Market Snapshot

Author

River1 Asset Management
August 20, 2025

Morning Note

presented by -

Calendar

This Week – Retail earnings to start, with all eyes on Powell to finish the week.

Wednesday – FOMC Minutes, TGT, LOW, TJX earnings

Thursday – Jobless Claims, WMT, ROST, WDAY earnings

Friday – Powell speaks at 10am Est.

Trading Observations

  • Rotation day yesterday out of high beta tech.  Whether this rotation trade continues for more than a few sessions will come down to Powell and Nvidia.

  • The reaction in HD shares stands in sharp contrast to CRWV, underscoring how positioning in certain parts of the market had become quite stretched – HD missed on EPS/comps and left guidance unchanged and yet the stock rallied (while CRWV beat and raised guidance, only to plunge). 

  • NVDA earnings report is just around the corner (on 8/27) and while results/guidance are likely to be strong on an absolute basis, there’s growing concern about whether the bar is impossibly high.

  • PLTR - Shares slip 2.8% in premarket trading Wednesday, on track for its sixth consecutive day of declines, as Citron Research says the stock is worth $40

  • Broadly still 6500 resistance vs. 6400 support

A sizeable rotation trade occurred Tues, with a fairly aggressive shift out of momentum/growth (i.e. tech) and into value/cyclical sectors (housing, staples, utilities, materials, real estate, healthcare, etc.). Rather than a single catalyst, an accumulation of factors, including fundamental news, macro developments, catalyst anticipation, technical trends, & AI bubble talk are spurring the shift. 

Futures

DOW -1

S&P -9

Nasdaq -59

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

VIX

Bitcoin

Financials / Consumer / Healthcare

SOFI – (Yesterday) SoFi to add a blockchain-powered international money transfer service to its app.

TGT – Down 11% - Our video earnings preview from this week said, “not cheap enough”. Comp sales negative, down 2% (was expected). We thought that was a low enough bar. The bar we wanted to be lower was margins, which missed slightly as gross margins of 29% vs 30% expected was the disappointment. New CEO might help, but the stock isn’t cheap until near $80.

Shares of Abercrombie & Fitch Co. (ANF -2.1%), Gap Inc. (GAP -2.3%) and Urban Outfitters Inc. (URBN -1.5%) are trading lower on Wednesday after Citi analyst Paul Lejuez cut his recommendation on the specialty retailers to neutral from buy.

HTZ – Up 10% on a pact with AMZN to sell their used vehicles. Probably a short-lived short cover. CVNA down 4%, KMX 2%.

CAR – Avis down 5% on a downgrade to underperform at BAC.

GES – Guess Brands up 25% on take private offer at $16.75 per share. Looks about 13x EBITDA to us and it was already leveraged.

JHX – James Hardie, as in Hardie Plank for your house, down 29% on a dramatic miss in sales.

EL – Down 6% on rough guidance.

TJX – Up 4% on solid numbers. Bargain hunters still shopping.

LZB – Lazy-Boy down 21% as expenses weigh on profits (tariffs).

UPST – Up 3% on a JPM upgrade.

McDonald's to reduce prices for eight combo meals by 15% - Reuters

EL falls 13% to $78 after FY26 profit outlook misses estimates

LOW in line 2Q results - updated FY25 outlook to include ADG (core guide unchanged) - announced acquisition of FBM for $8.8B (13.4x EBITDA)

TOL beat on key metrics such as closings and homebuilding GM, though ASP light and FY volume guidance at lower end of prior range. 

Technology

Magnificent Seven stocks: Microsoft (MSFT) +0.1%, Nvidia (NVDA) 0%, Tesla (TSLA) -0.4%, Amazon (AMZN) -0.5%, Apple (AAPL) -0.6%, Alphabet (GOOGL) -0.7%, Meta Platforms (META) -0.7%

Reuters reported Commerce Secretary Lutnick wants US to take stakes in all companies that received CHIPS Act funding, including MU [streetaccount.com], TSM [streetaccount.com] and Samsung. https://www.reuters.com/business/media-telecom/us-examines-equity-stake-chip-makers-chips-act-cash-grants-sources-say-2025-08-20/ [reuters.com]

ADI - Analog Devices shares are up 3.3% in premarket trading after the analog chipmaker reported third-quarter results that beat expectations and gave an outlook that is seen as strong.

ADBE - Adobe announced the introduction of Acrobat Studio. This offering brings together Acrobat, Express, and AI agents to help improve work collaboration. It also includes PDF Spaces, turning static PDFs into a dynamic work environment. Now available globally with early access pricing starting at $24.99/month for individuals and $29.99/month for teams.

PLTR - Shares slip 2.8% in premarket trading Wednesday, on track for its sixth consecutive day of declines, as Citron Research says the stock is worth $40 in a post on X.

Industrials 

Alaska Airlines launches $395 credit card in premium travel race, combines loyalty program with Hawaiian – CNBC

  • Also, ALK to offer Starlink Wi-Fi starting in 2026

Atmus Filtration Technologies (ATMU) downgraded to neutral from overweight at JPMorgan; $46 P

Custom Truck One Source (CTOS) downgraded to underweight from neutral at JPMorgan; $5.50 PT

Eaton Corp. (ETN) initiated neutral at Rothschild & Co Redburn; $336 PT

Goodyear Tire & Rubber (GT) downgraded to hold from buy at HSBC; $9.50 PT

Oklo, Inc. (OKLO) initiated neutral at UBS; $65 PT

USA Rare Earth (USAR) - Rare Earths Webcast w CEO hosted by Ben Kallo – 11:00 ET- Here to Register [goto.webcasts.com].

Vertiv Holdings (VRT) initiated neutral at Rothschild & Co Redburn; $135 PT

Latest Media

$TGT - Earnings on 8/20.

We are not buyers at $100.