Market Snapshot

River1 Asset Management
July 31, 2025

Morning Note

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Trading Observations

Indices all green this morning as MSFT and META print billions in extra AI and Cloud cash and point to more coming.
Eco Data This AM – PCE was in-line to slightly warm, Initial Jobless Claims at 218k. Add them together, and you have evidence the Fed doesn’t need to move.
AAPL and AMZN tonight, Non-Farm Payrolls Tomorrow, Trade Deals and End of Month also factors in today’s movements.
Conclusion – The leaders of today are Mega cap Tech and Semis. I doubt they will lead all year, but there are no obvious catalysts to rotate from these names into small cap or bonds.

Futures

DOW +115

S&P +58

Nasdaq +310

Hedge Funds Max Long Semiconductors – Feels like outperformance might wane soon.

Bitcoin coiling before a super-spike?

Financials / Consumer / Healthcare

KKR – Solid beat on management fee with strong monetization set for 2H. They raised another $28B last quarter vs $31B the prior quarter. Private Credit remains white hot.

UNH – Baird goes to Underperform, $198 PT (stock was $600 a few months ago). They have low conviction they can hot 1% margins in VBC into 2026. Complete business model destruction in progress. Prayers for Minnesota real estate.

PSA, EXR – Flat SS revenue growth suggests stabilization per GS.

TW – Downgraded to neutral at GS as premium valuation and growth slowdown don’t match.

NCLH – Up 13% after it reverses the RCL negativity.

SHAK – Growth slowing, stock down 10%, blaming the consumer.

Technology

META – $3B in revenue beat in core apps turned into a $3B beat in net income, which shows the earnings leverage they can employ. We thought the market might care they are paying $1B for individual engineers and whatever it costs for NVDA chips, but it doesn’t, because revenue and profits higher, not lower.

MSFT – Capex +58% to $88B, but much like META, it isn’t turning into less cash flow as investments seem to be working. GS doesn’t think that $300B in revenue will be tough to scale. Read through for SNOW, DDOG, Databricks were all positive.

Seims – LRCX, QCOM and ARM lower on earnings. AMAT lower with it. NVDA does not care and is higher.

Low bar for QCOM but it wasn’t enough as end market AAPL not dazzling. Xiaomi re-up positive and they talked AI, but the market hates value stocks unless revenue inflects higher. We would bet this recovers, especially if AAPL is solid.
ARM – Expenses slightly warm, revenue in-line.

CMCSA – One of a few cheap names that beat and is actually higher. Up 6%. P/E is 8x.

RBLX – Up 17% on solid earnings as boy tweens continue to get fed time-wasting money by exhausted parents.

Industrials

CVNA – Up 18% on solid revenue beat against high short-interest. They think they can continue to take share from dealerships for many years to come.

CAR – Avis downgraded to neutral at JPM.

RACE – Ferrari down 6% on a slight sales miss.