- S&P and Nasdaq futures down 0.15% in Friday Valentine’s day premarket trading, off some overnight strength. European markets mixed following a generally higher Asian session. Treasuries mixed with the curve steepening; follows yesterday’s yield pullback. Dollar index down 0.3% and set for fourth weekly decline in the last five weeks. Gold up 0.2%. Bitcoin is flat. WTI crude up 0.8% and on track for a modest weekly gain. Euro Stoxx 50 chart below.
- There are a lot of moving parts this week, but markets have generally looked to the bright side. Yesterday Trump outlined his plans for reciprocal tariffs however absent any specifics, with the market taking this as a positive with on delayed implementation and offers for impacted countries to negotiate (as India’s Modi announced he would do). Analysts noted firmer categories in January CPI and PPI reports may have more muted impact on core PCE. Rate-cut expectations pushed out to the second half of the year, but Powell’s congressional testimony this week did not spook the markets. Ukraine ceasefire hopes and retail dip buying among the bullish talking points.
- Trade Ideas Sheet: It’s been an earnings season with many land mines for both upside and downside moves. It’s been very challenging and I remain selective. Our 8% long China exposure is working very well with BABA up 6% in the premarket with story that Jack Ma will meet with President Xi. BABA is now up over 40% for us with KWEB up 5% in the premarket and up 20% for us overall. If you bought the KWEB March 33-40 call spread this trade is a home run. We bought it for $0.50, sold half of it for $1.50, and now we can hold the remainder with an even bigger gain.
- January retail sales the main economic event of the day came in weaker. Consensus was expecting a slight headline decline after a strong December reading (weaker auto sales likely weighed) with some moderation in control-group spending which was worse than expected -0.8% vs consensus +0.3%. Import/export prices and industrial production also on the morning’s calendar. Not much in the way of Fedspeak but Dallas Fed’s Logan to deliver remarks this afternoon. Some focus on Munich Security Conference and impact for Ukraine peace talks (though Russia not scheduled to attend);
- AMAT guide a bit below with company flagging export control related headwinds. PANW Q2 results a bit better but some disappointment on reiterated RPO guidance. DKNG raised FY25 revenue guidance. ABNB beat on key metrics, including GBV and nights/experiences booked. COIN beat and talked up shift in crypto regulatory. IR results and guide largely in line. DXCM Q4 mixed with sales a bit better and EPS below on margins. GDDY Q4 a bit better with guide largely in line. TWLO pressured by softer EPS and Q1 EPS guidance, along with very elevated expectations with stock up 35%+ ytd. ROKU beat on most key metrics, guided Q1 largely in line but FY25 EBITDA well ahead. INFA sales, ARR and guidance all weaker, with company noting unexpected headwinds. WYNN beat with Macau and Vegas both ahead. GT beat and talked traction behind strategic initiatives.
- Key Upgrades/Downgrades: Analog Devices initiated buy at Benchmark Company LLC. Kraft Heinz downgraded to neutral from buy at Citi. Advanced Micro Devices downgraded to outperform from buy at Daiwa – Target cut to $130 from $170. Airbnb upgraded to neutral from sell at Goldman Sachs. Upstart Holdings upgraded to equal-weight from underweight at Morgan Stanley – Target increased to $70 from $12. Informatica downgraded to equal weight from overweight at Wells Fargo Securities. Roku upgraded to overweight from equal weight at Wells Fargo Securities.
market snapshot
economic reports today
Weaker retail sales however revisions were higher from the previous month.
premarket trading
US MARKET SENTIMENT
S&P and Nasdaq bullish sentiment back in the elevated zone >70%
Bond bullish sentiment bounced after falling hard the previous day. A move over the 20 day moving average of bullish sentiment is first requirement for bonds to show some life.
Currency bullish sentiment with the US Dollar sentiment and Bitcoin sentiment slipping lower. These have had correlation in the last few months.
Commodity bullish sentiment a decent day overall
US MARKETS
S&P futures 60-minute tactical time frame shows the top of the range with a slight roll over after another sell Setup 9 which has been decent at inflection points
S&P futures daily remains in a range with no signals
Nasdaq 100 60-minute tactical time frame slight roll over with a new Combo sell Countdown 13 the first one in February.
Nasdaq 100 futures daily poked a little above the recent range and still below the high in December
Extra charts we’re watching
Euro Stoxx 50 has been moving higher with the prospects of Ukraine peace. There is a new DeMark Combo 13 with the Sequential on day 10 of 13.
One that popped up on my screen today. The Bloomberg World Exchange Market Capitalization index with new DeMark Sequential sell Countdown 13.
US Dollar Index daily has been moving lower after the recent DeMark Sequential sell Countdown 13 in downside wave 3 of 5 with a potential price objective of 105.72
US 10-Year Yield is holding the 50 day after reversing the CPI spike
Bitcoin Daily continues to trade sideways with near term support at 95k then bigger support at 90k
DeMark Observations – Euro Stoxx 600
With the rise in European indexes with the prospect of Ukraine war ending we are starting to see more sell Countdown 13’s developing on the daily and weekly time frames.
