Market Snapshot

River1 Asset Management
May 07, 2025

Morning Note

presented by -

Calendar

This Week – The only interesting earnings we see are PLTR and DIS. The rest looks like cleanup and a likely a do-nothing Fed.

Wednesday – FOMC (Bloomberg says 2% chance of a rate cut).

Thursday – Jobless Claims (Watch these, 300k is very bad), NY Fed Inflation Expectations.

Friday – 6 Fed Speakers.

Trading Observations

Bessent is clearly the MVP for the markets and logical spin around tariff craziness
When China meeting was announced last night futures moved 1% higher
China announces series of easing measures, including interest rate cuts also helping
Support 5600 and 5560 below vs. resistance at 5750
Crude is up 1%, Gold is down giving up some recent gains
Small traders very long https://tinyurl.com/tzh9v8v6 [tinyurl.com]
Plenty of eyes on Powell later today
Yields are moderately higher and Fed has helped recent bond deals
EPS revisions suggest that Fed should be be in cutting mode https://tinyurl.com/je92dtn6 [tinyurl.com]
Interesting S&P 500 ex-Mag 7 is up on the year https://tinyurl.com/ys5aafhj [tinyurl.com]
Unsold housing inventory rising https://tinyurl.com/yc2fjj7w [tinyurl.com]

Futures

DOW +149

S&P +13

Nasdaq +28

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Gold

Bitcoin

Financials / Retail / Healthcare

UPST – Down 18% - It’s not that people aren’t taking loans, as lending was up 100% y/y, it’s that they aren’t paying them back, as margins are lower from “Super Prime” borrowers (read bad credit).

JLL – No sign of distress for this brokerage name as EPS and EBITDA beat consensus by about 5%.

GS on Apartment Rents via CoStar – Early signs of deterioration in DC in March and April. Seattle decelerating, San Fran accelerating, and Sun Belt improving.

MAR – Results better than expected and FY decline is very modest given macro. Higher end looks resilient.

GPN – Baird positive on the ultra-low valuation of 3-4x 2028 FCF. Q1 results were quite good.

NVO - Bid up 4% in Europe following better than feared Q1 and guidance cut. Novo reported 1Q25 sales of DKK78.1bn which was in line with company compiled consensus of DKK 78.3bn, with a miss for Wegovy (-7%/DKK1.3bn - half of which was destocking) and a beat for Ozempic (+3%/DKK955m). Driven by the compounding impact, the FY25 guidance was cut by 3pp at both the top and bottom end.

Technology

ALAB: -1% Beat and raise, though limited operating leverage and investors likely wanted a bit more upside on the qrtr. Ramped capital return w/a $1.5B buyback ... leaving the FY outlook unch despite the Q1/2 strength given macro uncertainty

AMD: +2% Solid quarter with upside across rev/segment results (Gaming, Client and DC), though GM was hit by inventory charges tied to China export controls; expects to lose $1.5B in revenue this year due to US restrictions on sales to China, specifically affecting its MI308 chips .. Q1/Q2 revs came in ahead of buyside bogeys. For AI, 1Q DC GPU revs were down “very modestly” q/q (St already had -5%); DC/AI rev flat 1H + to accelerate 2H

AMD/EPYC: said they have begun manufacturing their 5th gen EPYC at TSM’s new Arizona fab – confirming previous market chatter on AMD’s switch away from Samsung Foundry to TSM for 4nm

AMZN/AV: Zoox, the Amazon-backed autonomous driving firm, plans to expand production next year as it looks to accelerate the rollout of its US fleet (FT)

AMZN: down 6 out of 7; cont to stall @ 50D ... add Bezos filing to list of overhangs (tariffs, health of consumer, AWS inline with bogeys). Bears post print cont to call out Q1 share loss to Azure plus the stock being historically hard to own into an investment cycle which is building into H2 (AI infrastructure, retail infrastructure, sports, satellites)

ANET: -7% Beat-and-raise quarter with revenue, gross margin, and EPS all above expectations; Looks inline to slightly better than bogeys ... combination of the conservatism on revenue and gross margins will limit the magnitude of consensus revisions to earnings expectations coming out of the print

APP: #s Wed night / 20% implied move .. bogeys hearing: Q1 Ad Revs: $1.1B+ vs street at $1.047B; Q2 Ad Revs: $1.15B+ vs street at $1.115B .. mgmt motivated to crush numbers this quarter given attacks from multiple shorts

BL: +6% decent upside in Q1 on EPS thanks to robust margins while sales inline; guidance update is mixed (the sales outlook is tweaked down while the EPS range is nudged higher)

DIS: +6% much better than feared in face of neutral/neg sentiment ... Q2 beat across board; Disney+ subs 126M (123.3M); cont to monitor macro but no major sohcks yet

EA: Solid 4Q Net Bookings beat and guiding Q1 above. Stock +5% in post.

FTNT: #s Wed night / 4.6% implied move .. bogeys hearing: Q1 billings 12% vs St at 11% y/y; Q2 Billings 12% y/y vs inline with st; Fy25 Billings - slight raise to 11-14% vs prior 10-13%

MRVL: -7% hit after pushing out Investor Day (from 6/10 to TBD in '26) - citing the “uncertain” economy; narrows Q1 range rev outlook to +/- 2% versus prior +/- 5%

MRVL new event: host a webinar on June 17 focused on the future of custom silicon technology for AI infrastructure. Downgraded at Cantor

PINS: #s Thur night / 12% implied move .. sentiment had been pretty terrible but have seen uptick in sentiment post META, GOOGL results ... Bogeys: Q1 Revs: $850M vs street at $847M; Q2 Revs: $930M vs street at $962M

SMCI: -5% messy; cuts FY sales view ... next Q below w/ mgmt blaming delayed purchases as the reason for the shortfall; CEO (little credibility) expects many of these commitments to land in the June and Sept quarters; says its margin guide is conservative due to the potential impact of tariffs and the switch from Hopper to Blackwell leading to more price competition

TSLA: launched a cheaper version of its Model Y in the US market (Reuters)

UBER: -4% huge run into print / falling short vs buyside ... Q1 GB $42.82B (below bogey/St); sees Q2 GB $45.75B to $47.25B (vs bogey $46.5-47B). Q2 EBITDA view also slightly below buyside ... other: Mobility bookings $21.18B (est $21.47B); Delivery bookings $20.38B (est $20.2B); Freight bookings $1.26b (est $1.29B) .... Co will have more product and partnership news, with a focus on affordability, at annual GO–GET event on May 14

Industrials

Nuclear spike: SMR, OKLO ripping on Axios report about WH planning executive action soon to try to speed nuclear reactors' deployment ....

Faro Technologies (FARO) Cut to Hold at Needham

• Cut to Hold at Craig-Hallum; PT $44

Honeywell (HON) Raised to Buy at BofA; PT $250

Illinois Tool (ITW) Cut to Underperform at BofA; PT $220

Louisiana-Pacific (LPX) Raised to Buy at Loop Capital; PT $110

Manitowoc Company Inc. (MTW) – 1Q25 First Take: Miss, Orders Improve, Guidance Reiterated

• 1Q miss, but orders show nice improvement, guidance reiterated.

• A 1Q miss was accompanied by good orders (+10% year/year) and positive commentary pointing to improving trends within both the European tower crane market and the Americas business.