Market Snapshot

River1 Asset Management
June 12, 2025

Morning Note

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Calendar

This Week – Almost no earnings and the Fed is in a quiet period, pointing to a trade related week for creating volatility outside CPI Wednesday.

Thursday – PPI, Initial Claims, ADBE earnings

Friday – U Michigan.

Trading Observations

Talk of Israel attacking Iran facilities, but have to think a short-lived event if does put pressure on market
Talk of July 9th tariff deadline may be extended so the 'cliff' may be more noise, though Trump says he will send letters to trading partners in the next 1-2 weeks setting unilateral tariff rates
ORCL higher on numbers, ADBE after the close
Notable GS broke out of consolidation range yday and semis continue to act well
Hard to see the market get into too much trouble with banks and semis acting well https://tinyurl.com/2y96un63 [tinyurl.com]
6000 support looks to be tested on the open with 5970 below vs. 6100 resistance
Total put/call .78 - lowest since 29 May
AAII Bulls 36.7%, the first time > Bears (33.6%) since January (though miles from headwind territory)
Positioning remains supportive https://tinyurl.com/4v4hhycj [tinyurl.com]
BA: -8.33% Air India flight AI171 crashes in Ahmedabad per Reuters/BBC

Futures

DOW -151

S&P -15

Nasdaq -50

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Vix

Bitcoin

Financials / Consumer / Healthcare

GS on REITs – Realtime job posting slowdown is real and is worst in DC and the West Coast. Avoid EQR, UDR, and CPT. Vacancy also rising across the Sunbelt on oversupply and expected to take until 2027 to sort itself out.

GS has a great note on changes to uses of cash for European public companies y/y. They are

Dividends +2%, Buybacks -5%, Capex +3%, R&D +2%, M&A Flat. There is a pivot in Europe happening from dividend paying and stock buybacks to Capex that should help firms.

CHWY – Baird is defending that earnings were fine.

CVAC – Up 30% on purchase announcement from Biontech.

GME -Down 18% on announcement of a convertible bond deal. Live/die by the sword Reddit crowd.

Redfin saying 28% of homes are trading above asking vs. 32% a year ago and 53% in 2022.

SBUX to test protein foam https://tinyurl.com/4crukfwf [tinyurl.com]

NVO – Goldman with a bullish note. (1) Strong foothold in the US should help mitigate any pharmaceutical specific tariff risk, and on MFN dynamics (2) Supply issues eased with oral sema fully prepped for a complete US launch

Technology

AAPL: remains funding short; cont to struggle @ 50D

AMZN: Amazon Doubles Prime Video Ads to 6 Minutes Per Hour – Adweek

AI COMPUTING POWER (from Jensen ystrdy): Bloomberg reports that Jensen projects that Europe's AI computing capacity will increase by a factor of 10 over the next 2 yrs, with >20 AI factories in the works.

AAOI: +14% announces first volume shipment of Data Center transceivers to a hyperscale customer

CSCO/AMD: Saudi taps Cisco/AMD for cloud project (The Info)

CRWV reportedly selected to provide computing capacity to GOOGL for new cloud partnership with OpenAI.

Databricks: said ARR would hit ~$3.7B in Jul, up 50% Y/Y (CNBC)

DDOG: +2% upgraded @ Wolfe - firm left the company's DASH conference more confident in its near-term growth oppty around AI and remains confident in Datadog's "market leading products driving long-term success ... Flurry of positive sell side notes post DASH

MSFT: Cleveland says Jun Q tracking ahead on Azure tailwinds as Copilot pipeline picks up

NVDA says this is the decade or robotics and autonomous vehicles https://tinyurl.com/m8fcavzy [tinyurl.com]

NET: -1.3% Cloudflare announces $1.75B convertible senior notes offering

OKLO: -5% to raise $400M in shr offering .... +29% during session; +734% since Oct

ORCL: +7% bullish F26 commentary. FY26 Cloud growth (IaaS + SaaS) “>40%” and IaaS “>70%.” Street and buyside models were closer to +34% cloud and mid-50 % IaaS - faster ramp than consensus. Reit ccy 15% y/y FY26 target (inline); expects RPO to grow >100 % in FY26, well above street/buyside ... RPOs, an indication of future growth, were robust, spiking 41% to $138B (vs. the Street ~$128B). The only notable negative in the Q was free cash flow, which came in at -$3B vs. the Street consensus forecast of +$3.15B as the company pours money into capex to fund its growth

ORCL commentary (EXTREMELY bullish): (1)"still in a position where our supply is not meeting our demand. We actually currently are still waving off customers or scheduling them out into the future so that we have enough supply to meet demand. This is a situation that we have not seen in our history" .... (2)"The demand right now seems almost insatiable"

LYFT/UBER: M-sci says both are tracking ~1ppt above street for bookings

Industrials

This morning, prompt crude futures are trading down by over $1/bbl alongside lower equity futures after President Trump stated that he intends to send letters to trading partners in the next few weeks to set unilateral tariff rates ahead of the July 9 deadline.

Aerospace - BA trading down 7% - Air India flight AI171 crashes in Ahmedabad – BBC - Reuters reports that there were 242 people on board the 787-8 Dreamliner - suppliers including SPR and GE are also lower

CF Industries Holdings (CF) downgraded to peer perform from outperform at Wolfe Research

Dana Corp. (DAN) announces agreement to Sell Off-Highway business for $2.7B to Alison Transmission

Modine Manufacturing (MOD) initiated overweight at KeyBanc

Lockheed Martin Corporation (LMT) - Baird Adding as Bullish Fresh Pick, F-35 Headline Risk a Buying Opportunity