Things you need to know
- Geo-political news sends stocks higher
- UBS upgrade causes MU to EXPLODE – taking the whole sector with it.
- Oil continues to fall, Gold falls as well, Bonds are higher, Yields lower.
- CRM, MRVL and HPQ all report after the bell.
- Try the Umbrian Mussels
Good morning… I am joining Maria Bartiromo today from 6 – 9 am on Fox Business. Please join me.
Yesterday was another reminder that markets don’t trade the headlines… they trade the change in the headlines. And yesterday morning? The market woke up in a good mood. Futures had been strong overnight, Oil was down, Bonds were being bought and that sent Yields lower. Gold continued to weaken and the VIX – remained in what is considered the ‘complacent zone’. So, what does it all mean?
Investors came into the day with a clear risk-on mentality – but the buying wasn’t broad. We saw money flow aggressively into growth, semis and AI while more defensive parts of the market lagged.
At the closing bell rang –The Dow lost 118 pts, – the only loser, but don’t let that fool you, the S&P up 45 pts (another record) , the Nasdaq surged by 312 pts as new money rushed in to buy anything tech, the Russell added 51 pts – closing above 2900 for the first time in history, the Transports rose by 441 pts or 2.2% – the clear winner….the Equal Weight S&P added 38 pts while the Mag 7 ended the day up 115 pts.
Let’s Talk About What Actually Happened…The S&P, Nasdaq, Russell and the Equal Weight S&P all notched new highs…and that matters because one of the concerns that we’ve been talking about for weeks is that this rally has felt ‘narrow’ at times — a handful of names dragging the indices higher while the rest of the market watched. Yesterday was better. Not perfect — but better.
Now let’s talk about what actually drove it. The headlines that suggested peace was close…’suggested’ is the key theme here…. caused oil to weaken and weaker oil, caused bonds to rally sending yields lower……BAM! And that would have been enough – but it wasn’t’…. There was something else that ‘lit the fuse’….
One name. One analyst. One call. Can you say MICRON? Well if you couldn’t – you can now….
Micron surged 19% or $144 to end the day at $895 and crossed $1 trillion in market cap value for the first time in its history. UBS analyst Timothy Arcuri (now a household name) raised his price target, not a little, not even more than a little – He TRIPLED it — from $535 to $1,625 a share — citing structural changes in the memory complex driven by AI. DRAM prices up 58-63%. NAND up 70-75%. HBM4 capacity sold out through year-end. His argument: the market has been valuing MU like an old cyclical chip company, but AI just changed the rules.
Just FYI – Timmy isn’t some rookie analyst looking for attention. This is a 20-year semiconductor veteran, one of the top-ranked analysts on all of Wall Street, with an 80% success rate and eleven All-America Research Team awards. When he triples a price target, people listen and surely UBS is listening as well…. I have to say though – it reminds me of another ‘high profile’ analyst – Who remembers – Henry Blodgett? Do you remember how dot com stocks would react if Henry opened his mouth? Just sayin’…..
MU took off like a rocket ship……and it dragged 16 of the top 20 S&P best performers with it. AMD +7.8%, Qualcomm +4.4%. GOOG +1.45%, MRVL + 6.1%, ARM + 4.8%…. The whole AI complex came alive – The SOXX +6.1%, DRAM (Roundhill Memory ETF) +14.8%, TRFK – the Pacer Data and Digital Revolution ETF surged by 4.3%.
Now – is a $1,625 price target aggressive? Yes, very! But when a credible analyst (and he is more credible now) makes a call that bold and that explicit, the market moves first and asks questions later. That’s exactly what happened Tuesday.
Then toss in yesterday’s eco data – Consumer Confidence specifically and you get another reason to go in….. The headline number came in at 93.1, beating expectations, but the internals told a more cautious story — consumers felt worse about current conditions (Present Situation Index fell to 121.2) while becoming slightly more hopeful about the future (Expectations rose to 74.4). And markets looked at that and said: ‘Its’ all good’!
5 of the 11 S&P sectors lost ground yesterday – Energy down 2.8%, Consumer Staples down 1.4%, Healthcare down 1%, Financials down 0.2% while Utilities lost less than 0.1%.
Tech gained 2.6%, Industrials +1.5%, Basic Materials +1.4%, Real Estate +0.4%, Consumer Discretionary up 0.25% and Communications gained 0.1%.
This morning oil is trading at $91 – down another $2.80 or roughly 3% – as the world waits for confirmation that some type of agreement is actually taking shape in the Middle East and that the Strait of Hormuz will reopen with ‘no strings attached’.
And as oil backs off… inflation fears ease. That’s sending bonds higher and yields lower again… The 2 yr is now yielding 4.02%, the 10 yr has slipped to 4.47%, while the 30 yr is sitting right on top of 5% – all three moving meaningfully lower from their recent highs. Over the past week we’ve seen yields fall by 2.9% on the 2 yr, 4.5% on the 10 yr and 3.8% on the 30 yr ‘long bond’.
And gold? It’s lower again too – down another $25 this morning to $4,483 as investors continue to unwind some of the fear trade. Lower oil, easing inflation concerns and less urgency to seek ‘safety’ are reducing demand for this traditional ‘safe-haven asset’ as investors rotate out of ‘protection’ and into more risk. Trendline support is at $4,390 – should we break that – then a test of the March low of $4,100 would be the next target and if we do test that, I suspect it will find plenty of support.
Earnings tonight include CRM, MRV and HP. We discussed this yesterday – but just to remind you – Salesforce is down 32% ytd…..tonight’s report will focus squarely on Agentforce’s AI numbers – they will either vindicate the stock or confirm more pain ahead. The stock is up 0.25% in pre-mkt trading at $179.50. It is hugging trendline resistance at $181…. with support down at $167….
Marvell is the AI semiconductor read of the week, and traders are taking that up 4.6% or $10 in the pre-mkt. HPQ tells you where enterprise hardware sits and that is down 0.1% in the pre-mkt at $24.40. Three very different stories. Pay close attention.
US Futures are UP …. Dow futures up 155 pts, S&P’s up 13 pts, the Nasdaq up 80 pts while the Russell is up 31 pts.
The S&P closed at 7519 – up 45 pts – leaving it solidly in another new century for 2026. Momentum is starting to get stretched. The RSI is in overbought territory and we’re now trading about 6% above trendline support. That’s not a red light — but it is a flashing yellow one. Remember – markets can stay overbought longer than people expect… but at some point they need to either pull back or consolidate to digest the move. Which only supports the idea of remaining disciplined and not chasing names that are stretched.
So, Trust your plan. And don’t get FOMO’ized.
Feel free to call me at 561-931-0190 for a free portfolio review. Happy to assess whether the risk in your portfolio matches your risk tolerance.
Take good care,
Kp
[email protected]
Source: Bloomberg, CNBC, Reuters, Wall Street Journal
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Umbrian Style Mussels
Umbria is one of the 20 regions in Italy – bordered by Tuscany, Lazio and Marche and is the only region that is neither located along either coastline – Mediterranean or Adriatic or has a border with another country. It sits between Rome and Florence and counts Perugia as its capital. Umbria is known as ‘Il Cuore verde d’Italia’ or the green heart of Italy. It has spectacular landscapes and its fertile grounds come from the Valley of the Tiber. Be sure to include Perugia and the region of Umbria in your next visit to Italy. You won’t be disappointed.
This is an easy dish to make and should be served with toasted garlic bread, a big salad and a glass of chilled Rose – You can serve it as an appetizer or a main dish – However you like.
For this you need – 2 lbs. of fresh mussels…now if they are really fresh you will need to scrub them to remove any sand and make sure that you remove the ‘beard’. Once you clean them – strain and then set aside in a pot of cool water –
You will also need, olive oil, onion, garlic, dry white wine, ½ cup of diced sun-dried tomatoes in oil, red pepper flakes, fresh parsley and this preparation calls for diced sopressata as well. (Sopressata is an Italian dry salami that you can buy in any butcher of in a large grocery store – It is NOT pepperoni).
Anyway – for this dish – it is really quite simple. Begin by heating the oil in a large pot. Once the butter is all melted – add in the chopped garlic and diced onion – sauté for 5 mins…next add the diced sopressata and the diced sun-dried tomatoes. Sauté for another 5 mins. (Now add some red pepper flakes – if you want a little spice). (Some people will use pancetta instead of the sopressata – that’s ok – but the sopressata gives it a whole different flavor and texture.)
Next add in about 1 ½ cups of the wine – bring to a boil. Once it boils – add the mussels, cover the pot with a tight lid and reduce the heat to med hi and cook for about 5 – 8 mins. Remove the lid and stir the mussels a bit – cook for another 5 mins. Once done – check for any unopened mussels and discard.
Add in some chopped parsley – this adds color and finishes the dish.
While the mussels are cooking – make the garlic bread with slices of fresh Italian Pane di Casa bread…. Toast in the oven and then slice in half – Serve in a basket in the center of the table for your guests to enjoy. Have plenty of Rose wine to enjoy.
Delish –
Buon Appetito