Market Snapshot

River1 Asset Management
March 14, 2025

Morning Note

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Trading Observations

Govt shutdown off the table so that negative card removed (don't think anyone REALLY expected a shutdown)
However, UMich sentiment could derail things given uncertainty
Levels remain the same: 5400 below vs. 5665, 5735, 5850 above
Exhaustion setting in, pray we get a relief gap and go
Rubio says Mexico is doing a lot more, but it’s still not enough, esp. on drugs (“We have seen a level of cooperation from the Mexican authorities that we have never seen in the past, but it is not enough”) – Reuters
Trump and Xi may soon hold a call and/or summit to dial back tensions between their two countries (media reports lately have talked about a “birthday summit” in June – Trump’s birthday is 6/14 and Xi’s is 6/15.

Futures

DOW +272

S&P +54

Nasdaq +240

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

ICE Brent Crude

Bitcoin

Financials / Retail / Healthcare

JPM on Consumer Credit – “Consumers financial positioning especially at the lower end is being eroded by the impact of cumulative inflation with threat of further erosion with impact of tariffs and policies as well as layoffs.” Renters worse off than homeowners. Basically, its all bad.

Hedge funds have aggressively de-risked their portfolios w/some of the most violent selling in years according to media reports (FT and CNBC), pointing to a cleaner backdrop over the coming days and weeks (i.e. there isn’t much left to sell in the immediate term).

Manhattan apartment rents record high on Friday.

Alternative asset managers got $7B in January and $9.2B in Feb, both records.

AXP – Upgraded to neutral at Baird after a strong selloff. 14x is a good price to be neutral for this asset, one that one have credit problems if they are coming.

ULTA – Up 8% - Setup was amazing after the market has been crushing consumer discretionary stocks with no thought behind the selling. EPS beat. Growth isn’t great, but its good enough for a rally today.

GS on M&A – The recovery looks to be pushed back some, and the 2x P/E multiple re-rating seems appropriate. We would bet nobody gets what they want until debt gets cheaper.

PTON – Up 8% on a Canaccord upgrade.

CMG Up 3% on a Loop upgrade on better sales momentum.

NKE Baird Preview - expect NKE to reach FQ3 estimates and to maintain a cautious sales/margin outlook for FQ4 directionally consistent with prior commentary. we now are modeling F2026E more conservatively given potential reinvestments and broader macro uncertainties (including tariffs).

PTON gains 7% as Canaccord upgrades its rating and says the company is set to reap the benefits of being the “clear leader” in the connected fitness market.

Technology

Amazon, Google and Meta support tripling nuclear power by 2050 https://www.reuters.com/business/energy/amazon-google-sign-pledge-support-tripling-nuclear-energy-capacity-by-2050-2025-03-12/ [reuters.com]

AAPL- iPhone 16e is outperforming the initial sales of the third-generation iPhone SE launched a few years ago, but isn’t enough to reverse the company’s sales decline in China, analyst firm IDC suggests.

Hon Hai: NVDA/AAPL supplier, Hon Hai Precision, reported 13% drop in net income on weaker Chinese iPhone sales. AI server demand expected to remain strong.

Hon Hai Precision Industry Co. reported a 13% drop in net income due to weak Chinese iPhone sales, missing analysts' estimates

SMTC up big on better fiscal Q4 results and guidance with takeaways positive on DC focus and flagging low expectations into the print. Despite ACC Setback, we see Multiple Growth Opportunities Ahead

DOCU jumps 10% after the e-signature software company posted quarterly results that beat expectations and gave a billings outlook that’s seen as positive.

AAOI surges 55% after the maker of fiber-optic networking products entered a warrant agreement with Amazon.

GOGO rises 9% after the in-flight broadband company forecast revenue for 2025 that beat the average analyst estimate.

RBRK surges 18% after the data security software company gave an outlook that is stronger than expected.

Industrials

BrightView Holdings (BV) announces $100M share repurchase program.

MYR Group (MYRG) Raised to Overweight at KeyBanc; PT $136

O-I Glass (OI) – Investor Day today. Ahead of the event, the company detailed strategic initiatives and reaffirmed FY25 guidance/long term targets.

TESLA (TSLA) to make lower-cost version of Model Y in Shanghai to regain ground in China

LMT – Portugal rules out upgrading its F16s to F35s due to concerns about the reliability of the US in the years and decades ahead (Portugal doesn’t know if Washington will allow F35 software upgrades and spare part sales in the future – Politico

AVAV - AeroVironment says the Department of the Army cancelled the stop-work order it issued in February 2025 on certain existing U.S. government contracts previously awarded to AeroVironment.