OTP Morning Brief: SAP nose-dived 16%
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OTP Morning Brief: Geopolitical risks have once again moved to the forefront
Major European and US equity indices closed lower on tuesday, with the technology sector underperforming particularly sharply. Oil prices were supported by escalating US-Iran tensions and uncertainty surrounding the Strait of Hormuz, resulting in a rise in crude prices. US Treasury yields declined, while the yield on Germany’s 10-year Bund rose to its highest level since 2011. The forint weakened against major currencies. Investors will focus on the release of the Fed minutes and the UK CPI data later today.
OTP Morning Brief: Geopolitical tensions in the Middle East remain elevated
European indices closed lower on Tuesday, as persistent geopolitical tensions and expectations of further interest rate hikes continued to weigh on sentiment. Major US indices edged lower on Monday; the US government did not support Apple’s procurement of Chinese memory chips; meanwhile, the New York Fed’s manufacturing activity index improved. Developed market bond yields moved modestly higher, while the Hungarian forint weakened slightly against the euro. Today, the focus will be on Germany’s ZEW Economic Sentiment Index, UK unemployment data, and US industrial production and housing market figures.
SAP's 16% dive dragged down the DAX and Europe’s technology sector. Deutsche Bank, ING, Roche, and Sanofi released their reports yesterday. Britain’s Prime Minister Keir Starmer has visited China. Meta soared, Microsoft plummeted as investors assess AI investments through the lens of ROI. Caterpillar, Mastercard, Lockheed Martin, and Apple published their reports in the USA. Oil prices continued to rise on Thursday, but gold and silver halted. Bond yields edged lower in the eurozone and the USA. An agreement appears to be taking shape in the US Senate to avoid a government shutdown. Q4 GDP data from several European countries and the eurozone will be released today. Donald Trump may announce the Fed’s next chairman nominee today.
SAP's 16% plunge dragged down the DAX and Europe’s tech sector
Despite the morning’s gains, the STOXX Europe 600 closed 0.2% lower on Thursday. SAP was the man reason for the sharp decline in the STOXX technology sector index (-3.9%) and Germany’s DAX (-2.1%). The German enterprise software maker's shares nose-dived 16.1%, even though its fourth-quarter revenue was in line with market expectations. The price fell because its 2026 cloud-based revenue forecast fell short of market expectations.
The mining sector also started on a strong foot, along with the increase in gold and silver in the morning, but both precious metals dipped into the red by the end of a volatile day, thus the mining sector closed only 0.4% higher. Rising energy prices helped the energy sector advance 1.4%. Although Deutsche Bank posted its biggest annual profit since 2007, its shares fell 1.2%. Germany’s largest bank reported a net profit of EUR 6.12 billion in 2025, driven primarily by the strength of its global investment banking business. Thus it marked its sixth consecutive year of profitability. The bank also met its three-year target of raising its return on tangible equity (RoTE) above 10% by 2025. However, the share price has been under pressure in recent days due to police raids at Deutsche Bank earlier this week in connection with a suspected money laundering case. ING beat quarterly profit expectations on Thursday, thanks to strong interest and fee income in the last three months of 2025 and an improving outlook for the next two years. However, its share price fell 0.9%.
In 2025, Roche’s adjusted operating profit grew by a slower-than-expected 5% as the weaker U.S. dollar has reduced profits from multiple sclerosis drug Ocrevus and haemophilia drug Hemlibra. The Swiss drugmaker’s share price still soared more than 29% in 2025; yesterday it gained 2.6%. French rival Sanofi said on Thursday it expected high-single-digit revenue growth in 2026, driven by its best-selling asthma drug Dupixent. However, the latter's patent protections will expire in 2031, so finding new products that can at least partially replace it is a key issue. In this regard, Sanofi had several disappointing clinical trials last year, and its share price slumped by more than 11% in 2025; on Thursday it slipped 0.6%.
Following President Macron's visit in December and Canadian Prime Minister Mark Carney's trip in January, Keir Starmer also visited China, marking the first official visit by a British prime minister to the Asian country in eight years. By strengthening relations with China, Western leaders are presumably trying to hedge the risks associated with the unpredictability of the USA.
December’s surplus of EUR 333 million took Hungary's foreign trade surplus in goods to EUR 8.2 billion in full year 2025. This is similar to the previous two years’ surpluses of HUF 8.2 and HUF 8.7 billion.
In the CEE region, Hungary’s BUX eased by 0.2%, Poland’s WIG20 shed 0.4%, and Czechia’s PX50 lost 1.2%.
Meta soared, Microsoft plunged
The S&P 500 and Dow Jones Industrial Average closed flat on Thursday, just like on Wednesday. The tech-heavy Nasdaq Composite fell 0.7%. Meta and Microsoft's stock performance contrasted sharply after their reports on Wednesday. Meta's shares jumped 10.4% on strong sales data, while those of Microsoft tumbled 10% as its cloud business failed to impress the market. In the AI ??sector, investors are primarily watching how well a given company can turn its huge investments into revenue. They appreciated that AI improved Meta's ad targeting, and boosted revenue by 24% in the quarter ended December, and supported its optimistic first-quarter forecast. In addition to Microsoft and SAP, software companies Salesforce (-6.1%), Oracle (-2.2%), Adobe (-2.65%) and cloud security company Datadog (-8.8%) were all affected by the sell-off.
Tesla plans to spend more than USD 20 billion on capital expenditures this year, more than doubling its 2025 figure. However, only a small portion of this will go to its traditional business, selling electric cars designed for human drivers. The company, which lost its global EV sales lead to China’s BYD last year, is instead focusing its investments on fully autonomous vehicles and humanoid robots. Tesla’s report was initially well received, still its share ended Thursday’s trading with 3.45% loss. Of the most important flash reports, Caterpillar (+3.4%) and Mastercard (+4.3%) rose on the back of strong quarterly profits. In the defence sector, shares of Lockheed Martin (+4.2%) shot up after the company forecast better-than-expected 2026 earnings. Apple’s report, released after market close, beat Wall Street’s revenue expectations, driven by strong demand for iPhones and a strong rebound in China.
Oil prices grew by roughly 10% last week, driven by a number of supply-side factors. Concerns about a US strike on Iran have been growing, in part after President Trump said a massive “armada” led by the aircraft carrier USS Abraham Lincoln was heading towards the Middle Eastern country. In January, production at Kazakhstan’s 900,000-barrel-per-day Tengiz oil field was shut down, owing to three transformer fires. On Wednesday, the field was allegedly restarted in phases and may reach full production levels within a week. However, industry experts are sceptical about the latter. Just like in Europe, the energy sector did well in the USA, despite rising oil prices. After eight days of unbroken march higher, gold prices eased on Thursday, ending a volatile trading day.
An agreement seems to be taking shape in the US Senate, to avert a government shutdown. As part of that, the debate on aggressive immigration policy measures and funding for the Department of Homeland Security would be separated from the overall funding package.
Bond yields edged lower in the euro area and the USA
There was no significant movement in the bond and money markets of advanced economies after the Fed meeting on Wednesday, despite relatively strong macroeconomic data. Europe’s confidence indices improved materially, America’s initial jobless claims remained low, and industrial goods orders expanded vigorously – yet the eurozone’s and the USA’s bond yields sank trivially yesterday. The US 10-year bond yield was below 4.25%, and the German below 2.85%. Meanwhile, the EUR/USD inched up 0.1%, so it seems that it can hold on to near-1.2 levels, at a more-than-four-year high.
The day started with forint weakening, the EUR/HUF initially rose 382, ??before it fell back to around 380. There was subdued Interest in the ÁKK’s auctions yesterday. The amount offered in 12Mdiscount Treasury Bills (HUF 30 billion) was sold at an average yield of 6.07%.The agency sold twicethe planned volume of the 6Y green bond, with adequate demand, at an averageyield of 6.27%. However, due to the anaemic demand, only two-thirds of theplanned HUF 15 billion was sold of the 10Y floater. Benchmark bond yields slightlypicked up from the recent yield decline, bond yields increased by 3-4 basispoints, and the 10Y yield is only slightly above 6.5%.
Today’s highlights
Heading into the close today, Asian indices looked mixed. Japan’s Nikkei (+0.2%) and Korea’s KOSPI (over +1%) rose while China’s SSEC (-0.6%) and the Hang Seng (-1.8%) dropped.
In accordance with the t+30-day publication schedule, Q4 GDP data from several European countries and the whole eurozone will be released today. Hungary’s KSH also publishes its respective first estimate today. December’s unemployment rate will be released for the eurozone. The January inflation data from Germany and Spain will be out, ahead of Wednesday's data release for the entire currency union. The USA will publish December’s producer price index. Elsewhere, China releases January purchasing managers' indices in the small hours of Saturday.
President Trump said on Thursday that he would announce the nominee for new Fed chairman on Friday morning. At this point, former Fed Governor Kevin Warsh seems to be the frontrunner, preceding BlackRock's chief investment officer Rick Rieder.
Among others, Exxon Mobil, Chevron and American Express will publish their quarterly reports today.
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