Markets wobble on interest rate comments and earnings reports

Dow rose 123, advancers slightly ahead of decliners & NAZ slid back 70.  The MLP index dropped 4+ to the 317s & the REIT index added 2 to the 408s.  Junk bond funds fluctuated & Treasuries are sold to lift rates.  Oil remained up 1 to the 73s & gold slid 4 to 2929 (more on both below).

Dow Jones Industrials

General Motors (GM) believes it can mitigate up to 50% of potential tariffs Pres Trump is threatening to impose on imports from Canada & Mexico, CEO Mary Barra said.  The chief exec said the automaker has contingency plans ready for if tariffs are levied on auto parts & vehicles coming into the US from the 2 neighboring countries.  That includes potentially avoiding short-term impacts of 30-50% of the additional costs “without deploying any capital.”  “We are prepared,” Barra said.  “When we know exactly what’s going to happen and/or even have an indication of what’s going to happen, we know the steps we could take.”  CFO Paul Jacobson, who appeared with Barra, added that if tariffs were prolonged, the company could take additional measures such as shifting production or parts or vehicles.  The comments are the most detailed yet of how GM believes it could reduce the impact of tariffs after investor concerns about the issue weren't addressed 2 weeks ago.  GM has some operations in Canada, with more substantial production in Mexico.  That includes many of its lower-priced electric vehicles as well as its highly profitable full-size pickup trucks.  Barra's comments followed crosstown rival Ford (F) CEO Jim Farley saying Trump's tariffs, whether implemented or threatened, are causing “chaos” for the US automotive industry.  GM stock rose 9¢ & Ford stock was off 2¢. 

GM expects to mitigate up to 50% of potential North American tariffs, which Ford describes as ‘chaos’

Intel (INTC), a Dow stock, rose after VP JD Vance said the US will safeguard American artificial intelligence technologies from “theft and misuse” by adversaries.  “Some authoritarian regimes have stolen and used AI to strengthen their military intelligence and surveillance capabilities, capture foreign data and create propaganda to undermine other nations’ national security,” Vance said in a keynote address at the Paris AI summit.  “This administration will block such efforts, full stop.”  While the VP didn't directly refer to the emergence of China's DeepSeek, Vance emphasized the importance of working with allies to “close pathways to adversaries attaining AI capabilities that threaten all of our people.”  The US Britain both refused to sign an intl declaration on AI at the summit.  The agreement commits each signing country to “ensuring AI is open, inclusive, transparent, ethical, safe, secure and trustworthy, taking into account international frameworks for all.”  The US declined to give a clear reason for not participating.  INTC, which used to be the world's leading semiconductor company before losing market share in recent years to a number of competitors, is in desperate need of a boost. The stock rallied on soaring demand for their AI processors.  Last month, INTC reported a 3rd straight qtr of declining revenue & issued a disappointing forecast.  It was the chipmaker's first earnings report since announcing the departure of Pat Gelsinger as CEO.  Gelsinger had a difficult 4-year tenure, not only giving up market share but also committing to manufacture costly plants.  INTC has won Bs of $s in gov subsidies to build factories in an effort to bring semiconductor manufacturing to the US.  INTC appointed 2 interim co-CEOs, finance chief David Zinsner & Intel Products CEO Michelle Johnston Holthaus, to succeed Gelsinger.  The stock rose 1.25 (6%).

Intel shares rise after VP Vance promises to safeguard American AI and chips

A 25% tariff on all aluminum imports shouldn't spell too much trouble for your favorite canned Coke, per Coca-Cola (KO), a Dow stock & Dividend Aristocrat, CFO John Murphy called the higher aluminum prices "a relatively small amount" of the "overall input mix."  "They are manageable within the overall context ... of the multibillion-dollar supply chain that we have," Murphy said, adding that the team has "a lot of levers" at its disposal.  And consumers won't see higher prices in the near future.  "We don't anticipate [higher prices] at the moment," Murphy said, but cautioned that the team "will see how things play out in the course of the year, and we will adapt accordingly."  But shoppers will be seeing different variations of Coke cans when they browse the aisles.  The company is trying to innovate by putting out "different sizes" & "makeup" of the its products.  It's part of a key "revenue growth management equation" the team has been building over the past 3-4 years.  In its 4th qtr earnings report, the company bested the estimates across the board.  Revenue came in at $11.5B, compared to expectations of $10.7B & EPS came in at 55¢ compared to expectations of 52¢.  That was largely driven by higher price/mix, which grew 9%, while unit case volume increased 2%.  In 2025, the company expects to deliver organic revenue growth of 5-6%, as well as adjusted earnings growth of 2-3%.  The stock rose 3.06.

Tariffs won't raise prices of canned soda for now: Coca-Cola CFO

Gold prices slipped as investors booked profits following a record high, yet remained bullish amid fears of a global trade war spurred by Pres Trump's new tariffs.  Spot gold fell 0.1% to $2904 per ounce after hitting a peak of $2942 earlier in the session.  US gold futures settled 0.1% lower at $2932.  Just seeing some profit-taking from the shorter-term futures traders. the market's becoming a bit overextended & just due for some downside corrective pressure & some chart consolidation.  Trump substantially raised tariffs on steel & aluminum imports to a flat 25% "without exceptions or exemptions" in a move he hopes will aid struggling industries in the US, but which also risks sparking a multi-front trade war.  Fed Chair Jerome Powell said the central bank is not in a rush to cut interest rates given an economy that is "strong overall" & inflation that remains above its 2% target.  His comments were part of opening remarks prepared for delivery at a Senate Banking Committee hearing.  Given any new proclamations from Pres Trump, the potential uncertainty could sustain prices & profit-taking scenarios, like today's, might be seen by bullish traders as a buying opportunity during a price dip.

Oil prices edged up to a 2-week high as sanctions raised concerns about Russian & Iranian oil supplies & on rising Middle East tensions, outweighing worries that trade tariffs would boost inflation & dampen global economic growth.  Brent futures rose $1.13 (1.5%) to settle at $77.00 a barrel, while US West Texas Intermediate (WTI) crude rose $1 (1.4%) to settle at $73.32.  That put both crude benchmarks up for a 3rd day & at their highest closes since Jan 28.  With the US bearing down on Iranian exports & sanctions still biting into Russian flows, Asian crude grades remain firm & underpin the rally from yesterday.  US sanctions targeting tankers, producers & insurers have significantly disrupted shipments of Russian oil to leading importers China & India.  Also supporting crude prices were US sanctions on networks shipping Iranian oil to China after Pres Trump restored his "maximum pressure" on Iranian oil exports last week.  Adding to supply jitters is the possibility of renewed fighting in the oil-rich Middle East.

Oil prices climb to 2-week high on supply worries, US tariffs check gains

Investors are digesting the latest commentary from Federal Reserve Chair Jerome Powell, who told the Senate Banking Committee that the central bank doesn’t “need to be in a hurry” to change its rate policy.  Also in focus are earnings reports with more coming after the markets close.