursday record high, while spot platinum slid 12% to $2,288.25/oz. 

Oil prices edged higher, bouncing after earlier losses, and adding to a three-day rally, on track for hefty weekly gains as traders focused on potential U.S. military action against Iran. 

Brent futures slipped 0.5% to $69.94 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $65.77 a barrel.

Both benchmarks were set to gain over 7% this week.

The Organization of Petroleum Exporting Countries and allies, known as OPEC+, is set to meet on Sunday, with recent reports indicating that the cartel is likely to keep its output unchanged.

Ambar Warrick and Ayushman Ojha contributed to this report

Investing.com -- Wolfe Research raised its price target on Nvidia to $275 from $250 saying rack-scale systems, higher average selling prices and sustained margins will drive earnings well beyond current expectations.

Nvidia recognizes revenue when it sells completed boards to cloud service providers, after manufacturing and packaging at TSM and board assembly at Foxconn.

Those boards account for about 75% of the final rack price, according to Wolfe’s supply chain checks.

Reported prices are about $3 million for GB200 NVL72 racks and $4.3 million for GB300 NVL72, with next-generation Rubin racks seen at $5 million to $6 million.

Wolfe estimates Blackwell rack shipments reached about 1000 units per week by the end of calendar 2025 and will hold that pace through 2026, implying 50000 to 60000 racks for the year.

It expects Rubin to ramp in the second half of 2026 without delays, helped by design changes that simplify assembly, and models a similar 1000-per-week run rate.

Wolfe forecasts about 55000 Blackwell racks and 20000 Rubin racks in 2026, rising to 55000 Rubin racks and 15000 Rubin Ultra racks in 2027. It expects Nvidia to continue shifting its mix toward rack-scale systems, with slower growth in HGX and other standalone platforms.

Those volumes translate into about 7.2 million data center GPU units in 2026, up 35% year on year, and 9 million units in 2027, up 25%. Wolfe models data center revenue exceeding $450 billion in 2027, driven by unit growth and roughly 20% higher ASPs as Nvidia moves from Blackwell to Rubin.

For Rubin Ultra, Wolfe assumes rack pricing of about $10 million, reflecting a doubling of GPUs per rack. It said this is conservative, noting that higher pricing could add $10 billion to $12 billion in revenue for every additional $1 million per rack above its estimates.

Wolfe expects Nvidia to sustain pricing power and gross margins around 75%, citing continued generation-on-generation performance gains and limited competitive pressure at the high end.

It sees 2027 estimates of $457 billion in data center revenue and $11.50 in EPS, with a bull case of $500 billion and $12. The new target values the stock at about 23 times bull-case earnings.

Investing.com -- London’s FTSE 100 edged higher on Friday as markets weighed U.S. President Donald Trump’s pick of Kevin Warsh to lead the Federal Reserve, with European shares advancing and the pound slipping below $1.38.

As of 1403 GMT, the blue-chip index rose 0.3%% and the British GBP/USD fell 0.4% against the dollar to 1.3752.

DAX index in Germany gained 0.8%, the CAC 40 in France rose 0.6%.

UK round up

AstraZeneca PLC (ST:AZN) will pay Chinese drugmaker CSPC Pharmaceutical Group up to $18.5 billion in a licensing deal for experimental obesity and weight-related drugs, CSPC announced Friday.

The agreement includes an upfront payment of $1.2 billion, with potential additional payments of up to $17.3 billion if certain milestones are met. This deal expands on existing collaboration between the companies in areas including artificial intelligence.

In other market news, Airtel Africa Plc (LAGOS:AIRTELAFRI) shares fell approximately 6%, reversing early gains despite reporting strong third-quarter results. The telecommunications company posted a 31.0% increase in EBITDA to $836 million in constant currency terms, with margins expanding to 49.6%, up 278 basis points year-over-year. The results were driven by strong revenue growth in Nigeria and mobile money services.

Meanwhile, Antofagasta PLC (LON:ANTO) shares dropped more than 4.8% following a downgrade by UBS from "buy" to "neutral." UBS cited limited near-term growth momentum after the Chilean copper miner’s shares surged approximately 135% over the past 12 months on a total shareholder return basis in U.S. dollars, outperforming copper prices by roughly 90% and the COPX index by about 40%.

In the financial sector, Schroders PLC (LON:SDR) has held high-level discussions about potential partnerships to boost growth in its private capital business, according to Reuters. The British asset manager reportedly explored deals for Schroders Capital with French investment firm Wendel and London-listed Bridgepoint Group. These previously undisclosed talks, which took place several months ago, have since been paused for reasons that remain unclear.

Regarding monetary policy, Deutsche Bank expects the Bank of England to keep its Bank Rate at 3.75% in its February decision. The German bank forecasts a 7-2 vote split, with external Monetary Policy Committee members Alan Taylor and Swati Dhingra likely to favor a rate cut. Deutsche Bank analysts pointed to signs of economic resilience in the UK despite a fragile labor market, where unemployment has reached 5.1% in the three months to October.

Investing.com -- Wolfe Research upgraded Broadcom Inc (NASDAQ:AVGO) to Outperform, with price target of $400 on growing confidence in the scale and competitiveness of Google’s tensor processing unit program and Broadcom’s position as a key beneficiary.

The firm said its channel checks suggest TPU shipments could reach about 7 million units annually by calendar 2028, a level that Wolfe said it can no longer ignore.

Google’s move to make TPUs available to third parties is creating a credible alternative to Nvidia’s GPUs, with Broadcom expected to capture much of the associated custom silicon demand.

Wolfe raised its calendar 2027 estimates to $154.5 billion in revenue and $16 in earnings per share, reflecting higher assumed TPU volumes and stronger AI-related contributions.

It said additional upside is possible from other custom accelerator programs not fully reflected in its forecasts, including projects linked to Meta and OpenAI.

For calendar 2026, Wolfe revised its AI ASIC revenue estimate to about $44 billion, based on roughly 3.3 million TPU shipments. It lifted its calendar 2027 AI revenue estimate to $78.4 billion, assuming around 5.1 million units.

The firm expects TPUs to drive the majority of Broadcom’s XPU growth, with other programs accounting for 17% of XPU revenue in 2026 and 14% in 2027.

Wolfe also modeled networking revenue of $15.1 billion in 2026, up about 75% year on year, and expects AI networking revenue to grow about 55% in 2027. It left estimates for non-AI semiconductors and infrastructure software unchanged.

Wolfe said its $400 target reflects about 22 times a bull-case earnings scenario of $18 per share in 2027, which assumes Broadcom can double AI revenue again that year.

The multiple sits below the stock’s roughly 25 times average over the past three years, covering the AI spending cycle.