Daily Brief United States: NVIDIA Corp, Microstrategy Inc Cl A, Crude Oil, Aptiv PLC, Benson Hill , Whirlpool Corp, USD, Avnet Inc and more

• Market value of stocks close to 2 trillion, including Nvidia at 600 billion
• Author missed opportunity to short Nvidia despite strong case outlined in article
• Concerns about competition, margins, and custom chips impacting Nvidia’s growth potential

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• Stifel is a leading middle market investment bank with a large equity research franchise
• Stifel has won the J.D. Power Award for Employee Advisor satisfaction two years in a row
• The Odd Lots podcast discusses topics like MicroStrategy’s perpetual motion machine and leveraged bitcoin investments

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• Oil markets in 2024 experienced slow supply and demand growth after years of high volatility
• Heading into 2025, demand is reaccelerating faster than supply, leading to a bullish outlook
• With low inventory levels and a modest supply deficit expected, prices are likely to gradually rise to low 80s Brent basis

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• Trump prioritizes reducing US trade deficit by urging nations with trade surpluses to increase oil and gas purchases or face tariffs
• To reduce bilateral deficits, US would need to significantly increase oil and gas exports to Europe, China, South Korea, and Japan
• Trump administration aims to accelerate US oil and gas production growth to meet demand and potentially lower costs for producers to achieve goals of reducing trade deficit and increasing energy exports

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• There were no new spin-off announcements this week, but I’ve done some more work on the Aptiv (APTV) spin-off announcement.

• Aptiv PLC (APTV), an automotive technology supplier, announced on January 22, 2025, that it plans to split into two distinct companies.

• Aptiv will spin-off its electrical systems business. The RemainCo will concentrate on technological components, including sensor-to-cloud solutions and autonomous driving software.

• Benson Hill exited after a +100% share price spike, despite a 38% loss; concerns over cash and buyout proposal persist.
• Marlowe position closed with a 23% return; buybacks had no impact on share price, concerns over future decline.
• DMC Global faces conflict with Steel Connect over valuation and acquisition proposals; Arcadia’s former president returns.

• Whirlpool Corporation’s fourth-quarter 2024 performance exhibited both areas of progress and challenges.
• The company acknowledged that while their financial outcomes have not fully met expectations, they have made strides in operational efficiency and portfolio transformation.
• Notably, the completion of the Europe transaction marked a significant transition in creating value opportunities.

• The U.S. oil and gas rig count rose for the first time in eight weeks, as it rose by 6 to 582 for the week ending 31/Jan.
• For the week ending 24/Jan, U.S. oil production fell to 13.24m bpd from 13.48m bpd the week prior.
• The number of active U.S. oil rigs rose by 7 to 479 while gas rigs dropped by 1 to 98. U.S. producers added four rigs in New Mexico.

• The Fed kept policy rates unchanged as expected, but Chair Powell’s press conference provided key insights on the Fed’s stance
• The Fed’s focus on inflation and asymmetric reaction function suggests a possible delay in further rate cuts
• Range-bound rate environment post-Fed meeting favors short gamma strategies for volatility sellers, while yield curve trading strategies may lack carry opportunities

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• Avnet has reported its second-quarter fiscal year 2025 results, which reflect both challenges and opportunities within the broader market environment.
• The company recorded sales of $5.7 billion and an adjusted earnings per share (EPS) of $0.87, performing above the midpoint of previous guidance.
• While sales showed resilience primarily in Asia, offset by weaker demand in Western regions, Avnet’s global book-to-bill ratio remains below parity, indicating continued market challenges, particularly in Europe.