Eksentricity

Tech

Data Center Growth in Asia and the US

• STACK Infrastructure’s Malaysian Expansion: STACK Infrastructure launched a 220MW data center campus in Johor Bahru, Malaysia, adding to its Asia-Pacific presence and boosting cloud and AI capacity near the Singapore border. The 1 million square foot facility is slated for completion in Q4 2026.
• Applied Digital’s HPC Funding: Applied Digital secured a $5 billion funding facility from Macquarie Asset Management to expand its 400MW Ellendale HPC data center campus, fueled by rising AI and HPC demand. Initial investment will reach $900 million.

Global AI Investment and Infrastructure

• Amazon’s AWS Growth: Amazon’s AWS cloud computing arm saw 19% year-over-year revenue growth, exceeding $100 billion annually, demonstrating significant AI investment and a projected $130 billion in 2025 revenue.
• Constellation Energy’s Clean Energy Acquisition: Constellation Energy’s $26.6 billion Calpine acquisition creates a leading clean energy provider, strategically positioned to benefit from growing AI energy needs, with secured contracts from tech giants like Microsoft.

Semiconductor Industry Dynamics and Geopolitics

• TSMC’s Strong AI-Driven Sales: TSMC experienced a 58% year-over-year sales surge in December, driven by AI product demand, with Q4 2024 revenue projected between $26.1 billion and $26.9 billion.
• US AI Chip Export Restrictions: The Biden administration’s AI chip export restrictions, impacting Nvidia and others, aim to curb adversary access but raise concerns about US innovation and global competitiveness.
• Arm Holdings’ Pricing and Manufacturing Shift: Arm plans to significantly increase prices (up to 300%) and explore chip manufacturing, aiming for $1 billion more annual smartphone revenue. This could reshape its relationships with major clients.

Electric Vehicle Market Trends

• Amazon’s Electric Truck Deployment: Amazon ordered over 200 Mercedes-Benz eActros 600 electric trucks for its European operations, representing a €1 billion investment towards its 2040 net-zero goal and annually transporting 350+ million packages.
• Tesla’s Model Y Success and Cybertruck Impact: Tesla’s updated Model Y saw 50,000 first-day reservations in China, highlighting continued demand amidst Tesla’s first annual delivery decline; meanwhile the impact of the Cybertruck on Model S and Model X sales remains significant.

Financial Performance and Strategic Partnerships

• TextMagic’s Revenue Decline: TextMagic reported an 11% year-over-year revenue drop in Q4 2024 (€3.762 million) due to US regulations and price sensitivity, though annual revenue remained stable at €15.715 million.
• Play.Works and Khaby Lame Collaboration: Play.Works partnered with TikTok influencer Khaby Lame to bring his content to CTV platforms globally, highlighting social media expansion into CTV.

Regulatory Landscape and Legal Challenges

• EU’s Tech Firm Investigations: The EU is reassessing its investigations into major tech firms, with implications impacted by the incoming US administration’s approach to regulatory oversight.
• Coinbase’s SEC Legal Victory and Stock Surge: Coinbase’s partial SEC legal victory regarding its crypto rulemaking petition, causing its stock to surge 87.63% year-over-year, highlights ongoing regulatory challenges in the crypto space.
• Lawsuits against Micron and Wolfspeed: Class action lawsuits against Micron and Wolfspeed allege financial misrepresentation and undisclosed decreased demand, illustrating the importance of sector transparency.

Finance

Securities Litigation

• US Securities Fraud Class Actions: Several law firms are investigating securities fraud claims against Unisys (UIS), Match Group (MTCH), Wolfspeed (WOLF), and Capri Holdings (CPRI). Allegations include misleading statements about cybersecurity risks, Tinder’s performance, Wolfspeed’s manufacturing facility, and Capri’s acquisition by Tapestry. Stock price drops ranged from 8.6% to approximately 39% following the revelations. Lead plaintiff deadlines vary.
• FTC Blocked Acquisition: Robbins LLP is investigating Capri Holdings (CPRI) after the FTC blocked its acquisition by Tapestry (TPR), causing a near 50% stock price decline. Investors are exploring potential legal recourse.
• MGP Ingredients Securities Fraud: Robbins LLP is investigating MGP Ingredients for allegedly misleading investors regarding demand and inventory levels. The details of the alleged misrepresentation haven’t been fully disclosed yet.

Shareholder Activity & Corporate Governance

• European Share Buybacks: ING Group, Equinor ASA, ICG Enterprise Trust plc, OSB Group plc, and Endeavour Mining plc repurchased millions of their own shares totaling hundreds of millions of Euros and Pounds. These actions represent a significant portion of their announced buyback programs.
• US Corporate Governance Issues: Bragar Eagel & Squire, P.C. is investigating Driven Brands Holdings (DRVN) and Chipotle Mexican Grill (CMG) for potential fiduciary duty breaches and misleading disclosures regarding business performance and costs. The specifics of the complaints are yet to be fully released.
• NB Private Equity Dividend: NB Private Equity Partners announced a $0.47 per share dividend, its 25th consecutive, returning over $380 million to shareholders since 2013. This represents a strong commitment to shareholder returns.

High-Yield Investments

• US High-Yield Dividend Stocks: Several high-yield dividend stocks are highlighted, including Black Hills Corporation (4.5% yield), Brookfield Renewable Partners (5.2% yield), Brookfield Infrastructure Partners (4%-4.9% yield), and Realty Income Corporation (6.1% yield). These companies offer above-average yields and potential for growth.
• High-Yielding Dividend Stocks for Retirement: Coca-Cola, Procter & Gamble, and AbbVie are mentioned as suitable high-yielding dividend stocks for retirement, providing consistent income streams.

Mergers, Acquisitions & Corporate Restructuring

• US and International M&A Activity: Multiple firms are investigating several mergers and acquisitions including Enfusion, Inc.’s sale to Clearwater Analytics, Intra-Cellular Therapies, Inc.’s sale to Johnson & Johnson, Edible Garden AG Incorporated’s merger with Narayan d.o.o., and Doodle’s acquisition of Lexibook, resulting in projected sales increases for Lexibook exceeding €69 million. United Rentals is acquiring H&E Equipment Services for $92 per share, adding $2.9 billion in assets. Moody’s acquisition of CAPE Analytics will combine Moody’s risk platform with geospatial AI analytics.

Market Analysis & Economic Trends

• US Stock Market Analysis: Market analysis includes discussions on RTX, Verisign (VRSN), 3M (MMM), and the S&P 500 outlook, noting significant investments by Warren Buffett in Verisign. Concerns regarding market volatility and the effectiveness of active vs. passive investing are also raised. Record ETF inflows exceeding $1.6 trillion in 2024 are noted.
• Global Market Trends: The global bond market sell-off, Bitcoin’s price movement (and market cap of $1.8 trillion) and its potential reaction to President-elect Trump’s policies, and the global economic outlook are discussed. Sygnum’s $58 million fundraising round, valuing the Swiss digital asset bank at over $1 billion, highlights activity in the digital asset market. Intesa Sanpaolo’s approximately $1 million Bitcoin purchase signifies increased institutional interest.
• Specific Stock Analyses: Various stocks are analyzed including SoFi Technologies (SOFI), PayPal (PYPL), Amazon (potential $5 trillion market cap), and several others, assessing their performance, growth potential, and challenges.

Healthcare

Drug Development and Approvals

• Lecanemab Autoinjector Approval: The FDA accepted Eisai and Biogen’s application for a lecanemab subcutaneous autoinjector, setting an August 31, 2025 action date. If approved, it would be the only at-home subcutaneous Alzheimer’s treatment. This follows the drug’s approval in the US, Japan, China, and EMA recommendation.
• Alzheimer’s Drug Pipeline: Neurocrine Biosciences and Nxera Pharma are advancing muscarinic agonists for neurological conditions. An End of Phase 2 meeting for NBI-1117568 was completed, with planned Phase 3 trials in schizophrenia in 2025. Nxera received a $35 million milestone payment.
• Oral COVID-19 Vaccine Trial: Vaxart’s Phase 2b oral COVID-19 vaccine trial continues, aiming to enroll 10,000 participants. The trial compares Vaxart’s oral pill vaccine to an approved mRNA vaccine, funded by BARDA with potential value up to $460.7 million.
• Cancer Drug Approvals: HUTCHMED’s savolitinib (ORPATHYS®) received NMPA approval for treating non-small cell lung cancer (NSCLC) with MET exon 14 skipping alteration. Sanofi’s Sarclisa (isatuximab) subcutaneous formulation met Phase III endpoints, with regulatory filing expected in the first half of 2025.

Market Dynamics and Growth

• Biosimilars Market Growth: Sandoz plans to launch five biosimilars in the US, aiming to become the leading biosimilars provider. The global generics and biosimilars market exceeds USD 200 billion, projecting 7% annual growth for the next decade.
• Medicare Advantage Expansion: The Biden administration proposed a 4.33% average increase in Medicare Advantage payments for 2026 (over $21 billion), exceeding market expectations. This benefits major MA plan sellers like UnitedHealth, Humana, and CVS Health.
• Ostomy Care Market Expansion: The global ostomy care accessory market is projected to reach US$ 1,287.9 million by 2034, growing at a 7.5% CAGR. The US market is projected at US$ 179 million in 2024, driven by an aging population and increased gastrointestinal diseases.
• Telehealth Growth and Partnerships: Teladoc partnered with Amazon to expand access to chronic condition programs, aiming to reach over 1 million active enrollees. This addresses enrollment barriers, given over half of U.S. adults live with at least one chronic disease.

Company Performance

• Financial Performance: Merit Medical Systems projected 2024 revenue of $1.355 to $1.357 billion (7.7%-7.9% increase). Sotera Health expects $1.1 billion (nearly 5% growth), CareDx projects Q4 2024 revenue of $85-$86 million (30% increase), Alphatec projects Q4 2024 revenue of $175.5 million to $177 million, and TG Therapeutics targets 2025 global revenue of $540 million.
• Stock Market Fluctuations: Several healthcare companies experienced significant stock price changes. CareDx rallied after Q4 results, MultiPlan after infrastructure consolidation, while TransMedics dropped following a negative report, and Tempus fell due to lower-than-expected revenue.
• Strategic Partnerships: Adaptive Biotechnologies and NeoGenomics partnered to expand MRD monitoring. Johnson & Johnson intends to acquire Intra-Cellular Therapies for nearly $14.6 billion. Biogen made an unsolicited bid for Sage Therapeutics.
• Clinical Trial Progress: PulseSight Therapeutics initiated a Phase 1 trial for PST-611. Instil Bio’s collaborator, ImmuneOnco, started a Phase 1b/2 trial in China. Umoja Biopharma secured $100 million in Series C financing. Biotalys awaits EPA review of EVOCA™.

Legal and Regulatory Landscape

• Class Action Lawsuits: Several class-action lawsuits were filed against various companies, alleging investor misrepresentation. Robbins LLP and Hagens Berman are involved in these investigations.
• Regulatory Reviews: The FDA is reviewing applications for several drugs, including lecanemab and mirdametinib. The EMA is also reviewing several applications.
• Patent Disputes: A court invalidated Pacira BioSciences’ ‘495 patent. Intra-Cellular Therapies settled patent litigation with Sandoz.
• Compliance Issues and Investigations: TransMedics faces allegations of fraud, leading to investigations into its business practices.

Industry Developments

• Financial Calendar: Pharma Equity Group published its 2025 financial calendar.
• Corporate Strategies: Blueprint Medicines and Kymera Therapeutics announced their 2025 corporate outlooks.
• Industry Collaborations: American Greetings and the American Cancer Society partnered on digital greeting cards.
• Medical Education Platform: Integra LifeSciences launched its global medical education platform, Integra Institute.

Economy & Real estate

US Economic Indicators and Outlook

• Easing Producer Price Inflation: December’s Producer Price Index (PPI) rose 0.2% month-over-month and 3.3% year-over-year, lower than expected, suggesting cooling wholesale price pressures. Core PPI remained flat.
• CPI Expectations and Federal Reserve Policy: Lower-than-expected PPI data suggests the December Consumer Price Index (CPI) might show year-over-year increase around 2.9%, potentially aligning with the Federal Reserve’s 2% inflation target.
• Market Response to Economic Data: Positive market reactions to the PPI data included rises in pre-market futures and slight drops in Treasury yields, reflecting reduced concerns about interest rate hikes.
• Expert Analysis and Future Projections: Experts offer mixed perspectives; some are optimistic, while others caution about rising commodity prices potentially hindering disinflation. The upcoming CPI release is crucial for further analysis.

US National Debt and Financial Stability

• Record-High National Debt and Interest Payments: The US national debt surpasses $36 trillion, with interest payments exceeding $892 billion in fiscal year 2024. The IMF projects $1.7 trillion in annual interest payments by 2034.
• Warnings of Potential Financial Crisis: Ray Dalio warned of a potential US financial collapse due to the soaring debt, urging a balanced approach to debt reduction.
• Impact of Rising Debt on Federal Budget: The increasing debt significantly impacts the federal budget, leading to a larger first-quarter deficit and increased interest payments, outpacing many government spending categories.
• Concerns about the US Dollar’s Global Role: The rising debt fuels concerns about the dollar’s status as the world’s primary reserve currency, necessitating fiscal adjustments to avoid economic repercussions.

US Student Loan Forgiveness Program

• Significant Loan Forgiveness Announced: The Biden administration announced a $4.2 billion student loan forgiveness initiative benefiting over 150,000 borrowers.
• Targeted Debt Relief Programs: The program includes loan discharges for borrowers affected by school closures or misrepresentation, those with disabilities, and public servants.
• Automatic Relief for Eligible Borrowers: Eligible borrowers will automatically receive relief without application, notified via email.
• Program Breakdown by Category: Approximately 85,000 borrowers will receive aid through the Borrower Defense Loan Discharge program, with additional relief for 61,000 borrowers with disabilities and 6,100 public servants.

Global Trade and Emerging Markets

• China’s Deflationary Export Impact: China’s falling export prices (down 18% from peak) create a disinflationary effect on global markets, although export volumes have risen significantly.
• Potential for Renewed Trade Conflicts: New US tariffs targeting China could harm emerging markets outside of China, potentially exacerbating economic slowdowns.
• Vulnerability of Emerging Markets to Trade Wars: Emerging markets are particularly vulnerable due to their high concentration of tariff-sensitive industries and overvalued equities compared to returns on equity.
• Shifting US Trade Deficit Composition: The US trade deficit now shows emerging markets (excluding China) accounting for 55%, compared to China’s 27%, raising concerns about future trade conflicts.

Spanish Economy and Housing Market

• Spain’s Housing Crisis and Government Response: Spain faces a housing crisis with high prices and shortages, prompting a proposed 100% tax on homes bought by non-EU residents.
• Tourism’s Contribution to Housing Issues: Tourism (over 13% of Spain’s GDP) contributes to the housing crisis due to high accommodation occupancy and rising rental costs (up 24.5% year-on-year).
• Positive Economic Outlook Despite Housing Challenges: Despite the housing crisis, Spain’s economic growth is projected to remain strong, outpacing the Eurozone average.
• Cooling Inflation in Spain: Spain’s producer price inflation slowed in December, with PPI increasing only 0.2%, suggesting easing inflationary pressures.

Canada-US Trade Council

• CUSTC Formation and Objectives: The Canada-US Trade Council (CUSTC) aims to facilitate collaboration and address potential challenges to Canadian-US trade through dialogue and information sharing.
• Diverse Membership and Leadership: The council includes representatives from various industries, labor unions, and experts, co-chaired by CEOs from the Aluminum Association of Canada and the Canadian Steel Producers Association.
• Focus on Collaboration and Information Sharing: The CUSTC prioritizes collaboration between Canadian stakeholders and government to mitigate potential economic impacts from policy changes.
• Importance of Unified Canadian Approach: The council emphasizes the importance of a unified Canadian approach in trade discussions with the US.

Retail

Brand Evolution and Expansion

• Walmart’s Rebranding: Walmart implemented a refreshed brand identity with logo and color palette adjustments, aiming for a more modern, digitally focused image across its platforms.
• 180 the Concept’s (Spain) Growth: The Spanish nutri-cosmetics brand 180 the Concept celebrated 30 years with an annual gala, highlighting its expansion and customized anti-aging solutions.
• Five Below’s Expansion Strategy: Despite a 2.6% same-store sales decline in the first nine months of fiscal 2024 (projected 4% drop in Q4), Five Below achieved rapid revenue growth (95% in five years) through aggressive store openings, each generating ~$2.2M in annual revenue and ~$500,000 in EBITDA.
• Potbelly’s Positive Q4 Performance: Potbelly exceeded Q4 2024 expectations with same-store sales growth of 0.2-0.3%, exceeding guidance, and opened eight new shops, bringing its total to 727.

Mergers and Acquisitions

• PepsiCo’s Acquisitions: PepsiCo acquired the remaining 50% stake in Sabra for $400 million and Siete Foods for $1.2 billion, expanding its presence in dips, spreads, and Mexican-American foods.

Retailer Performance and Challenges

• Dollar General’s Struggles: Dollar General’s stock dropped 44% in 2024 due to inflation, weak consumer spending, and competition. Second-quarter same-store sales increased only 0.5%, leading to a guidance cut.
• Home Depot’s Long-Term Outlook: Home Depot, with a $387 billion market cap and $155 billion in trailing-12-month revenue, faces short-term headwinds (same-store sales down 3.2% in fiscal 2023 and projected -2.5% in fiscal 2024) but benefits from long-term growth opportunities.

Operational Restructuring and Efficiency

• UNFI’s Business Restructuring: United Natural Foods (UNFI) restructured its wholesale business, creating Conventional Grocery Products and Natural, Organic, Specialty & Fresh Products divisions to improve efficiency and capitalize on natural and organic growth (mid-single to mid-teens growth rates across individual private brands). UNFI shares gained 47% in three months.

Restaurant Sector Performance

• Papa John’s Sales Decline: Papa John’s reported an 8% decrease in global system-wide sales year-over-year (flat excluding the 53rd week in 2023), with a 4% decline in North American comparable sales in Q4, despite opening its 6000th restaurant. International sales showed growth.
• Denny’s Mixed Results: Denny’s reported mixed Q4 and full-year 2024 results. Domestic same-restaurant sales were up 1.1% for Denny’s and 3% for Keke’s, but full-year same-store sales were down for both. Keke’s expanded into four new states.

Infrastructure

Offshore Wind Power Connectivity (Europe)

• Dutch North Sea Wind Farm Network: Nokia provides optical networking for TenneT’s €9.2 billion, eight 2GW offshore wind platforms, boosting Europe’s renewable energy capacity and contributing to climate goals. First platform operational by 2029.
• Renewable Energy Transmission Enhancement: This project exemplifies efficient offshore wind energy delivery to shore, increasing Europe’s renewable energy capacity and accelerating the transition from fossil fuels.
• Mission-Critical Network Resilience: Nokia’s solution ensures reliable energy transmission and remote platform operation via a resilient optical network supporting up to 400km transmission.
• European Energy Transition Impact: The project significantly advances Europe’s climate targets by facilitating a greener, more independent energy supply for millions.

Data Center Infrastructure Growth (USA)

• Sustainable Data Center Partnership: Southern Company’s PowerSecure partners with Edged Energy on Atlanta’s 168 MW data center campus, focusing on sustainable and energy-efficient solutions.
• Edged Atlanta Campus Efficiency: The campus, featuring a completed 27 MW and a 100 MW facility under construction, aims for a 74% reduction in energy consumption compared to traditional data centers.
• PowerSecure’s Backup Power Systems: PowerSecure provides backup power using low-emission engines, ensuring uninterrupted operation and contributing to the campus’ microgrid resilience.
• Innovative Data Center Design: The campus showcases sustainable design with features such as a microgrid and a self-healing distribution system, maximizing efficiency and minimizing downtime.

Equipment Rental Market Consolidation (USA)

• United Rentals Acquires H&E: United Rentals acquires H&E Equipment Services for ~$4.8 billion, expanding its fleet by nearly 64,000 units (original cost over $2.9 billion) across 30+ US states.
• Strategic Acquisition Rationale: This acquisition strengthens United Rentals’ market position, boosts capacity in key geographies, and leverages cultural synergies for enhanced operational efficiency.
• Acquisition Financial Projections: Projected annual cost synergies of $130 million and revenue synergies of $120 million by year three, expected to be accretive to earnings and free cash flow.
• Integration and Synergies Realization: United Rentals plans to integrate H&E, leveraging its technology and operational expertise to improve efficiency and productivity.

Infrastructure Project Awards (USA)

• Ameren’s MISO Transmission Projects: Ameren wins MISO contracts for ~$1.3 billion in energy infrastructure projects across the Midwest, enhancing grid reliability and supporting economic development.
• Improved Grid Reliability and Development: These projects strengthen the transmission system’s reliability, supporting businesses and residents while fostering economic growth, especially in energy-intensive industries.
• Ameren’s Competitive Advantage: Ameren’s focus on faster and cheaper project completion provides a competitive edge and potential for future project wins.
• MISO’s Long-Range Plan: These investments form part of MISO’s broader plan to meet growing energy demand and facilitate the transition to cleaner energy sources.

Leadership Changes and Contract Awards

• Wabash Executive Appointments: Wabash names Drew Schwartzhoff as SVP and Chief Commercial Officer and Donald Winston as SVP and Chief Operating Officer, aiming to drive growth.
• Focus on Growth and Customer Value: These appointments highlight Wabash’s commitment to innovation, customer service, and strategic growth.
• Jacobs Solutions’ Dublin Contract: Jacobs Solutions secures a contract for Dublin’s BusConnects program, supporting the delivery of bus and cycle infrastructure improvements.
• Cherokee Nation Government Contract: Cherokee Nation Government Solutions wins a $175.3 million U.S. Marine Corps contract for logistics support through 2029, spanning 22 global locations.

Other Infrastructure Developments

• KBR’s Global BP Agreement: KBR secures a three-year (plus two-year option) EPCM services agreement with BP for various energy projects globally.
• Kinder Morgan’s North Dakota Acquisition: Kinder Morgan’s Hiland Partners acquires a North Dakota natural gas gathering and processing system for $640 million, expanding its gas infrastructure.
• EMCOR Acquires Miller Electric: EMCOR Group acquires Miller Electric Company for $865 million, expanding its electrical system services in the Southeastern US.
• CN Railway Acquires Iowa Northern: Canadian National Railway’s acquisition of Iowa Northern Railway enhances its network by 175 miles, improving connectivity for agricultural and fuel markets.

Commodities

Protein Hydrolysate Market Growth

• North American Market Share: The North American protein hydrolysate ingredient market is projected to command a significant 25.1% global market share in 2024, reaching US$719.2 million by 2034. High demand in various sectors fuels this growth.
• Liquid Formulation Dominance: Liquid protein hydrolysates are favored over powders due to ease of use and superior absorption rates, particularly in sports nutrition. This segment is projected to reach US$3.19 billion by 2034.
• Industry Innovation and Competition: Companies like DuPont, Kerry Group, and Glanbia are developing innovative formulations, boosting competition and driving industry improvements.
• Regulatory Approvals and New Products: FDA approval of Arla Foods’ whey protein hydrolysates for infant formula and new product launches like Roquette’s pea proteins highlight market activity. Bunge’s $550 million investment underscores the growth.

African Sahel Mining Challenges

• Military Regime Interference (Mali, Niger, Burkina Faso): Mining operations face significant challenges from increasingly interventionist military regimes seizing gold, issuing arrest warrants (e.g., Barrick Gold, Resolute), and revoking licenses (e.g., Orano).
• Resource Nationalism and Geopolitical Shifts: Regimes are asserting sovereignty, renegotiating contracts, revising mining laws, and demanding higher taxes and ownership stakes. Geopolitical shifts away from the West towards Russia impact the industry.
• Global Supply Chain Disruptions: Tensions disrupt global supply chains, particularly for uranium (Niger supplies 25% of EU demand) and gold. Mali and Burkina Faso produced over 200 tonnes of gold in 2023.
• Opportunities for Allied Companies: Companies allied with Sahelian states may find opportunities, as exemplified by Ganfeng Lithium’s new mine in Mali. Mali’s government is set to earn $1.2 billion in Q1 alone.

Caledonia Mining Corporation (Zimbabwe)

• 2024 Gold Production and Sales: Caledonia Mining produced 76,656 ounces of gold in 2024 at its Blanket Mine, exceeding 2023’s 75,416 ounces. Sales totaled 76,271 ounces.
• 2025 Capital Expenditure: The company plans $41.8 million in capital expenditure for 2025, including $34.9 million for Blanket Mine modernization and $5.8 million for exploration and feasibility studies.
• 2025 Production Guidance: Blanket Mine’s 2025 production guidance is 73,500 to 77,500 ounces, with increased on-mine and all-in sustaining costs.
• Long-Term Growth Strategy: Caledonia aims to become a mid-tier Zimbabwe-focused gold producer with a mine life extension to 2034.

International Oil & Gas Outlook

• Geopolitical Risks and Supply: Geopolitical risks offer limited oil price support, while rising production from non-OPEC+ nations is projected to create a surplus of up to 1.4 million barrels per day by 2025.
• Shareholder Returns and Long-Term Threats: Energy companies prioritize shareholder returns through dividends and buybacks. However, renewable energy and EVs pose a significant long-term threat.
• Industry Underperformance: The Zacks Oil and Gas – Exploration and Production – International industry underperformed the broader Oil-Energy sector and the S&P 500 over the past year.
• Selected Company Performance: Companies like Tullow Oil, Kosmos Energy, and Capricorn Energy are positioned for better performance.

Kinder Morgan (USA)

• North Dakota Acquisition: Kinder Morgan acquired a North Dakota gas system for $640 million, enhancing its Williston Basin operations and increasing projected 2025 adjusted EBITDA to $8.3 billion.
• Strategic Fit and Financial Capacity: The acquisition complements existing assets, reduces future capital spending, and leaves room for further investments, given its conservative leverage.
• Growth in Natural Gas Demand: Kinder Morgan anticipates continued natural gas demand growth, supporting dividend growth.

Steel Demand and Alpha Metallurgical (AMR)

• Stock Price Surge: Alpha Metallurgical (AMR) saw a 10.4% share price increase, likely driven by expectations of rising steel demand in 2025 (projected 1.2% year-over-year increase to 1,772 Mt).
• High-Quality Coal Demand: Increased steel production fuels demand for high-quality coal, benefitting AMR, despite anticipated earnings and revenue decline.

Politics

Trump’s Inauguration

• Funding and Festivities: Trump’s second inauguration raised over $170 million, exceeding Obama’s 2009 inauguration ($53 million) and Clinton’s 1997 inauguration (under $24 million). However, the event will feature fewer official celebrations.
• Corporate Donations: The inaugural committee sought million-dollar donations from corporations, potentially leading to concerns about potential influence-peddling and “sweetheart deals.”
• Event Schedule: The four-day schedule includes a fireworks show at Trump’s golf course, a MAGA rally, and three inaugural balls.
• Historical Comparison: This contrasts sharply with previous administrations. Obama’s 2009 inauguration included ten balls; Clinton’s 1997 inauguration, fourteen. Biden held none in 2021.

Trump’s Policy Agenda

• Social Security Reform: Trump’s proposals to eliminate Social Security taxes for seniors and taxes on tips/overtime could severely reduce funding, accelerating the projected 2035 trust fund depletion and potentially leading to benefit cuts.
• Immigration and Trade: His plans for stricter immigration and higher tariffs could negatively impact Social Security revenue and increase inflation, affecting cost-of-living adjustments for benefits.
• Cryptocurrency Regulation: An executive order establishing a presidential crypto council and potentially altering banking regulations regarding cryptocurrencies is planned. Further orders may address a crypto working group and decentralized finance rules.

Hegseth’s Defense Nomination

• Allegations and Response: Pete Hegseth, nominated for Secretary of Defense, faced allegations of sexual misconduct, alcohol abuse, and mismanagement, which he attributed to a smear campaign.
• Political Polarization: Republicans largely supported Hegseth, while Democrats questioned his qualifications and the allegations. One senator stated Hegseth lacked the character and competence for the role.
• Experience Concerns: Hegseth’s relatively limited military and government experience compared to predecessors like Lloyd Austin (40+ years of military experience) was a major point of contention.

Marijuana Legalization Delay

• DEA Investigation: A federal judge postponed a hearing on easing marijuana restrictions due to serious allegations of misconduct within the DEA, including improper communications and witness tampering. The delay is at least three months.

Student Loan Forgiveness

• Biden’s Plan: The Biden administration announced $183.6 billion in student loan forgiveness for over 5 million borrowers, including relief for those misled by institutions, borrowers with disabilities, and public servants.

New Agencies and Cabinet

• External Revenue Service: Trump plans to establish an “External Revenue Service” to collect tariffs and foreign revenue, a change from the current system using U.S. Customs and Border Protection.
• Cabinet Confirmation: Trump’s cabinet nominees (Secretary of State, Transportation, Attorney General, CIA Director, and Energy Secretary) will undergo Senate confirmation hearings. Their confirmations may vary based on their experience and political leanings.

Stock Picks

Company Performance

• US Stock Market Movement: AdvanSix (ASIX) shares rose 9.4% to $28.98, despite projected Q1 losses of $0.38 per share and a 2.1% revenue decline to $374.15 million. This contrasts with its peer Arcadium (ALTM)’s 0.7% increase to $5.70, and reflects market optimism towards nylon demand. However, ALTM’s consensus EPS estimate fell -11.2% to $0.04. KB Home (KBH) exceeded Q4 expectations, with revenue of $2 billion and earnings of $2.52 per share, boosting shares 9.1% to $69.90. Conversely, Aehr Test Systems (AEHR) experienced a 19.3% decline to $12.90 after disappointing Q2 results. Other companies showed mixed results, with Calavo Growers (CVGW) and Karooooo (KARO) posting modest gains and losses respectively.
• Earnings and Revenue Analysis: Several companies reported mixed earnings results. Calavo Growers (CVGW) is expected to report earnings of $0.30 per share on $161.93 million in revenue, while Karooooo (KARO) is projected to report earnings of $0.38 per share on $64.95 million in revenue. Applied Digital (APLD) is projected to report a loss of $0.15 per share on revenue of $63.4 million.

Zacks Rank and Stock Ratings

• Positive Zacks Rank Upgrades: Five stocks—Brainsway (BWAY), Grupo Televisa (TV), ICU Medical (ICUI), Sally Beauty (SBH), and PHINIA (PHIN)—received Zacks Rank #1 (Strong Buy) upgrades due to significant increases in current-year earnings estimates (5.2% to 60%).
• Negative Zacks Rank Downgrades: Three stocks—Denso (DNZOY), Central Garden & Pet (CENTA), and Baidu (BIDU)—received Zacks Rank #5 (Strong Sell) downgrades due to downward revisions in current-year earnings estimates (5.2% to 17.3%).

Market Sentiment and Valuation

• Oversold Utilities and Growth Stocks: Constellation Energy (CEG), AES Corp (AES), and American Water Works (AWK) showed oversold conditions (RSI below 30), potentially indicating buying opportunities. Meanwhile, AMD, AMGN, and PLD, near 52-week lows, present potential growth investment opportunities.
• Short Interest: Increased short interest was observed in several companies, including Vulcan Materials (VMC), Symbotic (SYM), and others, suggesting varied market sentiment.

Momentum and Earnings Surprises

• High-Momentum Stocks: MasTec (MTZ) and Methanex (MEOH) exhibited strong momentum and attractive valuations, with MTZ holding a Zacks Rank #1 and MEOH a Zacks Rank #2. Mirum Pharmaceuticals (MIRM) also showed strong momentum.
• Positive Earnings Surprises: United Airlines (UAL) and Delta Air Lines (DAL) were highlighted for potential positive earnings surprises, along with Aspen Aerogels (ASPN) and Quanta Services (PWR).

Global Value Investing

• Undervalued Stocks: Methanex (MEOH), Iamgold (IAG), and Petroleo Brasileiro (PBR) were identified as potentially undervalued stocks based on their Zacks Ranks and valuation metrics.
• Comparative Value Stocks: Several pairs of companies were compared for value investing purposes, considering Zacks Ranks and Value Style Scores, including Universal Electronics (UEIC) and Rockwell Automation (ROK).