Morning Note

Trading Observations

• Fed Day! – Our Guess on Timeline

  • 1pm Central – Fed keeps rates where they are. Dot plots are slightly dovish with two dissenters, both vying for Powell’s job.

  • 1:30 Central Time – Powell speaks. Says $300B in tariffs are good for our deficit problems but come with higher inflation, so still on hold.

  • 2:00 Central Time – DJT calls Powell an idiot.

• Post Bell Earnings - MSFT, META, HOOD, ARM, QCOM. AAPL and AMZN Thursday. About 30% of the S&P reports now until Friday.

• This Mornings Eco – Mortgages missed, ADP employment was solid, GDP +3% beat (so much for a recession). Zero signs of a bad economy.

Futures

DOW +23

S&P +6

Nasdaq +39

Financials / Consumer / Healthcare

SOFI – Uses the good print yesterday to hit the tape with $1.5B in stock, down 7%. Could help lending growth, could help make a top in the name if that satiates retail demand.

Movers in Retail –

 Higher – WING +20%, VFC +19%, HOG +15%, PTON (upgrade) +7%, ETSY +6%,

Lower – SHOO -6%, CAR (Avis) -6%, MDLZ -1%     

WING – Up 20% on short cover and the old fashion way, revenue +12% y/y. It’s mostly store growth as comp sales were negative 2% vs 4% expected.

VFC is a short cover on “we expect to fully mitigate tariffs”. They still lose money, so everyone should probably just settle down.

SBUX – Results weren’t great, but up 5% on directionally positive and China sale likely being a big money maker.

HOG – Up on an official deal to sell a chunk of financing to stronger hands KKR and Pimco.

PYPL – Trades 12x 2026 and simply needs to find the bottom of branded checkout to re-rate. GS and Baird notes annoyed but understanding.

Visa – Down 2% - Strongest revenue growth in 2 years at +14%. International and data processing the driver, and domestic volumes were +9% thanks to Prime Day (probably good for AMZN which reports tomorrow).

TW – Flat – This growth name cam in just in-line. Expenses the problem, not revenue though , so market looks to be giving them a pass.

Baird on Banks – Core PPNR was solid, and loan growth helped move numbers higher. However, valuations limit upside from there and regionals look better than mega caps.

Technology

MRVL, Semis – MS out with a positive note that has MRVL up a massive 9%. Semis have led in July, and this feels like the crescendo.

SMH vs SPX

STX – Down 6% on disappointing outlook. Semis are the new hardware.

PANW – Down 5% as a deal with CYBR looks eminent. $25B is 19x revenue and ~100x next year’s net income so you better grow the heck out of this thing if you want to see that money again.

Industrials 

ALB – Downgraded at Keybanc. Second downgrade in as many days.

UPS – Two downgrades. Terrible business due to all the Capex spending needed.

Latest Media

$PYPL - From Darling to Dog, where to next?

We believe there might be some value down here.