Trading Observations

• Getting the bounce, will it hold or just dead-cat?

• Need to see a strong breadth thrust to suggest any rally has legs

• The $SPX is only 2.18% below its 52-week high. But 60% of stocks in the Index are down 10% or more from their respective 52-week highs, while 33% of are down 20% or more, per Carter Braxton Worth

• Op-ex out of the way, but concerns over data center spending from MSFT may keep a lid on AI trade until NVDA Wed Https://x.com/StockSavvyShay/status/1893685067769360781 [x.com]

• DOGE causing potential for some short-term pain? https://tinyurl.com/t3p77x75 [tinyurl.com]

• 6075 first hurdle to clear if we are going to see a pop back up, with  6000/5960 first support levels and 5875 more significant if we selloff

• IWM back below 200-day for first time since Nov 2023 https://tinyurl.com/3yku89mw [tinyurl.com]

• Smart money stayed long https://tinyurl.com/bdhzrw2j [tinyurl.com]

• CNN Fear/Greed back to fear https://tinyurl.com/29wf7c5n [tinyurl.com]      

• Real estate divergence https://tinyurl.com/yjuamxcw [tinyurl.com]

• Risk appetite fading https://tinyurl.com/ysk8mn43 [tinyurl.com] 

• Fwiw, Mag 7 ownership levels https://tinyurl.com/5x9c8khd [tinyurl.com]

Upgrades – BABA, AMRX, XYZ, CARR, CENX, ESAB, FND, FRPT, NKE, ODFL, RTX, SAIA, SEM, TDG, TWLO, WING, XPEV, XPO

Downgrades – ABR, BYD, CAG, EXEL, GSM, ITCI, LCID, NDSN, RIVN, TSLA

This Week – Today feels like we watch to see if this rally can hold after a rough finish to Friday. The week will be owned by NVDA earnings Wednesday post and 15 or so Fed speakers that likely cancel each other out.

Tuesday – Home Prices

Wednesday – NVDA Earnings Post, Home Sales

Thursday – Jobless Claims, Durable Goods, Home Sales

Friday – PCE. Trade Balance could be interesting.

Futures

DOW +205

S&P +27

Nasdaq +94

10-Year Yield

Oil

BITCOIN

Financials / Retail / Healthcare

BRK.A – Up 1% - Warren’s minting cash and keeping it in treasuries. Operating earnings beat estimates by 71% y/y in mostly insurance. They have a $334B bazooka if they need it.

DIS, NFLX – The bundle with Disney+, Hulu, and Max has higher retention rates than NFLX.

JPM – Said to be trying to raise $50B for its Direct Lending unit (Private Credit).

XYZ – Block, Square upgraded at BMO on valuation post selloff.

This chart has been done a lot of ways, but its all the same conclusion, the US stock market is too expensive relative to other markets.

Technology

AAPL: -1.3% will add 20,000 US jobs due to threat from Trump tariffs; plans to spend and invest more than $500 billion in the U.S. over the next four years

AAPL: Trump's claim of 'hundreds of billions' Apple US investment could take a decade to materialize (DigiTimes) ... have to start somewhere though

AI/DeepSeek: DeepSeek plans to open source portions of its online services’ code as part of an “open source week” event this week.

AMD: talks to sell the manufacturing plants inherited as part of the ZT Systems deal for $3-4B (Bloomberg)

BABA: on Monday said it planned to invest ~$52B on cloud computing and AI over the next three years (Reuters) .... MS upgrading - says Chinese AI play has room to run as cloud demand takes off

Memory Pricing: MU+1.2%, WDC+2% ... Apacer CEO believes that the drop in NAND Flash and DRAM prices is almost over, with little room for further declines. Prices are expected to rise in Q2, but procurement activities may exceed market recovery

MSFT: +0.5% more noise / reports that Co has been cancelling leases for AI data centers - according to a note from TD Cowen. Chatter made the rounds Fri as well which weighed on heavily on power up plays ... Nadella recently said in a podcast interview that there was an overbuild occurring

PLTR: retail darling / proxy slumped 15% last week; both MS and GS called out a fading retail bid in the 2H of Feb through tax day.

UBER - CEO said Musk not planning to make TSLA robotaxis available on its rideshare platform.

Industrials 

Carrier Global (CARR) Raised to Outperform at Wolfe; PT $80

Century Aluminum (CENX) Raised to Outperform at BMO; PT $22

Esab (ESAB) Raised to Inline at Evercore ISI; PT $120

Lucid (LCID) Cut to Sell at Redburn; PT $1.13

Nordson (NDSN) Cut to Neutral at BNPP Exane; PT $219

Old Dominion (ODFL) Raised to Buy at Stifel; PT $200

Rivian (RIVN) Cut to Underperform at BofA; PT $10

RTX Corp (RTX) Raised to Buy at UBS; PT $147

Saia (SAIA) Raised to Buy at Stifel; PT $524

Tesla (TSLA) Cut to Accumulate at Mirae Asset Securities; PT $390

XPeng (XPEV) ADRs Raised to Neutral at UBS

XPO Inc (XPO) Raised to Buy at Stifel; PT $147