MARKET WRAP

Economic growth concerns weighed on equities again, with today’s most disappointing headline being a sharp drop in Consumer Confidence—the largest month-to-month decline since 2021.

• The tech-heavy Nasdaq has now fallen from all-time highs to negative on the year in just a few days.

• Treasuries reflected economic concerns, with the US10Y yield now at 4.29% (down from 4.80% in early January).

Despite recent declines, the SPX is only about 3.2% off all-time highs. But, a shift in market sentiment has been evident over the past few days. And again today, rotations out of growth and into defensive names are concerning. The DJIA was green supported by HD’s earnings and a rebound in WMT. But banks were lower again. JPM is down about 7% in the past week. At the close: SPX: -0.5%, QQQ: -1.25%, IWM: -0.4%, US10Y yield: 4.29%, VIX: 19.35 

• RiskReversal Pod: Gene Munster joins Dan to discuss the most important trends in tech right now. 

• MRKT Call: Carter joins with key market levels and a deep dive into NVDA ahead of earnings.

MRKT MATRIX: February 25, 2025

Today’s Top Stories:

• S&P 500 falls for a fourth day after weak consumer confidence data, Nvidia leads Nasdaq lower (CNBC)

• US Consumer Confidence Drops by Most Since 2021 on Outlook (Bloomberg)

• Some ‘Trump trades’ are starting to roll over as the stock market sputters (CNBC)

• Trump Team Seeks to Toughen Biden’s Chip Controls Over China (Bloomberg)

• Nvidia Had a Rough Start to 2025. Investors Still Love the Stock. (WSJ)

• Bitcoin Slides Below $90,000 as Crypto Selloff Gathers Steam (Bloomberg)

• Home Depot Expects Tepid Recovery in Demand for Renovations (Bloomberg)

• Musk Begins Testing His Starlink Terminals in US Airspace System (Bloomberg)

Today’s MRKT Call is Presented by Robinhood

Key Levels for SPX + Chart Check on Nvidia Ahead of Earnings

Carter joins the show to discuss the recent market pullback. Despite some sharp declines—like PLTR dropping 30% in the past week—the SPX remains just 3% off all-time highs.

• SPX outlook: Analyzing the long-term chart, its position relative to the lower band, and the likelihood of a 10% correction from recent highs.

• Momentum stocks: A breakdown of recent sharp declines in some of the market’s most explosive names.

• NVDA earnings preview: The stock has remained largely unchanged over the past eight months. Dan and Guy take a deeper look at NVDA’s story, and Dan outlines a protective options trade for those holding the stock into earnings.

• ZM trade idea: A strategy for a potential bounce following its disappointing post-earnings move.

• Viewer questions:

  • Stagflation and treasury yields.

  • BTC’s drop below 90K—how low could it go?

  • A look at GOOGL.

Click here to access all of the charts mentioned in today’s MRKT Call.

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Today’s RiskReversal Podcast is Presented by Current and RBC

Gene Munster: Nvidia Earnings Preview, Apple's $500 Billion AI Investment & Microsoft's Computing Conundrum

Dan Nathan is joined by Gene Munster, managing partner at Deepwater Asset Management, to discuss various major tech headlines and their potential market impact. The conversation starts with Apple's investment of $500 billion in AI infrastructure and its implications. They also touch on a recent analyst report about Microsoft canceling some AI data center leases and the broader AI adoption theme in the market. The episode delves deeply into Nvidia, anticipating their upcoming earnings report and evaluating expectations for their guidance. They also discuss the challenge for Nvidia investors in assessing long-term growth amidst rapid technological advancements and market volatility.

Articles Mentioned

• Apple Will Add 20,000 US Jobs Amid Threat from Trump Tariffs (Bloomberg)

• Microsoft Cancels Leases for AI Data Centers, Analyst Says (Bloomberg)

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What’s Next

Nvidia Earnings
Market participants have been closely watching NVDA’s earnings, as it's the last mega-cap tech company to report. Traditionally, since NVDA reports late in the cycle, it serves as a final market sentiment check for earnings season. However, in the past few days, concerns over economic growth have taken the spotlight. Still, with a $3 trillion market cap, NVDA’s results remain a major market event.

Expected Move: 10% - With the stock ~$127, this implies a post-earnings range of about $114 to $140.

Recent Earnings One-Day Moves (Max Intraday Move):

• Nov ’24: -0.5% (+4.8%)

• Aug ’24: -6.4% (-7.1%)

• May ’24: +9.3% (+12%)

• Feb ’24: +16.4% (+16.5%)

Technical Context & Expected Move:

• The lower end of the implied range ($114) aligns with NVDA’s late January DeepSeek low after the recent sell-off.

• The upper end ($141) falls well short of NVDA’s all-time high ($153) from just over a month ago.

• The upper implied move is just below last week’s highs after the stock’s rally from the DeepSeek news topped out.

• The $140 upper implied level also coincides with NVDA’s June ‘24 peak, before the stock dropped to $90 in August.

Essentially, the expected move captures the highs and lows NVDA has already seen in February, emphasizing how volatile the stock remains—even outside of earnings. Those levels also have some historical context dating back to last Summer.

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