Investors digesting the latest corporate earnings, Nvidia announced a new deal.

A relatively muted trading day, with the Nasdaq in the red territory throughout the trading session, only to pare some losses. It comes when investors are digesting the latest earnings thus far. 

Treasury yields paused their 2-day rally in a trading day without major economic news. This is despite solid calls by many Fed officials that diminish the hope for a March rate cut. Still, bond yield fell, which could signal that a resistance is forming, giving stocks some breather for this rally upswing. 

Several corporate news stories spur the market. Let’s review them. 

🎢Nvidia shares fell despite announcing a new deal with Cisco Systems to tap into its hardware for its data centre. At one point in pre-market, shares rose above $700 per share. 

🚘Ford had a terrific day after the legacy auto manufacturers delivered a robust earnings report and released positive dividend news. It declared a 15 cents per share quarterly dividend and a special 18-cent dividend. This put the company on track to return around 40% to 50% of its free cash flow during a volatile stock market. This is the second surprise in recent years that Ford announced a special dividend. 

If we recall, a special dividend was paid in Feb 2023, which amounted to 65 cents. The dividend is a welcoming treat for investors this earning season. 

💰Amid all rosy sentiments, we would like to highlight the simmering risk in regional banks to allow us to stay grounded. We are seeing NY Community Bancorp share prices crashing over 20%. This is due to a dividend cut and a half-billion-dollar loan-loss allowance that have stirred traders’ nerves. The latest news development is coming in on a downgrade of the regional bank to a junk rating, too. 

Auntie Yellen, in a House committee hearing, did share that some risks are sprouting from banks that are too focused on commercial real estate lending, which has soured when rates have gone up and stay elevated for longer. However, she stated that bank regulators would assist banks in helping them tide over this microenvironment while assisting in shoring up their reserves. This helps to contain fear within selected regional banks. 

It is 7 Feb, Wednesday, 9 am in Singapore and 9 pm in New York. At 2 am, we will have the 10-year Treasury Note issuance, which could create some waves in the market should it be a sour auction. So do trade with care. Some questions are coming in on debt issuance risks to the stock market; I will provide a concise update later. 

Cheers,