Morning Note

Trading Observations

• Path of least resistance still higher? 

• Tech hit (though still holding the 100-day) https://tinyurl.com/58pxkx2n [tinyurl.com]

• With staples really shining https://tinyurl.com/4pwz2fuk [tinyurl.com]

• But noticeable outperformance IWM + MDY

• Market still has room? Now 3 months sideways...

• 7000 resistance vs. 6860 support

• Is software now so bad it's good? https://tinyurl.com/58t72t7s [tinyurl.com]

• Lot of talk on private credit https://tinyurl.com/2e623t8r [tinyurl.com] and https://tinyurl.com/42x3bcxn [tinyurl.com]

• Though not yet really a problem? https://tinyurl.com/mr35mk47 [tinyurl.com]

Futures

DOW +63

S&P +2

Nasdaq -104

Charts/Sentiment

Financials / Consumer / Healthcare

Michael Burry warns Bitcoin selloff could trigger a “death spiral” – https://tinyurl.com/2dt8dhpy [tinyurl.com]

CMG – Down 5% - Flat comp guide is unimpressive. It just isn’t growing much anymore, and as all the growth investors trickle out, the multiple just dies slowly until it becomes attractive for value investors.

BSX – Down 9% - FY26 guide was a few % below the street. Add in a 36x P/E and you get a down move.

HIMS – Up 5% on early cancer detection sales kit.

MDLZ – Down 3% on “unprecedented headwinds” to profit.

CLX – Looks in-line, stock down 3.5%, nobody likes staples in an up tape.

ABBV – Down 3%. Solid beat, but its mostly Botox driven.

AMGN - product revenue ahead and guidance strong with Street positive on new product momentum. 

LLY higher on their 2026 rev forecast

Technology

AMD: -9% hit as forecast underwhelmed investors (and qrtr boosted by unexpected China revs), a sign that it's not making the AI inroads anticipated; rack scale/MI455 remains something of a show-me story for the stock to move higher

APP -12% negative Cleveland checks fueling move
AMZN – Could use customized OpenAI models for Alexa

Anthropic: is in talks to allow some employees to sell shares during the upcoming fundraising round (which is expected to raise $20B+ at a $350B valuation) (Bloomberg)

Bitcoin ETFs: Outflows = Daily flows into ALL BTC ETFs. Outflows to 10 straight days (last inflow, January 15). New record

CRUS: +4.5% Q3 top/bottom line beat as unit tailwinds drove a healthy beat + raise. GMs ahead. Strong guide (rev $440M at mid vs est$384M) - driven by stronger-than-anticipated demand for components shipping into smartphones and a favorable mix of end devices

GOOGL: #s tonight .... hands down most 'clean' story in all of tech since DoJ ruling post Labor Day - contd AI momentum, TPUs, Cloud strength, Search/YouTube, Waymo fueling an incredible story where ppl can actually sleep at night .. BOGEYS: expects seem to be for Search +16% y/y, YouTube +13%, Cloud +38% (hearing bulls want 4-handle) and FY26 Capex of $135B

MEMORY SUPERCYCLE (INTC CEO commentary from ystry): CEO said the tech industry probably won’t get any relief from the current memory chip shortage for the next two years (Bloomberg)

NVDA: Nvidia nears deal to invest $20B in OpenAI as part of latest funding round (Bloomberg)

NXPI: CEO says demand for “physical AI” is accelerating, using edge AI chips in logistics automation, workplace safety, and robotics. NXP guided Q1 revenue to about $3.15B (+11% YoY) and said its industrial segment is growing ~20%, helped by data center buildout, energy storage, and factory automation

MTCH: +6% turnaround showing progress .... Solid upside on earnings in Q4 (EBITDA of $370M vs Street $352M) as mgmt. makes progress toward its strategic transformation, and rev was a bit better than anticipated too (as strength in Revenuer per Payer offset weaker Payer numbers),

Opticals: COHR+5.5%, CIEN+5%, GLW+3%

ORCL: FILES FOR OFFERING OF UP TO $20B OF COMMON STOCK

Semi M&A: SLAB +25% / TXN -3% .... Texas Instruments to buy SLAB for $231/shr

SEMICAPS: Citi positive on AMAT - sees material upside spend from foundry / memory customers

SMCI: +7.5% huge guide / production ramp- sees Q3 net sales at least $12.3B (est $10.25B) .. only generating gross margins of ~6.5% at a time of unprecedented demand is a red flag

SWKS: +3.8% solid upside in FQ1/Dec on EPS (1.54 vs St 1.40), w/ beat driven by higher sales ($1.035B vs St $1B) and slightly better GMs, and the Mar Q guide is ahead of the St

TYL - Tyler Tech buyback plan represents 7% of the company's current market value, data compiled by Bloomberg show. You may see this more from other software companies after the carnage on the sector pullback.

UBER – Reversed off -9% premarket lows - Profit misses / AV disruption concerns will cont to fuel the bearish narrative .... CFO departing ... Sees Q1 adj EBITDA below (2.37B - 2.47B vs est 2.45B); Q4 gross booings / delivery bookings / EBITDA slight beat. Guide lackluster ... to launch robotaxis in HK, Houston, Madrid, Zurich

Industrials 

GEV – Upgraded to Outperform at Baird

TDG – Downgraded to Neutral at Baird

CF Industries Holdings (CF) downgraded to sell from neutral at Rothschild; $72 PT

ENPH: solid upside on Q4 EPS (71c vs St 58c), w/the beat driven by higher GMs and better sales, and the Q1 guide mid-points are ahead of plan

Solars: Musk team visits Chinese solar manufacturers, sending solar shares sharply higher (Reuters )

Latest Media

River1’s CIO on Schwab Network

Levered ETFs, market perspectives, etc.