Morning Note

Trading Observations

• ADP came in -32k sending futures lower

• MSFT Lowers AI software sales quotas as customers resist newer products - Bbg

• MRVL higher on numbers the biggest headline... "We are guiding for robust growth in the fourth quarter and are on track for a strong finish to the fiscal year, with full-year revenue growth forecasted to exceed 40%. Looking ahead, we see demand for our products continuing to accelerate, and as a result, our data center revenue growth forecast for next year is now higher than prior expectations."

• As Q3 earnings wind down, for all tariff worries, margins highest on record (2009 last peak) https://tinyurl.com/yes7y56r [tinyurl.com]

• Thwarted by initial 6850 resistance with 6870 more significant above vs. 6780 support

• Oscillators pushing into overbought territory (likely to reach VERY overbought by end of week)

• S&P 200-day ma participation never breached key levels and turning up suggesting correction has run its course https://tinyurl.com/4x5rpvnk [tinyurl.com]

• Still need a follow thru day (>1% up on heavier volume) to confirm

• Use of repo market increasing and something to watch https://tinyurl.com/bdfszvyy [tinyurl.com]

• If small caps finally get the earnings growth expected, finally show some vigor? https://tinyurl.com/59v6c6wn [tinyurl.com]

Futures

DOW -17

S&P -25

Nasdaq -59

Financials / Consumer / Healthcare

Crypto: Bitoin @ two-week highs .... MSTR, CIFR, CRCL, HOOD, COIN up 2% to 3% in pre

Consumer Spend: MA Tues said consumer spending trends remain relatively healthy and largely consistent w/guidance and CQ3 patterns (the start to the holiday season has been healthy/encouraging), although the firm will see a smaller FX tailwind than previously envisioned. VISA said similar message

It's beginning to look a lot like Xmas as SSS retail highest since Dec 2022 https://tinyurl.com/4v93x4aa [tinyurl.com]

M – Macys down 7% on weak Q4 guidance. Pikachu at the Thanksgiving parade must not have helped. Comp sales guided flat to down 2.5% never helps investors buy.

AEO – Up 13% - JPM was underweight and upgraded. They should have done that on Sydney Sweeney day. Comp sales +8% and operating income beat nicely at $305M vs $263M street.

WEN – Down 1% on a JPM downgrade saying AUV needs to grow, and isn’t.

W – Wayfair downgraded to hold at Jeffries. Stock down 4%.

DLTR – Up 1% on a boosted outlook.

Coin related – All strong, up 3-5%. Bitcoin from $84k to $93k in a few days.

BMY – Up 3% on good news from its Alzheimer’s drug.

Technology

AI / OpenAI complex: group traded well ystrdy ahead of OAI's new model launch (ORCL, NVDA, Softbank, etc) - company claims will outperform Gemini 3 ..... Group pummelled in November. Tue

APP: outperformed in alpha from start to finish .... improving checks (Citi on Tues; Needham/Edgewater on Monday); ppl expecting to hear from Jefferies in coming days as well .... mgmt sounded good @ UBS TMT Conf as well

ASML: +2% locally as added to BofA Europe 1 List ...... up 7 out of 8

CRWD: -1.7% healthy results / fell short of buy side BUT bulls remain pleased with platform traction ... remains in the early innings of its multi-year growth story as its platform consolidation strategy continues to gain traction and is in the early stages of capitalizing on its AI Revolution market opportunity

GTLB: -8% sink after swinging to Q4 loss; reinforce concerns about AI-driven headwinds to seat-based revenue models

GOOGL - AV WARS: GOOGL has tweaked the programming in its Waymo vehicles to make them more “confidently assertive”, but some riders feel the cars are now driving like aggressive NYC cabbies (WSJ) • Waymo announces on X that it is expanding autonomous driving to four new cities: Baltimore, St. Louis, Pittsburgh, and Philadelphia.

MSFT - Microsoft Lowers AI Software Sales Quotas as Customers Resist Newer Products

MCHP - positively preannounced for Dec Q.

OKTA: -3.5% hit on weaker outlook; cRPO growth and backlog view remains limited by slow new customer growth and the prospect of increased competition around AI agent security from larger peers including MSFT/PANW .... net retention of 106% is below that of other pure-play cloud security peers showing limited upsell opportunities with its current suite of products

RISE OF THE ROBOTS | SERV +9% Politico: 'After AI push, Trump admin is now looking to robots'

Industrials 

EV WINTER: FORD EV sales crashed 61% Y/Y to just 4,247 units in Nov, a sign of the massive demand collapse awaiting the industry following the end of tax subsidies.

Cognex (CGNX) downgraded to underweight from neutral at JPMorgan; $35 PT

Honeywell International (HON) initiated neutral at BNP Paribas Exane; $195 PT

Linde Plc (LIN) initiated outperform at CICC; $510 PT

Pitney Bowes (PBI) initiated market outperform at Citizens: $13 PT

Schneider National (SNDR) upgraded to outperform from market perform at Raymond James; $28 PT

Latest Media

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Levered ETFs, market perspectives, etc.