Market Snapshot

River1 Asset Management
May 14, 2025

Morning Note

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Calendar

This Week – Early week – CPI, Digesting Tariff news, mid-week Retail related earnings, late week Powell speaks.

Wednesday – 3 Fed Speakers

Thursday – PPI, Initial Jobless Claims, Philly Fed, Powell Speaks at 8:40am ET at a Conference.

Friday – Housing Starts

Trading Observations

Trump kept pressure on Fed to cut rates following cooler CPI print on Tuesday, market now looking for just over 50 bp of easing this year
Dips now being bought…and people realizing Trump 2.0 is a lot different from the first Trump presidency….this has been a face ripper move higher…
Speaker Johnson says House GOP moving closer to deal on SALT, key issue in Trump's agenda – Axios
Markets still underweight https://tinyurl.com/yccebezj [tinyurl.com]
Recession probabilities down to 20% https://tinyurl.com/36nx8rrc [tinyurl.com]
Mag 7 continues to play catch up, while Market ex-Mag 7 is higher for the year https://tinyurl.com/n9hm5r7d [tinyurl.com]

Futures

DOW +33

S&P +8

Nasdaq +39

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Gold

Bitcoin

Financials / Consumer / Healthcare

AEO – American Eagle down 12% on earnings as they pulled guidance entirely. Selling “made in not America” clothing is a tough margin business with all this going on.

FI – Fiserv April Spend Trend showed April decelerated 1% over March.

MRK, ABBV – Downgraded to neutral at Citi.

SCHW – Small gain of $2.7B in new client assets. Total assets now ~$10T.

GPN – Baird positive on the name given the 6x EPS valuation. They also like XYZ as a value play.

ABNB – New Services/Experiences platform could add another $1B in TAM to the name.

UNH – Up 4% on bounce back. No new news.

NU – Growth bank down 3.6% on slightly higher credit provisions. Most banks credit has been impeccable, so this is a departure.

Overseas - Burberry shares jump 7% in European trading after the company reported better-than-feared earnings and unveiled a large cost cutting plan ~ looking action in TPR and CPRI off this

ONON - UBS raised the target on On Holding AG Class A to $75 from $59. Maintains buy rating.

UNH – Downgraded at BofA to Neutral

Technology

Semi Momentum/Freight Train: SMH bid up 1.2% in pre post flurry of big deals in Middle East; AI diffusion rules looks a lot more benign than expected and it seems like Trump will be making more deals with other countries

AMD – to Buy Back $6 Billion shares

ARM: +1.3% Citi says Mercury Research released ests for Q1 microprocessor shipments and market share, with Q1 MPU units down 6.1% q/q, above seasonality of down 9.4%.

CSCO: #s tonight / 5% implied move .. focus on AI realted demand; macro impact / slowing economy .. the spread of AI had brought opportunities to sell more networking infrastructure and security

GOOGL unveiled a major overhaul of its Android OS ahead of next week’s I/O conf. – Bloomey

MSFT from JPM conf: "No change to the Azure outlook comments, noted that optimizations are just part of the customer life cycle, and current trends are no different… guided FQ4 “closest to the pin” based on consistent demand signals through April"

MU: speaking at 840am ET this am ... Positive pre?

NVDA: up 4 out of 5; +50% off lows .. closing gap to $140 level ... reminder $150 has been BRICK WALL ... Jensen having lunch with Trump Altman Musk. Then Computex next week. #s May 28

SMCI: +15% set to extend Tuesday’s 16% rally, after Saudi Arabia-based data center company DataVolt signs a multi-year partnership agreement; deal should “fast-track delivery of ultra-dense GPU platforms and rack systems for DataVolt’s hyperscale AI campuses in the Kingdom of Saudi Arabia and the US. Valued at $20B .... Separately, Google, Oracle, Salesforce, Advanced Micro Devices, Uber Technologies and DataVolt will invest $80 billion “in cutting-edge transformative technologies in both countries”

TSLA: +1.9% has resumed the shipment of components from China to the US following the tariff détente reached between the two countries in Geneva

Industrials

CAT – Quick take from largest dealer report - CAT's largest dealer, Finning (FTT-CA, not covered) reported a solid qtr yesterday, stock was up ~14%. in a nutshell, orders were strong (keep in mind Finning operates outside the US thus no need for tariff “pre-buy”) and inventory declined 5% year/year with inventory turns up meaningfully vs prior year.

Boeing (BA) - Qatar Airways to announce order for 150 Boeing widebody jets -- The Hill, citing News Nation

NEXTracker (NXT) downgraded to neutral at Guggenheim

Nutrien (NTR) downgraded to sector perform at Scotiabank

Rivian (RIVN) downgraded to hold from buy at Jefferies

UL Solutions (ULS) downgraded to neutral from buy at Citi

F to recall 273.8k vehicles over braking system defect

Daimler Truck cut its forecast for the North America CL8 heavy-duty market from 280-320K units to 260-290K (it sees its own volume at 155-175K vs. the prior 180-200K) and now sees EBIT for the whole firm about flat Y/Y vs. the prior forecast of +10%.