Trading Observations

• Futures holding in so far despite weak Euro PMIs.  US PMIs after the open

• NVDA SITTING RIGHT ON 50D shrs -2.6% last week (which followed 16% gain in prior; 14% decline 2 wks ago)

• IWM the key? So so close to finally breaking above $225. A CLOSE above should draw buyers

• SPX 5670 finally cleared and now first support with 5610 below

• Short-term overbought so may struggle a bit as we work off

• Sentiment rose a bit last week, but nowhere near where it was in July, so not a major headwind yet in my view

• A few things I found interesting (and supportive) despite last week of Sept seasonality AndrewThrasher [x.com] Oct seasonality in election years difficult TrendSpider [x.com]

Futures

DOW +65

S&P +15

Nasdaq +69

10-Year Yield

Gold - another all time high

Consumer/Financial Healthcare

August credit card data shows no signs of “blowups” amid worries over consumer. delinquencies peaked in January and have seen six straight months of declines, while net charge-offs booked its fifth straight month of declines. Meanwhile, the year-over-year change in delinquencies and net charge-offs is also subsiding

Luxury goods – the industry is discussed in the latest Barron’s cover story, and the tone is mixed (the report details the well-known problems facing luxury companies, but says some stocks, including LVMH, Tapestry, and Richemont, look attractive) – Barron’s

JPM on MET and AFL – Insurance trends remain favorable and MET is less exposed to CRE losses than the stock implies.

BK – Upgraded at DB following meetings.

Basel 3 – Bloomberg saying the opposition voice is building to the latest idea set. The market expects a watered down version.

RILY – Name has been in trouble for a while. Shark Stifel has circled and is in talks to buy its wealth management for >$100M. I’d bet it’s a terrific pick up.

Citi – Chinese expansion to be put on hold per regulators.

Chinese Stimulus – More to come, including a lowering of mortgage rates.

Motel 6 – Sells itself from Blackstone to Oyo.

Technology

INTC: +3% in pre .. what a stretch for a fallen American icon ... weekend headlines: (1)Apollo reportedly willing to make an investment up to ~$5B to support turnaround strategy ... (2)AVGO says not evaluating .. FLOWS: saw covering late Friday ... vs ... shorts pressing QCOM

ADI: -1.8% downgrade @ Truist - believes much of Analog Devices' potential upside is already embedded in the stock price .. MCHP -1.6%

PLTR: valuation fueled downgrade @ RayJ

MSFT: DA Davidson d/g - competition has largely caught up with Microsoft on the AI front, which reduces the justification for the current premium valuation

Semi Downgrade: Truist downgraded the industry to Neutral from Constructive. Industry rev growth has peaked and is entering a "slow fade," while stock investment returns have been robust cycle-to-date, making significant addtl returns from here more challenging

SMCI: -2% reversion from Friday outperformance; Bloomberg headline - "Receives Nasdaq Non-Compliance Notice"

ASML: +1.2% bid as Samsung/TSMC discussing the construction of massive chip-making complexes in the UAE, projects could be valued @ >$100B

ADBE is mentioned positively in Barron’s, w/the article calling the stock an underappreciated AI play

Industrials 

Kratos Defense & Security Solutions (KTOS) – Baird Valkyrie Facility Tour Recap: Everyone Else Is on the Outside Looking In

• Last week we toured KTOS Unmanned operations in Oklahoma City with senior management, which showed impressive Valkyrie and Firejet production with key takeaways tied to the significant growth opportunities for both platforms.

• The Valkyrie is well positioned on the Marine PAACK-P program called Project Eagle, with a contract award expected later this year and Air Force likely to follow on to the Marine's efforts for tactical drones.

• Whereas the Firejet platform is now seeing tactical drone applications, extending its growth trajectory.

• Shield AI autonomy is running the Firejet.

AeroVironment (AVAV) – discloses U.S. Army has lifted stop work order on contract (8-K).

Core & Main (CNM) Rated New Overweight at Wells Fargo; PT $52

Fluor (FLR) Rated New Hold at Baptista Research; PT $51.50

General Motors (GM) Cut to Market Perform at Bernstein; PT $53

• GM: will begin laying off 1,695 workers at its Fairfax Assembly plant in Kansas, according to a worker adjustment and retraining notification notice earlier this week from the auto company.

Hexcel (HXL) Rated New Outperform at Baptista Research; PT $70.30

Installed Building (IBP) Rated New Hold at Baptista Research; PT $271

MasTec (MTZ) Rated New Underperform at Baptista Research; PT $120.80

Parsons (PSN) Rated New Hold at Baptista Research; PT $103

Tecnoglass (TGLS) Cut to Neutral at B Riley; PT $69

Timken (TKR) Rated New Hold at Baptista Research; PT $89.60

GNRC (Out Friday) expects sales of its power generators to rise given growing unreliability of the US power grid – Bloomey

Notables

NVDA contd consolidation on its 50D ….