Citi lifts Spotify to Buy as valuation, catalysts strengthen the bull case

Investing.com -- U.S. stock futures slipped lower Friday, but pared earlier losses as investors digested U.S. President Donald Trump’s nomination of Kevin Warsh to be the next head of the Federal Reserve as well as a series of quarterly earnings.

Here are some of the biggest premarket U.S. stock movers today:

• Apple (NASDAQ:AAPL) stock traded largely unchanged as investors parsed through the tech giant’s best quarterly iPhone sales growth performance in over four years, as well as less impressive news in wearables and accessories, including things like the Apple Watch and AirPods, which fell by roughly 3%. Sales of Mac computers were also down by just over 7%.

• Verizon (NYSE:VZ) stock gained 2.2% 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. 

• Exxon Mobil (NYSE:XOM) stock dropped 0.9% after the oil major reported better-than-expected earnings and revenue for the fourth quarter, but weak oil prices weighed.

• Aon (NYSE:AON) stock gained 1.1% despite the insurance broker reporting a jump in fourth-quarter adjusted profit on the back of robust demand for its risk management offerings.

• Chevron (NYSE:CVX) stock gained 0.4% 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 (NASDAQ:REGN) stock dropped 2.6% 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 fell 0.8% despite the credit card giant 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.

• SanDisk (NASDAQ:SNDK) stock soared 24% 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.

• American Express (NYSE:AXP) stock fell 2.5% as higher costs weighed on the payment company’s quarterly profit. However, it still plans to boost its dividend 16%, helped by resilient spending by the credit card giant’s largely affluent customer base amid broader economic uncertainty.

Investing.com -- U.S. stock index futures fell Friday, but cut into their losses on the news that President Donald Trump has nominated Kevin Warsh to be the next Federal Reserve chairman. 

At 07:55 ET (12:55 GMT), Dow Jones Futures fell 245 points, or 0.5%, S&P 500 Futures dropped 35 points, or 0.5%, and Nasdaq 100 Futures slipped 160 points, or 0.6%.

The main Wall Street indices closed mixed Thursday, with the S&P 500 and the tech-heavy NASDAQ Composite declining, weighed by losses from tech giant Microsoft (NASDAQ:MSFT) after its earnings. The Dow Jones Industrial Average rose marginally.

Week to date, the S&P 500 and Nasdaq have each added nearly 0.8%, while the DJIA is down nearly 0.1% on the week.

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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 was one of the top 4 finalists for weeks, but he wasn’t the market’s first choice given his very hawkish views on QE," said analysts at Vital Knowledge, in a note, "and past comments about effecting a “regime change” at the Fed." 

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 around 1% lower in premarket trade, 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, SanDisk (NASDAQ:SNDK) shares surged premarket 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.

Credit cad giant Visa (NYSE:V) beat 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, crude slip lower

Gold prices fell sharply Friday, retreating from record levels following the news that President Trump is set to announce his nominee for the next Federal Reserve Chair later in the day.

Warsh, the new favorite for the role, is 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 4.6% to $5,126.37 an ounce, after earlier briefly dropping below $5,000/oz, while gold futures for April fell 3.8% to $5,150.80/oz.  

That said, prices have risen more than 20% 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 7.3% to $106.073/oz, tumbling from a Thursday record high, while spot platinum slid 8.5% to $2,394.98/oz. 

Oil prices also retreated after a three-day rally, but were still on track for hefty weekly gains as traders focused on potential U.S. military action against Iran. 

Brent futures slipped 0.3% to $69.36 a barrel, and U.S. West Texas Intermediate crude futures fell 0.2% to $65.30 a barrel.

Both benchmarks were set to gain over 6% 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 -- As fourth-quarter earnings approach, BofA Securities is highlighting companies best positioned to navigate AI-driven disruption, cost discipline pressures, and uneven enterprise spending patterns. 

While macro uncertainty persists, the firm’s analysis identifies several leaders with durable competitive advantages, improving fundamentals, and catalysts that could unlock significant shareholder value in 2026. 

Among these, SAP emerges as the sector’s premier large-cap pick, backed by accelerating cloud adoption and a compelling AI monetization strategy, according to BofA Securities analysts.

The brokerage also sees opportunities across travel software, fintech, and payments platforms where structural growth and improving profitability are creating attractive entry points.

SAP SE

SAP remains the sector’s premier large-cap name, supported by resilient cloud demand and strong profitability. 

The latest Q4 results showed solid revenue performance and a meaningful 31% jump in operating profit to €10.42 billion, with continued momentum in AI adoption across the ERP suite, SAP Business AI featured in two-thirds of Q4 cloud orders.

Cloud growth stayed healthy at 26% for the full year, though backlog expansion of 25% and 2026 cloud guidance of €25.8-26.2 billion came in lighter than hoped.

Even so, SAP’s high recurring revenue base (86% of total revenue), improving margins (28.3% operating margin, up 4.5pp), and roadmap for AI-driven upsell keep it well positioned, reinforced by a new €10 billion buyback program launching February 2026. 

Free cash flow nearly doubled to €8.24 billion, underscoring the company’s strong cash generation despite near-term growth concerns.

Sabre  

Sabre offers a compelling turnaround opportunity as global travel volumes normalize and its technology modernization program reaches critical milestones. 

The company is steadily improving its operational efficiency, reducing technical debt, and scaling its next-gen retailing and distribution solutions. 

These initiatives are enabling margin expansion and strengthening Sabre’s competitive positioning against industry peers. 

As airlines increasingly adopt advanced merchandising tools and dynamic pricing, Sabre stands to capture incremental revenue growth. Its "buy" rating reflects confidence in continued execution and operating leverage.

Klarna  

Klarna, though private, is one of the sector’s most influential fintech platforms and is entering a new phase of disciplined growth. 

With a renewed focus on profitability, Klarna has optimized credit performance, enhanced monetization across merchants and consumers, and invested strategically in AI-driven customer engagement. 

The platform’s scale in “buy now, pay later” and adjacent financial services provides a foundation for long-term expansion.

Its strong brand, improving cost structure, and advancing AI capabilities make Klarna an attractive fintech exposure within the broader payments ecosystem.

Paysafe  

Paysafe continues to show operational stabilization as management focuses on simplifying its portfolio and pursuing cost efficiencies.

The company has achieved incremental progress in key segments such as digital wallets and iGaming payments, though top-line momentum remains more limited compared to sector peers.

While profitability is improving and the balance sheet is strengthening, competitive pressures and moderate organic growth temper upside potential.

With a "neutral" stance, Paysafe is best viewed as a steady operator rather than a high-conviction outperformer in the current market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Goldman Sachs initiated coverage of Kerry Group with a “buy” rating on Friday, citing valuation levels and business positioning following the completion of a multi-year portfolio transformation. 

Kerry shares were priced at €73.45 at the time of initiation, with a 12-month price target of €95, implying upside of 29.3%.

The initiation follows Kerry’s exit from its consumer foods operations, culminating in the December 2024 divestiture of Dairy Ireland. 

That business contributed 13% of group sales and 5% of EBITDA in 2024 and was described in the report as slower growing and more capital intensive than Kerry’s remaining operations. 

The transaction resulted in a 140 basis point increase in Kerry’s adjusted EBITDA margin for 2024, with the group now operating as a pure-play ingredients supplier focused on taste, nutrition and functional solutions.

Goldman Sachs reported that Kerry generated €6.93 billion in sales in fiscal 2024, with an EBITDA margin of 17.1%. 

The brokerage noted that more than 90% of Kerry’s portfolio is now positioned in higher-margin ingredients following 17 acquisitions and divestments since 2020, which collectively repositioned about 40% of the business. 

According to the report, future acquisitions are expected to be limited to technology bolt-on deals rather than large portfolio shifts.

At initiation, Kerry was trading at 14x 2026 estimated earnings, which Goldman Sachs said represents the first percentile of the company’s valuation over the past 10 years and a 35% discount to consumer ingredient peers. 

The brokerage noted that Kerry’s forward P/E multiple has compressed by about 50% from a peak of 32x in 2021, reflecting concerns around GLP-1 drugs, prolonged consumer weakness in the United States and China, and softer volume growth in recent years.

Goldman Sachs reported that Kerry’s volume growth slowed from 8% in 2022 to 1% in 2023 and has remained around 3%, below the company’s 4% to 6% target. 

The analysts identified volume recovery as central to the investment case, while noting that Kerry’s volumes have historically shown resilience, with declines occurring only in 2009 and 2020 over the past two decades.

The brokerage stated that Kerry derives 32% of its revenue from the food service channel, 61% from retail and 7% from pharma ingredients. Regionally, 55% of sales come from the Americas, 24% from APMEA and 21% from Europe. 

Goldman Sachs highlighted that Kerry’s food service exposure is higher than that of peers, while its customer base remains diversified, with no single customer accounting for more than a low single-digit percentage of revenue and the top 10 customers representing about 25% of sales.

The brokerage also pointed to balance sheet trends at initiation, reporting net debt of 0.9x estimated EBITDA for 2026, down from higher levels earlier in the decade. The analysts stated that improving cash generation and lower leverage increase financial flexibility following the completion of the portfolio transformation.

Investing.com -- A weakening dollar paired with surprisingly strong U.S. economic momentum is creating a supportive backdrop for risk assets, according to Barclays, which said the combination has “turbo-charged the reflation trade” across global markets.

In a new equity strategy note, analyst Emmanuel Cau wrote that “weaker dollar amid strong US growth is bullish for risk assets,” adding that recent volatility in foreign exchange markets has not derailed the move higher in equities. 

Barclays highlighted that despite “chaotic price action” in FX and rates, the MSCI World has continued to notch new highs, while emerging markets have “enjoyed the dollar tailwind the most,” with the MSCI EM up about 11 percent year to date.

Cau said the latest dollar sell-off, driven by verbal intervention from Japanese authorities and softer positioning, reflects a broader shift in sentiment. 

President Trump “endorsed the dollar decline,” Barclays noted, even as Treasury Secretary Bessent reiterated a pro-dollar stance. Still, the bank argued that “a weak dollar amid a strong US economy should rather be a positive development for risk assets.”

At the same time, Barclays cautioned that the reflation trade is starting to show “signs of frenzy,” with positioning “leaving little margin for error.” The firm believes this risk is visible in the “subdued reaction to early Q4 earnings.”

A stronger euro, meanwhile, is a “double-edged sword” for European equities, Barclays added, boosting inflows but posing a potential headwind for exporters and earnings if appreciation continues.

Investing.com - Canada’s main stock index is seen trading lower Friday, following the negative lead on Wall Street, ahead of the release of the latest growth data. 

Toronto Stock Exchange’s S&P/TSX composite index closed Thursday 0.5%, or 160 points, lower at 33,015.13, with falling stocks outnumbering advancing ones by 545 to 414 and 76 ending unchanged.

The index, however, is on track to register monthly gains of just over 4%. 

Speculation about new Fed chair

Investors have turned cautious on Wall Street, and this is expected to translate into losses on the TSE, following U.S. President Donald Trump’s announcement that he will announce his nomination to be the next chairman of the Federal reserve later in the session.

Speculation is mounting that he will nominate former Federal Reserve governor Kevin Warsh, especially after Reuters reported Warsh visited the White House for a meeting on Thursday.  

Warsh is seen as an advocate of lower interest rates, a view more aligned with Trump’s views over the past year, but is also considered to be one of the less radical choices among the various candidates that have publicly suggested for the role.

Canadian GDP data due

Back in Canada, growth data for the month of November is scheduled for release later in the session, with the gross domestic product number expected to show 0.1% growth month on month.

This would represent a rebound from the drop of 0.3% the previous month.

The Canadian economy is navigating a period of slow, but positive growth, with 2026 projected to be a year of transition and stabilization following the trade-driven volatility of 2025. 

Gold, crude retreat from highs

Gold prices fell sharply Friday, briefly dropping below $5,000/oz, after the U.S. dollar rose on the news that Kevin Warsh is expected to become Trump’s nominee for the next Federal Reserve chairman.

Warsh is seen as less dovish than other potential candidates, boosting the greenback, to the detriment of commodities denominated in the greenback. 

Spot gold slid 4.6% to $5,126.37 an ounce, while gold futures for April fell 3.8% to $5,150.80/oz.  

That said, prices have risen more than 20% 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 7.3% to $106.073/oz, tumbling from a Thursday record high, while spot platinum slid 8.5% to $2,394.98/oz. 

Oil prices also retreated after a three-day rally, but were still on track for hefty weekly gains as traders focused on potential U.S. military action against Iran. 

Brent futures slipped 0.6% to $69.18 a barrel, and U.S. West Texas Intermediate crude futures fell 0.5% to $65.07 a barrel.

Both benchmarks were set to gain over 6% this week.