Morning Note

Trading Observations

• Jobs numbers are out, and +177k beat the +138k estimate handily. Digging through though the revisions were all lower, to take some of the positivity out of it. Add to that bond yields jump when one of the Fed’s key metrics hurts their ability to cut, and you get a cautiously positive market driven by tech.

  Here’s where the economy sits –

  1. Survey work is terrible pointing to a recession.

  2. Employment data is fine pointing to a “we will get through this”.

  3. Market is preparing for higher prices and some shortages. Magnitude will matter.

  4. Fed can’t help yet.

Futures

DOW +438

S&P +64

Nasdaq +221

Charts/Sentiment

Financials / Retail / Healthcare

TROW – Flat – EPS beat the street slightly on stronger non-operating income. Base fee rates of 40bps continue to push lower. Equity outflows $19B, fixed income inflows $5.5B.

ABNB – Down 4% - US Travel market to blame. Lots of hotel chains including Wyndham and Hyatt have mentioned this.

FIVE – Five Below Up 11% on earnings way better than tariff haters imagined at $967MM vs prior guidance of $915MM. The Chairman is leaving.

KSS – Out mid-day, but the CEO is out after some inappropriate transactions with a love interest. Someone please take this company private.

Technology

AAPL – Down 3% - Two downgrades and tariff worries have this name down a hair on earnings. Services and wearables the culprit. Also, China sales are not great as that country is clearly moving away from US products in some regard. The $100B buyback seems interesting, but given its 3%, it isn’t really.

AMZN – Flat – Originally lower on mediocre AWS numbers. They also guided to a massive downside number, which is common for them and allows for some sort of tariff issue.

XYZ – Block, aka Square Payments down 22% on a big miss to guidance on the operating income side. Share losses in payments along with a competitive pricing market is killing everyone here. It’s very cheap here, but so was PYPL on the way down.

RDDT – Reddit up 5% on earnings that originally had it up much greater.

TEAM – Down 10% - I don’t read much wrong with the quarter, just no upside growth like some were likely hoping for. Revenues +14% y/y put it in “medium growth” territory, which has been tough lately.

TROW – Flat – EPS beat the street slightly on stronger non-operating income. Base fee rates of 40bps continue to push lower. Equity outflows $19B, fixed income inflows $5.5B.

TTWO – Down 10% on delay of Grand Theft Auto reprise.

ROKU – Down 7%. EBITDA looks light, and technology continues to eat its lunch slightly.

Industrials 

CVX – Chevron down 2% on a cut to buybacks given where oil prices are.

AUR – Has begun driverless trucking in Texas, ushering in a new era of American transportation.

DAL – Adds $1B to its buyback (2%).

Latest Media

Wall Street's Top Indicators Are Sending Mixed Signals.

Recession or Resilience?