US stock outlook | Futures on the three major stock indexes are rising, and the Fed's favorite recession indicator is “red light” again

1. On February 27 (Thursday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.33%, S&P 500 futures were up 0.66%, and NASDAQ futures were up 0.67%.

2. As of press release, the German DAX index fell 0.65%, the UK FTSE 100 index rose 0.41%, the French CAC40 index fell 0.11%, and the European Stoxx 50 index fell 0.59%.

3. As of press release, WTI crude oil rose 1.12% to $69.39 per barrel. Brent crude rose 1.12% to $72.88 per barrel.

Market news

The Federal Reserve's favorite recession indicator is flashing again! Has the US economy “turned red light”? Typical warning signs of a recession are flashing in the US Treasury bond market — the yield on 10-year US Treasury bonds is lower than the yield on 3-month US Treasury bonds, the so-called inversion of the yield curve. Over the past few decades, this warning signal has a reliable record in predicting economic downturns (12-18 months after the signal appeared). In fact, the New York Federal Reserve believes this is a very reliable indicator, so it updates this relationship every month and provides the probability of a recession within the next 12 months. At the end of January, when 10-year US Treasury yields were about 0.31 percentage points higher than 3-month US Treasury yields, the New York Federal Reserve's model showed that the probability of a recession in the next 12 months was only 23%. However, with the inversion of 10-year US Treasury yields and 3-month US Treasury yields, the possibility of a recession has increased.

Both US stocks and the US dollar are getting cold, and the aura of “American exceptionalism” is fading? At the beginning of this year, investors generally bet that US President Trump's policies will push the US stock market and the US dollar to stand out in the global market. However, this expectation appears to be increasingly being tested. Trump's reforms and large-scale trade and other policy initiatives have not brought confidence to investors, but have injected uncertainty, and consumers and businesses are worried about the economic outlook, threatening America's exceptionalist narrative. Furthermore, large US tech and growth companies, which have driven most of the market's gains in recent years, have faltered due to valuations and concerns about China's low-cost artificial intelligence model DeepSeek.

Federal Reserve Bostic: Interest rates need to be kept within a restricted range to curb inflation. Federal Reserve Bank of Atlanta Governor Rafael Bostic said that the Federal Reserve should maintain the current interest rate level so that it continues to put downward pressure on inflation. Bostic said at a housing conference in Atlanta on Wednesday, “We need to maintain the status quo.” He also added, “It can be said that we are meeting our employment goals, and now we have to control the price stability target. We need to maintain a restrictive policy stance.” Last month, policymakers kept interest rates unchanged to have more time to watch inflation progress further and learn more about how President Donald Trump's policies might impact the economy. The Federal Reserve's benchmark interest rate is currently in the target range of 4.25% to 4.5%, down 1 percentage point from September last year.

Trump cancelled Chevron's license to operate in Venezuela, and oil prices rose for the first time in three days. Oil prices rose for the first time in three days on Thursday. After US President Donald Trump announced the revocation of the license granted to Chevron (CVX.US) to operate in Venezuela, supply concerns resurfaced, and oil prices rose as a result. A day ago, these contracts closed at their lowest level since December 10 due to an unexpected increase in US fuel stocks, implying weak demand, and hopes for a possible peace agreement between Russia and Ukraine. Both of these oil price benchmarks have fallen by about 5% so far this month. Trump said on Wednesday that he will revoke the license granted by former President Joe Biden more than two years ago to operate in Venezuela. Chevron's business in Venezuela exports about 240,000 barrels of crude oil every day, accounting for more than a quarter of the country's total oil production. The termination of the license means Chevron will no longer be able to export Venezuelan crude oil.

The “Trump deal” has completely come to an end! Bitcoin spot ETF “lost blood” over 1 billion US dollars in a single day! 70,000 for the next stop? Investors withdrew more than $1 billion from US spot Bitcoin exchange-traded funds (ETFs) on Tuesday, the biggest daily outflow since these funds debuted in January last year. Bitcoin's decline was further exacerbated by weakening demand for ETFs. Among these funds, Fidelity Wise Origin Bitcoin Fund (FBTC) has the most outflows, followed by iShares Bitcoin Trust ETF (IBIT), according to data compiled by Bloomberg. Meanwhile, Bitcoin's price has been falling, and investors are shunning riskier assets in the face of uncertainty. Overall, Bitcoin funds have outflows of about 2.1 billion US dollars in the past six days, which is the longest outflow period since June last year.

Individual stock news

Daxin Energy (DQ.US) Q4 revenue declined 59.0% year over year, with a net loss of US$180.2 million. Daxin Energy's Q4 revenue was US$195.4 million, down 59.0% year on year; net loss attributable to the company's shareholders was US$180.2 million, or US$2.71 per ADS. The adjusted net loss attributable to the company's shareholders was $170.7 million, or $2.56 per ADS loss. Compared to the third quarter of 2024, the decline in revenue was mainly due to a decrease in average selling price, but the increase in sales volume mitigated this impact. Polysilicon production in the fourth quarter was 34,236 tons, compared to 4,3592 tons in the previous quarter; sales volume was 42,191 tons, compared to 42,101 tons in the previous quarter. Looking ahead, the company expects to produce around 25,000 tons to 28,000 tons of polysilicon in the first quarter of 2025. It is estimated that around 110,000 tons to 140,000 tons of polysilicon will be produced throughout 2025, including the impact of the company's annual facility maintenance.

Nvidia's (NVDA.US) earnings report has borne the “computing power question”, and the AI spending boom still exists. Nvidia's Q4 revenue increased 78% year over year to US$39.331 billion, and analysts expected US$38.05 billion; of this, data center revenue was US$35.58 billion, up 93.32% year over year. Net profit for Q4 was US$22.06 billion, up 72% year over year, corresponding to net profit of $0.89 per share. Analysts expected $0.84. The company's sales in the most recent quarter surpassed Nvidia's annual revenue two years ago, when Nvidia's total annual revenue was $27 billion, which highlights how fast the company is growing. In fiscal year 2025, Nvidia achieved a total revenue of US$13.497 billion, an increase of 114% year over year; net profit reached US$72.88 billion, an increase of 145% year over year. The data center division is Nvidia's largest revenue stream to date, with sales of $35.6 billion. This surpassed the average estimate of $34.1 billion.

CRM.US (CRM.US) Q4 revenue and guidance were disappointing, and increased competition for AI agents raised concerns. SAFTSE's Q4 revenue increased 7.6% year over year to US$9.99 billion, falling short of market expectations; earnings per share, excluding some projects, were US$2.78, better than market expectations of US$2.61. The software company achieved single-digit revenue growth for the third consecutive quarter, and the company has maintained a faster growth rate for a long time. Looking ahead, Saifushi expects revenue to reach 40.5 billion to 40.9 billion US dollars in the 2026 fiscal year ending January 2026, with an average analyst forecast of 41.5 billion US dollars. The company expected an adjusted operating margin of approximately 34%, compared to an average analyst estimate of 33.9%.

Synopsys (SNPS.US)'s Q1 results exceeded expectations, maintaining performance guidance leading to a slight increase in stock prices. For the fiscal quarter ending January 31, Synopsys adjusted earnings per share of $3.03, exceeding analysts' expectations of $2.79. Despite a 12% year-on-year decline in revenue, it still reached US$1.46 billion, exceeding analysts' expectations of US$1.45 billion. Among them, the revenue of the design automation business increased slightly by 3.5% to reach US$1.02 billion; while the revenue of the design intellectual property (IP) business fell 17% to US$435.1 million. Looking ahead, Synopsys expects adjusted earnings per share for the second quarter to be between $3.37 and $3.42 billion, and revenue is expected to be between $15.9 and $1.62 billion. Analysts had previously expected adjusted earnings of $3.39 per share and revenue of $1.6 billion.

Snowflake (SNOW.US) Q4 performance exceeded expectations, driven by strong sales prospects. Data warehouse giant Snowflake's revenue growth prospects for the current fiscal year were better than expected, and it also sent an optimistic signal about the adoption of its recently launched artificial intelligence products. The stock soared in after-hours trading. According to the data, the company's Q4 revenue increased 27.4% to US$986.77 million, exceeding analysts' expectations of US$956.89 million, and adjusted earnings per share of $0.30, exceeding analysts' general expectations of $0.18 per share. Product revenue for the fourth fiscal quarter increased 28% to $943.3 million, while analysts' average expectations were $915.8 million. Snowflake currently has 580 customers who have spent more than $1 million in the past 12 months, compared to 542 in the previous quarter. For the quarter ending January 31, the remaining performance debt (another important growth benchmark) was $6.9 billion, exceeding the average forecast of approximately $6.67 billion.

eBay (EBAY.US)'s Q4 performance exceeded expectations, and the stock price plummeted due to poor sales prospects. eBay's Q4 revenue was $2.6 billion and earnings per share were $1.25, all exceeding market expectations. In the fourth quarter, eBay's total merchandise transaction volume (GMV) increased 4% to $19.3 billion, exceeding market expectations of $19.1 billion. By the end of 2024, the number of active eBay buyers reached 134 million, which also exceeded market expectations. However, the strong performance of the holiday season was overshadowed by a bleak outlook. eBay expects revenue for the current quarter to fall short of analysts' expectations, and CEO Jamie Iannone blames weak demand in Germany and the UK. eBay expects revenue for the first quarter of 2025 to be $2.52 billion to $2.56 billion, and adjusted earnings per share of $1.32 to $1.36. In contrast, analysts expect average revenue of $2.6 billion and earnings per share of $1.33.

Instacart parent company Maplebear (CART.US)'s Q4 revenue and Q1 profit guidelines fell short of expectations. Instacart Q4's fourth-quarter revenue increased 10% year over year to US$883 million, but fell short of analysts' average expectations of US$891 million. Under GAAP accounting standards, net profit was US$148 million, an increase of US$13 million over the same period last year; adjusted profit before interest, tax, depreciation and amortization (EBITDA) was US$252 million, an increase of 27% over the previous year. The gross transaction value (gross transaction value), which measures the value of products sold, was US$8.645 billion, an increase of 10% over the previous year. At the same time, the company expects the adjusted EBITDA for the first quarter of 2025 to be between US$220 million and US$230 million, which is less than the average forecast of US$237.1 million; the total transaction value for the first quarter is expected to be between US$9 billion and US$9.15 billion, with an average analysts' expectation of US$9 billion.

Amazon's (AMZN.US) Alexa voice assistant is undergoing a major upgrade, embedding generative AI. Amazon on Wednesday unveiled its first major improvement since launching the Alexa voice assistant more than a decade ago, embedding it in generative artificial intelligence. Since launching Alexa in 2014, Amazon has invested billions of dollars in it, hoping to roll out the service to a range of devices and ultimately drive sales for its major e-commerce sites. Panos Panay (Panos Panay), Amazon's head of devices and services, said the new service is called Alexa+, which echoes the premium names of many high-tech and streaming service products.

Key economic data and event forecasts

21:30 Beijing time: The initial monthly rate of US durable goods orders in January (%), the revised quarterly annualized rate of US GDP for the fourth quarter (%), and the number of US jobless claims for the week ending February 22 (10,000).

23:00 Beijing time: Monthly rate (%) of the US existing home contract sales index after the January seasonal adjustment.

23:30 Beijing time: Changes in US EIA natural gas inventories for the week ending February 21 (100 million cubic feet).

The next day at 00:00 a.m. Beijing time: US February Kansas Federal Reserve Manufacturing Composite Index.

21:15 Beijing time: 2027 FOMC voting committee and Richmond Federal Reserve Chairman Barkin delivered a speech on inflation.

22:15 Beijing time: 2025 FOMC voting committee and Kansas Federal Reserve Chairman Schmid delivered a speech on economic issues.

23:00 Beijing time: Federal Reserve Governor Barr delivered a speech on “New Activity Regulation.”

The next day at 00:45 a.m. Beijing time: Federal Reserve Governor Bauman delivered a speech on “Community Banking.”

The next day at 02:15 a.m. Beijing time: Cleveland Federal Reserve Chairman Hamak delivered a speech.

The next day at 04:15 a.m. Beijing time: 2026 FOMC voting committee and Philadelphia Federal Reserve Chairman Huck delivered a speech on the economic outlook.

Performance Forecast

Friday morning: Dell (DELL.US), HP (HPQ.US)