Trading Observations

• Closed right at 6050

• NFLX and Trump AI investment announcement (ORCL + NVDA rallying) looks to push us over

• A CLOSE above would make a higher high and change the calculus for technicians

• In addition, incredibly strong breadth suggests higher coming 

• Yday was 6th straight session with >2/3 advancing... the first time in 97 years of data https://tinyurl.com/3cv7u83s [tinyurl.com]

• PG higher, GEV + JNJ flat on numbers

• 6100 resistance with oscillators short-term overbought

• Despite the rally, II BULLS only a slight uptick to 45% from 42%, nowhere near the 60% headwind territory

• Foreigners buying record amounts of US stocks https://tinyurl.com/bde3yb2m [tinyurl.com]

• While everyone talks valuation, Stat of the day "Only 29% of S&P 500 companies have outperformed the index over the past two years, one of the lowest levels since 1990." per BofA

Futures

DOW +143

S&P +30

Nasdaq +205

10-Year Yield

Oil

BITCOIN

Financials / Retail / Healthcare

ALLY – Up 8% as loan loss provisions decline. There is always worry this name will blow up on auto credit issues, and it didn’t.

TRV – Up 6% on strong earnings. EPS were $9.15 vs $6.59 street, and net premiums written were strong as well.

COF – Credit losses a hair higher than expected which is tightly watched as they are not well known to have high end borrowers.

IBKR – A well rounded beat and raise per GS from this discount brokerage name. Everyone is still trading a lot.

Baird positive on Visa’s set up into earnings but is cautious they think MasterCard EPS will be 2-3% below the street.

GS/Agents: Goldman has launched a genAI assistant to all bankers, traders, and asset managers (CNBC)

JNJ – Nice beat; initiated FY25 revenue below estimates

DUOL: hit .... "Spotify’s educational audio courses could be coming to US"

Technology

AI/Stargate: formally anncd - Ellison, Masa, and Altman formally unveiled The Stargate Project at WH event after the close - aim is to deploy $100B immediately on AI infrastructure for OpenAI, with $500B targeted over the next four years ... initial equity funders are Softbank, OpenAI, Oracle, and MGX (the UAE-based AI company), with technology provided by Arm, Microsoft, Nvidia, Oracle, and OpenAI

Watch Nuclear/energy stocks (SMR, CEG, VST, TLN, OKLO, NRG, CCJ) after the WSJ reported South Carolina to reboot giant Nuclear project to meet AI Demand. Santee Cooper is working with bankers to solicit interest in V.C. Summer station https://tinyurl.com/z46866xw

AAP – PT raised to $440 from $315 at UBS

AAPL: Apple is now lagging the NDX by 13.5% this month .. nearing a deal that would see the ban on iPhone 16 sales in Indonesia lifted (Bloomberg)

META: $5000 bonios? report FB is handing out cash bonuses and other inducements to lure content creators from TikTok (Tech Crunch)

NFLX: +15% breaking out to ATH, so much for FX fears (hearing new framework 35x $32) .... crushed buyside net add whispers; raising 2025 revenue and Oper margin guide despite the FX; price increases coming; board has approved another $15B buyback – favorable positioning into print for this type of move. Engagement starts the flywheel with subs – and lead to better pricing leverage

NVDA: +3% on 3mm shrs (as of 705am ET) ... $150 big level to watch - failed post EPS in Nov + post Jensen CES keynote ... stock has been on tear with dollars rotating back into AI and post Asian/China supply chain tour

ORCL climbs 10% as the company teams up with SoftBank Group and OpenAI to form a $100 billion joint venture that will fund artificial intelligence infrastructure. (stock spiked yesterday 7% on the news as well)

RDDT: lower in pre, -1.1% on $10.2mm notional .... Roth downgrading on valuation / balanced risk-reward call more than anything ...YTD: +15%; shrs +461% since IPO pricing ($34)

STX: +4% solid print - positive HARM commentary; ASPs continue to lift; v good call as well - "hard-disk drives remain the preferred storage solution for the bulk of data storage needed in the cloud.

TikTok/Musk: Trump said he was open to Elon Musk buying TikTok if the Tesla CEO wanted to do so. On his first day in office, Trump signed an executive order delaying by 75 days a ban on the app in the US on national security grounds reut.rs/40s4u6F

Industrials 

3M (MMM) upgraded to overweight from equal weight at Wells Fargo Securities

Airlines trading higher with UAL leading the charge following last night’s Q4 beat and Q1/FY25 guide – UAL trading up 3.6%

Aptiv (APTV) announces intention to separate its electrical distribution systems business - Aptiv announced that its board has unanimously approved a plan to separate its Electrical Distribution Systems (EDS) business from Aptiv, creating two independent companies

Cerence (CRNC) upgraded to buy from hold at Needham

Fluence Energy (FLNC) downgraded to hold from buy at Jefferies

Ford (F) downgraded to equal-weight at Barclays

United Parcel Service (UPS) added to Tactical Outperform list at Evercore ISI