On CNBC 8am ET. Believe investors will focus not on rev -4% y/y but 1) $AAPL being relatively cheaper after underperforming YTD 2) optimism on AI focused WWDC in June 3) hopes for resultant replacement cycle & 4) historical stock outperformance leading up to a new iphone launch.

Jerome Powell more supportive of the market than expected: 1) “unlikely that that next policy move will be a hike”, 2) on potential for Stagflation- “I don’t see the stag or the flation” 3) more tapering of QT than expected to $25B instead of $30B.

$PI & RFID market growth continues to be my favorite multi-year theme. Besides large EPS revision higher, two major future positives: 1) earlier opportunity in food 2) potential for their silicon in mobile phones due to European Digital Product Passport and Food legislation.

$META deserves penalty box for now. Q2 rev guide miss, while FY expense & capex increase on push to be “leading AI company in the world.” But stock now ~18x CY25 PE for still one of fastest megacap growth rates. Election & Olympic spend coming. Expect good 2H risk to reward.

Prior to this one, $TXN (2024 Top5 Pick) forward revs had been lowered in all 6 prior reports following the Covid driven surge. Similarly, the recovery could last a long time & investors should come to appreciate their domestic capacity expansion as tensions with China increase.

Yesterday was just an oversold bounce. Today’s further gains combined w/ bond & credit rally, $USD weakness, & broadening bounce in AI names despite AI related $CDNS guiding down Q2 is encouraging for tech into earnings. Is excess mkt optimism lowered enough w/ recent decline?

With @CarlQuintanilla Sara Eisen 11am ET. Expect NT mkt bounce given some oversold conditions. But punitive reaction to tech results so far (ie $TSLA deliveries, $TSM, $ASML, $NFLX, $SMCI lack of +pre) & concerns about ROI on AI investments keep us selective on earnings this wk.

$NFLX reports today. Stock reaction to expectations of beat & raise qtr will be viewed as bellweather for Mag7 starting next wk despite fundamentally not having much in common. Still believe selectivity is key for Q1 earnings & rest of yr especially w/ Fed potentially on hold.

This is the 3rd straight higher than expected CPI. “To the extent Fed officials underreacted to the January and February inflation readings, there is a greater risk that a hot inflation number for March could lead to an overreaction.” – WSJ’s “Fed Whisperer” Nick Timiraos

Saw this on my PC when I sat down to work. $GOOGL has over 90% search share & $MSFT Bing has less than 5%. AI powered search is more expensive for $GOOGL while $MSFT can attack through their dominant position in office productivity apps. The gauntlet has been thrown down.

Stock market has ignored rising oil & bond yields all year but was yesterday a warning sign? This makes reaction to NFP on Friday & start of earnings season next wk that much more important. Misses (such as with $TSLA deliveries yesterday) are likely to be punished unlike in…

If $AAPL does not negatively pre-announce on Monday (low chance), expect a technical relief rally given 2+ standard deviation move lower yesterday on DOJ news. This had been previewed for ~2 months. My longer-term fundamental view remains negative based on competition & valuation

French retailer Kering $KER.FP is down ~11%, after pre-announcing Q1 sales down ~10% y/y & biggest brand Gucci down ~20% driven by weak demand for luxury goods in APAC. This is not a good omen for the upcoming Q1 earnings results for those looking for improvement in China.

Japan’s Central Bank raised interest rates for the 1st time since 2007. Given how many leveraged macro strategies have been based on cheap yen borrowing costs, it will be interesting to see if eventually there is any collateral damage.

Great discussion on Yahoo Finance w/ Brad Smith Seana Smith on the importance of the Fed. My belief continues to be if we have a strong economy driving minimal rate cuts then S&P can go higher in 2024 but stocks will continue to separate based on earnings.

Good summary of thoughts w/ Oliver Renick on Schwab Network on 1) Magnificent 7 being now just the Fantastic 4 2) why $GOOGL is the most intriguing of the ones we kicked out, 3) our thoughts on the biotech sector, $XBI was one of our Top 5 picks for 2024.
schwabnetwork.com/video/the-fant…

After a continued beating to start the yr, China $ASHR is above 50 & 100DMA in Feb for 1st time since last August dragging along $KWEB. Potential capitulation, improving charts & inexpensive PEs are a powerful combo. But ~60% China tariff if Trump is re-elected was unexpected.

Post tech rally sparked by $NVDA yesterday, we sold half our $AAPL at the close & are selling the rest today. We dislike positions that are opposed to our fundamental views but try to balance that w/ managing risk & taking advantage of high probability short-term trades.

Managing our risk & covered $AAPL short & getting long. Our data analytics gives high probability to ST bounce. Looking to sell/reshort given downside over LT: 1) Huawei resurgence, 2) no foldables, 3) no AI on smartphones, 4) minimal rev growth, 5) 27x CY24 PE vs 21x for S&P.

We discuss earnings driving stock performance for the Mag7 in 2024 ( $META $AMZN $MSFT $NVDA strong while $AAPL $TSLA $GOOGL underperform on competition issues) when it really wasn’t in 2022/23. We are long the Fantastic 4 of the group & short the other 3.