Market Snapshot

River1 Asset Management
August 28, 2025

Morning Note

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Calendar

This Week – NVDA earnings, software earnings, and PCE are the must watch events. Retail earnings are the undercard.

Thursday – Personal Consumption, Waller Speaks (possible next Fed Head). Earnings – DG, BBY, ADSK, ULTA, DELL

Friday – PCE (Fed cares here on inflation)

Trading Observations

Futures basically flat on a ho-hum NVDA reaction.
For the Bulls – The AI trade is not dead. NVDA was fine with some optionality for the future, and SNOW was very good.
For the Bears – There is no obvious catalyst from here and September is historically the worst return month for equities.
We don’t like valuation either but will admit there is a lack of negative catalysts in front of us that are obvious.
Fed clarity likely the topic DuJour post Labor Day. Rate cut probability sits at 85%.

Futures

DOW +68

S&P +3

Nasdaq +10

85% chance of a September cut, 116% chance of two cuts this year (implies a third possible), with the second likely being in December per the market –

Our best guess on what kills the AI trade will be a spike in electricity prices for consumers –

Financials / Consumer / Healthcare

BBY - Flat - Solid execution, but tariff problems cloud the profit picture a bit at Best Buy.

VSCO – Up 7% as a well-managed quarter meets a 18% float short interest. I continue to think this company died with that Jax song from several summers ago.

BURL – Up 8%- They took up the low end of guidance very slightly, so it seems like any party will be subdued. FY sales +7-8% is impressive in this market as many other retailers have fared worse.

DKS – Down 3% - Took comp sales up to +2-3.5% vs +1-3% prior. The market loves growth, and they have a little, but not enough to tempt. Valuation at 16x isn’t out of bounds though.

MBUU – One day after MasterCraft boats had a good quarter, Malibu decided to do the opposite, down 11% as they see net sales flat to down.

COO – Down 16%. Contact lenses, surgical products, and a dying revenue stream have this one making lower lows.

Technology

NVDA – Flat – Down a hair makes sense to us given there aren’t many incremental buyers left. That said the fundamental picture remains solid with a lot of hope in the out quarters and years to come. Fear factor 0.

SNOW – Up 13% - Product revenue +32% beat +26% expectations. SNOW is an early AI software play that competes with Databricks. The next catalyst (likely negative) would be Data Bricks making their IPO debut.

CRWD – Down 3% - Was worse. The numbers were great as they came out so the initial down 8% move was a bit puzzling. We think 100x net income valuation is the issue here.

CRWV – Up 5% as the AI trade definitely didn’t die on NVDA earnings.

Industrials

AAL, JBLU – Bloomberg out negative pointing out worse margin than peers.