Market Snapshot

River1 Asset Management
May 19, 2025

Morning Note

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Calendar

This Week – Retail earnings and a host of Fed speakers abound. The earnings feel like the bigger deal unless someone sends a message June cuts aren’t coming.

Monday – 6 Fed Speakers

Tuesday – 6 Fed Speakers, HD, PANW earnings, Philly Fed Non-Manufacturing.

Wednesday – 2 Fed Speakers, LOW, TGT, TJX earnings

Thursday – Initial Jobless Claims, WSM, ROST, ADSK, WDAY, DECK earrings.

Friday – 3 Fed Speakers (plus Powell Sunday)

Trading Observations

Debt downgrade, out of the blue
My guess is market shrugs off, however, EVERYONE seems to be thinking same so maybe has a bit more overhang than otherwise would
Also coincides with overbought market that may be looking for a reason to take profits
NVDA keynote today but prerelease doesn't suggest anything monumental
The bigger concern over time is tariffs may go back up in time if no progress https://tinyurl.com/3c5sk42p [tinyurl.com]
As long as 5750 holds as support, constructive vs. 6000 next significant resistance
Another indicator suggesting next 12 months constructive https://tinyurl.com/y3vp2x99 [tinyurl.com]
Consumer slipping? https://tinyurl.com/pj9y32yy [tinyurl.com]
Trump to speak with Putin today

Futures

DOW -295

S&P -65

Nasdaq -320

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Gold

Bitcoin

Financials / Consumer / Healthcare

JPM Investor Day deck is out – Unchanged guide in 2025 across the board. The flat NII guide will be a point of contention. Tariff related loan portfolio release helps visibility. Conclusion is largely nothing should shock anyone or the market.

COF, DFS – Complete merger.

WMT – Down 2% on Trump tweeting they should “just eat the tariffs”.

Baird Retail Earnings Preview – They like LOW because its cheap and WSM on growth.

GS on Sunbelt Migration – Remains positive, with MAA, CPT, and AMH the beneficiaries.

GS on Asset Managers – Thinks peaking valuation makes them expensive at 25x 2026 P/E. KKR, TPG, and CG look to have the most upside.

UNH – New CEO Stephen Hemsley, has just bought $25M worth of company shares, adding to the managed care giant’s recent insider purchases as its stock plunged over 20% last week

HD – Added to tactical outperformance list at Evercore ISI

RH - launched a limited-time promotion offering RH members 35% off all outdoor merchandise, a deeper discount than its standard 25% member discount… cause for concern??

ONON is making a big push into China and aims to have the country be ~10% of global revenue over the next 2-3 years – FT

Technology

AI POWER UP/DC THEME: GSENEPOW up six weeks in a row; GSTMTDAT up 5 out of 6 .... US nuclear industry is ramping up lobbying to preserve tax credits from the IRA, crucial for meeting energy demand (FT)

AMD: Sanmina is in advanced talks to buy AMD's AI server assembly plants, which were acquired as part of its ZT Systems deal (Bloomberg)

BABA: -3.4% overnight .... report that the US has raised concerns over Apple’s potential deal with the Chinese technology firm

INTC: to unveil new GPUs for AI, workstations @ Computex (Bberg headline hit at 640am ET)

MSFT: Nadella keynote at Build conf @ 12pm ET

NFLX: -2.3% JPM downgrading to Neutral given recent outperformance - says there is change to its long-term bullish view on Netflix's streaming leadership position; believes risk/reward is becoming more balanced

NVDA / JENSEN @ COMPUTEX: Jensen bullish last night at Computex Keynote - sweeping keynote that revealed the co's aggressive roadmap to power the next era of AI — from personal AI supercomputers to an ambitious AI infrastructure hub in Taiwan

NVDA/QUANTUM SHIFT? report Co in advanced talks to invest in PsiQuantum, a quantum computing startup, according to a person involved in the discussions. The investment would be the latest signal that Nvidia has shifted its stance on quantum computing after CEO Jensen Huang earlier this year seemed to cast doubt on the field, saying it was likely two decades away from being useful technology

QCOM announced plans for a data center CPU capable of linking to Nvidia’s GPUs – CNBC

RDDT: -6% downgraded @ WFC - change in search user behavior is accelerating with Google likely to integrate full AI search capabilities soon. The threats are not only to Reddit, but all the companies dependent upon search traffic; sees logged-out user declines for Reddit as Google more aggressive implements AI features in search

SNOW: #s Wed night ... sentiment is bullish on the fundamental story as the new CEO successfully engineers a turnaround. For FQ1, the Street is looking for product revenue +22.3% to $965MM, RPOs +31.5% to $6.57B, and op. margins of 5.5%

Industrials

Archer-Daniels-Midland (ADM) Raised to Buy at UBS; PT $60

Carrier Global (CARR) Investor Day

Delta Air Lines (DAL) upgraded to buy from neutral at UBS

GE Aerospace (GE) Cut to Neutral at Northcoast

United Airlines (UAL) upgraded to buy from neutral at UBS