Market Snapshot

River1 Asset Management
May 20, 2025

Morning Note

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Calendar

This Week – Retail earnings and a host of Fed speakers abound. The earnings feel like the bigger deal unless someone sends a message June cuts aren’t coming.

Tuesday – 6 Fed Speakers, HD, PANW earnings, Philly Fed Non-Manufacturing.

Wednesday – 2 Fed Speakers, LOW, TGT, TJX earnings

Thursday – Initial Jobless Claims, WSM, ROST, ADSK, WDAY, DECK earrings.

Friday – 3 Fed Speakers (plus Powell Sunday)

Trading Observations

Broad brush, the song remains the same
6000 resistance vs. 5950 support and as long as we hold 5750 constructive
HD higher on numbers (bar was pretty low for retail)
Some things of note, retail bot the dip with $4.1 billion of during the first 3 hours of today's trading sessions, the most in history, and accounted for 36% of all trading volume today, the highest ever https://tinyurl.com/mbm5dkxa [tinyurl.com]
QQQ divergences suggest higher coming https://tinyurl.com/3cb7eyzh [tinyurl.com]
Leaders leading https://tinyurl.com/e2244nn2 [tinyurl.com]
A decent take https://tinyurl.com/3f9kch9m [tinyurl.com]
Short term complacency https://tinyurl.com/4ty99exp [tinyurl.com]
Stat of the day per @futurenomics: Waymo now does more rides than Lyft in SF. There are only 300 Waymos. Lyft has 45,000 drivers. Every Waymo is doing more rides than 150 human drivers

Futures

DOW -11

S&P -14

Nasdaq -81

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Gold

Bitcoin

Financials / Consumer / Healthcare

HD – Up 2% - Expectations for a tariff miss were somewhat unfounded. Comps were down 0.3% vs 0.1% expected. Mortgage rates not helping. FY guidance intact.

Baird Restaurant Surveys – Missing tough year-ago comparisons.

JPM Investor Day Recaps – Baird says risk/reward unattractive at 2.65x TBV (we would agree). Investors overpaying for insulation to all markets.

FHB – JPM reiterates underweight post management meetings.

BULL – WeBull Up 8% on partnering with Coinbase for crypto expansion.

AS – Up 13% on solid profit outlook.

VSCO – Up 3% on new Poison Pill provision to keep takeovers at bay.

Nike downsizing its technology division and letting go of some employees as management resets priorities – Bloomey

UNH +3% (stock was +8% yesterday)

Technology

GOOGL I/O: kicks off today / keynote @ 430pm ET .... Focus on Gemini product updates / unveiling of AI Mode inside Search which has been teased .... Desk flows have quickly turned better to buy. We saw global LO demand every single day on the desk last week as bull vs bear debate continues to rage regarding Google’s positioning within AI ... MS bullish results post their GenAI survey on Monday, following Yipit pos on Friday

GOOGL Marketing Live: Wednesday event .... advertisers should get new generative-AI creative and Measurement upgrades plus a clearer read on how AI Overviews and Performance Max are monetizing

Stat of the day per @futurenomics: Waymo (Google) now does more rides than Lyft in SF. There are only 300 Waymos. Lyft has 45,000 drivers. Every Waymo is doing more rides than 150 human drivers

ADI: #s Thur am / 4.5% implied move

ADSK: #s Thur night ... sentiment is bullish as investors anticipate continued healthy top line trends coupled with a more concerted push toward by mgmt. to expand op. margins. For FQ1, the Street is looking for EPS +15% to 2.15 with sales +13.4% to $1.6B, op. margins +70bp to 35.33%, and RPOs -3% to $5.72B

AAPL - Chinese shipments of Apple's iPhone and other mobile devices to US plunge to lowest levels since 2011 in April – Bloomey

AVGO: Broadcom unveils third-gen CPO technology to power AI's next leap (DigiTimes)

HPE: upgraded @ Evercore to Outperform - thinks the current risk/reward is "fairly attractive," especially for investors that have some duration.

MSFT/OpenAI: to offer xAI’s AI models to its cloud computing customers, the latest sign of the software giant’s attenuating relationship w/ OpenAI

PANW: #s tonight / 7.5% implied move ... Sentiment bullish but positioning doesnt seem demanding either (heard LOs UW relative); we are expecting to see strong cyber security deal activity across enterprises as PANW continues laying the foundation for its platformization approach heading into FY2026

PEGA: +6% Pegasystems to Join S&P Midcap 400

INTC - is considering a sale of its network and edge businesses as the firm looks to focus on its core PC and data center chip products – Reuters

SNOW: #s Wed night / 10% implied move. Conf call at 5pm ET... Reaccel story / sentiment is bullish on the fundamental story as the new CEO successfully engineers a turnaround. Checks have been positive (healthy growth/margins).

UBER: +1% in pre to fresh all-time highs ... just a beast; has been hesitancy to chase but any/all dips we've seen LO support. JPM lifts PT after spending time with mgmt. Co's tone was upbeat, with management emphasizing that it is on track or ahead of its three-year targets through 2026 calling for mid-high teens bookings growth, mid 30%-40% EBITDA growth, and 90% conversion of EBITDA to free cash flow.

WDAY: #s Thur night / 7% implied move ... despite some anxiety about macro volatility potentially impacting the Global Business Solutions unit (which is very levered to small and medium-sized businesses), sentiment is relatively sanguine on the story. Street is looking for total rev +12.25% to $7.56B (incl Global Business Solutions +19.5% to $2.85B and Consumer +8.8% to $3.97B).

Industrials

Tariffs are passed along more aggressively to investment goods than consumer goods according to a new NY Fed report – “our estimates suggest that the impact of an across-the-board 25% tariff could be much larger on investment goods prices, about 9.5%, than on consumption goods, about 2.2%”

Auto headlines: (1)BYD’s new e7 midsize sedan is aimed at Tesla’s Model 3 and will start at only ~$14.5K in the Chinese market (Electrek) .... (2)GM will stop exporting cars from the US to China due to Trump’s trade war (NYT) .... (3)Subaru said it was hiking prices on several models in the US, the latest company to pass along Trump’s import taxes to consumers (Reuters) ... (4)Toyota plans to launch more EV models in the US as it sees an opportunity to capture share from a struggling TSLA(Nikkei)

Tesla supplier CATL surges on first day of trading in Hong Kong – CNBC

AV WARS: Waymo received approval to expand its autonomous taxi service in San Jose (CNBC) ... Uber and Waymo said they would begin offering robotaxi rides in Atlanta to select customers ahead of a full launch this summer (Tech Crunch)

DAL – Can sue CrowdStrike over July 2024 outage.

Nippon steel says it will invest $14B in US Steel, including $4B for new steel mill – FT