Morning Note

Trading Observations

• US Weekly Jobless Claims Rise 8K to 208K; Est. 212K

• US TRADE DEFICIT NARROWS TO SMALLEST SINCE 2009

• Challenger job report released early, shows job cuts FALL to lowest level in 17 months https://tinyurl.com/mry84tkz [tinyurl.com]

• Saw highest Dec hiring since 2022

• Samsung preliminary expectations strong, yet stock fell, showing a lot priced in in tech?   

• 7000 being watched above 6900 with 6825 below

• While overall market broadening, S&P/NDX diverging suggesting tech rallies or chop? https://tinyurl.com/mtdjmhd6 [tinyurl.com]

• As we enter a traditional chop zone in mid-term years, I think tech rallies but we will see https://tinyurl.com/58ec46nv [tinyurl.com] 

• Away from the big guys, 3rd best start to a year since 1988 https://tinyurl.com/y6zk3jhs [tinyurl.com]

• 17% of homes sold in Q3 went to 'investors' though a lot of mom and pops in that number https://tinyurl.com/5967zjvj [tinyurl.com] 

• Homebuilders sold off and closed right at 200-day, don't want to see a breakdown given ripple effects on overall economy

Futures

DOW -171

S&P -9

Nasdaq -50

Financials / Consumer / Healthcare

OSCR (RVER Name) – Up 8% on Barclays upgrade. Weakness yesterday was likely the CEO selling $3.6MM worth and someone buying the Jan 30^th $20 call 4000 times.

COST – Up 2% on Dev comp sales bearing expectations at +7% vs +5.7% estimate. We have thought this name to be too expensive for a long time, but it clearly is a great executor.

STZ – Up 2.5% on improved beer trends. Alcohol stocks have been terrible, so this feels like a dead cat bounce. Sees beer growth negative 3%, wine and spirits negative 18%. Wine and spirits volume shipment for Q3 was -71% vs -46% estimated.

Big Movers in Drug Stocks (Feels like decisions are coming faster these days) – MLTX +33%, RGC +26%, NEOG +30%, VRNDA -12%, IMRX -27%, CRMD -9%, ERAS -13%.

SHCO – Soho House down 10% on saying it faces a funding gap for its proposed go private.

CZR – Up 2% on a Susquehanna upgrade.

GAP – Up 4% on an UBS upgrade.

SHOO – Up 3% on a Needham upgrade (Steve Maaaaadeeeennn).

LLY – confirmed deal for VTYX for $1.2B in cash. 

UNH - Democratic senators Elizabeth Warren and Ron Wyden have renewed their inquiry into UnitedHealth Group’s business practices regarding nursing homes, according to a statement.

This hit yesterday… OpenAI launches ChatGPT Health….encouraging users to connect their medical records.  https://www.cnbc.com/2026/01/07/openai-chatgpt-health-medical-records.html [cnbc.com]

JPMorgan replaces Goldman Sachs as Apple Card issuer, expanding its credit-card franchise – Reuters

ABBV slip 1.1% after Wolfe Research downgraded to peerperform from outperform while Merck shares (MRK) are up 1.5% following an upgrade to outperform from peerperform.

Technology

AAPL: Goldman commentary - Apple App Store spending down slightly in December - grew roughly 6% y/y in December 2025, decelerating from November as weakness in Games and Entertainment and softer trends in China and Japan offset stable U.S. growth

CRWD - Crowdstrike buys AI security startup SGNL for $740 million in latest deal push

CLSK (RVER Name)- Maxim Group LLC initiated coverage of Cleanspark Inc. with a recommendation of buy.

GOOGL - gains 1.5% as Cantor Fitzgerald upgrades to overweight.

ROKU up 2.5% after Evercore ISI upgraded the streaming-video platform company to outperform from inline.

SNOW up 0.7% after Argus Research upgraded the software company to buy from hold.

SNOW - Snowflake, the AI Data Cloud company, today announced it has signed a definitive agreement to acquire Observe, a leader in AI-powered observability.

Industrials 

Defense Stocks - US defense stocks rally premarket after President Donald Trump said he wants to increase the country’s military budget by about 50% to $1.5 trillion in 2027. • KTOS +12%, AVAV +10%, LMT +7%, NOC +8%, RTX +4%, GD +5%, BA +1.5%

LMT said it delivered a record 191 F-35 jets in 2025 to US and allied forces – Reuters

BE - BLOOM ENERGY SHARES UP 7% AFTER AEP FUEL-CELLS PURCHASE PACT

Alcoa Corp (AA) downgraded to underweight from neutral at JPM

Aptiv Plc (APTV) upgraded to overweight from neutral at Piper

Ball Corp (BALL) downgraded to equal-weight from overweight at Morgan Stanley

BorgWarner (BWA) downgraded to neutral from overweight at Piper Sandler

Ford (F) upgraded to overweight from neutral at Piper

Generac (GNRC – RVER Name) rise 2.2% after Citi analyst Vikram Bagri raised the recommendation on the generator seller to buy from neutral, writing that its high-output business is a “deeply discounted” part of the stock after a selloff fueled by investor worries regarding the opportunity from data centers.

General Motors (GM) upgraded to overweight from neutral at Piper

J.B. Hunt Transport Services (JBHT) downgraded to neutral from buy at Citi

J.B. Hunt Transport Services (JBHT) upgraded to positive at Susquehanna

Ryder System (R) downgraded to peer perform from outperform at Wolfe

Saia Inc. (SAIA) downgraded to peer perform from outperform at Wolfe

United Parcel Service (UPS) downgraded to peer perform from outperform at Wolfe

Vestis (VSTS) downgraded to sell from neutral at Goldman Sachs

Wabtec (WAB) upgraded to outperform from peer perform at Wolfe

XPO, Inc. (XPO) downgraded to neutral from buy at Citi and downgraded to peer perform from outperform at Wolfe

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