Morning Note

Trading Observations

• Another failed rally attempt and another early gap higher

• CPI +.2% vs .3% welcome relief for the market.  Now if we can stop talking/tweeting about tariffs for a few days!

• Look for high beta stocks to rip today early going:  PLTR, APP, RDDT, TSLA etc

• Levels to watch remain the same: 5400 on the downside vs. 5665, 5735, and 5850 on the upside

• INTC higher on report of TSMC pitching Foundry JV to Nvidia, while AMD may help semis...

• J.P. Morgan has increased the probability of a US recession [finimize.com] to 40% for 2025, citing rising economic tensions and policy shifts under Trump.

• 401k trading at 4 1/2 year highs (retail panic)

• Breadth measure at levels that normally lead to rallies https://tinyurl.com/k9vyhphc [tinyurl.com]

Futures

DOW +306

S&P +66

Nasdaq +325

Charts/Sentiment

Financials / Retail / Healthcare

SCHW – Schwab’s official advice to customers “stick to your long-term plans”.

Crypto related – All much higher after the rout. HOOD and SOFI +7%, the balance +3-4%.

XYZ – Cathie Wood selling down here (bottom).

Fin-Tech Conference – MA, V, FI all presented – Visa and MasterCard saying February trends moderated, blaming Leap Day a bit. MA trades 33x which is middle of its average.

DKS – Baird called the quarter Strong and called the company at the top of their game. +1-3% comp guidance didn’t impress the street.

DIS – JPM out with a note asking if Direct to Consumer content can eclipse Disney Parks as the greatest revenue/profit generator, and then answering “no”.

GS Options Recommendations – Goldman saying buy ULTA puts and DG straddles ahead of earnings tomorrow.

Capital Markets – AUM at asset managers was lower in February by 0.5% on average as most lost market value and some had small outflows.

Zealand Pharma stock surges as Roche secures rights for its obesity therapy in a $5.3B deal – FT

TGT announced the return of Target Circle Week. The shopping event, which will run March 23 to March 29, will include exclusive deals and up to 40% off for members of the retailer's free-to-join Target Circle program.

Stitch Fix (SFIX) rallies 15% after the personal styling platform boosted its full-year revenue forecast. Analysts are encouraged by the business’s improving trends.

Technology

ADBE: #s Wed night / 7% implied move .... Ppl looking for Q1 Digital Media net new ARR of around $415mm, and a Q1 guide in-line with consensus ($456mm). Mgmt has also already put out the Fiscal Year 2025 target last quarter ... Cleveland checks ystrdy: F1Q appeared to Finish inline w/ high -end of guide; outlooks suggest path for upside though macro more uncertain

Salesforce pledges to invest $1B into AI in Singapore over five years – CNBC

Google in final talks to acquire AdHawk Microsystems, a maker of eye-tracking technology, for $115M – Bloomey

TSM said to have pitched Intel foundry JV to Nvidia, AMD and Broadcom – Reuters. INTC higher Foundry JV to Nvidia, while AMD may help semis...

IRBT sinks 35% on the robot-vacuum company’s going-concern warning following disappointing quarterly results. Management canceled its fourth-quarter and full-year 2024 results conference call and webcast

Industrials 

ABM – Q1 EPS beats on inline revs. Company raises low end of guidance by less than beat. Solid quarter - slightly cautious outlook. Q1 EPS $0.87 ex-items vs FactSet $0.78. FY2025 guidance = EPS $3.65-3.80 vs prior $3.60-3.80 and FactSet $3.73.

Albemarle (ALB) Cut to Sell at Pekao Investment Banking; PT $51.80

Eaton Corp (ETN) Raised to Overweight at KeyBanc; PT $340

Stellantis (STLA) Cut to Sell at Pekao Investment Banking; PT $11.47

Sunrun (RUN) Cut to Hold at Jefferies; PT $8

Toyota is shifting gears to bring nine fully-electric vehicles to Europe by the end of 2026, targeting the continent’s fast-growing EV market.

Defense company Rheinmetall reports record orders and profits in era of European rearmament – FT

Latest Media

We are buyers down here

Interesting Tweets

Put volumes rising with values at levels last seen in Mar 2020 and Oct 2022

Credit spreads not ‘yet’ signaling bigger problems

All that’s really missing is a “Markets in Turmoil” special on CNBC (pray we get one)

Longer term, new high-new lows nowhere near bear market levels despite the carnage