Market Snapshot

River1 Asset Management
April 08, 2025

Morning Note

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Trading Observations

Finally a bounce... Will it hold? Headline leak showed market ready for relief on any positive news
Yesterday’s rip higher on the “fake news” headline of a 90 day pause on tariffs shows how much the market wants to rally and upside FOMO is real.
Today is China day, as they are digging heels in verbally, devalued Yuan
Interesting theory https://tinyurl.com/3yks5wex [tinyurl.com]
QQQ biggest volume day since Jan 2022 (Opex and NFLX earnings on that day so skewed!)
Total put/call at 1.2, the third day in a row with very high readings and 10 day-ma over 1.0 for first time since pre-election
5300 first hurdle while 5500 fills the gaps and is a reasonable reflexive target should the rally press on
Small caps washed out? https://tinyurl.com/mvaevtxc [tinyurl.com]
Earnings revisions continue to deteriorate https://tinyurl.com/2s3b3xn5 [tinyurl.com]
AVGO $10B buyback
High yield credit continues to widen https://tinyurl.com/5ae452sx [tinyurl.com]
Stock/bond correlation most negative since 2020 https://tinyurl.com/2kexzx3d [tinyurl.com]
With bankruptcies on the rise https://tinyurl.com/mr42b4z7 [tinyurl.com]

Futures

DOW +1210

S&P +152

Nasdaq +505

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

ICE Brent Crude

Bitcoin

Financials / Retail / Healthcare

Risk on Beta Trade in Financials – HOOD and the Crypto plays all up 4%, SOFI +5.5%, UPST +7.5%, AFRM +6%, XYZ +4%...etc.

MS on Banks – Morgan Stanley out downgrading the banking sector on an up ticked recession risk. The market will drive right on by this one today most likely. They like CME and SCHW as defensive picks.

NU – Upgraded to overweight at JPM.

WFC +4% on an upgrade to overweight at Piper Sandler.

WBA – Nothing terrible. Stock only up 2% as it is getting bought out. CVS strong on good news from healthcare reimbursement rates.

HUM, UNH and CVS among the names boosted by news they will receive a meaningful increase in Medicare reimbursements for 2026.

XYZ – Baird likes it at 12x 2026 FCF and mid-teens gross profit growth, 5-10% in a recession.

Baird downgrading two retail names, TGT and ARHS on recession probability. They are also upgrading WSM.

LEVI – Up 15% after maintaining its full year outlook and saying tariffs will have “minimal impact”.

HOG – Harley Davidson dealer checks down 15-20%.

ONON – Baird positive after a 30% pullback gives an attractive entry price.

Technology

AAPL: down 19% over the past three trading days, its biggest three-day collapse since July 2001 ... Ives slashed PT to $250 from $325 - tariff economic Armageddon unleashed by Trump is a complete disaster for Apple given its massive China production exposure

Apple planning to send more iPhones from India to US to offset cost of China tariffs Apple Plans to Source More iPhones From India as Potential Tariff Fix [msn.com]

AMAT: CEO buys $6.87M in common stock

AMD/Semis call: AMD d/g @ KeyBanc - noting that their quarterly supply chain findings are most negative for AMD ... findings are most positive for Qualcomm and Qorvo; Most negative for AMD; negative for AVGO, MRVL, NVDA, INDI, NXPI, ON. Mixed for ADI, INTC, MCHP, MPWR, TXN

AVGO/DONT SLEEP ON HOCK: +3% $10B accelerated buyback; much-needed positive msg for tech

BABA/AI: Alibaba races to secure Nvidia H20 chips for Apple as US ban looms (DigiTimes)

GOOGL: Cloud Next begins on Wednesday

HPE: -1.4% MS downgrading - accretion from the impending close of the Juniper acquisition has been put on pause for now until the Department of Justice trial in late summer.

MRVL: +3% Infineon said it is buying MRVL (Marvell)’s auto ethernet business for $2.5B in cash (the business is expected to generate sales of $225-250MM this year w/GMs of ~60%)

SHOP is out with a new memo stating that it will not bring aboard any new workers unless managers can prove AI isn’t able to do the same job

TTWO: MOST ANTICIPATED NEW GAME IN PAST 10 years: Grand Theft Auto 6 .... nice catalyst/fundamental story attached .... GTA user base is MASSIVE and a large opportunity for TTWO with GTA6

VRT: new bull in Roth - "well-positioned for strong long-term growth and its differentiated offering enabling the company to grow above market, as it operates globally, providing a comprehensive end-to-end solution to the high growth data center market, and is well-positioned to drive margin expansion with execution of the Vertiv Operating System; appears undervalued considering its long-term growth potential

Industrials

American Air (AAL) Cut to Sell at Goldman; PT $8

Fluence Energy (FLNC) Cut to Equal-Weight at Barclays; PT $5

Fortive (FTV) downgraded to neutral from outperform at BNP Paribas Exane

GE Aerospace (GE) Cut to Neutral at President Capital Management

Knight-Swift (KNX) Raised to Buy at Citi; PT $48

Old Dominion (ODFL) Raised to Buy at Citi; PT $183

Schneider National (SNDR) Raised to Neutral at Citi; PT $23

Union Pacific (UNP) Raised to Buy at Citi; PT $244

Werner Enterprises (WERN) Raised to Neutral at Citi; PT $29

Zurn Elkay Water Solutions (ZWS) downgraded to neutral from outperform at BNP Paribas Exane

Alcoa (AA) Cut to Underperform at BofA; PT $26