Trading Observations

• Breadth is back https://tinyurl.com/4tnfww79 [tinyurl.com]

• Historically a good omen https://tinyurl.com/4epr53bb [tinyurl.com]

• Though institutions more deployed than retail https://tinyurl.com/3pnvxd35 [tinyurl.com]

• Hopefully the rally continues post Trump (admittedly we are back to one-liners out of the blue potentially impacting, as evidenced by 50pt SPX drop on Mexico/Canada tariff comment)

• Would like to see net new highs to improve https://tinyurl.com/4rbc579h [tinyurl.com]

• So a pause/pullback would not be unusual here

• Earnings take over as relatively quiet week of macro

• MMM + DHI  higher on numbers, NFLX post close

• 6050 first resistance and a CLOSE above would be a higher high and open the door to 6100 vs. 5965/5900 support

• Higher rates not (yet) a drag https://tinyurl.com/3babdywy [tinyurl.com]

• Continue to hope smids can perform https://tinyurl.com/5aapcrub [tinyurl.com]

• Druckenmiller thoughts if you missed https://tinyurl.com/y7f32tfd [tinyurl.com]

Futures

DOW +189

S&P +29

Nasdaq +123

10-Year Yield

Oil

BITCOIN

Financials / Retail / Healthcare

COST – the Teamsters said its members at Costco voted overwhelmingly to authorize a strike if a new labor contract isn’t struck by the 1/31 deadline (more than 18K Costco employees are in the union) – Reuters

SCHW (+): EPS of $1.01 vs. $0.91. Looks like revenue came in ~2-3% better than expected driven by NII, trading rev, and BDA fees. Expenses in-line. Organic growth of 7% in December

Gaming: Macau visitor arrivals rose to 3.04M in December from 2.83MM in November, according to the Statistics and Census Service.

MRNA rises 4% after being awarded an additional $590 million from the US government to help the company develop a vaccine aimed at protecting people from bird flu.

WBA tumbles 5% after the Department of Justice sued the company for allegedly dispensing opioids and other controlled substances at pharmacies across the US while ignoring red flags that the prescriptions were likely illegal

Technology

Crypto: -5% off highs seen ystrdy ... Official Trump memecoin has slipped from $75 to $35 last while Melania Meme peaked at $13.6 and now trading $4.2 (a few billion dollar swings there!)

AAPL (-2.2%): Jefferies downgrading to SELL .... thinks sales of iPhone 17 and 18 will be weak because there are limited hardware upgrades to drive adoption; incremental negative in the next few quarters is his belief that the SE wont be that successful. Negative Apple Intelligence/AI

AAPL: Loop piling on, downgrading to Hold as checks point to lower demand

AAPL: sales of Apple handsets in China in 4Q -18.1% YoY with lack of AI features cited

ALAB: -3% as MS downgrading citing valuation - "continues to see Astera as one of the highest growth stocks in its coverage, but says the stock is also the most expensive. The 250% rally in four months leaves the risk/reward as more balanced"

GOOGL: Barrons - danger for Google may not be losing market share in search, but rather that search becomes subsumed within the broader category of AI, specifically automated personal assistants.

HOOD: +3% extending to fresh highs as retail / crypto activity remains elevated

INTC: +3% extending gains seen Fri on vague M&A chatter from SemiAccurate; UMC says partnership on track

LYFT – ML positive, maintain BUY $21 PT. We conducted a pricing survey of the same 10 rides on Lyft, Waymo, and Uber in San Francisco (SF) and found price per mile was least expensive on Lyft, averaging $4.70 per mile, compared to $7.78 on Waymo, and $5.66 on Uber. The average wait time for a ride was 2.9 minutes on Lyft, compared to 6.8 minutes on Waymo and 3.1 minutes on Uber.

QRVO: upgraded @ MS .... "has struggled to achieve its margin targets, but the activist influence could inject some urgency; sees the potential for $9.50-plus in sustained earnings per share power if fundamental changes result"

STX - Moved to Top Pick at Morgan Stanley; Replaces Apple

TSLA/Elon headlines: Musk is likely to be given office space directly in the White House, underscoring his close proximity to Trump (NYT) .... Elon issued rare criticism about China, lamenting how TikTok is allowed to operate in the US while most American social media platforms, like X, are banned by Xi’s government (FT)

TSM: confident its CHIPS Act funding will continue under Trump, says CFO Wendell Huang; has been promised $6.6 billion under the Biden-administration’s CHIPS and Science ACT to help build three cutting-edge chip fabrication plants in Arizona (CNBC)

Industrials 

MMM – beat by 14c; sees profit rising in 2025 as CEO looks to advance turnaround

Bunge Global (BG) downgraded to equal weight from overweight at Barclays

CF Industries Holdings (CF) downgraded to equal weight from overweight at Barclays

FMC Corp (FMC) upgraded to overweight from equal weight at Barclays

General Motors (GM) upgraded to buy at Deutsche Bank

Mosaic (MOS) downgraded to underweight from overweight at Barclays

Northrop Grumman (NOC) upgraded to buy at Citi

Nutrien (NTR) downgraded to equal weight from overweight at Barclays

RTX Corp (RTX) upgraded to buy at Citi

Teradyne (TER) downgraded to underweight from equal-weight at Morgan Stanley