TMTB Morning Wrap

Good morning. Futures -60bps as more concerns around Oil +6% staying higher for longer as Brent nears $100 again. 2 tankers struck in Iraqi waters / Oman clearing ships from its key export terminal outside the Strait of Hormuz / Chinese refiners starting to cancel fuel export cargoes all driving Oil higher this morning. We’ll see how long Trump and team can last — NBC News quoted a WH source saying it only has until the end of March before oil becomes an “unsustainable political five-alarm fire”

Asia red overnight: TPX -1.32%, NKY -1.04%, Hang Seng -0.7%, HSCEI -0.06%, SHCOMP -0.1%, Shenzhen -0.68%, Taiwan TAIEX -1.56%, Korea KOSPI -0.48%

BTC -50bps. Yields slightly flat.

We get ADBE earnings tonight. Let’s get to it…

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MELI: JPMorgan Downgrades to Neutral on Persistent Competition and Margin Pressure; PT Cut to $2,100

JPMorgan says the factors behind its prior upgrade have faded. The analyst notes competition—particularly from Shopee in Brazil—remains intense and is likely to pressure margins longer than expected, prompting JPMorgan to lower its long-term margin assumption to 14% from 17% and cut 2026 EBIT estimates by ~9%. The firm adds management appears comfortable operating with lower profitability, increasing the risk of a ~24% miss to 2026 EBIT consensus.

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ORCL: Oracle prepares for job cuts as it hails efficiencies from AI coding tools - FinancialTimes

The Financial Times reports that Oracle has boosted its restructuring reserves by $500M to $2.1B for the fiscal year, signaling potentially thousands of additional job cuts as the company credits AI with enabling it to “build more software in less time with fewer people.” The cuts come as Oracle faces investor pressure over its expensive data center buildout, with long-term debt ballooning to ~$143B, while shares remain down over 50% from their September peak. Staff in legacy and support roles outside the core cloud business are reportedly bracing for layoff announcements within weeks.

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GFS: Mubadala said to seek $852M in share sale (explains weakness yesterday) at 41.6-42.6. GFS to repurchase $300M of shares.

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HPQ: ISI Highlights >$6 FCF Potential and ~7% Yield as Memory Headwinds Ease as co already trades at 8x

HPQ could generate more than $6 of annual FCF per share through the cycle, according to Evercore ISI, which argues investor concerns around memory costs and PC demand may be overstated. The analyst notes normalized FCF margins could exceed 7.5% with EPS around $6 and ~40% working-capital conversion, while the ~6% dividend yield appears well covered by roughly $2.9B of annual FCF. ISI adds cost actions and improving PC mix should push Personal Systems margins toward the high end of HP’s 5–7% target