Market Snapshot

River1 Asset Management
March 17, 2025

Morning Note

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Calendar

This Week – The two biggies were retail sales out this morning (weak, not a shock), and the Fed Wednesday which has 0% chance of a cut, but they could signal.

Tuesday – Housing Starts, NVDA/GTC

Wednesday – Fed Day

Thursday – Jobless Claims, Philly Fed, Existing Home Sales, NKE, FDX, MU, LEN Earnings

Trading Observations

Is THE low in? That is the pressing question
90% upside volume Friday, the first since Aug 2024 (and even better using NDR) https://tinyurl.com/56899etp [tinyurl.com]
If we can get a follow thru day, this week would be significant, but needs time to play out
Clarity on tariffs (relief) the only potential change that could trigger a V bottom in my opinion
However, worst should hopefully be behind us https://tinyurl.com/mr29n6pz [tinyurl.com]
Fed eliminating QT Wed wouldn't hurt either https://tinyurl.com/9uzx5ca8 [tinyurl.com]
Big drop in VIX and perhaps more significant big drop in VVIX suggest near term low in and a level to shoot against https://tinyurl.com/3ce3p6ch [tinyurl.com]
5560 and 5400 support vs. 5665, 5740, and 5850 resistance
Reasons to think a bottom in:
10 week advancers https://tinyurl.com/mtwdnkk3 [tinyurl.com]
Equity put/call https://tinyurl.com/2zvbw2d5 [tinyurl.com]
Big inflows arriving https://tinyurl.com/3rp6mvx9 [tinyurl.com]
Updated valuation table: Back in normal ranges for all but QQQ https://tinyurl.com/nefku73a [tinyurl.com]
Long only hedge funds punting at extreme levels https://tinyurl.com/4jyjrwzx [tinyurl.com]
Small caps near historical futility https://tinyurl.com/s9tjrd5d [tinyurl.com]

Futures

DOW +11

S&P +8

Nasdaq +52

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

ICE Brent Crude

Bitcoin

Financials / Retail / Healthcare

BFH – Net charge offs were higher than expected at 8.62%. Delinquencies were up 11 bps to 6.22%. As a comparison JPM’s private individual loans and credit cards run about 1.5%. Although these aren’t terrible, they are in the “watch carefully” zone

COF, SYF – DQs in line, but Net Charge Offs Worse. Capital One has largely so-so credit so investors watch this one as a tipper. So far, it’s not bad enough to say much other than slightly directionally worse.

BX – Upgraded to buy at UBS.

State Farm – Received approval for an emergency 22% rate hike in California.

ACN – Upgraded to outperform at Baird on strong managed services vs cheaper priced for the name after sluggish IT spend and DOGE fears.

NCLH – Upgraded to overweight at JPM, up 4%.

AEO – Announced a $200M accelerated repurchase program ($3.2B EV), up 6%.

AFRM – Down 7% on news it lost WMT to Klarna in the buy now, pay later area.

State Farm received approval in California for an emergency 22% hike in home-insurance rates as the company faces an avalanche of claims from the LA wildfires - WSJ

Technology

AI SPEND: EU is planning to invest >200B euros to advance AI, while the US is aiming to invest up to $500B under Project Stargate

Barron’s recommends buying AMZN, GOOGL, META and NVDA on the recent pullback

AMD: Edgewater positive saying server builds tracking better in Q1 - pot’l for 1H25 AI GPU upside but focus still on Mi350 launch in 2H

ANET: +2.4% added to Analyst Focus List at JPM - shares offer "ample room for upside," both from earnings upsides as well as upside to the valuation multiple. AI spend concerns overblown

CVNA: 15% used-car Loans at 40-Year High – unrelenting pain for buyers .. while default rates surge

IPO: Klarna formally files for an IPO in the US despite recent market turmoil (FT)

META: four-wk losing streak but up 3 out of last four sessions ... Edgewater mixed checks last week - for the first time called out some macro headwinds saying feedback around softening cons discretionary increased in last couple of weeks, although they are unclear what if any impact there will be in Q1.

MU: Citi sees Micron guidance miss but remains optimistic; "mainstream DDR5 spot pricing is inflecting up, as pricing is higher nearly 8% year-to-date, the largest increase since Q1 of 2024, and this supports the belief that DRAM pricing should improve beginning in Q2"

o Baird recent Asia field trip gives us comfort that current valuation provides attractive entry point opportunities for Micron for the rest of this year.

NAND FLASH: names strong overnight led by KIOXIA +5.6%, Samsung+5.3% ... NAND flash prices set to rebound as Micron, Samsung and YMTC hike rates due to tight supply conditions (DigiTimes); follows other reported px hikes

NFLX: +1.1% catching upgrade @ MoffetNathanson - says Co’s ability to better monetize its engagement in the years ahead remains an underappreciated aspect of its scale; increasing confidence in the company’s margin expansion potential, boosting his operating income estimate for 2027 by +4% and his 2030 estimate by +9% ... EPS: co set date last week, 4/17

NVDA/GTC: Jensen keynote Tues, 1pm ET .... GB 300 w/ HBM capacity surge, Rubin, CPO connectivity (Infiniband-based Quantum 3400, Ethernet-based Spectrum 5/6) .... Other: lot of focus on a path towards gross margin recovery, China demand impacts from exports controls, competitive moat versus custom ASICs

ORCL/TikTok: Oracle is accelerating negotiations w/the White House on a deal that would see it run TikTok going forward (Politico)

TSLA/Waymo/Autonomous: TSLA -1.5% ... John Krafcik, the former head of Waymo, made critical remarks about Tesla’s robotaxi product, suggesting the company doesn’t seem serious about succeeding in the market (Electrek)

UBER - The stock has been idling amid fear that robo-taxis will eventually push the company out of the market but that worry is “overblown,” as Uber has diversified and is positioned to complement the rise of autonomous driving, Barron’s

Industrials

ALK - Flight attendants from Hawaiian Airlines — owned by Alaska Air — reached a tentative agreement for a contract extension through Feb 2028.

Calumet (CLMT) upgraded to neutral from sell at UBS

Generac (GNRC) upgraded to neutral from sell at Guggenheim Securities

LMT -Canada Prime Minister Mark Carney ordered a review of the country’s contract for Lockheed’s F-35 fighter jets, a new front in the dispute between the two sides in response to tariffs and expansionist rhetoric from Donald Trump.

FLS – Baird UPGRADING TO BUY... Thematic name that looks CHEAP vs SPX...