Market Snapshot

River1 Asset Management
March 06, 2025

Morning Note

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Calendar

This Week – A smattering of mostly retail earnings with the two biggest driver’s Friday, NFP and Powell.

Thursday – Jobless Claims, COST, ABGO, HPE earnings

Friday – Non-Farm Payrolls. Powell Speaks Mid-Day

Trading Observations

Trading Macro Observations
Ugly start, no specific headline to cause the drop adds to the angst
Japan yields ticking higher going to trigger carry trade unwind?
Close to critical levels https://tinyurl.com/3cvybbk3 [tinyurl.com]
DB estimated $20T exposure prior to Aug wobble https://tinyurl.com/ycydp57b [tinyurl.com]
Jobs tomorrow, but claims premkt and last week had the first meaningful jump in a while (one week does not a trend make) so will see if two in a row
Semis taking another bullet with MRVL getting hit hard on numbers
Levels still the same with 5725 (200-day) support vs. 5850 and 5905 resistance
To really break the back of the downside momentum, need to see a day with upside volume of >10/1 vs. downside volume (yday was only 3/1)
Auto delinquencies are at multi year highs. Consumer is cracking??

Futures

DOW -395

S&P -72

Nasdaq -325

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

ICE Brent Crude

Bitcoin

Financials / Retail / Healthcare

SEMIS … SMH -2.3% in pre; SOX has been holding big 4500 level but conviction from buyers remains limited given where we are in AI cycle, tariff, policy concerns and ongoing debate post DeepSeek about power/ performance consumption needs

Software Growth to get whacked … MDB -18% (shrs now ~48% off levels seen a year ago as outlook fueling growth/margin concerns) .. bankshots: SNOW-2.7%, ORCL-1.8%, DDOG-1.6%, MSFT-1.4%

MDB shares are down 18% in premarket trading Thursday, after the database software company gave a full-year forecast that is weaker than expected.

Analog Semis/green shoots: ADI favored given recent update / demand commentary - re-stocking cycle imminent ... MCHP also sounded good Monday at MS - They said Jan/Feb bookings “meaningfully” improved vs. Dec, think distribution revs will bottom in March and is calling “at” or “near” end of inventory correction, while total backlog is “no longer dropping”

AVGO bogeys: Q1 revs $14.7B (est $14.6B); guided to AI rev in the qtr of $3.8bn, with investors closer to ~$4B; Q2 revs $14.7B (est $14.6B). Q2 AI Semi revs $4.2B (St at $4.1B); FY27 AI revs reit $60-90B ... positioning has def cleaned up / valuation not demanding + name both HF/LO investors will revisit once dust settles ... there have been some negative checks regarding Mediatek competition

CVNA: been getting lot of ?s on weakness; easing auto tariffs neg read for Used Car players .... risk appetite towards growth/high beta names has been limited; commentary from BBY WMT TGT not great read for anything consumer related …. Stock had been bullet proof from mid-Jan into print before T+1 blowup where stock was crowded long / lofty expectations. Some looking for more details on the 1Q/FY25 outlook to gain greater comfort around sustainability of economics as total units surpass prior highs

MRVL: -14% hit on weaker guide; sees Q1 revs $1.78B - $1.87B; buy side closer to $2B for Q1. Mgmt bullish on call - AWS Trainum debate contd as both Marvel/Alchip talking like they both have won (while most of the chatter in Taiwan point to Alchip already having taped out on Tranium 3). For Trainium 4, it is too early for any decision (likely Jul-Sep we will hear something) .... AI: very bullish on contd momentum/supercycle. Guided to “very significantly” exceeding the $2.5bn AI rev target (though sell side consensus is already at $3.5bn for FY26E)

NVDA @ MS: dismissed recent TSMC CoWoS spec saying “a lot of noise” and BW demand remains very strong

TSLA: BEARISH FRESH PICK AT BAIRD (seems like call could’ve been made month ago) .... PT slashed to $370 from $440 citing weak intra-quarter sales data from key regions — Europe, US and China (lead us to believe there is risk to the consensus Q1 delivery estimate of 437.5K) ... “Production downtime associated with the Model Y refresh complicates the supply-side of the equation while at the same time, Musk’s involvement with the Trump administration adds uncertainty to the demand-side”

ZS: +5% raising FY; solid beat w/ key KPIs ahead

Technology

NVDA - spokesperson said Hopper demand very strong and Blackwell production on track to ramp in 2H.

NVDA - Upgraded to Buy at New Street Research.

PLTR - Traded +17% on a beat & raise. PLTR winning in the market because products are production ready vs vague prototyping. Seeing strength in US Commercial business. Customer counts increased 83% y/y …Introduced Warp Speed for the re-Industrialization (like Spacex that developed from scratch via internal engineering)

Latest Media

Signs of bottoming?

Stocks we are buying down here!