Market Snapshot

Morning Note

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Trading Observations

Markets looking remarkably flat this morning as mortgage applications and ADP employment numbers both missed. Slightly more important initial jobless claims and NFPs come later this week. In the meantime, we have ISM today where Services are slated at 52.1 and Prices Paid are 65.1.

  • A beat on that 52 number and miss on the 65 is the best-case scenario for a rally today.

  • The only interesting earnings we see for the remainder of this week is AVGO. Overbought indicator is 93/100 (see chart below).

  • Employment numbers this week are important, but we see no reason to think they’ve gotten much worse, so that likely turns them into a non-event.

  • Market is truly waiting on Trump/China. “Progress” and we rally. “China cheats” and we tank.

Hedge Fund Desperation at New Highs as Net Leverage Has Exploded

How to Trade? – Stay away from popular HF longs.  

UNH Stock – Stuck at $300. Cheap or Administrations new political victim?

AVGO – You done chasing?

Futures

DOW +10

S&P +2

Nasdaq +6

Financials / Consumer / Healthcare

WFC – Up 2% - Asset cap restriction has finally been lifted after 7 years. The market knew it was coming, and now WFC should be out pushing its post jail agenda to grow.

HOOD – Up 3% - “A prime candidate to join the S&P 500” says BAC.

XP – Up 3% on a GS upgrade to Buy.

Technology

CRWD (security) – Down 7% - Downgrades and PT cuts abound. Q1 and Q2 guidance missed by a hair, and they tried to kick save it with better EPS, but the market isn’t having it. They also announced a $1B buyback, which at $110B EV is meaningless. The stock trades at ~30x sales and 100x net income, so there’s zero room for misses.

CRWV – Up 5% - This recent IPO hits the datacenter theme and is up another 5% on “who cares what we are paying for it”.

SNOW – +2% - Investor Day notes are largely positive with UBS upgrading.

HPE - +6% - The printer version of Hewlett, HPQ, is mired in a bad business and the server version is thriving. Could help DELL today.

AAPL – Down 1% on a Needham downgrade. They don’t like the AI positioning or iPhone upside.

Industrials 

Vehicle Sales yesterday at 15.6MM was below 15.8MM consensus. Brands most affected by tariffs income Mazda, Nissan, and Stellantis.

LMT, RTX – Upgraded to buy at President Capital Management (who?).

ALIV – Capital markets day today.

FSLR – Added to Top Picks list at Mizuho. Stock has been kicked down on the Administrations anti-solar moves.

Latest Media

The most important chart in investing over the last 20 years, in our opinion.

This is what we are looking at.

Interesting Tweets

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