THE ETERNAL SOVEREIGN

Tag: Stock Trading

  • Three Fintech Leaders: A Comeback Story, a Steady Performer, or a High-Risk Play?

    The payments industry is thriving—but not every company is reaping the rewards. Firms like Fiserv, Global Payments, and FIS take a cut whenever you tap your card, settle a bill, or transfer money digitally.

    Still, their performance tells three very different stories. One appears to be a turnaround opportunity with deep value potential. Another has just completed a major acquisition that could either redefine its future or introduce new challenges. The third stands out as a consistent, dividend-paying performer.

    For investors aiming to benefit from the growth of digital payments, any one of these—or a combination—could offer a way to gain exposure to the trend.

    Fiserv: A Contrarian Bet on a Beaten-Down Stock

    Fiserv has been through a difficult stretch. Its stock is now trading around levels not seen in nearly eight years, despite the company continuing to generate billions in free cash flow and holding strong positions with banks and merchants nationwide.

    In 2025, Fiserv posted $21.2 billion in revenue and $5.8 billion in operating income, supported largely by its recurring payments processing business. The fourth quarter showed some signs of stability—while revenue growth remained muted, both revenue and earnings still exceeded analyst expectations. Revenue rose less than 1% year-over-year to $4.9 billion, while earnings per share came in at $1.99—down 21% from the prior year but still 9 cents above forecasts.

    The biggest blow to the stock, however, came earlier. After reaching a 52-week high of $221.50, shares dropped sharply in late 2025 following disappointing third-quarter results. This triggered leadership changes, including the appointment of two co-presidents and a new chief financial officer.

    More recently, another sell-off followed the company’s year-end report and cautious outlook. Management’s 2026 guidance—projecting earnings per share between $8 and $8.30 and organic revenue growth of just 1%–3%—fell short of prior growth rates, raising concerns that its turnaround strategy may take longer than expected.

    Analyst sentiment remains neutral overall. Of 37 analysts covering the stock, most recommend holding, with a smaller number leaning bullish and only a few bearish. The average 12-month price target sits in the low-to-mid $70 range.

    For contrarian investors, Fiserv may present an intriguing setup: a fundamentally solid business facing short-term headwinds, where patience could potentially be rewarded—though not without risk.

    Global Payments: Big Acquisition, Bigger Question Marks

    Global Payments (GPN) presents the most complex narrative among the three. In 2025, the company reported adjusted net revenue of $9.3 billion, up 2% year-over-year—or 6% on a constant-currency basis excluding divestitures. Adjusted earnings per share rose a solid 11% to $12.22.

    However, under GAAP metrics, the picture was less encouraging, with both revenue and net income declining—highlighting the gap between adjusted performance and reported results.

    At the same time, GPN is returning capital to shareholders. It announced a $2.5 billion share buyback as part of a broader $7.5 billion capital return plan through 2027. The company also pays a modest quarterly dividend of $0.25, offering a yield of around 1.5%.

    What truly defines GPN right now is its strategic transformation. A key milestone is the acquisition of Worldpay, completed in January 2026. The deal—valued at over $24 billion and structured through a mix of cash, stock, and debt—gives GPN full ownership of Worldpay. At the same time, it sold its Issuer Solutions unit back to FIS.

    This reshapes GPN into a more focused commerce solutions provider, with ambitions to scale its merchant platform, expand cross-border capabilities, and leverage richer transaction data. But deals of this magnitude rarely come without risk—especially when integration complexity is high and financial benefits may take time to materialize.

    Management remains optimistic, forecasting 2026 net revenue growth of about 5% and adjusted EPS growth of 13%, reaching $13.80–$14 per share.

    For now, though, Wall Street remains cautious. Analyst sentiment leans neutral, with a consensus “Hold” rating and an average price target in the upper $80s—suggesting some upside from current levels but far from a strong vote of confidence. Several analysts have recently downgraded expectations as the stock touched a 52-week low, reflecting ongoing uncertainty around execution.

    Fidelity National Information Services (FIS): A Stronger Fit for Income Investors

    FIS stands out with a distinct profile built on steady growth, expanding free cash flow, and a steadily improving dividend.

    After divesting its Worldpay merchant stake to Global Payments, the company posted solid 2025 results, with revenue rising 5% to $10.7 billion and adjusted earnings per share increasing 10% to $5.75. Cash flow from continuing operations surged 19%, allowing the company to boost its dividend by 10% to $0.44 per share. Altogether, FIS returned $2.1 billion to shareholders during the year, including $1.3 billion through share repurchases.

    The company’s outlook for 2026 remains upbeat. Management expects adjusted revenue to grow by around 30%, with EPS projected to increase between 8% and 10%.

    Analysts remain broadly positive, assigning a “Moderate Buy” consensus rating. With an average price target of $69.67, the stock suggests close to 50% upside from current levels. Meanwhile, a dividend yield approaching 4% enhances its appeal for income-oriented investors.

    That said, some risks persist. A slowdown in the financial sector or reduced spending from major clients could weigh on performance, while pricing pressure may affect margins. Even so, for those seeking consistent returns within financial infrastructure, FIS appears to be the most balanced of the three companies.

    Different Ways to Invest in Payments

    These three companies each come with their own set of trade-offs. While all provide exposure to the growth of digital payments, they play very different roles within the sector. Investors could consider holding all three—Fiserv, Global Payments, and Fidelity National Information Services—to diversify risk while benefiting from the broader industry tailwind.

    A more conservative strategy might lean toward FIS for its income potential. Meanwhile, Global Payments offers a clearer growth story, albeit with execution risks tied to its recent transformation. Fiserv, on the other hand, represents a contrarian play, dependent on a successful turnaround.

    Although they operate within the same segment of financial services, their differences in strategy, risk, and return profiles make each a distinct way to approach the payments space.

  • 1 stock to consider buying and 1 to consider selling this week: Netflix and Johnson & Johnson.

    • Iran-related geopolitical tensions, upcoming PPI inflation data, and the kickoff of the first-quarter earnings season will dominate market attention in the coming week.
    • Netflix appears poised for a possible breakout as it approaches its Q1 earnings release.
    • Meanwhile, Johnson & Johnson is expected to face pressure, with forecasts pointing to a decline in earnings.

    U.S. stocks mostly ended lower on Friday, though the S&P 500 still posted its strongest weekly performance since November, as investors monitored the fragile two-week ceasefire between the U.S. and Iran.

    For the week, the benchmark S&P 500 surged 3.6%, the Dow Jones Industrial Average advanced 3%, the tech-heavy Nasdaq Composite climbed 4.7%, and the small-cap Russell 2000 added 4%.

    Looking ahead, market focus will again center on Middle East developments and oil prices after weekend peace talks between the U.S. and Iran ended without an agreement. In response, President Donald Trump said on Sunday that the U.S. Navy will start blockading ships entering or leaving the Strait of Hormuz.

    Beyond geopolitical tensions, the upcoming week features a relatively light U.S. economic calendar, with key reports including producer price inflation, existing home sales, and initial jobless claims.

    At the same time, the first-quarter earnings season gets underway, with major banks like JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley set to report. Beyond the banking sector, companies including Netflix, Johnson & Johnson, PepsiCo, Taiwan Semiconductor, and ASML are also scheduled to release their results next week.

    No matter which way the market moves, below I outline one stock that could attract strong buying interest and another that may face additional downside pressure. Keep in mind, this outlook only covers the upcoming week, from Monday, April 13 through Friday, April 17.

    Stock to Buy: Netflix

    Netflix looks like a strong candidate for upside this week. The streaming leader is set to release its first-quarter earnings after Thursday’s market close, followed by a live management interview. According to the options market, investors are expecting a notable move in NFLX shares after the announcement, with an implied swing of about ±6.9% in either direction.

    Netflix is expected to post earnings of $0.79 per share, marking a 19.7% year-over-year increase. Revenue is projected to rise 15.5% to $12.18 billion, driven by solid streaming growth, strategic price hikes, and the rapid scaling of its ad-supported tier.

    Investor sentiment has improved after Netflix walked away from acquiring the streaming and studio assets of Warner Bros. Discovery, sidestepping a large, debt-intensive deal. This decision helped maintain balance sheet flexibility and allowed the company to redirect capital toward content creation, share buybacks, and expanding its advertising business.

    Looking forward, developments such as Netflix’s push into sports and gaming point to emerging growth opportunities.

    After a sharp decline earlier this year—largely triggered by its scrapped attempt to acquire Warner Bros. Discovery’s streaming and studio assets—Netflix stock has staged a recovery as investors shifted their attention back to the company’s fundamental strengths.

    The stock is now exhibiting strong upward momentum, having broken out of a double-bottom pattern at $75.21 and climbing to $103.01. It continues to gain traction ahead of Q1 earnings. The MACD remains in bullish territory, while the price is holding comfortably above both the 20-day and 50-day moving averages, indicating a solid uptrend.

    Trade Setup:
    Entry: around $103
    Target: $110.00 (approximately +6.8%)
    Stop-loss: $98.60 (approximately -4.2%)

    Stock to Sell: Johnson & Johnson

    In contrast, Johnson & Johnson appears to be heading into a more difficult earnings period, making it a stock to consider avoiding or selling this week. The company is scheduled to report its Q1 results before the market opens on Tuesday at 6:20 AM ET.

    Analyst sentiment has turned more cautious ahead of the release, with roughly half of the recent estimate revisions trending downward. Meanwhile, the options market is anticipating a potential post-earnings move of about ±3.8% in JNJ shares.

    Analysts expect a slight decline in Q1 earnings per share, with consensus estimates around $2.68—pointing to a low single-digit drop compared to the same period last year. Revenue, however, is projected to remain relatively stable, coming in between $23.4 billion and $23.6 billion, supported by continued strength in the Innovative Medicine and MedTech divisions.

    Although the company benefits from a well-diversified portfolio and a solid pipeline—including key treatments like Darzalex—its near-term outlook lacks strong catalysts that could drive a meaningful upside surprise.

    Management guidance and commentary are also unlikely to significantly shift the short-term narrative, given ongoing challenges such as the loss of exclusivity for major products like Stelara, along with persistent legal uncertainties.

    Johnson & Johnson’s technical outlook has weakened. After reaching a record high of $251.71 in early March, the stock has lost momentum, slipping below both its 20-day and 50-day moving averages, while the SuperTrend indicator has turned bearish.

    With a rounding top pattern taking shape, the stock may need to find solid support again before bullish sentiment can return.

    Trade Setup:
    Entry: around $238.40
    Target: $226.30 (approximately +5.1%)
    Stop-loss: $247.20 (approximately -3.7%)

    Sources: Jesse Cohen

  • Markets in Focus – BTC/USD, NASDAQ 100, USD/MXN, DAX, USD/CAD, EUR/USD, Silver, Gold

    BTC/USD

    One of the most compelling charts this week is Bitcoin. Despite widespread hesitation and global risk aversion, it has remained relatively resilient instead of breaking down. In addition, Wall Street–based ETFs tied to Bitcoin continue to attract inflows, even as overall market sentiment stays cautious.

    That said, this suggests a level of resilience in the Bitcoin market that shouldn’t be overlooked. At some point, the market will need to make a longer-term move, and based on current signals, it appears to be leaning toward a bullish outcome.

    This outlook is somewhat logical, considering Bitcoin has already dropped around 50% from its highs. For long-term holders, that kind of correction often signals a potential buying opportunity. While I’m not strongly bullish on Bitcoin overall, the technical picture indicates that a move above $76,000 could quickly become significant.

    NASDAQ 100

    The Nasdaq 100 moved higher over the week, largely driven by the ceasefire announcement, which boosted overall risk appetite. By the end of the week, the index was hovering around the 25,000 level. However, with key talks taking place in Pakistan over the weekend, market sentiment could shift quickly as early as Monday. For this reason, I remain optimistic about equities—but only with a strong sense of caution.

    USD/MXN

    The US dollar declined sharply against the Mexican peso over the week as risk appetite returned. It’s also important to note the significant interest rate gap between the two economies, which encourages traders to short this pair, as holding Mexican pesos allows them to earn daily carry.

    It now appears that the pair is on the verge of breaking down toward the 17 peso level. However, that level may not matter much at this stage due to the upcoming meeting in Pakistan over the weekend. If the outcome is negative, the US dollar is likely to strengthen; if not, the current downward trend should continue.

    DAX

    Germany’s DAX ended the week in positive territory, although it closed on a weak note on Friday. This likely reflects caution ahead of the weekend meeting, as Germany remains highly sensitive to energy supply risks—particularly LNG from Qatar and crude shipments through the Strait of Hormuz. Any disruption there could create significant challenges for its industrial sector. As a result, many traders appear to be locking in profits and reducing exposure ahead of potentially impactful developments from the talks in Pakistan.

    USD/CAD

    The US dollar has declined against the Canadian dollar and is now hovering around both the 50-week EMA and the 200-day EMA, making a pause at this level quite reasonable. As with other markets, Monday’s open will likely be influenced by developments in Islamabad. Overall, this appears to be a market attempting to establish support before potentially moving higher. The 1.3750 level stands out as a key area to watch for a possible bounce if the pair continues to pull back, while the 1.40 level remains a significant resistance to the upside.

    EUR/USD

    The euro posted a solid rally over the week, largely supported by improving risk appetite. It has now climbed above the 1.17 level for the first time in about five weeks. If this momentum holds, the next target to watch would be the 1.18 level.

    The 1.18 level represents a major resistance zone. However, if the talks between Iran and the United States produce positive outcomes, it could trigger a broad relief rally—potentially pushing this market higher along with others.

    Silver

    Silver has been volatile but clearly positive over the week as it continues to search for a bottom. The market is likely to remain choppy, and while a larger move will eventually take shape, it may not be the ideal time to take on significant positions.

    Interest rates will remain a key driver here, so it’s important to watch the US 10-year yield closely. Generally, a move above 4.30% tends to be negative for this market—though it’s not a definitive rule, just one of several influencing factors. Additionally, developments coming out of Islamabad and the ongoing talks are likely to have a significant impact on interest rate expectations, which will in turn affect price action here.

    Gold

    The gold market has also moved higher, but this seems to have caught many traders off guard, as the main driver has been interest rates rather than geopolitical fear. Many people are puzzled by gold’s weakness during times of conflict, but the explanation lies in the bond market—yields are now significantly higher than before, prompting portfolio managers to shift allocations toward interest-bearing assets instead of gold.

    I remain bullish on gold over the longer term, but I also recognize that a renewed spike in yields—possibly triggered by disappointing outcomes from the talks in Islamabad—could push the market down toward the $4,600 level. On the upside, the $5,000 mark stands out as the first major resistance zone.

    Sources: Lewis

  • S&P 500 breakout signals a cautious tone for the market’s recovery

    Markets tilted back toward buyers, but it’s still too early to call a sustained rally. The S&P 500 led the move, breaking above downtrend resistance, though it has yet to test its 20-day moving average. A fresh MACD buy signal emerged, but its strength remains questionable as the indicator is still below the zero line.

    The Russell 2000 (IWM) closed above its 20-day moving average but still needs to overcome more meaningful resistance at prior highs. After holding firmly above its 200-day MA, it has generated fresh buy signals in both On-Balance Volume and MACD. The index is also showing relative outperformance versus its peers.

    The Nasdaq Composite remains below key range support and downtrend resistance. While the past three sessions saw constructive buying—with new buy signals in MACD and On-Balance Volume—the broader picture is largely unchanged, and the index still leans bearish.

    Bitcoin has seen little change in its overall setup, but still tilts in favor of the bulls and may offer a trading opportunity. From a technical standpoint, there’s a confirmed buy signal in On-Balance Volume and a potential buy trigger emerging in the MACD.

    The Dow Jones Industrial Average has successfully back-tested its breakout and held above the 20-day moving average. The next step is a push toward the 47,000 level. The move is supported by buy signals in both MACD and On-Balance Volume, with the index also outperforming its peers.

    Indices that have rallied over the past three sessions are unlikely to extend gains into a fourth, or at least don’t offer attractive long setups. Bitcoin continues to present the most compelling long opportunity. On the short side, there’s limited conviction—though the Nasdaq Composite could provide a setup on a test of the 47K level.

    Sources: Declan Fallon

  • Oil Spike Raises Inflation Concerns as Markets Focus on This Week’s CPI and PCE Reports

    Key highlights

    • Oil surged at the Asian open on Monday, bonds declined, and equities were mixed as Donald Trump warned of “hell” if Iran fails to meet his Strait of Hormuz deadline.
    • Crude prices advanced after the Easter break, with the ongoing U.S.-Israel conflict with Iran continuing to disrupt global supply.
    • The dollar remained firm, while the yen hovered near the key 160-per-dollar level amid market unease over escalating Iran tensions and Trump’s deadline.
    • Japan’s benchmark yields climbed to a 27-year high as Middle East conflict fueled inflation concerns and strong U.S. jobs data reduced expectations for early rate cuts.
    • Gold edged lower, weighed down by a stronger dollar, as elevated oil prices and robust U.S. labor data dampened hopes for Federal Reserve easing.

    Dow Jones futures ticked higher Sunday night, with S&P 500 and Nasdaq futures also posting modest gains as investors remained cautious amid fresh U.S.–Iran tensions and rising oil prices.

    The S&P 500 advanced during the holiday-shortened week, breaking a five-week losing streak. Earlier, the index had recorded its worst quarter since 2022, weighed down by late-February declines linked to the conflict and surging energy costs. However, markets rebounded last week despite continued gains in crude oil.

    All three major indexes ended their five-week slides, each rising at least 3%. Still, equities have faced pressure this year due to concerns over AI disruption, weakness in private credit, and ongoing Middle East uncertainty, leaving the S&P 500 roughly 6% below its late-January peak.

    U.S. Economic Data & Earnings Preview

    Investors are closely watching upcoming inflation data, particularly Friday’s March Consumer Price Index, which is expected to rise 0.9% month-over-month—an early indication of the inflationary impact from the war-driven surge in energy prices. U.S. crude oil has climbed roughly 90% so far this year, pushing average gasoline prices above $4 per gallon for the first time in more than three years.

    Another key release comes Thursday with the Personal Consumption Expenditures report, a preferred inflation gauge for the Federal Reserve and a crucial input for its interest-rate decisions.

    Economic calendar:

    • Monday (Apr 6): Donald Trump holds a press conference at the Oval Office at 1:00 p.m.
    • Tuesday (Apr 7): Austan Goolsbee participates in a live Q&A in Detroit at 12:35 p.m.
    • Wednesday (Apr 8): Federal Reserve releases minutes from its March meeting at 2:00 p.m.
    • Thursday (Apr 9): February PCE report is published.
    • Friday (Apr 10): March CPI data is released at 8:30 a.m., with forecasts pointing to a 0.9% monthly increase.

    Earnings calendar:

    • Wednesday (Apr 8): Delta Air Lines reports Q1 results before the open, while Constellation Brands posts its fiscal Q4 earnings.

    Delta’s recent performance reflects the typical volatility of the airline sector, where fuel costs, labor expenses, and consumer demand fluctuate. The company has held up relatively well by focusing on higher-income travelers who are less sensitive to inflation, even as demand for economy-class seats weakened. In Q4, main-cabin revenue dropped 7% to $5.62 billion, while premium ticket revenue increased 9% to nearly $5.7 billion.

    The stock reaction to Delta’s January 14 earnings was muted: adjusted EPS declined 13% year-over-year to $1.55, slightly beating expectations, while revenue rose 3% to $16 billion. Looking ahead, the company projects full-year adjusted EPS of $6.50–$7.50 (midpoint $7.00, below the $7.25 consensus) and Q1 adjusted EPS of $0.50–$0.90, roughly in line with market estimates.

    Technical Analysis

    DJIA Technical Outlook

    The Dow Jones Industrial Average recently broke out above a descending channel, which has now turned into support around 45,760.

    As long as the index holds above this level, it is likely to extend its rally toward 47,430, followed by a potential short-term pullback. A clear breakout above 47,430 would signal further upside, with the next target near 48,400.

    Notably, the index successfully retested and rebounded from the previous all-time high zone around 45,000—an encouraging sign that the broader uptrend remains intact.

    Nasdaq 100 Technical Outlook

    The Nasdaq-100 has rebounded from the previously identified support near 23,000.

    To maintain upward momentum, the index needs to stay above 23,990, which would open the way for a move toward 24,330 this week. However, a rejection at the 24,330 level could push prices back down toward the 23,000 support zone.

    In the near term, the NDX is likely to trade within a range of 23,000 to 24,330 until a decisive breakout establishes a clearer direction.

    S&P 500 Technical Outlook

    The S&P 500 rebounded from the 6,335–6,340 support zone and delivered a strong rally last week, in line with the previous outlook.

    To continue the upward trend, the index needs to break above the 6,610–6,615 resistance area, which would open the path toward 6,705.

    If that breakout fails, the SPX is likely to move sideways within a 6,510–6,610 range, with potential downside risk extending to around 6,475.

    Weekly U.S. Indices Probability Map

    The U.S. weekly probability map for March 30 to April 3, 2026 indicates that the following week (April 6–10) has historically been bullish for major U.S. indices, suggesting a favorable environment for upward momentum.

    These probability maps are based on historical seasonality trends, while sentiment indicators are generated using a scoring system derived from those seasonal patterns.

    Sources: Ali Merchant

  • Hedge funds dumped global equities at the fastest pace in 13 years as market risks intensified.

    Goldman Sachs Group Inc. reported that hedge funds offloaded global equities in March at the fastest pace in 13 years, marking the second-largest wave of selling since its prime brokerage began tracking the data in 2011.

    The selloff was largely driven by a surge in short positions, as investors bet on further market weakness amid ongoing conflict in Iran. Global equities reflected this pressure, with the MSCI All-Country World Index dropping 7.4%—its worst monthly performance since 2022—while the S&P 500 Index fell 5.1% over the same period.

    Fast-moving hedge funds increasingly used exchange-traded funds (ETFs) to express bearish views, with short positions in large-cap equity ETFs driving a 17% rise in overall short exposure across U.S.-listed ETFs.

    In the U.S., selling was widespread, hitting eight out of 11 sectors, with the heaviest outflows seen in economically sensitive areas such as industrials, materials, and financials.

    At the same time, fund managers rotated into more defensive assets, buying consumer staples stocks at the fastest pace since July 2025—driven entirely by new long positions.

    Meanwhile, hedge funds turned net buyers of technology, media, and telecom stocks for the first time in four months, though this was mainly due to short covering rather than fresh bullish bets.

    Sources: Vlad Schepkov

  • Weekly stock picks: buy ExxonMobil and sell Nike this week.

    • The coming week will be driven by key U.S. data releases, including the jobs report and retail sales figures, alongside ongoing developments in the Iran conflict.
    • ExxonMobil is highlighted as a momentum opportunity, supported by increased oil price volatility stemming from Middle East supply risks.
    • In contrast, Nike is seen as a stock to avoid ahead of its earnings release, with concerns over potentially weak results and cautious forward guidance.

    U.S. equities fell sharply in a broad-based selloff on Friday, with both the Dow Jones Industrial Average and the Nasdaq Composite slipping into correction territory as investors grew concerned about the global economic fallout from the war in Iran.

    The S&P 500 extended its losing streak to a fifth consecutive week, falling 2.1%, while the tech-focused Nasdaq Composite dropped 3.2% and the Dow Jones Industrial Average declined 0.9%.

    Looking ahead, investors will focus on the upcoming U.S. employment report, a key economic release expected to show around 56,000 job additions and an unemployment rate of 4.4%, alongside ongoing monitoring of the second month of the Iran conflict. The payrolls data is scheduled for April 3, when U.S. markets will be closed for the Good Friday holiday.

    Retail sales for February and manufacturing activity data are also scheduled for release next week.

    On Monday, Jerome Powell will participate in a moderated discussion at Harvard University, with his remarks likely to influence market sentiment.

    On the corporate side, Nike is set to report earnings on Tuesday, while the majority of first-quarter results will come later in the earnings season.

    Overall, the focus remains on the week ahead—Monday, March 30 to Friday, April 3—as investors position for key macro data, central bank commentary, and early corporate earnings, along with one stock expected to outperform and another at risk of further downside.

    Buy Idea: ExxonMobil

    ExxonMobil emerges as the top pick to buy this week, supported by a notable surge in global oil prices as markets react to heightened fears of supply disruptions tied to the ongoing U.S.–Israeli conflict with Iran. Since the outbreak of the war, crude benchmarks have climbed sharply amid growing concern that the turmoil could choke flows through the strategically vital Strait of Hormuz.

    U.S. West Texas Intermediate (WTI) crude has surged more than 70% year-to-date, trading near $100 per barrel, while Brent crude futures have climbed above $105 and briefly approached $110 during intraday trading on Friday.

    Despite periodic pullbacks and speculation around potential ceasefires, geopolitical risk premiums remain elevated, helping to sustain higher energy prices in the near term.

    ExxonMobil is well positioned to benefit from this environment, given its large upstream portfolio, including major production assets in the Permian Basin and Guyana. As a result, each $10 increase in crude prices could add billions of dollars in incremental annual cash flow.

    Notably, XOM is trading close to its 52-week high of $171.23. While volatility has increased, the stock continues to demonstrate strong resilience, reflected in its relatively low 1-year beta of 0.27, suggesting limited sensitivity to broader market swings even amid turbulence.

    This stability reinforces ExxonMobil’s appeal as a buy or add at current levels, particularly as geopolitical tensions continue to support higher crude prices.

    Trade Setup:

    • Entry: Around current levels (~$171.00)
    • Exit Target: $180.00 (approx. +5.3%)
    • Stop-Loss: $165.60 (approx. -3.5%)

    Stock to Offload: Nike

    Nike, by contrast, is the stock to avoid or sell this week, as it heads into its upcoming earnings release facing multiple challenges. The sportswear giant is scheduled to report fiscal Q3 results on Tuesday at 4:15 PM ET after the market close, and expectations remain weak.

    Despite its globally recognized brand, Nike has been under pressure in recent quarters due to weakening consumer demand, rising competitive pressure, and a series of strategic setbacks.

    Options markets are currently pricing in an earnings-related move of roughly ±9%, suggesting significant volatility ahead, with downside risk that could drive the stock toward multi-year lows.

    Nike is projected to report a 45% year-over-year decline in adjusted EPS to $0.30, with revenue expected to slip 1% to around $11.2 billion. The weaker outlook reflects soft demand in key regions—especially China—along with inventory overhang, higher tariff pressures, and intensifying competition.

    Any disappointing forward guidance could further dampen investor sentiment, as the market increasingly questions when Nike’s turnaround strategy under new leadership and restructuring efforts will begin to deliver sustained growth.

    Meanwhile, competitors such as On, Hoka, and Alo Yoga continue to take share in both performance and lifestyle segments, gradually eroding Nike’s dominance. At the same time, Nike’s premium pricing strategy is becoming more challenging in an increasingly value-sensitive consumer environment.

    Nike (NKE) is currently trading just above its 52-week low at around $51.20, extending a persistent downtrend marked by a 16.8% decline over the past month.

    Heading into a key earnings release, management has already flagged continued headwinds, and the combination of elevated valuation concerns and weak price momentum suggests the stock may remain under pressure.

    Although the RSI indicates oversold conditions from a technical standpoint, the absence of clear positive catalysts raises the risk that attempting to “buy the dip” could be premature.

    Trade Setup:

    • Entry: Near current levels (~$51.15)
    • Target: $48.00 (approx. +5.5% downside move)
    • Stop-loss: $53.24 (approx. 4.4% risk)

    Sources: Jesse Cohen

  • S&P 500: Goldman Sachs identifies the crucial question for the second quarter

    U.S. stocks are facing a challenging mix of shrinking valuation multiples and still-strong corporate fundamentals as markets head into the Q1 2026 earnings season.

    According to Goldman Sachs’ latest “Weekly Kickstart” report, the S&P 500 has fallen about 9% from its January peak, pressured by rising oil prices, higher interest rates, and ongoing instability linked to the Iran conflict. Over the past month, the index’s P/E ratio has dropped from 21x to 19x, even as analysts have unexpectedly increased 2026 EPS forecasts by 3%.

    From a sentiment standpoint, positioning has weakened sharply, with Goldman’s U.S. Equity Sentiment Indicator falling to -0.9—its lowest level since August 2025. While historically such low readings can precede stronger returns, analysts caution that sentiment alone may not be enough to drive a rebound without clearer improvements in underlying fundamentals. Continued escalation in the Middle East could still pose downside risks to growth expectations.

    Despite macro pressures, corporate fundamentals remain relatively solid. Goldman still expects S&P 500 earnings to grow 12% in 2026, assuming disruptions do not worsen significantly. The upcoming earnings season will be key in testing this outlook, particularly whether companies can sustain margins amid elevated energy costs and shifting trade dynamics.

    Looking ahead, markets are closely watching how the Federal Reserve responds to stagflationary pressures. While earnings growth persists, high oil prices and sticky inflation complicate the case for rate cuts. Investors are increasingly leaning toward high-quality companies with strong balance sheets that can endure a prolonged high-rate environment. Ultimately, management guidance in the coming earnings reports will play a decisive role in determining whether the S&P 500 can stabilize at current levels.

    Sources: Simon Mugo

  • The S&P 500 could be starting a countertrend rebound after successfully holding a key support level.

    In our previous update, we noted that the S&P 500’s year-to-date performance had closely followed midterm election-year seasonality. When combined with our Elliott Wave analysis, we concluded that:

    • The decline was likely to bottom around $6,490 ± 10
    • A countertrend rally would begin once that low was in place, potentially reaching about $6,900 ± 100
    • This would likely be followed by another pullback, at minimum retracing 38.2% of the rally from the April low

    As of now, the index appears to have behaved largely in line with that outlook. It bottomed on Friday at $6,473—just 7 points below the projected zone—and has since rebounded by roughly 2%.

    However, given that the market seems to be undergoing a fourth-wave correction comparable in scale to the 2022 second-wave decline, it’s unlikely that such a modest pullback represents the entire correction. Elliott Wave theory suggests corrections typically unfold in at least three waves (a, b, and c).

    As a result, while not impossible, it is unlikely that the correction has already completed. More plausibly, the red Wave A within the broader black Wave 4 has now formed its low.

    Figure 1. Intermediate-term Elliott Wave count for the S&P 500 (SPX) since April 2025.

    Because we prioritize what’s most probable rather than merely possible, we rely on a weight-of-the-evidence approach. In addition to seasonality, we assess a range of market breadth indicators.

    Here, the McClellan Oscillator for the S&P 500 shows a higher low between the March 13 and March 20 price lows (see Figure 2). This indicates that fewer stocks were involved in the latest decline—a condition known as positive divergence (green dotted arrow), which is typically a bullish signal.

    Moreover, the indicator had fallen to levels last seen during the April 2025 crash low, pointing to deeply oversold market breadth. Much like a stretched rubber band nearing its limit, such conditions often precede a rebound—another constructive signal for the market.

    Figure 2. McClellan Oscillator for the S&P 500 since April 2025.

    The second breadth indicator we analyze is the cumulative Advance–Decline line for the S&P 500 (SPX A/D), shown in Figure 3. So far, it has continued to hold above its upward-sloping blue dotted trendline from the April lows (black arrows), which is a constructive sign.

    Earlier in 2025, a negative divergence between the index and the A/D line signaled the February–April correction (solid red and green arrows). In contrast, no such divergence has appeared recently. Instead, the A/D line has been rising while the index has been largely flat (dotted red and green arrows within the black box).

    Moreover, the A/D line has now broken above its downtrend line that had been in place since early March (green arrow), adding another bullish indication.

    Figure 3. Cumulative Advance–Decline (A/D) line for the S&P 500 since October 2025.

    In summary, while price action remains the ultimate arbiter, key market breadth indicators are broadly supportive of a bullish outlook. At the same time, the index found a low precisely within the zone projected by our Elliott Wave and Fibonacci analysis.

    As long as prices hold above Friday’s low, we anticipate the B-wave rebound to extend toward the $6,900 ± 100 area. However, if that level fails to hold, the next meaningful support lies in the mid-6,300s, where buyers may look to reestablish control.

    Sources: Dr. Arnout ter Schure

  • Energy stocks rally as oil prices spike: time to buy, hold, or cash in?

    Since fighting with Iran erupted on Feb. 28, energy stocks have stood out as some of the few consistent winners for bullish investors—until a social media post from President Trump triggered a drop in oil prices, dragging energy shares down with it. The episode underscored how fragile markets are right now, where even a single headline can spark sharp swings.

    That’s why recent remarks from Chevron CEO Mike Wirth carry weight. He warned that markets may be underestimating the impact of potential supply disruptions, particularly if Iran closes the Strait of Hormuz—a key route that typically handles about 20% of global oil flows . According to Wirth, pricing is being driven more by perception than solid information, even as investors are flooded with conflicting data.

    Still, his view shouldn’t be dismissed as self-serving. With decades of operational experience in volatile regions like Venezuela, Wirth understands how deeply disruptions can affect supply chains—and how long it can take for markets to stabilize again.

    As a result, even if oil avoids extreme scenarios—such as the $200-per-barrel projections floated by some analysts—consumers may still face elevated fuel prices for an extended period. For investors who missed the initial rally, opportunities may still exist, particularly across different segments of the energy sector.

    Big Oil Momentum: Chevron at the Forefront in a Supply-Constrained Market

    Among major oil companies, Chevron stands out as a top pick. Its stock (CVX) has surged nearly 33% in 2026, breaking out of a multi-year range that had held since 2022.

    Much of this rally followed U.S. military actions in Venezuela, where Chevron uniquely maintains operations among international oil firms.

    That said, investors may question whether the stock is vulnerable to a pullback if tensions in the Strait of Hormuz ease. Currently, CVX trades about 11% above its average analyst price target. Still, those targets are being revised upward, with the most optimistic call from Piper Sandler lifting its target to $242 from $179.

    Over the past three years, Chevron has delivered roughly 50% total returns—modest for growth-focused investors, but notable given its reputation as a reliable dividend payer. Even after its recent rally, the stock offers a 3.5% yield, reinforcing its appeal as a blend of income and stability.

    Refining Edge: Valero Benefits from Volatility and Expanding Margins

    While Chevron represents upstream exposure, Valero Energy provides a different angle—pure refining. This makes it well-positioned even in volatile oil markets.

    Unlike producers, refiners profit from the “crack spread,” or the gap between crude input costs and refined product prices. Supply disruptions that hurt producers can actually boost refining margins.

    Valero, the world’s largest independent refiner, operates 15 facilities across North America and the U.K., giving it both scale and flexibility—especially valuable if supply routes shift due to geopolitical risks.

    Its stock (VLO) has climbed over 45% in 2026, now trading about 20% above consensus targets. While somewhat extended, analysts continue to raise expectations. Meanwhile, investors benefit from a dividend yield near 2%, offering a mix of cyclical upside and income.

    Midstream Stability: Enbridge Delivers Income with Volume-Driven Growth

    Another way to play the energy rally is through midstream operators like Enbridge, which function more like toll collectors for oil and gas flows.

    These companies earn fees based on volume rather than commodity prices—and volumes are currently near record highs in early 2026.

    Enbridge is one of the largest pipeline operators in North America, with over 18,000 miles of infrastructure, transporting roughly 30% of the region’s crude oil and about 20% of U.S. natural gas demand.

    Over the past three years, ENB has returned around 80%, highlighting the consistency of midstream performance. With a consensus price target implying nearly 20% upside and a dividend yield around 5.1%, Enbridge offers a compelling combination of steady income and moderate growth.

    Sources: Chris Markoch

  • 1 Stock to Buy and 1 to Sell This Week: Ondas and PDD.

    • This week, markets will be closely watching developments in the Iran conflict, movements in oil prices, and changes in global government bond yields.
    • Ondas is recommended as a buy for traders who are comfortable with high-risk, high-reward situations, especially with earnings approaching.
    • PDD is suggested as a sell because its slowing growth and looming regulatory challenges likely outweigh any short-term upside, particularly ahead of its fourth‑quarter earnings release.

    U.S. stocks fell sharply on Friday, with the S&P 500 ending at a six-month low, as tensions in the Middle East pushed oil prices higher, fueling concerns about inflation and the likelihood of rising interest rates.

    The major U.S. stock indexes recorded their fourth consecutive week of losses. The Dow Jones Industrial Average fell 2.1%, the S&P 500 dropped 1.9%, the Nasdaq Composite slid 2.1%, and the Russell 2000 lost 1.7%.

    Since the outbreak of the Iran conflict on February 28, the S&P 500 has declined 5.4%, the Nasdaq is down 4.5%, and the Dow has fallen nearly 7%. All three benchmarks are trading below their 200-day moving averages, highlighting the recent weakening of market sentiment.

    In the coming week, attention will continue to focus on oil prices, global bond yields, and developments in Iran.

    U.S. economic releases are expected to be relatively light, with reports on manufacturing, services activity, and initial jobless claims scheduled for the week ahead.

    Notable companies such as Carnival and Chewy are scheduled to release their earnings this week.

    Additionally, a major energy conference in Houston, featuring leading executives from the global industry, may capture Wall Street’s focus.

    Below, I outline one stock recommended for purchase and one to consider selling for the week of Monday, March 23, through Friday, March 27.

    Recommended Buy: Ondas

    Ondas, a company specializing in private wireless networks and drone solutions, is scheduled to report its latest earnings this week. The firm is active in high-growth areas such as industrial automation and critical infrastructure, sectors that are rapidly embracing advanced wireless technologies.

    Ondas will release its Q4 results on Wednesday, with a conference call set for 8:00 AM ET. Based on options market activity, investors are anticipating a potential move of roughly ±10% in ONDS shares following the announcement.

    Ondas has already released updated preliminary results, reporting Q4 revenue of $29.1 million to $30.1 million—exceeding prior guidance of $27–$29 million—driven by strong demand in defense, homeland security, and critical infrastructure applications.

    The company anticipates Q4 net income between $82.9 million and $83.4 million, with full-year net income projected at $50.4 million to $50.9 million, surpassing earlier estimates.

    Management also reaffirmed its ambitious 2026 revenue target of $170–$180 million (excluding potential acquisitions), backed by a growing backlog and recent defense contract wins, including border protection systems and counter-drone solutions.

    ONDS recently traded near $10, closing at $10.06 on Friday, following a pullback accompanied by strong trading volume. After an extraordinary one-year rally of roughly +1,300%, Ondas is now consolidating within a high-volatility symmetrical triangle. The stock is trading between $9.50 (rising support, aligned with the 50% Fibonacci retracement) and $11.50 (falling resistance), with the triangle nearly 80% complete.

    This technical pattern indicates potential for a favorable earnings-driven move if the final results align with preliminary figures and guidance remains intact.

    Trade Setup:

    • Entry: $9.95 – $10.25
    • Target: $12.00 (~20% potential gain)
    • Stop-Loss: $9.35 (~6.5% risk)

    Recommended Sell: PDD

    In contrast, PDD Holdings, the parent company of Pinduoduo and Temu, heads into earnings week amid a pronounced downtrend. Despite strong growth in recent years, PDD faces increasing headwinds, including intensifying competition in China’s e-commerce market and rising global regulatory scrutiny, which could weigh on investor sentiment.

    The company is scheduled to report its fourth-quarter results before the market opens on Wednesday. Options markets imply a potential ±6% move in the stock following the earnings release, highlighting the risk of an earnings miss.

    Analysts expect year-over-year growth in both EPS and revenue, but recent quarters have fallen short, and the company faces broader challenges.

    Temu’s rapid international expansion has driven up marketing expenses, potentially weighing on profitability. Additionally, PDD operates in a tightly regulated environment in both China and overseas, with recent scrutiny on data privacy and trade practices posing further risks.

    Against this backdrop, even strong revenue results may not reassure investors if management provides cautious guidance or commentary, or if margins are pressured by ongoing subsidies and high marketing costs.

    PDD has dropped nearly 25% over the past year, closing at $96.19 on Friday. The stock recently broke below key multi-month support at $97.00, signaling a textbook bearish breakdown.

    Technical indicators reinforce the downtrend: the price is trading below all major moving averages (20-, 50-, and 200-day), the SuperTrend is red at $106.42, and the Ichimoku Cloud confirms a bearish outlook, with the next potential support zone around $90–$92.

    Trade Setup:

    • Entry: Near current levels (~$96)
    • Target: $87 (~9.5% potential gain)
    • Stop-Loss: $102 (~6.2% risk)

    Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always perform your own due diligence before making investment decisions.

  • Markets in focus: EUR/USD, Silver, Gold, BTC/USD, GBP/USD, USD/CHF, NASDAQ 100, and DAX.

    EUR/USD

    The euro climbed during the week, testing the 1.16 level as both central banks tied to this pair held their meetings. However, the key takeaway is that the Federal Reserve is likely to stay more hawkish than previously expected, increasing the chances that the US dollar will remain stronger for an extended period.

    In fact, by Friday, even though the ECB had sounded somewhat more hawkish than expected, there were already signs of a shift in tone, with ECB member Villeroy indicating that a rate cut cannot be ruled out.

    Ongoing concerns over energy in the European Union also add downside risk—if energy issues persist, economic growth could slow. As a result, the euro may remain under pressure, with any short-term rallies likely to face selling pressure.

    Silver (XAG/USD)

    Silver prices dropped sharply over the week as rising U.S. interest rates weighed on the market, and that trend is likely to continue. As the week comes to a close, the focus is on holding above the $70 level—a key round number that carries strong psychological importance and is being closely watched by traders.

    If the market breaks below this support level, it could trigger significant selling pressure, potentially driving prices toward $65, and over the longer term, even down to $50.

    Overall, this is a market that may be hard to navigate, and it’s unlikely to see consistent upward momentum unless U.S. interest rates begin to stabilize.

    Gold (XAU/USD)

    The gold market is likely to behave similarly to silver, with the key difference being its safe-haven appeal. Because of that, gold may outperform silver—and frankly, that’s what I expect to happen.

    That said, outperformance is relative, and this week’s candlestick looks quite weak. I’d be watching the 4,500 level closely, with the 4,400 area below it acting as additional support.

    Any rally from here is likely to face selling pressure sooner or later, with 5,000 serving as a near-term ceiling. It’s only when U.S. interest rates fall meaningfully that gold can resume a stronger upward move. Still, looking at the longer-term charts, gold could drop another 1,000 and remain within a broader uptrend.

    BTC/USD

    Bitcoin initially attempted a breakout during the week but is having trouble holding above the 72,000 level. Still, it remains within a formation that suggests a possible reversal, although—like other markets—the outcome will largely depend on U.S. interest rates.

    If interest rates remain exceptionally high, it’s hard to see Bitcoin—being a high-risk asset—performing strongly in that environment.

    That said, I’m not expecting Bitcoin to collapse, but any upward move is likely to be gradual rather than sharp. If the trend is positive, it will probably be more of a slow grind higher than a rapid rally.

    GBP/USD

    The British pound climbed over the week, reaching up to test the key 1.35 level before pulling back. Overall, the market is likely to remain quite volatile, with the 1.3250 level acting as a support zone.

    It seems that traders are continuing to sell the British pound whenever signs of exhaustion appear, especially as ongoing energy concerns in the United Kingdom weigh on sentiment.

    There is a strong possibility that the US dollar could strengthen against the pound, pushing this pair lower. If the price falls below the 1.32 level, it may head toward the 200-week EMA, which is currently around 1.30. I have little interest in buying the pound at the moment, even though it may still perform better than several of its peers against the US dollar.

    USD/CHF

    The US dollar is trading choppily against the Swiss franc, hovering around the 0.79 level. If the price manages to break above this week’s high, it could pave the way for a move toward the 0.81 level.

    If the price breaks below this week’s low, the market could decline toward the 0.77 level. Overall, this is likely to remain a choppy and noisy environment.

    With US interest rates rising, the market tends to favor safe-haven flows, while the Swiss National Bank may step in if the franc strengthens excessively. Given these opposing forces, I expect the pair to eventually move higher.

    NASDAQ 100

    The Nasdaq 100 attempted to move higher during the week but encountered resistance around the 25,000 level. After reversing and showing weakness, the market now appears to be testing the 23,800 level.

    Given this situation, the market appears vulnerable to a deeper downside move. The 50-week EMA sits near the 23,800 level, and a break below that could trigger significant selling pressure. While short-term bounces may occur, a sustained move above 25,000 would be needed for buyers to regain control and target higher levels. For now, elevated interest rates continue to weigh on overall risk sentiment.

    DAX

    In Germany, the DAX initially attempted to rally but has since broken down decisively, appearing to lose key support. Rising German interest rates, combined with a broader risk-off environment and ongoing energy challenges across Europe, continue to heavily influence the market’s direction.

    With liquefied natural gas and oil continuing to pose challenges, this market will likely need time to establish support at lower levels. Before that happens, however, it could potentially decline toward the 20,000 mark.

    Sources: Lewis

  • S&P 500 Faces Breakdown Risk as Oil Prices and Bond Yields Surge

    The S&P 500 closed down more than 1.3%, pressured by a hotter-than-expected PPI reading, a sharp rise in oil prices, and growing expectations that the Fed may delay rate cuts into 2026—even without Jay Powell at the helm.

    The 2-year Treasury yield tells the story, jumping over 10 basis points to 3.79%, its highest level since August. While there’s minor resistance around 3.8%, it appears limited, leaving the door open for a move back toward 4% in the near term.

    More notable is the move in the 30-year yield, which is once again approaching the 5% level. It rose 4 basis points on the day to 4.89%, putting it within striking distance of that key threshold.

    If oil prices remain elevated—or push even higher—and inflation continues to trend upward, a breakout above 5% looks increasingly plausible, with a potential move toward 5.1%–5.2% not out of the question.

    Turning back to the S&P 500, the index closed at its lowest level since November, finishing at 6,624. With the 200-day moving average just 9 points below, the market is approaching a key technical battleground ahead of Friday’s options expiration (opex).

    A decisive break below the 200-day, especially with follow-through selling, would likely raise red flags for investors. For now, however, such a move would more likely signal a test of the next support zone around 6,520.

    The real inflection point lies below that—if 6,520 gives way, downside momentum could accelerate. In the near term, 6,500 is also shaping up as a critical level, acting as a put wall at least through Friday.

    Based on my CTA model, flows are currently negative, with the next key flip level sitting around 6,570. I’m still refining the longer-term trend signal, so confidence there remains limited. More importantly, though, systematic flows at this point are not providing support for a market move higher.

    The Financials ETF (XLF) is nearing a break of key support just below $49. If that level gives way, the next support zone comes in around $47.25—an area that dates back to April last year and also marks an unfilled gap on the chart.

    At the end of the day, it all comes back to one key driver: oil—and for now, that trend is still pointing higher. As long as oil continues to climb, it likely keeps upward pressure on rates and the dollar, while weighing on risk assets.

    Micron (NASDAQ: MU) just delivered stellar earnings and strong forward guidance, yet the stock is still down more than 3%. It’s not disastrous—at least for now—but notably, shares remain below the $450 level.

    In essence, call options at $450 and above could rapidly lose value today if the stock fails to recover. That may trigger selling pressure, which in turn could force market makers to unwind their hedging positions.

    As long as the stock holds above $430, gamma should remain positive—at least based on yesterday’s readings—making that level a potential area of support. However, if it falls below $430, dealers may turn into sellers, which could push the stock down toward $400, or possibly even closer to $390.

    In this market, it really does feel like the tail is wagging the dog—at least from my perspective.

    Sources: Michael Kramer

  • S&P 500 earnings strength is offsetting geopolitical pressure.

    Investor focus remains firmly on Iran—and rightly so. West Texas Intermediate crude is hovering near $100 per barrel, up sharply from December lows, as tanker traffic through the Strait of Hormuz remains restricted. Iran is selectively allowing shipments—primarily to China and some Asian countries—helping ease oil price pressure slightly.

    The key market variable continues to be how long the Strait disruption lasts. While timelines remain uncertain, reopening it will likely be slow and complicated, with limited international support increasing pressure on the U.S. to act.

    Despite geopolitical tensions, corporate earnings have remained resilient and continue to support equities. Strong investment in AI is driving robust growth—especially in tech, which accounted for more than half of recent S&P 500 earnings gains—and is expected to play an even larger role ahead. Fiscal stimulus is also boosting capital spending and profits.

    Notably, earnings estimates are holding up better than usual, defying the typical early-year downgrades and continuing to trend higher into 2026 and beyond.

    Upward revisions in the energy sector are lifting overall 2026 earnings forecasts, as highlighted in “It’s Not Just Energy Boosting Earnings Estimates.” But the strength isn’t limited to energy—technology and materials are also pulling more than their weight. And this shift has already emerged just two weeks into March.

    Bottom line

    Earnings momentum remains strong and should stay resilient despite the conflict in Iran. With core U.S. growth drivers intact and energy independence in place, double-digit earnings growth in 2026 still looks achievable—providing solid support for the stock market and helping cushion downside risk until geopolitical tensions ease.

    Sources: Jeff Buchbinder

  • 2 High-Quality Dividend Stocks to Buy and Hold for the Long Run

    For investors aiming to build reliable passive income and long-term wealth, dividend stocks continue to stand out as some of the most dependable assets. Among the most consistently favored names are The Coca-Cola Company and Walmart Inc..

    Both companies belong to the elite group known as Dividend Kings — firms that have increased their dividends for at least 50 consecutive years. Their proven resilience and steady growth make them particularly attractive for long-term investors. Whether constructing a retirement portfolio or seeking stable income-generating holdings, these two consumer giants remain strong candidates.

    Coca-Cola and Walmart: Enduring Dividend Leaders

    Coca-Cola has delivered 63 straight years of dividend increases, reinforcing its reputation as a cornerstone income stock. It currently offers a yield of around 2.65%, supported by solid price performance, with shares up more than 10% year-to-date and over 77% in the past five years.

    Its strength lies beyond dividends. With a portfolio of 32 billion-dollar brands, a deeply loyal global customer base, and a localized production strategy that helps mitigate tariff pressures, Coca-Cola continues to maintain a competitive edge that investors value.

    Walmart, on the other hand, has raised its dividend for 53 consecutive years and operates the world’s largest retail network, spanning over 5,000 stores in the U.S. and nearly 11,000 globally. While its dividend yield is lower at roughly 0.79%, its total return profile is exceptional — the stock has surged more than 200% over five years, far outpacing the S&P 500.

    Importantly, Walmart’s growth is no longer tied solely to its physical stores. Its e-commerce division expanded 24% year-over-year in fiscal Q4 2026, while its Walmart+ subscription service continues to grow, adding a high-margin recurring revenue stream.

    Both companies operate within the consumer defensive sector, meaning demand for their products remains stable regardless of economic conditions. Essentials like food, beverages, and household goods are always needed, making these businesses naturally resilient. Combined with decades of disciplined dividend growth, this stability underpins their role as long-term portfolio anchors.

    Stock Snapshot: Performance and Market Outlook

    As of mid-March 2026, Coca-Cola trades at $77.49 with a market capitalization of roughly $333 billion. It has a trailing P/E ratio of 25.49 and generated $3.04 in earnings per share over the past year, consistently exceeding analyst expectations. The company also boasts a strong return on equity of over 43%, alongside annual revenue nearing $48 billion and profit margins above 27%.

    Analyst sentiment remains positive, with an average price target of $83.36. Notably, Barclays recently raised its target to $83 while maintaining an overweight rating.

    Walmart trades around $126.07, with a market value exceeding $1 trillion. Its higher P/E ratio of 46.17 reflects the premium investors are willing to pay for its consistent growth and execution.

    Over the past 12 months, Walmart generated more than $713 billion in revenue and nearly $22 billion in net income, along with strong free cash flow of $7.77 billion — supporting both dividend increases and ongoing investments.

    Analysts remain optimistic. Mizuho Financial Group rates the stock as outperform, while Tigress Financial Partners recently lifted its price target to $150.

    Overall, both stocks demonstrate not only dependable income potential but also strong capital appreciation. Coca-Cola has outperformed the broader market so far in 2026, while Walmart’s nearly 202% five-year gain highlights its ability to generate superior long-term returns. Investors holding these names benefit from a powerful combination of rising dividends and sustained growth that often matches or exceeds market benchmarks.

    Sources: Timothy Fries

  • Defensive sectors—utilities, consumer staples, and health care—are they hinting at looming risks?

    Key Takeaways

    • Utilities are outperforming the S&P 500, signaling growing investor demand for defensive positioning.
    • Consumer Staples and Health Care present mixed signals as traders evaluate potential rotation into risk-off sectors.
    • Tracking both absolute and relative sector strength can offer insight into broader market risk.

    It’s March Madness on Wall Street: the VIX remains in the mid-20s, WTI crude oil has climbed back to $100, and bearish momentum continues to build. With “defense wins championships” in mind, traders may be weighing whether bracing for further downside is the prudent strategy.

    In that context, sector analysis deserves a spot in your playbook. Within the 11 S&P 500 sectors, Utilities, Consumer Staples, Health Care, and Real Estate are typically viewed as less cyclical, lower-growth, defensive areas. Together, they account for about 18.5% of the index (under 10% excluding Health Care). From a portfolio standpoint, shifting heavily into these sectors represents a meaningful active bet. If sentiment flips and bulls regain control, a sharp rebound could quickly punish defensive positioning.

    Even so, opportunities may lie beyond the high-growth “headline” sectors. Let’s take a closer look.

    Utilities Gaining Momentum

    Starting with Utilities (XLU), it’s useful to assess both absolute and relative price action. The sector ETF remains firmly in an uptrend.

    As shown in the chart, a pattern of higher highs and higher lows has persisted since September 2023. The upward-sloping 200-day moving average indicates that bulls still dominate the primary trend. Meanwhile, the RSI momentum indicator has frequently reached overbought territory—often a sign of strength rather than weakness. In short, XLU continues to show strong upside momentum.

    XLU remains in a strong uptrend and is trading near record highs.

    But how does it compare to the S&P 500 ETF (SPY)?

    To check, enter “XLU:SPY” in the SharpCharts symbol box (or “_XLU:_SPY” for a price-only view). As of last Friday, the ratio hit its highest level since May 2025, breaking above key resistance.

    In short, relative strength is shifting toward Utilities, which implies a more bearish tilt for the broader S&P 500.

    Staples Near a Crucial Support Zone

    Looking at Consumer Staples (XLP), the price trend is less decisive. The ETF is edging closer to correction territory, pulling back toward key support around $84 and its 50-day moving average. Given the strong volume-by-price concentration in the mid-$80s, there’s an expectation buyers may step in at this level. The coming weeks will be pivotal.

    Similarly, the XLP:SPY ratio is not as well-defined as XLU:SPY. It formed a rounded bottom around the start of the year and has since moved into a consolidation phase—potentially a bull flag.

    From a technical perspective, consolidations typically break in the direction of the broader trend—which is upward here. That suggests XLP could maintain support near $84 and resume outperforming the S&P 500 in the weeks and months ahead.

    Health Care Still on the Sidelines

    Turning to Health Care (XLV), the chart shows a clear bearish double top, with sellers stepping in twice around the $160 level—first in Q3 2024 and again more recently over an extended period.

    The sector, which includes defensive pharmaceutical firms, somewhat cyclical medical device makers, and higher-risk biotech names, has seen its RSI drop to its weakest level since just after Liberation Day. Meanwhile, the rising 200-day moving average sits only a few percentage points below the current price. In addition, after breaking below an upward trendline, the next key level to watch is the 38.2% Fibonacci retracement near $148.

    Overall, XLV looks better left on the sidelines for now.

    XLV:SPY lacks a compelling setup. The sector found a bottom last August, showed some strength in November, but has largely moved sideways since December.

    Much like how Walmart and Costco lead the Staples space, Health Care performance is heavily driven by Eli Lilly, Johnson & Johnson, and UnitedHealth Group.

    Don’t Overcomplicate the Defensive Trade

    At a high level, it’s easy to get lost comparing relative strength across defensive, cyclical, and growth sectors. But the reality is simple: risk-off areas like Utilities, Staples, and Health Care can rally—and have done so multiple times during this bull market. In fact, companies such as Walmart, Costco, and Eli Lilly often behave more like growth stocks than traditional defensive names.

    The takeaway: sector analysis—including relative strength—is just one tool within a broader top-down and intermarket framework.

    When Defensive Strength Signals Trouble

    So when does outperformance in defensive sectors shift from a caution sign to a real warning? If Utilities, Staples, Health Care (and possibly Real Estate) start showing relative strength while declining in absolute terms, it’s usually a sign the S&P 500 is under pressure.

    There have been early hints of this dynamic alongside the index’s bearish rounded top, but so far it’s been inconsistent rather than decisive. While it’s not ideal for defensive sectors to lead, such phases can persist longer than expected.

    Bottom Line

    While attention is centered on Energy and Technology—with $100 oil and NVIDIA grabbing headlines—along with Financials facing stress from private credit concerns, traders shouldn’t ignore the defensive sectors. Monitoring both absolute and relative trends in these areas can provide clarity and help filter out noise during volatile market conditions.

    Sources: Mike Zaccardi

  • Oil Price Surge Complicates Outlook for Global Rate Cuts and Risk Assets

    This week will see a series of major central bank meetings worldwide, including those of the Federal Reserve, European Central Bank, Bank of Japan, and Bank of England. With oil prices climbing sharply and inflation expectations edging higher, investors will be closely watching how policymakers assess the outlook for monetary policy and the implications of elevated energy costs.

    Among these institutions, the Bank of Japan faces perhaps the most delicate situation, particularly after the country’s February general election and the policy trajectory it had already been pursuing since its previous meeting. With oil trading near $100 a barrel, the BOJ must proceed cautiously as the USD/JPY exchange rate moves toward 160 — a level widely viewed as a potential tipping point for the currency.

    The pair has already broken above resistance near 159, though it still remains below the highs reached in July 2024.

    From a technical perspective, once USD/JPY moves above its July 2024 peak, there would be no clear resistance levels ahead, potentially opening the door for further and possibly sharp depreciation of the Japanese yen.

    Meanwhile, the recent surge in oil prices has reshaped expectations for U.S. interest-rate cuts. Markets have gradually scaled back their projections for easing, even though the incoming Federal Reserve chair nominee has indicated a preference for looser monetary policy.

    December Fed funds futures have climbed to around 3.44%, reflecting reduced expectations for rate cuts. Since 2022, market pricing for Fed easing has broadly moved in tandem with oil prices.

    If oil continues to rise, it could complicate the Fed’s ability to lower rates, as higher energy costs tend to fuel inflation. Rate cuts may only become more likely if oil prices rise to a point where they begin pushing the economy toward recession.

    Rising rates are not limited to the U.S., as Australia’s 2-year bond yield has now moved above its October 2023 peak.

    Rising global oil prices are likely to tighten liquidity and financial conditions worldwide. Tighter financial conditions typically place pressure on economic activity and risk markets. As long as oil prices remain elevated — or continue to climb — they are likely to further tighten global financial conditions and weigh on risk assets.

    For investors trying to gauge the outlook for risk assets, the direction of oil prices has become increasingly important. However, predicting oil’s near-term path remains challenging. Weekend oil CFDs were trading about 3% higher and above $100 per barrel.

    From a technical perspective, the trend remains upward for now, as long as oil continues to hold above its 10-day exponential moving average.

    The situation is similar for the S&P 500—as long as the index stays below its 10-day exponential moving average, the short-term trend is likely to remain downward.

    The distribution pattern in the S&P 500 appears relatively clear, with a key pivot level near 6,525, which coincides with the index’s November lows.

    More significantly, measuring the decline from the recent high to this pivot level and projecting that move 100% lower points to a potential downside target near 6,050. Such a move would also fill the price gap from June 24 and allow the index to retest the breakout level from the pre-tariff highs, an area that could act as technical support.

    Such a scenario would likely require oil prices to stay elevated while interest rates and the U.S. dollar continue to strengthen. The U.S. Dollar Index could also extend its gains; a decisive break above 100.50 may open the door for a move toward 102.

    With momentum indicators turning positive, it appears likely that CTAs and leveraged funds may start adding long dollar positions while reducing their existing shorts.

    Meanwhile, the U.S. 2‑Year Treasury Yield may have room to extend higher, with the next resistance level seen near 3.80%, followed by a potential move toward 3.97%.

    Technically, the outlook has strengthened as the yield has moved above its 200-day moving average, while the 50-day moving average is beginning to trend upward. In addition, the yield recently broke above a multi-year downtrend line that had been in place since April 2024, reinforcing the case for further upside momentum.

    We’ll have to watch how the week develops. With options expiration (OPEX) taking place, market volatility could remain elevated. This is particularly true for the S&P 500, where put options currently dominate positioning, increasing the potential for sharp and erratic intraday price swings.

    Sources: Michael Kramer

  • Markets await Fed decision, Powell briefing, and earnings from Micron and FedEx this week.

    Key Market Highlights

    • Japanese equities tumbled sharply, with the Nikkei 225 dropping as much as 6.9% and the TOPIX falling up to 5.7%, as investors reacted to surging oil prices, escalating Middle East tensions, and weak U.S. employment data.
    • Asian markets traded cautiously while oil prices remained volatile amid uncertainty over shipping through the Strait of Hormuz. Investors are also watching a series of upcoming central bank meetings for signals on inflation. On Wall Street, attention is turning to Jensen Huang’s AI conference at Nvidia, while the U.S. dollar eased slightly from recent highs but stayed near key technical levels.
    • Oil prices fluctuated, with Brent crude trading around $105 per barrel and West Texas Intermediate near $99, after surging more than 40% over the past two weeks. The rally followed a U.S. strike on Iran’s Kharg Island, the country’s main oil export hub, and retaliatory Iranian attacks on Israel and several Arab states.
    • The International Energy Agency indicated that strategic oil reserves could soon be released to markets. Meanwhile, Donald Trump rejected ceasefire negotiations and called on nations to help reopen the Strait of Hormuz to global shipping.
    • Bond investors are debating the inflation outlook, weighing whether the Iran-war-driven oil shock will sustain inflation pressures or eventually lead to slower growth. Some strategists warn that markets may be underestimating that risk, favoring bullish bond strategies such as long positions in short-term rates that anticipate deeper Federal Reserve rate cuts than currently priced in.
    • U.S. stock futures edged higher on Sunday night, with Dow Jones Industrial Average, S&P 500, and Nasdaq Composite futures all posting modest gains. U.S. crude briefly climbed above $100 per barrel before retreating, while economic data from China came in stronger than expected.
    • U.S. equities declined for a third consecutive week as the Iran conflict entered its second full week. All three major indexes lost more than 1% again and hovered near their 2026 lows amid volatile markets and sharply rising oil prices.

    U.S. Economic Data and Earnings Calendar

    Investors will look for clearer signals next week on how the Middle East conflict may be altering expectations for interest-rate cuts this year, as policymakers at the Federal Reserve meet for the first time since U.S. and Israeli airstrikes on Iran roughly two weeks ago. The escalation pushed oil prices sharply higher and triggered volatility across global markets.

    Comments from Fed Chair Jerome Powell following the policy decision will be closely monitored, as they could highlight divisions within the Federal Open Market Committee. Some officials support deeper rate cuts amid signs of labor-market weakness, while others remain concerned about persistent inflation. The press conference may also be Powell’s second-to-last before his term concludes in May.

    Also on Wednesday, the February Producer Price Index will provide insight into wholesale inflation after January’s stronger-than-expected increase. Meanwhile, upcoming reports on new and pending home sales will be examined for indications of recovery in the U.S. housing market.

    Economic Calendar

    Monday, March 16

    • February Industrial Production and Capacity Utilization data
    • March Empire State Manufacturing Survey
    • March Homebuilder Confidence

    Tuesday, March 17

    • February Pending Home Sales

    Wednesday, March 18

    • Federal Open Market Committee interest-rate decision
    • Press conference by Jerome Powell, chair of the Federal Reserve
    • February Producer Price Index
    • January Factory Orders

    Thursday, March 19

    • January New Home Sales
    • Weekly Initial Jobless Claims (week ending Mar. 14)
    • March Philadelphia Fed Manufacturing Index
    • January Wholesale Inventories

    Friday, March 20

    Xpeng (NYSE:XPEV)

    Micron Technology (NASDAQ: MU) is set to report earnings after its stock surged more than fourfold over the past year amid the AI boom. The memory-chip maker posted a 60% year-over-year jump in revenue last quarter and exceeded profit expectations.

    FedEx (NYSE: FDX) will release quarterly results on Thursday. Its shares have climbed nearly 25% this year, and investors will look for signals on global shipping trends and the health of the broader economy.

    Results from Dollar Tree (NASDAQ: DLTR) are expected to provide further insight into U.S. consumer spending after the retailer previously noted that customers were feeling financially “stretched.” Earnings from General Mills, Lululemon Athletica, and Macy’s will also offer a clearer view of consumer demand.

    Nuclear-energy startup Oklo is scheduled to report earnings as well, after announcing earlier this year a deal to supply power for data centers operated by Meta Platforms.

    Meanwhile, Alibaba Group, China’s largest technology company, will post earnings as it accelerates investment in artificial intelligence. Chinese EV maker XPeng, a global competitor to Tesla, is also due to report.

    Alibaba is reportedly preparing to launch an enterprise-focused agentic AI service built on its Qwen model by the DingTalk team, potentially as soon as this week. The company plans to gradually integrate the service with platforms such as Taobao and Alipay, aiming to capitalize on growing demand for AI assistants capable of performing complex tasks.

    Technical Analysis

    Dow Jones Industrial Average (DJIA) Index

    The DJIA has broken below its long-term uptrend that began in August 2025 and is now trading within a downward-sloping channel, signaling a potential shift in short-term momentum.

    • Key support: 46,430
    • Next downside target: Around 45,770 if the index breaks decisively below support.
    • Short-term rebound level: A corrective bounce toward 47,000 remains possible as long as 46,430 holds.

    In technical terms, the market is currently testing a critical support zone. Holding above it could trigger a temporary recovery, while a breakdown would likely accelerate downside pressure within the bearish channel.

    DJIA Daily Candlestick Chart

    Nasdaq‑100

    The Nasdaq-100 is currently moving within a rectangular trading range between 24,300 and 25,370, with 24,860 acting as the midpoint pivot that helps define near-term direction.

    • Key support: 24,300
    • Midpoint resistance/pivot: 24,860
    • Upper range resistance: 25,370

    A Monday 9:30 a.m. ET open below 24,300 would signal a bearish breakout from the range.

    Downside targets if the breakdown occurs:

    • 23,800
    • 23,250

    If support holds, the index is likely to continue consolidating within the lower portion of the range, trading roughly between 24,300 and 24,860 in the near term.

    NDX Daily Candlestick Chart

    SPX (S&P500) Index

    The S&P 500 has broken below a rectangular consolidation pattern, signaling the start of a bearish move in the near term.

    • Primary support zone: 6,550 – 6,520
    • Key resistance: 6,670 – 6,680

    A temporary corrective rebound toward 6,660–6,680 remains possible. However, this resistance area needs to hold firmly to maintain the bearish outlook.

    If the index fails to reclaim this resistance zone, downside momentum could continue toward the 6,550–6,520 support range.

    SPX Daily Candlestick Chart

    Weekly Probability Outlook for Major U.S. Stock Indices

    The U.S. weekly market probability map for March 16–20, 2026 indicates that historically, major U.S. indices tend to begin the week with mixed performance, followed by a three-day rally, before shifting to a mixed-to-bearish tone toward the end of the week.

    This outlook applies broadly to benchmarks such as the S&P 500, Nasdaq-100, and Dow Jones Industrial Average.

    The probability maps are constructed from historical seasonality trends, analyzing how markets have typically behaved during the same calendar period in past years. Sentiment readings in the model are generated through a seasonality-based scoring framework, which evaluates historical performance patterns to estimate the likely directional bias for the week.

    Sources: Ali Merchant

  • How Passive Investing Is Distorting Stock Valuations

    Passive Investing Shapes Market Flows

    In a market dominated by passive strategies, investment decisions are often detached from traditional valuation metrics, which blurs the distinctions between classic styles such as value and growth.

    Passive investors are commonly associated with broad market index funds tracking benchmarks like the S&P 500 or the Nasdaq. Yet passive capital also flows into sector- or factor-focused ETFs, including funds targeting areas such as consumer staples or large-cap growth.

    While “passive” refers to not selecting individual stocks, it does not necessarily mean the investment behavior itself is passive. Increasingly, investors in passive vehicles actively trade themes and narratives, shifting capital between popular sectors and strategies.

    For example, in recent months, stocks within large-value ETFs have gained popularity, while the once-favored mega-cap technology names have lost momentum. This rotation is clearly visible in the diverging performance of value and growth ETFs and sectors, as well as in the inflows and outflows among the largest exchange-traded funds.

    The first chart below highlights the sharp contrast in capital flows between the Vanguard Value ETF and the iShares Russell 1000 Growth ETF.

    The second chart illustrates an even wider divergence in flows between the Energy Select Sector SPDR Fund and the Technology Select Sector SPDR Fund.

    All flow data presented in the charts is sourced from ETF.com.

    The Value Rotation Narrative

    Financial media has been heavily focused on the apparent shift from “expensive” growth stocks into supposedly “cheaper” value stocks. However, as discussed in Part One, investors are largely responding to a narrative. In many cases, market participants believe they are buying value when they are actually selling it.

    The value-rotation story generally goes like this: high-beta, mega-cap growth stocks have already enjoyed strong gains and now appear overvalued and risky. As a result, investors assume the logical move is to rotate into the opposite segment of the market—smaller-cap, lower-priced, and traditionally “value” sectors.

    Whether or not this reasoning is accurate, the narrative itself is influencing markets, sectors, and factor performance. Even if many so-called value ETFs do not truly represent value, capital flows continue to follow the story until investor sentiment eventually shifts.

    When narratives diverge from underlying fundamentals, however, distortions can emerge. For that reason, active investors must recognize the influence of prevailing narratives while also identifying genuine value opportunities—because eventually the market tends to reward them.

    Why Traditional Screens Often Miss True Value

    Most value investors start their search with quantitative screens that filter for metrics such as low price-to-earnings ratios, high dividend yields, or low price-to-book multiples. While these indicators are helpful starting points, they should not be treated as definitive conclusions. Frequently, they only highlight companies that appear inexpensive on the surface.

    In reality, “cheap” valuation metrics can sometimes reflect underlying problems rather than attractive opportunities. For example:

    • Earnings could be cyclical and currently near their peak.
    • The company’s business model may be weakening.
    • Management execution might be inconsistent.
    • Emerging legal, political, or structural challenges could be affecting the outlook.

    Many screening models—particularly those that rely on historical data rather than forward-looking estimates—struggle to differentiate between companies that are truly undervalued and those that are simply in decline. As a result, investors often mistake statistical cheapness for genuine value.

    A Forward-Looking Framework

    To properly assess value, investors should evaluate companies through several valuation perspectives. Each perspective addresses a different aspect of a company’s fundamentals, and when all three point in the same direction, the likelihood of identifying genuine value opportunities increases.

    These perspectives focus on the past, present, and future. Investors should ask: Does the company have a strong earnings history? Is it currently performing well? And does it have solid prospects for future growth? Just as important as earnings themselves is how the current share price compares with past results, current performance, and expected future earnings.

    Past Earnings

    The first step is determining whether the stock appears expensive based on its recent financial performance. Measures such as trailing price-to-earnings ratios, free cash flow yield, and profit margins help investors evaluate valuation relative to earnings and cash flow generated over the past year or two.

    One-Year Forward Earnings

    Forward-looking estimates are often more informative than historical metrics—but only when those projections are credible. As the legendary investor Benjamin Graham once advised, investors should limit forecasts to what can reasonably be anticipated.

    Businesses with stable financial trends, durable competitive advantages, and consistent management execution generally deserve greater confidence than companies reliant on optimistic projections, uncertain economic scenarios, or speculative growth stories.

    Growth-Adjusted Valuations

    As discussed earlier, both trailing and forward P/E ratios can appear elevated if earnings growth is expected to accelerate. For that reason, investors often incorporate the PEG ratio, which compares valuation multiples with anticipated growth rates.

    This third layer is frequently absent from many screening approaches. It is also the most challenging to evaluate, since small adjustments to growth expectations can significantly influence whether a stock qualifies as a genuine value opportunity.

    Applying the Framework

    In Part One, we highlighted that companies such as Walmart and Costco—often perceived as classic value names—are not necessarily inexpensive.

    Applying the three-tier framework shows that Walmart, for example, trades at a P/E ratio of 46, a forward P/E of 43, and a PEG ratio of 4.50, indicating a relatively high valuation across all three measures.

    To help investors identify companies that may represent genuine value rather than merely appearing inexpensive, we developed a screening process. The companies that emerge from this screen combine relatively low valuations with solid earnings prospects and growth expectations that justify their current prices. While these stocks may better resemble true value opportunities in today’s market, they still carry risks.

    The screen included the following criteria:

    • Market capitalization above $5 billion
    • U.S.-listed companies
    • P/E ratio
    • Forward P/E ratio
    • PEG ratio
    • Price-to-sales ratio
    • Quick ratio

    Beyond the three primary valuation lenses, we also incorporated the price-to-sales ratio to reinforce the valuation assessment and the quick ratio to gauge a company’s short-term liquidity. Financial companies were excluded from the analysis because their earnings structures differ significantly from those of most other industries, making direct comparisons less meaningful.

    Why True Value Often Gets Overlooked

    Market outcomes are shaped not only by fundamentals but also by investor psychology and industry incentives. Many professional portfolio managers prefer to hold widely owned stocks because straying too far from benchmark indices can create career risk. Meanwhile, passive investment vehicles allocate capital according to index weightings that loosely align with their mandates, which naturally directs more money toward the largest and most established companies. Financial media narratives can further reinforce this dynamic by highlighting popular themes that attract even more capital to the same group of stocks.

    These forces often create a self-reinforcing cycle: popular companies draw new inflows, rising prices follow, and the higher prices then attract additional investment. Companies that fall outside the spotlight frequently face the opposite pattern—even when their earnings and financial positions remain solid. As a result, the valuation gap between favored companies and overlooked ones can widen significantly.

    For example, the companies identified in our screen generally represent only small positions in widely held ETFs. Phillips 66, the largest firm in the screen, represents just 3.78% of the Energy Select Sector SPDR Fund. Delta Air Lines and United Airlines—the next-largest companies—account for only 0.86% and 0.67% of the Industrial Select Sector SPDR Fund respectively. Their weights are even smaller in the large-cap value ETF Vanguard Value ETF.

    The Value Trap

    A common misconception in investing is that a stock that looks “cheap” automatically qualifies as a value investment. In reality, one of the riskiest situations is when a stock appears inexpensive but lacks the earnings strength, growth potential, or stability needed to justify its low valuation.

    Take the airline sector as an example. Both Delta Air Lines and United Airlines appear in our screen as potential value candidates. However, their revenue prospects are highly sensitive to economic conditions and jet fuel prices. In addition, a meaningful share of their profits comes from airline credit card reward partnerships. If the economy slows, forecasts for strong double-digit earnings growth may prove unrealistic.

    Rising jet fuel costs also pose an important question: can airlines pass those higher costs on to consumers? Another uncertainty is whether increasing competition from newer financial service providers could pull customers away from airline rewards cards tied to networks such as Visa and Mastercard.

    Ultimately, genuine value investing requires both a reasonable price and credible earnings prospects. The stronger the investor’s confidence in a company’s future earnings growth, the higher the likelihood that a value investment will succeed.

    Summary

    Identifying true value has always been challenging, but the rise of passive investing has made the task even more difficult. Many investors today purchase “value” in name only, often through ETFs labeled with the term. These funds attract capital from investors seeking value exposure, yet fewer participants are actively searching for genuinely undervalued companies.

    This dynamic can lead to a wide divergence between stocks perceived as value and those that truly offer value. Over time, such market distortions can create compelling opportunities—though investors must remain patient while waiting for those valuation gaps to eventually close.

    Sources: Michael Lebowitz

  • Key Markets in Focus – USD/MXN, NASDAQ 100, EUR/USD, USD/CAD, GBP/USD, USD/ZAR, DAX

    USD/MXN

    The U.S. dollar remained highly volatile over the past week as markets continued to assess the broader risk appetite outlook. The 18 MXN level still stands as a major resistance barrier, while the weekly candlestick formed a hammer pattern, signaling the potential for continued volatility. However, it is important to remember that holding long positions may carry costs due to interest rate differentials. A move lower would likely indicate a return of risk appetite in the market.

    NASDAQ 100

    The NASDAQ 100 experienced significant volatility over the past week, driven largely by rising U.S. interest rates and ongoing war-related headlines. Surging energy costs could also pose challenges for many AI-related companies, creating a lingering overhang that may weigh on the market. That said, a major sell-off does not appear likely at this stage. Instead, the market is likely to remain choppy, with pullbacks continuing to attract buyers.

    EUR/USD

    The euro has declined sharply over the past week and has now slipped below the key 1.15 level, an area closely monitored by many traders. As a result, investors appear to be moving toward the US dollar in search of safety. At the same time, inflation in the United States remains persistent, leading traders to believe the Federal Reserve may have to keep interest rates higher for longer. Meanwhile, the European Central Bank must contend with potential energy shortages that could pose challenges for the continent.

    USD/CAD

    The US dollar strengthened for most of the week, with the market continuing to encounter significant resistance around this area. The 1.3750 level remains a key obstacle, having acted as a strong barrier on several occasions. While higher oil prices typically support the Canadian dollar, this pair may behave differently as the United States keeps boosting its oil output, currently around 14 million barrels per day. As a result, the pair is likely to be driven largely by shifts in risk sentiment, with traders turning to the greenback during periods of uncertainty.

    GBP/USD

    The British pound attempted to rally over the past week but was sharply pushed lower as risk appetite deteriorated. GBP is now threatening a breakdown below the 1.3250 level. If it falls through that support, the next potential target could be around 1.30. Any rallies at this stage may present selling opportunities, as several factors continue to drive traders toward the US dollar. For now, buying interest remains limited, especially with ongoing war-related headlines that could continue to influence market sentiment.

    USD/ZAR

    The US dollar started the week on the back foot but then rebounded sharply as traders navigated the ongoing risk aversion dominating the market. South Africa sits on the higher end of the risk spectrum, and concerns about the country’s ability to secure sufficient energy supplies are prompting capital outflows. As a result, the pair is now approaching the 17 ZAR level, a significant round and psychological threshold that many traders monitor closely. A break above this level could trigger a stronger move higher, suggesting the market is nearing a key turning point.

    DAX

    The German index has remained highly volatile, much like other markets, but it has so far managed to hold relatively steady, with the 23,000-euro level acting as a potential floor. From here, the market may attempt to recover. However, a closer look at the daily chart shows considerable choppiness, suggesting the index may be trying to form a base before any broader turnaround. If the market were to break below the 23,000-euro level, it could trigger a much sharper decline.

    Sources: Lewis

  • Historical Data Shows S&P 500 Gains Often Slow After Extended Multi-Year Rallies.

    In late December 2025, I wrote a blog post to reflect on the various factors that influence equity market returns. One of the simplest ways to look at historical performance, however, is to assume that double-digit gains cannot continue indefinitely.

    After three consecutive years of strong returns for the S&P 500:

    • 2025: +17.88%
    • 2024: +24.87%
    • 2023: +26.37%

    it would be reasonable to expect that a typical “reversion to the mean” year for the index might deliver single-digit performance, either slightly positive or slightly negative.

    One of the more interesting developments in 2025 was the resurgence of previously underperforming asset classes, particularly international equities (and even bonds), along with emerging market stocks. These so-called non-correlated trades had been largely stagnant for years, yet international equities posted their strongest performance since 2006 during 2025.

    However, tensions involving Iran have significantly altered the investment outlook for 2026, disrupting the rotational trade that had appeared logical—at least before the recent airstrikes.

    The real challenge now is distinguishing between stocks, sectors, and asset classes that could face genuine long-term damage from the geopolitical conflict and those that are simply undergoing a normal correction driven by news headlines.

    Earlier, the “Liberation Day” correction from late January 2025 to early April 2025 resulted in roughly a 20% peak-to-trough decline. That episode was the last time investors experienced a meaningful surge in market fear and negative sentiment.

    Looking back at history, the last time the S&P 500 produced returns similar to those seen from 2023 to 2025 occurred during the following stretch:

    • 2021: +28.75%
    • 2020: +18.2%
    • 2019: +31.8%

    Aside from 2019, those gains were heavily influenced by accommodative monetary policy and the era of near-zero interest rates. But it is worth noting what happened next: in 2022, the S&P 500 declined by -18.11%.

    In short, some investors describe market behavior as a “sequencing of returns.” The broader takeaway is that after two or three years of strong equity gains, markets often transition into a period where returns become more modest—typically in the single digits. This is not a forecast, but historical patterns are worth considering.

    At the moment, the U.S. equity market may need a significant spike in fear to establish a tradable bottom, particularly following the recent surge in crude oil prices. As always, this commentary is not investment advice but simply an opinion. Past performance does not guarantee future results. Investors should assess their own tolerance for portfolio volatility and make adjustments accordingly.

    Thank you for reading.

    Sources: Brian Gilmartin

  • China expands ban on BHP iron ore during ongoing contract negotiations, sources say.

    China has expanded its restrictions on iron ore from BHP Group for the second time in two weeks, intensifying a prolonged contract dispute with the world’s third-largest supplier of the key raw material used in steel production.

    On Thursday, the state-owned buyer China Mineral Resources Group informed domestic steelmakers and traders that, beginning late next week, they will no longer be permitted to take delivery of Newman fines — a widely traded BHP iron ore product stored at Chinese ports, according to three sources familiar with the matter.

    However, customers will still be able to collect shipments that are scheduled for delivery within the next five working days, two of the sources said, requesting anonymity.

    One source noted that the move had been expected. “We had anticipated that restrictions on additional BHP products might eventually arrive, so the decision did not come as a surprise,” the person said.

    BHP declined to comment, while CMRG did not immediately respond to requests for comment.

    Over the past six months, Beijing has gradually tightened controls on purchases of BHP iron ore by domestic mills and traders as negotiations continue over the company’s 2026 supply agreement.

    China first banned purchases of Jimblebar fines in September, followed by restrictions on the Jinbao product in November.

    Last week, traders were instructed to limit new purchases of Newman fines, Newman lumps, and Mac fines, although buying cargoes already stored at ports was still permitted.
    The latest measure now limits purchases only to existing port inventories of Newman lumps and Mac fines.

    Spillover impact

    Concerned that additional restrictions may soon target the remaining grades, traders have begun offloading their cargoes quickly.

    “We plan to sell all Newman fines stored at ports within the next few days and will also try to exit Mac fines positions,” another source said. “Even if Mac fines are not yet restricted, there is uncertainty about when delivery might be banned.”

    Meanwhile, benchmark April iron ore futures on the Singapore Exchange rose more than 4% on Thursday afternoon to $108.95 per ton, the highest level since January.

    According to another trader, port inventories of Newman fines reached 3.17 million tons this week — an increase of 55% compared with October.

    Sources: Reuters

  • Logistics firm GLP seeks $20 billion valuation in planned Hong Kong IPO, sources say

    Singapore-based logistics firm GLP is targeting a valuation of around $20 billion through a potential initial public offering in Hong Kong, which could take place as early as this year, according to two people familiar with the matter.

    The company has been discussing the possible listing with advisers including Citigroup and Morgan Stanley, one source and a third person with knowledge of the plans said.

    However, both the size and timing of the offering have yet to be finalized.

    Under the rules of the Hong Kong Exchanges and Clearing, large-cap companies typically float at least 15% of their shares in an IPO.

    The sources declined to be identified as the discussions are private. GLP, Citigroup and Morgan Stanley all declined to comment.

    If completed, the listing would add a major name to a revitalized equity capital market in Hong Kong, where the current IPO pipeline is largely dominated by companies from China.

    After ranking first globally for IPO fundraising last year, Hong Kong entered 2026 with a strong pipeline. About $5.5 billion was raised through IPOs and secondary listings in January alone, according to data from HKEX and London Stock Exchange Group.

    Return to public markets

    A Hong Kong listing would mark a return to public markets for GLP, which was taken private from the Singapore Exchange in 2017 in a S$16 billion ($12.6 billion) deal led by investors backing CEO Ming Mei.

    Investors involved in the privatization included Hopu Investment, Hillhouse, the investment arm of Bank of China, and Ping An Insurance.

    GLP describes itself as a global thematic investor and business builder focused on logistics real estate, digital infrastructure, renewable energy and related technologies. The firm manages more than $80 billion in assets across real assets and private equity.

    In recent years, GLP has sought to strengthen its capital base and reshape its business. In August, a subsidiary of the Abu Dhabi Investment Authority agreed to invest up to $1.5 billion in the company.

    Earlier, in March 2025, GLP sold GCP International to Ares Management in a deal that included $3.7 billion upfront and a potential earn-out of up to $1.5 billion.

    Sources: Reuters

  • Nasdaq, S&P 500, Russell 2000 ranges widen as traders search for direction

    Markets appear to be reflecting the uncertainty surrounding developments in the Middle East, showing the same kind of indecision that currently characterizes the U.S. administration’s approach to the region. While headlines emphasize sharp declines, actual price action has been more mixed. The Nasdaq Composite has been particularly resilient, even as concerns about a potential AI bubble add pressure to the technology sector.

    On the technical side, a declining resistance line drawn from January now intersects near Tuesday’s closing level. This area could present a potential short setup, with risk management defined by a stop placed on a close above Tuesday’s sharp spike high.

    Although there is a weak buy signal present, several other indicators remain bearish. This cautious outlook persists despite the Nasdaq’s recent surge in relative performance compared with the Russell 2000, often tracked through the iShares Russell 2000 ETF.

    After Monday’s bullish engulfing pattern in the Russell 2000, the market followed with a “gravestone doji” formation, suggesting a potential loss of upward momentum. However, the signal carries somewhat less weight because the index is not currently in overbought territory.

    Even so, the pattern may present a shorting opportunity, particularly after the index failed to secure a close above the $255 level. A prudent risk management approach would place stops on a high-volume move above $258.

    The iShares Russell 2000 ETF—often used as a trading proxy for the index—could reflect similar technical dynamics as traders watch for confirmation of either renewed weakness or a recovery attempt.

    The S&P 500 ended the session with an indecisive spinning top candlestick at what had previously been support but now appears to be acting as resistance. This shift suggests the market is struggling to establish a clear directional bias.

    Resistance within the broader trading range is now relatively well defined, and a move back toward Monday’s candlestick range appears possible in the near term. While a deeper pullback toward the 200-day moving average cannot be ruled out, the broader picture points toward the development of a wider consolidation range.

    In this evolving structure, 6,550 is emerging as a potential new support level, reinforcing the likelihood that the index may continue trading within an expanded range rather than entering a sustained trend in the immediate term.

    The S&P 500 Equal Weight Index moved close to the 7,800 support level, which could develop into the next key floor for the emerging trading range.

    Technical indicators remain broadly negative, although the index has not yet reached oversold territory. A further decline toward the 7,800 level would likely push momentum indicators into an oversold condition, potentially setting up the conditions for a short-term stabilization or rebound.

    Among potential long opportunities, Bitcoin stands out. What initially appeared to be a potential bull trap is now developing into a test of the 50-day moving average, a level that could determine the next directional move.

    If Bitcoin manages to break above this moving average, it could open the path toward the 200-day moving average and potentially a move toward the $85,000 level. While technical signals remain mixed, the MACD has managed to maintain a modest buy signal, suggesting that bullish momentum has not fully faded.

    Notably, the cryptocurrency has already fallen roughly 50% from its peak last year. Given the magnitude of that correction, the balance of probabilities may now favor further upside if key technical resistance levels begin to give way.

    Traders currently face a mixed set of opportunities across major markets. On one side, several leading equity indices—such as the S&P 500, Nasdaq Composite, and Russell 2000—are presenting potential short setups as technical resistance levels come into play.

    On the other side, Bitcoin is shaping up as a possible long trade if it can push through key moving-average resistance and build bullish momentum.

    In short, the market currently offers both bearish equity setups and a bullish crypto opportunity—leaving traders to decide which side of the risk spectrum they want to engage.

    Sources: Declan Fallon

  • S&P 500 Volatility Eases While Liquidity Worries Remain

    Stocks dropped sharply at Monday’s open but, as anticipated, recovered steadily throughout the session as volatility began to fade. Sentiment improved further later in the day after headlines suggested the war could end soon.

    From a bullish perspective, however, one key challenge remains. Today marks the settlement of roughly $15 billion in Treasury bills. Historical data indicates that markets rise only about one-third of the time on settlement days, while in roughly two-thirds of cases equities tend to decline.

    It is still possible that elevated volatility overrides the typical settlement pattern, allowing the market to post a modest gain of around 40 to 50 basis points. Even so, the historical analysis has generally proven reliable.

    From both an options-market and technical-analysis standpoint, 6,800 is a key level. If the SPX moves above it, the index could quickly advance toward 6,900, which corresponds to the zero gamma level.

    Another concern is that the USD/JPY cross-currency basis has been turning more negative, pointing to tighter dollar liquidity. This comes on top of signals from the Treasury settlement data. Overall, the liquidity situation hasn’t improved much so far and may even be slightly worse.

    That said, the cross-currency basis could widen if markets begin to believe oil prices will stabilize or decline. For now, however, the outlook remains uncertain and difficult to call.

    Oil had clearly become overbought, trading above its upper Bollinger Band while the RSI was above 70. There also appears to be solid support near the $80 level. While prices could decline further, a return to the $60 range in the near term seems unlikely.

    Oil at $80 is certainly preferable to $100, but it is still significantly higher than $60. A $20 jump in prices represents more than a 33% increase, which is unlikely to be favorable for the upcoming CPI report or for consumers paying at the gas pump.

    Sources: Michael Kramer

  • Key Markets to Watch – Silver, S&P 500, USD/CAD, USD/MXN, Bitcoin, Nasdaq 100, EUR/USD, USD/JPY

    Silver

    Silver faced a difficult week as the U.S. dollar strengthened for much of the period, though it’s important to remember that its recent collapse wiped out many retail trading accounts.

    That said, this is a market worth monitoring closely because the $80 level represents an important support area and sits near the center of the broader consolidation range.

    If the price breaks below this week’s candlestick, it could open the door for silver to decline toward the $70 level, where I also expect support to emerge.

    Overall, the market has been quite volatile and choppy, and that pattern is likely to persist. Because of this, careful position sizing will be essential.

    S&P 500

    The S&P market declined quite sharply over the week, testing the 5,000 level. This level is a major round number with strong psychological importance, so it’s an area many investors are watching closely.

    If the market breaks below 5,000, it could pave the way for a drop toward 4,800, with the possibility of quickly moving further down to around 4,600.

    From a longer-term perspective, the 5,000 level may continue to act as a price magnet for the market.

    If that remains the case, we could see extended sideways movement around this zone, although my broader outlook still leans bullish over the long run.

    USD/CAD

    The US dollar first strengthened against the Canadian dollar, rising to test the 1.3750 level, but then reversed and began showing signs of weakness. Meanwhile, the 1.35 level below stands as an important support area that many market participants are closely monitoring.

    It is also worth noting that the Canadian dollar has been gaining some strength on the back of rising oil prices. Whether that trend will continue is uncertain, but if oil fails to maintain its momentum, a reversal could follow.

    For now, the market remains within the same consolidation range that it has revisited repeatedly.

    USD/MXN

    The US dollar surged sharply against the Mexican peso during the week, but in reality a pullback had been due. The key question now is whether the 18-peso level will act as strong enough resistance to reverse the move.

    If it does, it could present a solid opportunity to take short positions. However, if the market manages a daily close above the 18-peso level, it may signal that the recent trend is coming to an end.

    All things considered, this is a market where traders may look for signs of exhaustion to sell into, as the interest rate differential still generally favors Mexico.

    Bitcoin

    The Bitcoin market has been quite volatile during the week, but it did manage to break above the $72,000 level. This is notable given the overwhelmingly negative headlines around the world at the moment, and it’s a market I’ll be monitoring very closely.

    If the market can close above the weekly high and continue moving higher, Bitcoin could begin to rally strongly. There may still be debate about what Bitcoin truly represents, but one thing seems clear—it appears to be heavily oversold.

    The key question now is whether buyers will step back in. On the other hand, if the price drops below the $60,000 level, it could trigger a sharp and widespread sell-off.

    Nasdaq 100

    The Nasdaq 100 has been volatile but has continued to show resilience. This is a pattern that appears repeatedly in the US stock market, even when there have been plenty of reasons for it to break down. In itself, that persistence likely says a lot about the underlying strength of the market.

    What I think it tells you is that given enough time, the US stock market, and in this case the Nasdaq 100, will find buyers on any pullback and selling just does not seem to be working out.

    EUR/USD

    The euro weakened significantly during the week. Much of this appears to be driven by expectations that energy costs in the European Union will rise sharply, which could heavily influence the options available to the European Central Bank.

    Keep a close eye on the 1.15 level. If the market breaks below that point, the euro could decline sharply.

    For now, the market remains within the same consolidation range it has been trading in for some time. I do not expect significant movement at the moment, but the 1.15 level will be important to watch.

    USD/JPY

    The US dollar continues to signal the possibility of a major breakout against the Japanese yen, although it has not achieved it yet. The ¥158 level marks the start of a strong resistance zone that extends up to the ¥160 level.

    If the market manages to break above that area, it is likely to move significantly higher. In the short term, pullbacks could present buying opportunities as traders look to pick up the dollar at lower prices.

    Over the longer term, I expect an eventual breakout to the upside. However, the current situation makes it challenging to short the market, while buying directly at this resistance zone is also difficult. It may be best to wait for better value and take advantage of opportunities when they appear.

    Sources: Lewis

  • S&P 500, Nasdaq 100, Russell 2000: Ranges Hold Despite Pullback, but Breakdown Risk Builds

    Trading volume has begun to increase, with selling pressure dominating, though the market has not yet confirmed the start of a new downtrend. While news headlines suggest a more severe market deterioration, price action has not fully validated that narrative so far.

    The Russell 2000 (IWM) has gradually drifted toward range support, forming a series of lower highs but still avoiding lower lows. This tightening structure could eventually resolve with a decisive bearish breakdown—likely marked by a strong red candlestick—which would present a potential short opportunity targeting the 200-day moving average.

    If that level is reached, the technical outlook would likely shift to a net-negative stance. At that point, the market could begin to reveal whether a broader bearish trend is developing.

    The S&P 500 is also approaching the lower boundary of its trading range, though it still has the early-week spike low acting as a reference level. Trading volume in recent sessions has remained relatively modest, but the broader technical picture has turned negative, highlighted by a newly formed downtrend in On-Balance Volume (OBV).

    When prices move back toward a spike low, markets often break below that level if the session ultimately closes within the spike range. A decisive drop below 6,800 would therefore create a potential short setup, with risk managed by placing a stop on a daily close back above 6,800.

    The equal-weighted S&P 500 may provide clearer insight into the market’s direction. It recently registered a clear trend break and has since completed two successful retests of its 50-day moving average. Given how frequently this level has been tested, a third retest would not be surprising—and that attempt could potentially lead to a breakdown below the 50-day MA.

    Technical indicators currently present a mixed picture. For the time being, the most reasonable interpretation is that the index remains in a trading range, similar to the consolidation pattern observed in the market-cap-weighted S&P 500.

    The Nasdaq is showing slightly better resilience compared with other major indices. Yesterday’s volume was classified as accumulation, indicating some buying interest. However, the 20-day moving average is currently acting as resistance and is quickly converging with range support and the 200-day moving average.

    This tightening price structure suggests a potential volatility squeeze, which is likely to lead to a sharp breakout. Once that move occurs, traders can look to position themselves in the direction of the breakout.

    Bitcoin has made an initial move higher, successfully breaking above its 20-day moving average. Although prices have pulled back slightly since the breakout, the move remains intact and has not yet threatened the bullish shift.

    The next upside target is the 50-day moving average, followed by the $85,000 level, which is likely to align with a test of the 200-day moving average.

    Potential short opportunities are beginning to emerge, but with markets still confined to trading ranges, entering positions too early carries a high risk of whipsaws. For the time being, bullish traders may find Bitcoin to be the more stable long setup, as it continues to hold above its recent breakout level.

    Sources: Declan Fallon

  • Is the S&P 500 Entering a Distribution Phase? Key Signals Traders Should Monitor

    Key Takeaways

    U.S. large-cap stocks slipped to multi-month lows this week as oil prices surged, although dip buyers quickly stepped in. A modest rotation across sectors is giving bulls some optimism ahead of upcoming earnings releases and key economic data. Meanwhile, potential distribution in SPY and consolidation in the U.S. dollar could serve as important signals for market direction.

    As the week progresses, traders may finally shift their attention away from geopolitical tensions. Following the release of the Beige Book on Wednesday afternoon, Broadcom reported earnings. The semiconductor firm—less highlighted than the “Magnificent Seven”—has been under pressure like many peers, currently about 25% below its December record high of $413. After four consecutive declining sessions, a rebound would provide some relief for the VanEck Semiconductor ETF, which tracks the chip sector.

    Chip and Consumer Earnings Shift Focus

    Upcoming earnings from Marvell Technology and Costco Wholesale will further influence market sentiment. Marvell’s results could add to volatility in semiconductor stocks, while Costco’s report may offer new insight into the strength of the consumer.

    Looking more closely at Costco, bullish signals are beginning to emerge after a difficult second half of 2025. The consumer-staples retailer fell sharply from $1,067 last June to a 16-month low in December, marking its first series of 52-week lows since March 2009.

    Currently, however, the stock has recovered above its long-term 200-day moving average as well as its rising 50-day average. A bullish “golden cross” could soon form just as the company releases its fiscal Q2 results. A positive reaction to the earnings report would likely be viewed as an encouraging sign for the broader economy. While consumer staples are typically considered defensive, Costco’s performance is closely tied to middle- and upper-income consumer spending and it has historically been a major leader during long-term bull markets.

    It’s the Market Reaction That Matters, Not the Data

    At the moment, a pullback in that group would be unwelcome, especially as stocks such as American Express (NYSE: AXP) are already showing potential warning signals. What matters most won’t simply be the revenue and earnings figures released on Thursday evening, but how the stock responds when trading resumes on Friday. In the end, investors’ reactions to fundamental data often carry more weight than the data itself.

    Economic Data Takes Center Stage

    With that in mind, Friday morning’s focus will shift toward domestic economic indicators rather than the ongoing concerns surrounding the Middle East conflict, including tensions near the Strait of Hormuz, drone and missile strikes, and the possibility of crude oil prices climbing above $100 per barrel for WTI and Brent.

    In fact, something unusual is set to occur: the February Employment Situation report and the January Retail Sales report are scheduled to be released at the same time. Key questions remain—how strong will the headline job gains be? Will consumer spending confirm a solid start to the year? For now, it’s uncertain.

    Friday Risk Sentiment and Sector Trends

    What should become clearer, however, is traders’ appetite for risk as the weekend approaches. Market behavior at the close of the first week of the month—especially with the VIX nearing the 30 level—may provide clues about how the remainder of the first quarter could unfold. Will markets experience heightened volatility, or will conditions calm after March’s turbulent start? Instead of speculating, the charts may offer the answers.

    Sector movements have stood out this week. Despite sharp volatility in Energy and other cyclical industries, the Financials (XLF) sector has still managed to generate modest outperformance. That’s an encouraging sign for bullish investors, considering banks and related stocks have been among the market’s leaders since October 2022. At the same time, Energy (XLE) and Utilities (XLU) have continued to rank among the top performers over the past six trading sessions.

    However, two sectors trailing behind are Health Care (XLV) and Consumer Staples (XLP). This suggests there hasn’t been a complete shift into defensive assets even as the VIX has climbed. It’s worth noting that the S&P 500 (SPY) has only slipped slightly since February 23, which may hint at a somewhat healthier sector backdrop. By the market close on Friday, we should have a clearer picture of the trend.

    SPY: Bulls and Bears Still Battling

    Looking at the bigger picture, the SPY still appears somewhat fragile. A bearish rounded-top pattern seems to be forming, and the price has slipped below the 100-day moving average. While this moving average isn’t always a primary indicator, it has acted as a fairly reliable support and resistance level over the past two years.

    That said, the bulls have shown resilience this week. U.S. large-cap stocks rebounded significantly from their lows on both Monday and Tuesday. However, the sharp volatility and heavy trading volumes mean a large amount of shares have changed hands between roughly $670 (Tuesday’s low) and the record high just under $700 set on January 28. For technical analysts, that kind of activity often signals distribution.

    Typically, bullish investors prefer to see tight consolidation rather than price structures that stretch out over several months. The concern is that major market participants could be gradually selling shares after a long rally. In other words, traders should remain cautious—especially with potential distribution patterns emerging as March unfolds.

    The Dollar’s Rally: Why It Matters

    From an intermarket standpoint, the US Dollar Index ($USD) should remain a key indicator to watch for the rest of the quarter. Earlier this week, it moved into the important 99.50–100.50 range but was initially pushed back. Now trading below 99 ahead of major economic releases, a move toward 10-month highs above 100.39 would likely signal a broader risk-off environment in financial markets.

    The latest rebound followed what appears to have been a bullish false breakdown, occurring when market sentiment toward the dollar had become excessively negative. To put things into perspective, it’s quite rare for the dollar to remain trapped in such a tight trading range for an extended period.

    Once the index eventually breaks out or breaks down, the move could carry significant consequences across global asset markets—from equities to commodities and currencies. For the moment, however, the situation remains a wait-and-see one as traders watch for a decisive shift.

    The Bottom Line

    March volatility has arrived as expected. Geopolitical tensions have intensified, yet the S&P 500 continues to show resilience. With several key earnings reports and important economic data releases approaching, the market’s reaction heading into the weekend will likely provide the clearest signal for traders.

    At the very least, attention may briefly shift away from geopolitical developments. For now, the key areas to monitor include evolving sector trends, the months-long consolidation in the S&P 500, and the range-bound movement of the US Dollar Index. Together, these factors could offer important clues about the market’s next direction.

    Sources: Mike Zaccardi

  • S&P 500: Higher Rates, Surging Oil, and a Stronger Dollar Threaten Equities

    Stocks ended the session little changed, rising just 4 basis points. As anticipated in this free daily note, the S&P 500 opened with a gap lower and quickly tested the 6,800 put wall. Implied volatility was sharply compressed as those put positions were likely unwound, paving the way for a rebound in equities.

    In short, the action unfolded largely in line with Sunday’s outlook.

    The more notable development was that the CBOE Volatility Index still climbed to 21.5 on the session after spiking to roughly 25 earlier in the day. Examining the volatility smile, implied volatility for the SPDR S&P 500 ETF Trust March 20 options moved broadly higher. With minimal net price change in the underlying, the bulk of the adjustment reflected a parallel upward shift in implied volatility across the curve. Put skew steepened, while call skew flattened.

    In other words, volatility did increase overall, but the sharp pullback from intraday highs helped power the rebound following the opening gap lower.

    At the same time, the gap between the S&P 500 Dispersion Index and three-month implied correlation tightened. Historically, that spread has tended to act as a leading indicator for the S&P 500. It’s hard to envision a setup where implied volatility stays elevated and correlations continue to climb without the index eventually facing downside pressure.

    For the moment, though, options traders seem comfortable maintaining positioning around the 6,800 level.

    Equities could also face headwinds if interest rates and crude prices keep pushing higher. A combination of rising yields and elevated oil costs is rarely constructive for economic growth. The same dynamic extends to the U.S. dollar — since 2022, oil, rates, and the greenback have often moved in tandem.

    If all three continue advancing, financial conditions would likely tighten over time, a backdrop that historically has not been favorable for stocks.

    But as long as the options market keeps propping up the S&P 500, what could possibly derail the rally?

    Sources: Michael Kramer

  • Financial Stocks Come Under Strain

    The heatmap below, via Finviz, highlights one-month returns across the S&P 500 financial sector. Notably, Berkshire Hathaway (NYSE: BRK.B) and several insurers have posted gains, while most other financial names have lagged. For comparison, the broader index declined 2.80% over the same stretch. Three key forces appear to be weighing on the group:

    Yield Curve Pressure:

    Banks typically fund themselves through short-term deposits and CDs while extending longer-term loans. As a result, the slope of the yield curve directly affects net interest margins. Recently, the curve has flattened by roughly 25 basis points, compressing margins and dampening earnings prospects.

    Credit Concerns:

    As discussed in Monday’s commentary, stress is building in the private credit market due to rising loan losses and potential fraud. Major institutions such as Goldman Sachs and Morgan Stanley are significant participants in that space. Turbulence in private credit is now spilling over into banks and brokers more broadly. At the same time, consumer delinquencies are trending higher, adding to sector-wide risk.

    Credit Card Competition:

    Payment leaders Visa (NYSE: V) and Mastercard (NYSE: MA), long viewed as possessing durable competitive advantages, are facing mounting competition from lower-cost payment alternatives. Real-time payment rails, account-to-account transfers, and fintech platforms are increasingly bypassing traditional card networks and their interchange fees. Investors are beginning to question the sustainability of their pricing power.

    Taken together — margin compression, mounting credit risks, and intensifying payment competition — the financial sector currently lacks a compelling catalyst for sustained outperformance.

    Key Things to Monitor Today

    Earnings

    Economy

    No major economic data releases today.

    Financial Stocks Are Losing Momentum

    Building on the opening section, the financial sector has been the weakest performer over the past five days. The first chart highlights that it has lagged the S&P 500 by 3.00% during that span, following an additional 2.84% underperformance in the preceding 20-day period.

    The second chart shows that the Financial Select Sector SPDR Fund (XLF) continues to churn in the lower-left quadrant, indicating that both its absolute technical score and its relative strength versus the S&P 500 remain in oversold territory.

    As noted earlier, three primary factors are pressuring the financial sector, and there is no clear near-term fundamental catalyst to shift the tone.

    Today’s Tweet Spotlight

    Sources: Michael Lebowitz

  • Oil Jumps After Iran Conflict Closes Strait of Hormuz: 5 Energy Stocks to Consider

    The world’s most critical oil chokepoint has effectively gone offline — and energy markets are adjusting instantly.

    Brent crude surged 13% to $82.37 per barrel on Monday morning, marking its largest one-day jump in four years. The rally followed coordinated U.S. and Israeli airstrikes on Iran over the weekend — an operation the Pentagon has labeled Operation Epic Fury. The strikes killed Supreme Leader Ali Khamenei, ending his 36-year rule and plunging the Islamic Republic into its most severe political upheaval since 1979. Tehran responded swiftly, launching attacks on U.S. bases across the region and, more critically for global markets, targeting oil tankers moving through the Strait of Hormuz.

    That narrow passageway handles roughly 20% of global oil flows each day. By Monday morning, it was effectively shut. Maersk suspended all vessel transits. Over 200 oil and LNG carriers dropped anchor. Iran’s Islamic Revolutionary Guard Corps reportedly warned ships that no vessels would be permitted to pass. This is no longer rhetoric — it is a tangible supply shock.

    Why the Oil Outlook Has Fundamentally Shifted

    Oil markets are accustomed to geopolitical tension. They have repeatedly absorbed headlines without lasting disruption. What they cannot easily digest is the sudden loss of one-fifth of global supply with no clear timeline for restoration.

    Just days ago, Brent was trading near $73, and the prevailing narrative centered on excess supply. The U.S. Energy Information Administration projected WTI crude would average $53 by year-end. OPEC+ was discussing potential production increases. Market bears appeared firmly in control.

    That backdrop has flipped. Brent settled near $79 after briefly touching $82, while WTI climbed from $67 on Friday to $72. Diesel futures — a key barometer of industrial activity — spiked more than 20% intraday. U.S. gasoline futures advanced 9% to their highest level since July 2024. According to GasBuddy analyst Patrick De Haan, retail gasoline prices could rise by 10 to 30 cents per gallon in the near term, with some stations potentially increasing prices by as much as 85 cents.

    The market is no longer pricing geopolitical risk. It is pricing physical disruption.

    “The magnitude of the retaliation caught the market completely off guard,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “This is far removed from what investors had been pricing in.”

    OPEC+ attempted to ease concerns on Sunday by announcing a relatively small output increase of 206,000 barrels per day for April. However, as Helima Croft of RBC Capital Markets noted, incremental barrels offer limited relief if transport routes remain compromised. “Accessing spare capacity becomes highly constrained when key waterways are effectively shut down,” she wrote.

    From a broader market perspective, Dominic Wilson of Goldman Sachs emphasized that equities will be driven less by dramatic headlines and more by the duration of the energy shock. In a client note, he argued that only a prolonged and severe spike in oil prices would materially alter the global growth trajectory.

    Meanwhile, analysts at JPMorgan outlined four key variables shaping the outlook: the scale of supply disruption, the length of the outage, the speed at which alternative production can be activated, and the credibility of a diplomatic resolution. On Sunday, Donald Trump suggested U.S. military operations could extend for “four to five weeks” — a timeframe that implies a potentially sustained period of elevated risk for energy markets.

    How to Position for the Oil Shock

    Energy equities are the clearest near-term beneficiaries, and capital is already rotating aggressively into the space. The Energy Select Sector SPDR Fund (XLE) notched a fresh 52-week high on Monday. Below are five vehicles to consider:

    Exxon Mobil (XOM)

    Trading near $155, just shy of its all-time high of $156.93, Exxon represents the most diversified large-cap exposure to elevated crude prices. The company produced 4.7 million barrels of oil equivalent per day last quarter, exceeded Q4 expectations with EPS of $1.71, and has earmarked $20 billion in buybacks for 2026.

    Wells Fargo recently lifted its price target to $183 from $156. CEO Darren Woods reiterated on the latest earnings call that there is “no near-term peak Permian” for the company. With Permian breakevens around $35 per barrel and production in Guyana scaling, incremental oil price gains translate efficiently into free cash flow expansion.

    Chevron (CVX)

    Shares briefly reached a new 52-week high of $196.76 before closing near $193. Chevron’s estimated Brent breakeven — inclusive of dividends and capex — sits near $50 per barrel. At current levels around $79 Brent, the company is generating substantial surplus cash.

    Bank of America raised its target to $206 from $188. Chevron is also reportedly in exclusive discussions to assume control of Iraq’s West Qurna 2 field from Lukoil, a move that would add meaningful production upside. CEO Mike Wirth recently characterized the company as “bigger, stronger, and more resilient than ever.”

    ConocoPhillips (COP)

    Up nearly 4% to roughly $118 and marking a new 52-week high, ConocoPhillips offers more direct leverage to crude prices given its pure upstream model.

    Goldman Sachs added COP to its U.S. Conviction Buy List, arguing the stock is approaching a material re-rating. The Marathon Oil integration is enhancing scale, while a $2 billion asset divestiture is sharpening its Permian focus. At current oil prices, COP is generating approximately $7 in EPS, implying a sub-17x multiple — reasonable for a commodity cycle inflection.

    Occidental Petroleum (OXY)

    Trading near $54, Occidental offers higher beta exposure. Its more levered balance sheet amplifies upside in a sustained higher-price environment.

    Berkshire Hathaway holds roughly 28% of the company, providing a credibility anchor via Warren Buffett’s long-term endorsement. While the Carbon Engineering acquisition adds energy-transition optionality, the immediate thesis is straightforward: if Brent sustains levels above $80, OXY’s earnings power expands rapidly, making a $70+ valuation plausible under that scenario.

    Energy Select Sector SPDR Fund (XLE)

    For investors seeking diversified sector exposure without single-name volatility, XLE remains the default allocation. Trading near $93 and at a 52-week high, the ETF is heavily weighted toward Exxon (~22%), Chevron (~17%), and ConocoPhillips (~8%), which together account for nearly half the portfolio.

    XLE provides integrated exposure across oil, gas, and energy services in a single vehicle. Should the conflict extend for several weeks — as suggested by Donald Trump — the entire sector could undergo a structural repricing higher.

    The Bear Case You Can’t Ignore

    History shows that geopolitical shocks often produce violent spikes followed by equally sharp reversals. During the June 2025 “12-day war” between Israel and Iran, crude initially surged but retraced quickly once it became clear that physical supply flows were unaffected.

    While this episode involves direct tanker strikes and the functional closure of the Strait of Hormuz, some analysts still see a limited-duration event. Max Layton of Citigroup argues the base case is a leadership shift in Tehran that brings the conflict to an end within one to two weeks.

    A similar view comes from Landon Derentz at the Atlantic Council. He notes that regional energy infrastructure remains intact and that global supply capacity has not been structurally damaged. The oversupply dynamics that capped prices before the conflict have not disappeared. If Hormuz reopens quickly, crude could surrender much of its recent gains.

    The Inflation Risk

    There is also a macro layer that complicates the bullish narrative. Sustained higher oil prices feed directly into transportation, manufacturing, and consumer input costs. That dynamic could constrain the Federal Reserve, forcing policymakers to delay or abandon anticipated rate cuts.

    Monday’s Institute for Supply Management manufacturing data showed input costs rising at their fastest pace since 2022. Treasury yields have begun to move higher in response. If oil remains elevated long enough to reignite inflation pressures, the Fed’s stance could shift from easing to holding — a headwind for equities broadly, even if energy stocks outperform on relative terms.

    A Structural Repricing of Risk

    That said, even a swift diplomatic resolution would not fully reset the clock. Markets were effectively assigning near-zero geopolitical risk premium to oil prior to this weekend. That complacency has been challenged.

    Energy equities were already trading at modest multiples relative to free cash flow. Now they have a tangible catalyst. Even if the conflict de-escalates quickly, the perception of risk — and the embedded premium in crude pricing — is unlikely to vanish overnight.

    What to Watch

    Three catalysts in the next 72 hours. First, Iran’s response — Tehran’s next move over the next 24 to 48 hours will determine whether this is a two-week shock or a multi-month crisis. Any strikes on Saudi or UAE energy infrastructure pushes Brent toward $90 or beyond.

    Second, the Strait of Hormuz reopening timeline. If shipping insurance companies begin covering Hormuz transits again this week, oil pulls back. If the effective closure extends past Friday, the supply disruption becomes real and sustained — and $80+ becomes the new floor.

    Third, the U.S. Strategic Petroleum Reserve. The IEA said Monday it’s in contact with major producers about potential coordinated reserve releases. Any SPR drawdown announcement would cap oil’s upside temporarily but wouldn’t change the structural supply picture.

    The energy sector just went from afterthought to the most important trade in the market. Whether this conflict lasts two weeks or two months, the companies producing oil at $35 to $50 breakevens and generating massive free cash flow at $70 to $80 Brent are going to reward shareholders. The question isn’t whether to own energy — it’s how much.

    Sources: Jaachi Mbachu

  • U.S. stock futures slide as Iran-related concerns trigger a volatile session on Wall Street

    U.S. equity index futures declined Monday evening, pulling back as renewed tensions among the United States, Israel, and Iran fueled fresh volatility across Wall Street.

    Earlier in the day, U.S. markets staged a sharp recovery from significant intraday losses to close slightly higher. The rebound was supported by solid business activity data, while technology stocks attracted bargain hunters following steep declines in February.

    Investor attention remained firmly fixed on escalating Middle East tensions, as leaders from Washington, Tel Aviv, and Tehran showed no indication of de-escalating the conflict. Weekend strikes by the U.S. and Israel on Iran prompted swift retaliation from Tehran, intensifying geopolitical risks.

    By 20:00 ET (01:00 GMT), S&P 500 futures were down 0.3% at 6,867.0. Nasdaq 100 futures slipped nearly 0.4% to 24,922.25, while Dow Jones futures declined 0.3% to 48,807.0.

    Wall Street swings sharply amid US-Iran tensions

    Major U.S. indices ultimately finished modestly higher on Monday after rebounding from earlier session lows, though market sentiment remained fragile as the regional conflict deepened.

    Technology stocks led the gains, particularly semiconductor names, which recovered after notable February losses. Nvidia surged 2.9% following a 7.3% decline the previous month.

    The S&P 500 closed essentially unchanged, the Dow Jones Industrial Average edged down 0.2%, and the Nasdaq Composite rose 0.4%. Market volatility remained elevated, with the CBOE Volatility Index jumping nearly 8%.

    Hostilities continued into Monday, with the U.S. signaling no intention to halt its military actions. Iran responded with drone and missile strikes targeting Israel and nearby regions, while senior Iranian officials reiterated that negotiations with Washington were not under consideration.

    Markets grew increasingly concerned about the inflationary implications of the conflict, particularly as oil prices surged. A prolonged rise in crude could reignite global inflationary pressures and prompt central banks to adopt a more hawkish stance.

    ANZ analysts noted that higher oil prices represent a negative supply shock, increasing inflation while weighing on growth prospects. They emphasized that the broader economic impact will largely depend on the duration of the conflict.

    U.S. PMI data exceeds expectations

    Meanwhile, February U.S. purchasing managers’ index data came in stronger than expected, according to ISM figures released Monday.

    Manufacturing activity expanded for a second consecutive month, with new orders significantly outperforming forecasts. However, the report also showed a sharp increase in manufacturing input prices, even before factoring in potential energy-related shocks stemming from Middle East tensions.

    The data followed last week’s stronger-than-expected producer price figures for January, reinforcing concerns that inflation may remain sticky. As a result, investors are increasingly wary that the Federal Reserve could maintain interest rates at elevated levels for longer than previously anticipated.

    Several Federal Reserve officials are scheduled to speak in the coming days, which may provide further guidance on the future path of monetary policy.

    Sources: Ambar Warrick

  • Will a War with Iran Move Major Indexes Like the Nasdaq, S&P 500, and Russell 2000?

    Beyond the surge in oil prices — which had already been climbing before Israel and the accompanying U.S. strike on Iran — the longer-term market consequences remain uncertain. I closely monitor how major indices trade relative to their 200-day moving averages. Since late 2025, this positioning has normalized, no longer appearing overbought or presenting the level of risk I had anticipated heading into 2026.

    That said, clearly defined support levels are now in play and are likely to be tested early next week. A break below these levels would not necessarily be severe, as the 200-day moving averages lie beneath and could provide a cushion. The real risk scenario would emerge if the Iran conflict escalates into sustained terrorist attacks targeting U.S. interests, potentially provoking direct U.S. (and possibly Israeli) ground involvement in Iran.

    The Middle East rarely offers quick, decisive resolutions, and the U.S. has little historical success in such engagements to rely upon. In that kind of drawn-out conflict, markets could experience gradual, persistent losses that eventually shift the broader trend into bearish territory. If declines were to push indices decisively below their 200-day moving averages, it could create attractive long-term buying opportunities — even if headlines remain overwhelmingly negative.

    The S&P 500 ended Friday with a technical “sell” signal following higher-volume distribution. February has already seen several distribution days. Considering the questionable activity in prediction markets ahead of the Iran strikes, it raises the possibility that some February selling may have reflected insider positioning around a potential conflict. The elevated distribution volume on Friday — just before Saturday’s airstrikes — stands out as unusual, especially within what had been a range-bound market where volume is typically subdued.

    Ultimately, speculation aside, we can only act on the data in front of us. For now, the S&P 500 remains a “hold.”

    The Nasdaq Composite also registered a distribution day, though the signal was less pronounced than what we saw in the S&P 500. It’s possible the 200-day moving average could converge with established range support just as the index pulls back to retest that same level.

    Technical indicators are giving mixed signals. The only outright positive is a weak MACD buy trigger, but that comes after an extended stretch of relative underperformance compared to the Russell 2000 (IWM). Under these conditions, a break below support would not be surprising — though it’s best to wait and see how price action unfolds.

    The Russell 2000 (IWM) may prove to be the most resilient in the face of negative headlines. Unlike the larger indices, it did not register a distribution day and continues to hold support at its 50-day moving average.

    Technical indicators are leaning constructive: on-balance volume and stochastics are positive, ADX remains neutral, and although MACD is trending lower, it is still positioned above the bullish zero line. For now, the key question is how the index responds to the weekend developments — price action will ultimately provide the clearest signal.

    Bitcoin has responded relatively calmly to the developments surrounding Iran. From a trading perspective, there appears to be a swing setup forming, with a decisive move above $70K or below $65K likely to determine the next directional bias.

    Given that the market is already in oversold territory, even a downside break may struggle to sustain prolonged weakness. Any dip could prove short-lived if buyers step in at lower levels.

    An eventful week is shaping up, but this feels more like the beginning of a broader development rather than its conclusion.

    Sources: Declan Fallon

  • Key Instruments in Focus – USD/CAD, EUR/USD, USD/MXN, BTC/USD, USD/JPY, DAX, NASDAQ 100, USD/CHF

    USD/CAD

    The U.S. dollar initially strengthened against the Canadian dollar over the course of the week, but has since pulled back and is now showing signs of indecision. This isn’t particularly surprising, given that the pair has been fluctuating within the same range for the past five weeks. Notably, the 1.3550 level continues to serve as solid support, while the 1.3750 area above remains a key resistance zone.

    For longer-term traders, the prudent approach is likely to wait for a decisive breakout in either direction. In the meantime, short-term participants may keep trading the range, especially as the interest rate differential between the two currencies continues to narrow, encouraging back-and-forth price action.

    EUR/USD

    The euro has traded in a choppy, sideways manner throughout the week, much like the U.S. dollar against the Canadian dollar. The interest rate differential between the euro and the dollar is relatively modest, with the European Central Bank expected to hold rates steady while the Federal Reserve may move toward cutting them.

    In this kind of environment, traders are searching for a catalyst to drive price in either direction. At the moment, the 1.18 level appears to be acting as a magnet, drawing price back toward it as the market struggles to establish a clear trend.

    USD/MXN

    The U.S. dollar moved higher against the Mexican peso over the week, which isn’t particularly surprising given how sharply it had declined beforehand. If the pair continues to rebound, the 17.50 level is likely to attract selling pressure, making it a potential area to consider short positions.

    A sustained break above 18.00 would be needed before entertaining the idea of a broader trend reversal. For now, the interest rate differential continues to favor the downside, so the pair is often used to collect positive swap. I rarely look to buy this market, though sharp upside moves can occur and prove highly profitable—typically driven by strong momentum or bouts of risk aversion, which tend to override the yield advantage.

    BTC/USD

    Bitcoin has been highly volatile throughout the week, with price action continuing to revolve around the $60,000 level. This area is drawing significant attention, as a decisive break below it could pave the way for a swift move toward the $50,000 region.

    A break above the $72,000 level would open the door for a potential rally toward $84,000. However, at this stage, the more likely scenario appears to be continued sideways consolidation. In fact, the longer Bitcoin trades within a range and builds a base, the healthier the overall structure becomes, potentially setting the stage for a more sustainable move higher later on.

    USD/JPY

    The U.S. dollar edged higher against the Japanese yen over the week, though the ¥158 level continues to act as resistance. At this point, traders seem to be searching for a catalyst strong enough to push the pair beyond the key ¥160 threshold.

    A sustained move above ¥160 could trigger a significant rally, as that area marks the major swing high dating back to 1990. In the meantime, short-term pullbacks are likely to be viewed as buying opportunities, supported by the wide interest rate differential and Japan’s heavy debt burden, which limits the scope for materially higher domestic rates.

    DAX

    The German equity market has been somewhat erratic, with the DAX moving back and forth, though overall activity has been relatively subdued. The 25,000-euro level remains a key focus, as it represents a major round number with strong psychological significance. In the near term, minor pullbacks are likely to be viewed as buying opportunities.

    There is also the potential for a push above the 25,400 level. A decisive breakout there could pave the way for a move toward the 27,000-euro region. At this stage, I have no interest in shorting the DAX, as the German economy appears to be supported by substantial government stimulus measures.

    NASDAQ 100

    The Nasdaq 100 has experienced significant volatility throughout the week. Despite ongoing challenges and heavy selling pressure in major stocks such as Nvidia, the index is set to close the week in relatively steady shape. The 25,000 level remains a key focus, as it represents a major psychological milestone.

    A decisive move above 25,000 could open the door to the 25,500 area, which may act as the next resistance barrier. Overall, the broader outlook remains constructive, with short-term pullbacks likely presenting buying opportunities.

    Meanwhile, the U.S. dollar has continued to weaken against the Swiss franc over the past week, making this currency pair one to monitor closely.

    USD/CHF

    The U.S. dollar has edged lower against the Swiss franc over the past week, making the pair particularly important to monitor. Swiss officials have expressed concern about the franc’s strength, which adds another layer of sensitivity to current price movements.

    The 0.76 level appears to be providing near-term support, and the market will be watching closely to see whether it holds. A breakdown below that area could open the way toward the 0.75 level. Over the longer term, there is a strong possibility that the Swiss National Bank may step in to curb further franc appreciation, though any intervention would more likely begin in the euro–Swiss franc pair rather than in USD/CHF itself.

    Sources: Lewis

  • Nasdaq: Near-Term Tech Weakness Frequently Sets the Stage for Long-Term Gains

    NASDAQ Composite — and technology stocks more broadly — are like a finely tuned sports car. They can easily lap your grandmother’s Oldsmobile — the Dow Jones Industrial Average — but they also require more maintenance and can stall at inconvenient moments.

    Since its launch, and particularly since 2015, the NASDAQ has outperformed both the Dow and the S&P 500. Still, it’s very much a hare-and-tortoise story: the speedy rabbit occasionally takes long naps, yet ultimately wins the race — provided investors can tolerate the volatility that comes with tech-heavy exposure.

    That dynamic is playing out again in the current market rotation. Since November 1, 2025, the Dow has gained 4.34%, while the NASDAQ has slipped 3.54% — a near mirror image. Once again, capital has rotated out of high-flying tech names (the flashy sports car) and into the steadier reliability of the Dow’s blue-chip stalwarts.

    In April, Consumer Discretionary stocks tumbled during a tariff-driven selloff. Although they initially sank, they’ve since rebounded strongly. Betting against the U.S. consumer has historically been a mistake, especially when sentiment temporarily sours.

    Over the past year, Consumer Discretionary shares outpaced Consumer Staples, though a recent rotation has narrowed that gap.

    Yes, the NASDAQ can test your patience — even break your heart — but history suggests that endurance can pay off.

    Consider late 2021. While Federal Reserve officials were still describing inflation as “transitory,” markets began adjusting. On November 19, 2021, the NASDAQ reached an all-time high of 16,057. Over the next 13 months, it plunged 36.4%, closing at 10,213 on December 28, 2022. During that same stretch, the S&P 500 fell about 19%, and the Dow declined just 7.65%.

    Investors heavily concentrated in high-growth tech during 2022 likely felt significant pain. Yet those wounds healed quickly. From 2023 through 2025, the NASDAQ surged 122%, compared with a 78% gain for the S&P 500 and a more modest 45% rise for the Dow.

    Short-term breakdowns in tech can be dramatic — but historically, they have often laid the groundwork for powerful long-term outperformance.

    The Biggest NASDAQ Disaster – The Y2K Crash

    In 1999, the NASDAQ Composite was on a tear, doubling between June 1999 and March 2000, while the Dow Jones Industrial Average seemed half-asleep by comparison. That divergence flipped abruptly in March 2000. The Dow began climbing just as the NASDAQ collapsed, ultimately losing 50% or more in short order.

    In February 2000, the NASDAQ experienced a classic “melt-up” even as the Dow drifted lower. By mid-April, the opposite occurred: the NASDAQ suffered its worst week, plunging while the Dow actually advanced. From the start of 1999 through the end of February 2000, the NASDAQ had soared 122%, compared with gains of just 16% for the S&P 500 and 17% for the Dow. Then came the reversal. Between March and May, the blue-chip indexes gained about 4%, while the NASDAQ tumbled 28%. In a single week — April 11–15 — the NASDAQ dropped 25.3%, even as the Dow rose 3.4%.

    The aftermath was even more sobering. It took 16 years for the NASDAQ to reclaim its March 2000 peak. Meanwhile, the Dow and S&P 500 briefly reached new highs by 2007 and went on to establish lasting all-time highs by 2012. Over that 16-year span, the Dow climbed 48.6%, the S&P 500 gained 33.8%, and the NASDAQ was still slightly below its prior peak.

    Still, comparisons between 2026 and the dot-com era can be misleading. The 1999 boom was driven largely by speculative internet companies with little or no earnings. Today’s technology leaders, by contrast, generate substantial revenues and profits, with strong forward guidance tied to tangible business applications. This is a very different foundation.

    Over the long haul — since its launch 55 years ago — the NASDAQ has dramatically outperformed both the Dow and the S&P 500, often by multiples of two to four times. Since 1971, the NASDAQ has surged nearly 260-fold, rising from 89.61 to 23,242 at the start of 2026. Over the same period, the Dow has increased about 57-fold and the S&P 500 roughly 74-fold.

    So while volatility can test investors’ patience, history suggests resilience. Not every four-letter ticker deserves a four-letter rebuke.

    Sources: Louis Navellier

  • Financial experts respond to U.S.–Israel military action against Iran

    The United States and Israel carried out coordinated strikes on Iran on Saturday, killing Supreme Leader Ali Khamenei and triggering a fresh wave of conflict across the Middle East.

    The attacks unsettled neighboring Gulf Arab oil producers as concerns mounted over further escalation, particularly after Iran retaliated with missile launches toward Israel.

    According to four trading sources, several major oil companies and leading commodity traders temporarily halted crude and fuel shipments through the Strait of Hormuz following the strikes.

    Key Reactions from Analysts

    Helima Croft, Head of Commodities Research, RBC Capital:

    Croft said the long-term impact on oil prices will depend on whether the IRGC retreats under sustained airstrikes or escalates further, potentially increasing the costs of what she described as Washington’s second regime-change effort in just over two months.

    She added that regional leaders had cautioned Washington about the spillover risks of renewed confrontation with Iran, warning that oil prices above $100 per barrel would pose a serious threat.

    Croft also emphasized that OPEC’s ability to cushion supply shocks is limited. Aside from Saudi Arabia, most OPEC+ members are already producing near capacity, meaning any announced output increase may have little practical effect.

    Jorge Leon, SVP and Head of Geopolitical Analysis, Rystad Energy:

    Leon noted that while alternative infrastructure exists to bypass the Strait of Hormuz, a prolonged disruption could effectively remove 8–10 million barrels per day from the market—significant in a world consuming roughly 100 million barrels daily.

    He suggested countries with strategic petroleum reserves may release supplies if the disruption drags on. Absent quick de-escalation, he expects oil prices to reprice sharply higher at the start of the week.

    Eurasia Group energy analysts:

    They anticipate oil prices will surge when markets reopen. If fighting continues into Sunday, prices could jump $5–$10 above the current $73 level, especially given Iran’s claim that it has closed the Strait of Hormuz and reports of tanker disruptions.

    Barclays energy analysts:

    Barclays warned that markets may confront worst-case supply fears on Monday. Brent crude could climb to $100 per barrel as traders assess the risk of major supply interruptions amid intensifying regional instability.

    Vishnu Varathan, Head of Macro Research (Asia ex-Japan), Mizuho, Singapore:

    Varathan said recurring regional attacks may become the new norm, keeping oil prices elevated as both production and transit routes remain vulnerable. OPEC could face pressure to boost output, though a 10–25% risk premium on oil prices would not be excessive—even without a full blockade of the Strait of Hormuz, which he described as a potential 50% premium event.

    Christopher Wong, Strategist, OCBC, Singapore:

    Wong expects geopolitical risk premiums to rise as markets open. Safe-haven assets like gold are likely to gap higher, while oil could strengthen on supply concerns. Meanwhile, risk assets and high-beta currencies may experience early volatility, particularly if retaliation or regional spillover intensifies.

    Nick Ferres, CIO, Vantage Point Asset Management, Singapore:

    Ferres argued that energy remains undervalued and should rally at the start of the week—alongside gold.

    Sources: Reuters

  • The New Must-Own “Magnificent” Stocks for 2026

    Each week, host and Zacks stock strategist Tracey Ryniec teams up with guest experts to break down the most compelling trends in stocks, bonds, and ETFs — and what they mean for investors’ everyday lives.

    The era of the “Magnificent 7” may be winding down. Before that, investors rallied around the FANG stocks, which later evolved into FANGMAN. At one point, some pushed to include Tesla, transforming the group into the Magnificent 7.

    Now, with several of those mega-cap names losing momentum, that once-dominant lineup appears to be fading.

    Moving Past Apple and Microsoft

    For years, mega-cap tech giants like Apple and Microsoft have led the market. But what if leadership shifts?

    Tracey highlights five non–big tech companies that could emerge as the “new” magnificent stocks. All five are trading at fresh five-year highs and are projected to deliver double-digit earnings growth in 2026.

    Are you prepared to look beyond Apple and Microsoft to discover the market’s next generation of winners?

    5 New “Magnificent” Stocks to Consider for 2026

    MasTec, Inc. (MTZ)

    MasTec operates across communications, energy, and utilities infrastructure — positioning it as a potential AI infrastructure beneficiary. The stock has surged 225% over the past five years and is trading at fresh five-year highs.

    While it has yet to report Q4 2025 results (due Feb. 26, 2026), earnings are projected to climb 61.8% in 2025 and another 28.6% in 2026. However, with a forward P/E of 33.5, the valuation is well above traditional value levels.

    Does an infrastructure-focused growth name like MasTec deserve a spot on your watchlist?

    Caterpillar Inc. (CAT)

    Known for its construction and mining equipment, Caterpillar is benefiting from renewed infrastructure and development activity. Shares are up 262% over the past five years, also marking new five-year highs.

    Earnings are expected to grow 18.9% in 2026. Yet, like MasTec, Caterpillar trades at a premium, with a forward P/E of 33.6.

    Is there still upside ahead, or have investors already priced in the growth?

    Walmart Inc. (WMT)

    One of America’s largest retailers, Walmart has significantly expanded its online presence since 2020. The strategy appears to be paying off: shares have gained 164% over five years and sit at new highs.

    Despite projected earnings growth of 11% in fiscal 2027, Walmart trades at a lofty 42.6 forward P/E — even higher than NVIDIA at roughly 25x.

    Has Walmart become overheated, or is its transformation still underappreciated?

    Eli Lilly & Company (LLY)

    Eli Lilly, a pharmaceutical heavyweight, is riding strong momentum driven partly by its weight-loss treatments and an upcoming pill launch. The stock has soared 404% over five years, outperforming the S&P 500 and hovering near record highs.

    Earnings are forecast to rise 39.6% in 2026. With a forward P/E of 30, Lilly isn’t cheap, but it’s more moderately valued compared to some peers.

    Could healthcare leadership define the next “magnificent” cycle?

    Howmet Aerospace Inc. (HWM)

    Operating in aerospace and defense, Howmet has delivered one of the most remarkable runs of the group, climbing 798% over the past five years and reaching new all-time highs.

    Earnings are projected to grow 18.8% in 2026. Still, its forward P/E of 56 signals a steep premium.

    Can a high-growth defense supplier sustain its momentum at these levels?

    Sources: Tracey Ryniec

  • WTI: Traders Maintain Strong Long Positions Ahead of Weekend Production Decision

    Indices: Tech Drags as Futures Edge Lower Before PPI

    U.S. equity futures slip slightly after a weak session led by semiconductor losses. The tech-heavy Nasdaq 100 (-1.2% to 25,034) paced declines, followed by the S&P 500 (-0.5% to 6,908), while the Dow 30 (flat at 49,499) avoided closing in the red. Treasury yields eased across the curve, with the 10-year hovering near the 4% threshold, as investors await January PPI data. CME FedWatch pricing still points to rate cuts in July and October as the base case.

    Stocks: Chip Selloff; Media Takeover Saga Nears Conclusion

    • Nvidia (-5.5%) slid despite beating earnings and revenue expectations, dragging the broader semiconductor space lower, including AMD (-3.4%), Intel (-3%), and ASML (-4.1%).
    • The contest for Warner Bros Discovery (-1.7% AH) appears to be wrapping up, with Netflix (+8.5% extended) stepping aside after Paramount Skydance (+10% close; +6.2% AH) presented a stronger bid.
    • Block (+23.6%) surged in extended trading after earnings and announcing plans to cut over 4,000 jobs.
    • IonQ (+21.7%) rallied on upbeat revenue guidance, with Morgan Stanley lifting its price target.
    • Meta (-0.7% AH) dipped after reports its in-house chip project faced hurdles and that it struck a deal to lease Google TPUs for AI development.
    • PayPal (-3.7%) declined after denying talks of a potential sale.
    • Meme stock movers included Beyond Meat (+2.9%), GoPro (+3.3%), Krispy Kreme (+27.8%), Opendoor (+8.6%), and BlackBerry (+2.6%).

    Earnings Highlights:

    • Dell Technologies beat on both earnings and revenue; shares rose 11.6% after hours.
    • Zscaler missed on deferred revenue and billings; shares fell 9.5% AH.
    • Synopsys disappointed with full-year guidance; shares dropped 5.2%.
    • CoreWeave topped revenue slightly but issued weak guidance; shares sank 8.8%.
    • Rolls-Royce beat expectations, raised its profit outlook, and announced £2.5bn in buybacks; shares closed up 5.2%.
    • Baidu missed revenue forecasts; shares slid 5.7%.

    Commodities:

    • Gold volatility eased as prices hovered near $5,200 but failed to sustain gains above that level, amid geopolitical uncertainty and a firmer dollar. Silver reclaimed $90, narrowing the gold/silver ratio below 58. The World Gold Council flagged stretched valuations.
    • WTI crude steadied around $65 after elevated intraday swings, with attention on Geneva talks and lingering U.S. military rhetoric. Traders are also focused on Sunday’s OPEC+ meeting amid speculation of a possible April output increase.

    FX / Central Banks / Crypto:

    • Bitcoin retreated toward $68K, while Ether remained above $2K.
    • The U.S. Dollar Index firmed back into the 97 area, reversing prior losses on stronger labor data and reduced expectations for near-term Fed easing.
    • Fed officials offered mixed signals: Miran backed four quarter-point cuts this year, while Goolsbee cautioned against easing too quickly before inflation cools.
    • ECB President Lagarde reiterated inflation is expected to return to the 2% target over the medium term, emphasizing a data-dependent approach and monitoring — not targeting — FX markets.

    Data: Stronger-Than-Expected Labor Figures

    • U.S. initial jobless claims came in at 212K (vs. 217K forecast), with continuing claims falling to 1.833m. Kansas Fed manufacturing improved sharply to 10 from -2.
    • Tokyo headline CPI rose to 1.6% y/y, though core measures eased. Retail sales rebounded 1.8% y/y, while industrial production disappointed at 2.2% growth (vs. 5.3% expected).

    Ahead:

    • U.S. PPI, Chicago PMI, and Baker Hughes rig count data due later today.
    • In Europe, German preliminary CPI, import prices, and labor data.
    • Saturday: Earnings from Berkshire Hathaway.
    • Sunday: OPEC+ meeting to determine April output levels.

    Sources: Monte Safieddine

  • US Dollar, S&P 500 and Yields: Could March Trigger Heightened Market Volatility?

    Key Takeaways

    • The benchmark 10-year Treasury yield is testing critical support, with downside pressure beginning to build.
    • Equities and bond yields are sliding in tandem — an unusual combination that may reflect deteriorating macro-risk conditions.
    • A strengthening US dollar alongside declining yields could point to a broader defensive rotation across markets.

    Last week, attention was drawn to the danger zone in the CBOE Volatility Index. Historically, when Wall Street’s “fear gauge” climbs into the mid-20s, equity markets have tended to experience heightened turbulence.

    Now, focus shifts to the benchmark 10-year US Treasury yield. Recently, declining yields have supported the S&P 500 — particularly small- and mid-cap shares — since the so-called Liberation Day and the development of the expansive One Big Beautiful Bill Act (OBBBA). Additional fiscal stimulus or tax relief may still be forthcoming, as suggested by Donald Trump during Tuesday night’s State of the Union address.

    Importantly, the surge in yields last April and May was not confined to the United States. Global bond markets reached multi-decade highs, pulling US Treasuries higher in tandem. Despite narratives around “selling America,” the primary US bond bear market unfolded between August 2020 and October 2023, when the 10-year yield climbed sharply from 0.504% to 4.997%. The past two and a half years have largely represented a consolidation phase rather than a fresh structural breakout.

    The key question now: is that consolidation nearing resolution — and if so, in which direction?

    10-Year Treasury Yield: A historic tightening pattern after the major bond bear market. Chart courtesy of StockCharts.com.

    Treasuries Under the Spotlight

    The chart below suggests that the 10-year Treasury yield could be slipping beneath a critical support level. A brief upside breakout in January quickly reversed as sellers stepped in, and now the benchmark rate is hovering near the 3% mark. It’s worth reminding traders that diagonal trendlines can be unreliable, while horizontal support and resistance levels tend to carry more weight. Additionally, log-scale charts are generally better suited for evaluating wide swings in price or yield.

    With those caveats noted, what is the chart signaling? Trading below both the 50-day and 200-day moving averages, the primary trend favors Treasury price bulls (and lower yields). Meanwhile, the RSI has eased back toward the 30 level after failing to reach 70 during the fourth-quarter rate advance. The green upward-sloping support line is now pivotal — a decisive break beneath it, along with a drop below the late-2025 low of 3.947%, could push the 10-year yield down into the low 3% range.

    10-Year Treasury Yield: Multi-Year Consolidation With Key Support at Risk (Log Scale). Chart courtesy of StockCharts.com.

    In isolation, increasing exposure to Treasuries would be logical if yields break down and bond prices attract strong demand. But stepping back with an intermarket perspective, the bigger question becomes: what would that move signal for the broader financial markets?

    A Potential Shift in the Stock–Bond Dynamic?

    For stocks, a move toward 3–4% intermediate-term rates would likely coincide with softer economic conditions — perhaps a weak jobs report, sharply cooling CPI or PCE inflation, a downturn in sentiment indicators such as the ISM Manufacturing survey, or another disappointing Retail Sales release.

    That said, with the fourth-quarter earnings season mostly wrapped up — including NVIDIA’s (NASDAQ: NVDA) results released Wednesday — it would probably take truly bleak off-season earnings updates or a wave of negative preannouncements to significantly rattle equities.

    Another potential driver of a renewed bond bull market could be the ever-intensifying AI theme. In a “sell first, ask questions later” climate, fresh cautionary analyses or existential-impact discussions around artificial intelligence could further unsettle investors and sustain demand for safe-haven assets.

    When Trading Ranges Start to Break Down

    Regardless of the underlying catalyst, it’s evident that stocks and bonds are no longer moving in sync the way they did last spring and summer. The S&P 500 — like the 10-year Treasury yield — has been edging lower in recent weeks. We’re now nearly a month past the SPDR S&P 500 ETF Trust (SPY) intraday record of $697.84. Although much attention has focused on the tight trading range since late November, one could argue that a rounded-top formation is beginning to take shape.

    A glance at the RSI momentum oscillator reinforces this view. Momentum has been trending lower since July. Much like a ball tossed into the air slows before changing direction, RSI often decelerates ahead of a price reversal. The unfolding narrative could be this: bond yields break down first — and equities eventually follow.

    SPY: Emerging Rounded-Top Pattern, RSI Deteriorating, 200-Day Moving Average Around $650. Chart courtesy of StockCharts.com.

    Don’t Overlook the Dollar

    Largely flying under the radar is the US Dollar Index (USD). The greenback carved out a low near 95.55 around the same time U.S. large-cap equities peaked. Since then, the 98 level has surfaced as a potential breakout zone.

    A setup featuring falling Treasury yields, declining stocks, and a strengthening dollar would reflect a classic risk-off macro environment. Based on a measured-move projection, the USD could target the 100 area — just shy of the zone where the dollar encountered resistance from May through November 2025.

    US Dollar Index: Short-Term Ascending Triangle Pattern Points Toward 100. Chart courtesy of StockCharts.com.

    The Bottom Line

    Is this a doomsday forecast? Not at all. Market corrections are a normal part of the cycle. On average, the S&P 500 experiences an intra-year drawdown of about 14.2%, yet it has still finished higher in 35 of the past 46 years.

    Rather than sounding alarms, this is simply a cross-asset check-in as we head into a month that has historically delivered heightened volatility. I tend to think of March as October’s little brother — price swings can become exaggerated. And with the CBOE Volatility Index still hovering around 20, disciplined risk management deserves to remain front and center.

    Sources: Mike Zac

  • Nvidia: AI Boom May Be Losing Steam as $78bn Forecast Falls Short of Expectations

    Nvidia’s (NASDAQ: NVDA) $78bn revenue projection would once have sparked a broad rally in global equities. This time, investors paused.

    The stock initially slipped before edging slightly higher in post-market trading. In this stage of the AI cycle, rapid expansion alone is no longer enough to impress the market.

    Over the past two years, artificial intelligence exposure commanded a premium almost regardless of valuation. Capital flowed aggressively into the AI infrastructure layer, with Nvidia at the epicentre. Its chips became foundational to hyperscale data centres, sovereign digital strategies, and enterprise AI rollouts. Valuations climbed on expectations of sustained, exponential demand. Now, scrutiny has intensified.

    A $78bn forecast confirms demand remains robust—but it also suggests expectations were already set near perfection. Markets are no longer rewarding size alone; they are evaluating the durability, quality, and profitability behind that growth.

    Investors are calling for tighter operating discipline. They want clearer visibility on margins, pricing strength, and forward orders. Strong revenue growth does not automatically guarantee lasting shareholder returns when valuations assume near-flawless execution.

    Nvidia’s competitive position remains strong. It continues to underpin the AI infrastructure ecosystem. Hyperscale cloud providers are spending aggressively, governments are advancing sovereign AI ambitions, and enterprise adoption is accelerating. The structural tailwinds remain intact.

    What has changed is the market’s tolerance for uncertainty. Premium valuations now demand premium predictability—stable gross margins, resilient pricing power, and a more diversified revenue mix.

    Markets are likely to scrutinise customer concentration, especially reliance on a limited group of hyperscale clients. They will question whether current capital expenditure by major cloud operators marks a cyclical high or the start of a sustained multi-year investment cycle.

    Any indication that AI-driven capex is plateauing rather than accelerating could trigger disproportionate market reactions. Competitive pressures are also building. As large cloud providers ramp up in-house chip development, investors will increasingly assess how defensible Nvidia’s ecosystem remains amid the rise of alternative silicon architectures.

    This shift does not negate the AI revolution — it sharpens its contours.

    The implications stretch far beyond a single company. Semiconductor peers, advanced memory manufacturers, data-centre infrastructure providers and AI-centric software firms have largely traded in tandem with Nvidia’s rally. A more discerning market is now separating businesses that translate AI adoption into concrete earnings from those still priced primarily on long-term potential.

    Dispersion within AI equities is likely to widen over the coming year. Infrastructure leaders with strong cash flow and resilient balance sheets may continue to attract support. By contrast, application-layer companies that have yet to prove sustainable monetisation could face heightened volatility.

    Institutional investors are applying greater discipline to their assumptions. Portfolio managers who heavily overweighted AI leaders during the initial surge are revisiting long-term growth trajectories beyond peak deployment phases. Scenarios in which hyperscale spending moderates into 2027 are increasingly part of valuation models, with capital intensity and return on invested capital under renewed scrutiny.

    AI companies are being assessed more like established enterprises than early-stage disruptors. Market psychology has matured.

    For Nvidia, this phase could ultimately reinforce its leadership if operational execution remains strong. Consistent free cash flow, ongoing innovation cycles and deep integration across the AI value chain offer structural advantages. However, expectations have risen materially. Earnings announcements may drive sharper volatility as the scope for positive surprise narrows.

    Markets are transitioning from thematic enthusiasm to detailed financial examination. Compelling narratives must now be backed by measurable precision.

    The AI expansion is tangible. The capital investment is tangible. The demand is tangible. But investors are no longer rewarding mere participation in the theme — they are rewarding disciplined growth, sustainable margins and transparent capital deployment.

    Nvidia’s $78bn revenue outlook affirms that large-scale AI expansion continues. The subdued market response underscores a parallel reality: momentum alone is insufficient to justify elevated valuations.

    The next stage of the AI cycle will favour companies capable of turning market leadership into reliable profitability. Those that fall short may discover that even strong revenue growth offers limited insulation when expectations are already stretched.

    Sources: Nigel

  • Markets in focus: Nvidia, Salesforce results and U.S.–Iran nuclear negotiations

    Futures tied to the main U.S. stock benchmarks edged lower as investors focused on key earnings from the technology sector. Nvidia, a heavyweight in the U.S. equity market, delivered stronger-than-expected results, though investors are seeking clearer guidance on when its substantial cash flow will translate into greater shareholder returns. Salesforce shares declined after issuing a softer revenue outlook. Meanwhile, oil prices held steady ahead of crucial nuclear negotiations between U.S. and Iranian officials.

    Futures Edge Lower

    U.S. equity futures moved down Thursday as markets digested earnings from AI leader Nvidia.

    As of 03:05 ET (08:05 GMT), Dow futures were down 122 points, or 0.3%, S&P 500 futures slipped 0.1%, and Nasdaq 100 futures also fell 0.1%. This followed gains across all major Wall Street indices in the previous session, when investors positioned ahead of Nvidia’s earnings release.

    Sentiment had improved on renewed optimism surrounding artificial intelligence, marking another shift in what has been a volatile narrative around the emerging technology. The Nasdaq led prior gains as investors regained confidence that AI could eventually deliver broad economic benefits — contrasting with earlier concerns that new AI models might disrupt software firms and limit returns on heavy data center spending.

    Remarks from Richmond Fed President Tom Barkin also supported equities, as he noted uncertainty over whether automation would significantly raise unemployment and suggested AI could instead improve labor market efficiency.

    Nvidia Little Changed Despite Strong Results

    Nvidia reported better-than-expected earnings for the January quarter and issued revenue guidance above forecasts for the current period, yet its shares were mostly flat in after-hours trading.

    Some investors questioned whether the chipmaker is returning sufficient capital to shareholders. Yvette Schmitter, CEO of Fusion Collective, pointed out that while Nvidia generated $35 billion in cash during the fourth quarter, it returned just 12% to shareholders — sharply lower than 52% a year earlier.

    She also raised concerns about reduced buybacks despite record cash generation, especially as Nvidia highlights strong demand for its sold-out Ampere chips.

    These concerns echoed questions raised during the company’s earnings call, including from a UBS analyst who asked whether Nvidia plans to distribute more of the anticipated $100 billion in cash expected this year. CFO Colette Kress emphasized ongoing investment in the broader AI ecosystem, while CEO Jensen Huang underscored AI’s foundational role in the future of computing.

    Salesforce Drops on Soft Revenue Outlook

    Salesforce shares fell in extended trading after the company issued fiscal 2027 revenue guidance below Wall Street expectations, suggesting softer demand for enterprise software amid economic uncertainty and tighter corporate budgets.

    The company projected full-year revenue between $45.80 billion and $46.20 billion, slightly below consensus estimates at the midpoint.

    Salesforce continues to invest heavily in artificial intelligence to counter investor concerns that emerging AI models, such as those developed by startups like Anthropic, could erode demand. These pressures have contributed to stock volatility as the company works to defend its position within the software-as-a-service industry.

    However, Salesforce raised its fiscal 2030 revenue forecast to $63 billion from $60 billion, citing expected growth from agentic AI offerings. Analysts at Vital Knowledge described the report as not flawless but “good enough,” highlighting strong AI product momentum, stable core performance, and solid cash flow generation.

    Oil Steady Before U.S.- Iran Talks

    Oil prices were largely unchanged Thursday, remaining near seven-month highs as markets prepared for a third round of nuclear discussions between Washington and Tehran.

    Brent crude gained 0.2% to $70.84 per barrel, while U.S. West Texas Intermediate rose 0.2% to $65.62 per barrel.

    U.S. representatives, including special envoy Steve Witkoff and adviser Jared Kushner, are scheduled to meet Iranian officials in Geneva as negotiations continue over Iran’s nuclear program. President Donald Trump has warned that failure to make meaningful progress could lead to serious consequences, raising concerns that prolonged tensions may disrupt supply from Iran, a key OPEC producer.

    Gold Edges Higher

    Gold prices ticked up as uncertainty surrounding U.S. trade tariffs bolstered safe-haven demand, with investors also monitoring developments in the U.S.-Iran nuclear talks.

    Spot gold rose 0.6% to $5,196.55 per ounce, while U.S. gold futures dipped 0.5% to $5,200.54 per ounce.

    Markets are also evaluating the implications of newly announced U.S. tariffs following a Supreme Court ruling that struck down President Trump’s sweeping reciprocal tariff measures. Attention now turns to upcoming U.S. economic data, including weekly jobless claims. So far this year, gold has remained supported by geopolitical tensions, central bank buying, and portfolio diversification trends.

    Sources: Scott Kano

  • Wall Street futures inch higher after sharp tariff- and AI-driven selloff

    U.S. stock index futures edged higher on Monday night after growing uncertainty surrounding Donald Trump’s tariff policies and concerns about AI-related disruption in the software sector triggered steep losses on Wall Street.

    Lingering unease over a potential U.S.-Iran conflict, along with caution ahead of this week’s closely watched earnings from NVIDIA Corporation (NASDAQ: NVDA), also kept sentiment restrained.

    As of 19:30 ET (00:30 GMT), S&P 500 Futures were up less than 0.1% at 6,855.0 points. Nasdaq 100 Futures gained 0.1% to 24,781.0 points, while Dow Jones Futures added nearly 0.1% to 48,873.0 points.

    FedEx sues U.S. government to recover tariff payments

    FedEx Corporation (NYSE: FDX) filed a lawsuit against the U.S. government on Monday evening, seeking a “full refund” of emergency tariffs it paid over the past year.

    The action comes only days after the Supreme Court of the United States ruled the levies illegal, with the tariffs scheduled to be lifted from midnight Tuesday.

    FedEx is the first company to formally pursue reimbursement following the Court’s decision, joining a broader wave of firms mounting legal challenges against tariff measures introduced under Donald Trump.

    However, the ruling did not clarify how the more than $160 billion in revenue already collected from the invalidated tariffs will be handled.

    Wall Street battered by tariff uncertainty and AI concerns

    Wall Street’s major indexes each dropped more than 1% on Monday as uncertainty surrounding Donald Trump’s tariff policies and mounting concerns about artificial intelligence disrupting the software industry kept investors in a risk-off mood.

    Technology sentiment remained fragile ahead of quarterly results from NVIDIA Corporation (NASDAQ: NVDA), scheduled for Wednesday. Widely viewed as a key gauge of AI demand, the world’s most valuable company is expected to post robust earnings growth compared with last year.

    Markets also grappled with renewed tariff worries after Trump unveiled a 15% universal tariff under a different legal authority. A report from The Wall Street Journal indicated the administration is considering additional levies on at least six more sectors.

    The president appeared to double down on his trade agenda, even as several countries that recently reached agreements with Washington sought greater clarity on the scope and implementation of the tariffs. He also cautioned that nations retreating from newly negotiated trade deals could face steeper duties.

    The S&P 500 declined 1%, while the NASDAQ Composite fell 1.1%. The Dow Jones Industrial Average led losses, tumbling 1.7%.

    Technology stocks continued to lag, with software names hit by renewed selling pressure amid rising anxiety over AI-driven disruption. Part of the concern stemmed from a speculative note by Citrini Research envisioning a June 2028 scenario in which rapid AI adoption leads to widespread displacement of white-collar jobs.

    Sources: Ambar Warrick

  • 1 Stock to Buy, 1 to Sell This Week: Nvidia and Intuit

    • U.S. PPI inflation data and Nvidia’s earnings will take center stage in the coming week.
    • Nvidia appears set to post another standout quarter.
    • Meanwhile, Intuit is confronting mounting fundamental and technical pressures ahead of its results.

    U.S. equities closed higher on Friday after the Supreme Court invalidated President Donald Trump’s tariffs. Trump criticized the decision as a “disgrace” and said in a Truth Social post on Saturday that he would introduce a new 15% global tariff, just one day after announcing a 10% levy.

    After Friday’s gains, the 30-stock Dow Jones Industrial Average finished the week up about 0.3%. The S&P 500 advanced 1.1%, while the tech-heavy Nasdaq Composite broke a five-week slide with a 1.5% surge. The small-cap Russell 2000 added nearly 0.7%.

    Markets may see heightened swings in the days ahead as investors weigh prospects for growth, inflation, interest rates, and corporate earnings against a backdrop of renewed trade frictions.

    With a relatively light economic calendar, attention will center on Friday’s January U.S. producer price index report. As of Sunday morning, traders are pricing in slightly better than even odds that the Federal Reserve will lower rates by its June meeting.

    On the earnings front, Nvidia’s (NASDAQ: NVDA) report will headline the week as the season winds down. Beyond Nvidia, investors will be tracking several major tech names, particularly software companies facing pressure from concerns that AI could disrupt their core businesses, including Salesforce (NYSE: CRM), Intuit (NASDAQ: INTU), Snowflake (NYSE: SNOW), Zscaler (NASDAQ: ZS), and Zoom Video Communications (NASDAQ: ZM).

    AI infrastructure providers Dell Technologies (NYSE: DELL) and CoreWeave (NASDAQ: CRWV) are also set to post results. Outside the tech space, prominent retailers such as Home Depot (NYSE: HD), Lowe’s Companies (NYSE: LOW), and TJX Companies (NYSE: TJX) are scheduled to report.

    At the same time, markets will be parsing President Trump’s State of the Union address on Tuesday and monitoring any developments involving the U.S. and Iran.

    No matter which way markets move, below I outline one stock that could attract buying interest and another that may face renewed downside pressure. Keep in mind, this outlook covers only the week ahead—Monday, February 23 through Friday, February 27.

    Stock to Buy: Nvidia

    Nvidia heads into its earnings report with analysts anticipating another “beat-and-raise” performance, fueled by robust demand for AI infrastructure. Fourth-quarter results are scheduled for release after Wednesday’s market close at 4:20 p.m. ET, followed by a 5:00 p.m. ET conference call with CEO Jensen Huang.

    According to an InvestingPro survey, profit forecasts have been lifted 36 times in recent weeks, compared with just one downward revision—highlighting growing optimism around Nvidia’s earnings outlook. In the options market, traders are pricing in a potential move of roughly ±6% in NVDA shares following the announcement.

    Wall Street expects the AI powerhouse to deliver earnings of $1.52 per share, up 71% from a year earlier. Revenue is forecast to climb 67% to $65.6 billion, underscoring the company’s ongoing strength in the AI chip space.

    Citi recently suggested that January-quarter revenue could exceed $67 billion, with projections pointing to even stronger results in the April quarter.

    Another solid showing in data-center sales, along with widening margins and healthy free cash flow, would bolster the view that Nvidia remains firmly in the midst—not at the tail end—of an AI supercycle.

    NVDA shares ended Friday at $189.82, consolidating after a strong advance but still positioned to move higher on favorable catalysts. Across multiple timeframes—from intraday charts to the monthly view—technical indicators and moving averages continue to signal a “strong buy.”

    A beat-and-raise report could ignite another leg up, particularly if management emphasizes longer-term visibility into 2026–2027 growth driven by next-generation architectures such as Rubin.

    Trade Setup:

    • Entry: Near current levels (around $190)
    • Target: $210 (approximately 10% upside)
    • Stop-Loss: $184 (roughly 3.5% downside risk)

    Stock to Sell: Intuit

    Intuit—the parent company of TurboTax, QuickBooks, Credit Karma, and Mailchimp—heads into earnings week facing mounting pressure. Concerns have escalated in early 2026 that generative AI tools could weaken its competitive moat across tax prep, accounting, and financial software by enabling free or lower-cost alternatives, custom AI agents, or in-house solutions for small businesses and consumers.

    This anxiety has fueled broader “SaaSpocalypse” sentiment, with the software sector shedding trillions in market value. INTU shares have been particularly hard hit in recent months, sliding sharply alongside peers such as Salesforce.

    Analyst sentiment has also turned more cautious ahead of the report, with 23 of the last 25 estimate revisions moving lower—signaling growing skepticism around near-term performance.

    Wall Street expects Intuit to post earnings of $3.68 per share, up roughly 11% year over year, on revenue of about $4.5 billion. The bigger concern, however, centers less on the headline numbers and more on the narrative surrounding AI-driven disruption.

    Although Intuit has made significant investments in artificial intelligence, investors seem to view these efforts as largely defensive—designed to protect its existing franchises rather than meaningfully expand them or counter broader competitive threats. TD Cowen recently cut its price target, pointing to doubts about the strength of Intuit’s AI strategy and intensifying competition.

    Any remarks about rising competitive pressures, decelerating growth in key segments, or conservative forward guidance could amplify downside risks—particularly in a stock that may be technically oversold but remains vulnerable in a sentiment-driven market.

    Shares of Intuit have fallen 42.5% over the past three months and are now hovering just above their 52-week low of $375.40. Technical signals remain decisively negative: across timeframes—from hourly charts to the monthly view—both moving averages and momentum indicators continue to flash “strong sell.”

    With management’s outlook likely to face intense scrutiny, any earnings miss or cautious commentary reflecting a more competitive, AI-driven environment could deepen the selloff.

    Trade Setup:

    • Entry: Near current levels (around $381)
    • Target: $355 (approximately 7% downside)
    • Stop-Loss: $400 (about 5% risk)

    Sources: Jesse Cohen

  • Markets in Focus – USD/MXN, S&P 500, EUR/USD, USD/CAD, Gold, Bitcoin, USD/JPY, GBP/USD

    USD/MXN

    The US dollar at one stage surged sharply against the Mexican peso, but by week’s end it had given back some of those gains. The 17.00 area below continues to act as a key support zone, and a decisive break beneath it could open the door for a move toward 16.50.

    While short-term bounces are possible, the broader setup suggests selling into strength. The 17.50 region remains a significant resistance barrier, and the wide interest rate differential still strongly favors the Mexican peso.

    S&P 500

    The S&P 500 pulled back early in the week but appears to be stabilizing as it continues to trade within a broader consolidation range. Since early December, price action has been confined between 6,800 and 7,000, suggesting a market building momentum for its next major move.

    The bias still leans to the upside. A decisive daily close above 7,000 could trigger a stronger breakout and accelerate gains. On the other hand, a breakdown below 6,800 would signal a shift in tone and mark a more bearish development.

    EUR/USD

    The euro declined notably over the course of the week, but it continues to find buyers near the 1.18 level, making that area especially important to watch. Given the current structure, caution is warranted when trading this pair.

    Price action appears largely range-bound, with 1.18 acting as a central pivot or magnet. Resistance stands near 1.1850, while solid support can be found around 1.1750, reinforcing the broader sideways pattern.

    USD/CAD

    The US dollar has advanced against the Canadian dollar, but price action remains choppy around the 1.3750 zone — an area that has repeatedly proven significant. The pair appears to be oscillating as traders assess whether momentum can build for a sustained move higher.

    A decisive push and hold above 1.3750 would signal renewed strength for the US dollar. Conversely, a breakdown below 1.35 would represent a notably bearish shift in sentiment.

    Major Technical Support and Resistance Levels

    Gold (XAU/USD)

    Gold remains choppy, initially easing back during the week, yet buyers continue to emerge on dips, stepping in whenever prices soften. The 4,800 level appears to be firm support, while the 5,000 mark is likely to act as a psychological magnet for price action.

    The broader bias still favors buying pullbacks, with the expectation of an eventual move higher. However, volatility may persist after the sharp turbulence seen in recent weeks, following what had previously been a near one-way surge. Over the longer term, a retest of the highs seems plausible, though it will likely require patience amid ongoing fluctuations.

    Bitcoin (BTC)

    The Bitcoin market is still searching for renewed upside momentum, but the encouraging development is that price action has at least stabilized. Given the prolonged weakness seen in recent periods, simple stability is a constructive step forward for the market.

    The $60,000 level remains a crucial support zone and a major psychological benchmark. Holding above this area is essential if Bitcoin is to maintain any realistic prospect of a sustained recovery.

    USD/JPY

    The US dollar posted solid gains against the Japanese yen over the week, with the ¥152 level continuing to provide strong support. The 50-week EMA is positioned just beneath that area, reinforcing the floor and encouraging dip-buying as the interest rate differential remains in favor of the US dollar.

    With the Bank of Japan maintaining its current policy stance, there appears to be little immediate catalyst for a structural shift. As a result, the pair may be entering a consolidation range between ¥152 on the downside and ¥158 on the upside. A decisive move above ¥160 would represent a significant breakout, clearing a resistance zone that has been in place since 1990.

    GBP/USD

    The British pound declined sharply during the week, dropping to test the 1.35 level — a large, round psychological threshold that has proven important on multiple occasions. The fact that buyers are attempting to defend this area is at least a constructive short-term signal.

    However, recent UK economic data has been somewhat underwhelming. As a result, sterling may currently be one of the weaker major currencies against the US dollar. This pair deserves close monitoring, as broader dollar strength could translate into pronounced downside pressure here, potentially making GBP/USD particularly vulnerable.

    Sources: Lewis

  • Three crucial earnings releases this week that could sustain the AI rally.

    The artificial intelligence trade faces its biggest test of the year this week as three cornerstone companies in the AI infrastructure ecosystem prepare to deliver quarterly earnings. With tech stocks showing signs of fatigue, investors want more than simple earnings beats. They’re looking for proof that heavy capital expenditure is translating into the successful deployment of next-generation hardware. All attention will turn to the after-market close (AMC) on Wednesday and Thursday to see whether the AI rally still has momentum.

    NVIDIA: The undisputed AI infrastructure leader

    NVIDIA (NVDA) is set to report fiscal Q4 2026 results on Wednesday, Feb. 25, after market close. As the dominant supplier of GPUs powering large language models, NVIDIA remains the clearest gauge of the AI trade’s health. Wall Street is anticipating a “beat and raise,” with consensus revenue estimates around $65.6 billion — an impressive 67% year-over-year increase.

    Investors are especially focused on the production ramp of its Blackwell architecture chips. Any updates on supply chain constraints or the development timeline for the upcoming Rubin platform could influence not only tech stocks but the broader S&P 500. Options markets imply a potential 6.5% swing in either direction, making NVIDIA’s earnings the week’s must-watch event for global investors.

    Hardware and cloud players: CoreWeave and Dell under the spotlight

    On Thursday, Feb. 26, AMC, attention shifts to the physical backbone of AI infrastructure. CoreWeave (CRWV), a specialized cloud provider and key NVIDIA partner, will report against high expectations driven by its sizable revenue backlog. Analysts project Q4 revenue of roughly $1.53 billion, but the more significant figure is its $56 billion backlog — a forward-looking signal of how much computing capacity AI firms and tech giants are securing

    Also reporting Thursday is Dell Technologies (DELL), which has repositioned itself as a major supplier of AI-optimized servers. Consensus forecasts call for earnings of $3.53 per share on $31.6 billion in revenue. Dell recently earned a spot on Evercore’s “Tactical Outperform” list, supported by a sharp rise in AI server orders and an $18.4 billion backlog exiting last quarter. The key question for Dell will be whether it can preserve margins while rapidly scaling production to meet surging demand for AI infrastructure.

    Sources: Investing

  • Energy vs. Tech: Where Is Capital Rotating Now?

    After a powerful rally in large-cap technology shares, investors are once again asking whether smart money is beginning to rotate.

    With AI enthusiasm pushing tech valuations higher and energy names still trading at comparatively modest multiples, there are early signs that capital flows may be shifting beneath the surface. Here’s a closer look at the current landscape — and where institutional positioning may be headed.

    The Case for Tech: Structural Growth Still Intact

    Companies such as Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Apple (NASDAQ: AAPL) remain central pillars of institutional portfolios.

    Technology continues to lead in earnings expansion, fueled by AI infrastructure investment, cloud migration, and ongoing software monetization.

    Why capital is still favoring tech:

    • Revenue growth outpacing the broader market
    • High operating margins and robust free cash flow
    • Sustained AI-driven capex cycles
    • Strong balance sheets with significant liquidity

    Mega-cap tech remains a structural core holding for institutional investors. Even during brief pullbacks, dip-buying has been persistent — a sign that long-term conviction in the sector remains strong.

    That said, valuations in select segments have stretched beyond historical norms. If earnings momentum moderates, the probability of sector rotation increases, particularly as investors reassess risk-reward at elevated multiples.

    The Case for Energy: Undervalued and Cash-Generative

    Integrated majors such as Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) are drawing renewed attention as investors reassess sector allocations.

    Energy equities typically trade in cycles influenced by crude prices, global demand dynamics, and geopolitical developments. After extended periods of relative underperformance, the sector often becomes a magnet for value-oriented capital.

    Why institutional money may rotate toward energy:

    • Lower forward P/E multiples compared to technology
    • Strong and visible free cash flow generation
    • Dividend yields frequently above the broader market average
    • Ongoing share repurchase programs

    If crude prices remain stable or trend higher, integrated oil majors can produce substantial cash flows, offering a mix of income, capital return, and relative defensiveness.

    In an environment where parts of the technology sector appear valuation-stretched, energy provides a compelling contrast on both multiples and yield.

    Sector ETF Signals: Tracking Institutional Flows

    Sector ETFs can offer valuable insight into how institutional capital is rotating beneath the surface. Two key vehicles to monitor are the Technology Select Sector SPDR Fund (NYSE: XLK) and the Energy Select Sector SPDR Fund (NYSE: XLE).

    ETF performance and fund flow data often act as real-time indicators of positioning shifts:

    • If XLK continues to outperform, it suggests growth leadership remains firmly in place.
    • If XLE begins to show sustained relative strength versus XLK, it may signal that rotation into energy is gaining traction.

    Historically, sector leadership transitions tend to coincide with:

    • Shifts in interest rate expectations
    • Narrowing earnings growth differentials
    • Sharp moves in commodity prices

    Monitoring the relative strength ratio between XLE and XLK can provide early confirmation of whether capital is merely rebalancing tactically — or whether a broader structural rotation is unfolding.

    Macro Forces Driving Sector Rotation

    1. Interest Rates
    Elevated yields tend to weigh more heavily on high-multiple technology stocks, as future cash flows are discounted at higher rates. In contrast, energy companies—often valued on nearer-term cash generation—can prove more resilient. If bond yields move higher, defensive value sectors may attract incremental capital at the expense of growth.

    2. Commodity Prices
    Oil prices remain a primary earnings driver for energy producers. A sustained rally in crude can rapidly alter sector performance dynamics, drawing capital into integrated majors and upstream names as profit expectations improve.

    3. Earnings Revisions
    Institutional allocation models closely track forward earnings revisions. If analyst upgrades begin to slow in technology while turning more constructive for energy, portfolio rebalancing flows may follow.

    4. Risk Appetite
    Technology typically outperforms in strong risk-on environments characterized by abundant liquidity and growth optimism. Energy, by contrast, can gain relative strength during inflationary phases or periods of geopolitical tension, when commodity exposure and cash yield become more attractive.

    What Institutional Capital Is Likely Doing Now

    Rather than making an outright “either/or” shift, institutional investors typically adjust exposure more subtly. That can mean trimming extended technology positions, selectively adding energy holdings, or rotating within sectors—such as moving from mega-cap AI leaders into second-tier beneficiaries of the theme.

    The real driver is relative earnings momentum, not headlines.

    Which Sector Offers More Upside?

    Tech Upside Scenario

    • Continued acceleration in AI-related spending
    • Consistent earnings beats from mega-cap leaders
    • Declining bond yields that support higher valuation multiples

    Energy Upside Scenario

    • Oil prices establish a sustained uptrend
    • Inflation concerns re-emerge
    • Technology valuations compress

    In the near term, technology remains the structural growth narrative, supported by AI infrastructure, cloud expansion, and software monetization. However, energy presents potential asymmetric upside if commodity dynamics shift in its favor.

    Sector rotation is rarely abrupt. More often, it unfolds gradually through portfolio rebalancing rather than wholesale liquidation.

    While tech continues to dominate leadership, energy’s relative valuation discount and strong cash generation could attract incremental capital if macro conditions evolve.

    Key indicators to monitor:

    • Relative strength between the Energy Select Sector SPDR Fund and the Technology Select Sector SPDR Fund
    • Forward earnings revisions
    • Oil price trends
    • Bond yield movements

    The critical question is not whether rotation will occur — but whether it is already quietly underway beneath the surface.

    Sources: Tafara Tsoka

  • Rate uncertainty, Iran tensions drag on Asia stocks; South Korea bucks the trend.

    Most Asian equities declined on Friday as mounting uncertainty over the U.S. interest-rate outlook and escalating tensions surrounding Iran dampened appetite for risk assets.

    South Korea stood out as a bright spot, with the KOSPI surging to fresh record highs on sustained optimism in domestic markets following a recent tech-led rally.

    Regional bourses tracked overnight losses on Wall Street, where a wave of risk-off sentiment pressured stocks. S&P 500 Futures edged up 0.16% by 22:37 ET (03:37 GMT), as investors awaited key inflation and growth data due later in the session. Chinese markets remained shut for the Lunar New Year holiday.

    Japan slides despite mixed data; Hong Kong retreats after break

    In Japan, the Nikkei 225 and TOPIX were the region’s weakest performers, falling 1.4% and 1.2%, respectively.

    Shares came under pressure following mixed economic releases. Data showed Japan’s headline consumer price index slowed to its lowest level in nearly four years in January, while core inflation also eased but remained above the Bank of Japan’s 2% annual target.

    Meanwhile, purchasing managers’ index figures indicated factory activity expanded to a four-year high in February, supported by firm overseas demand.

    Hong Kong’s Hang Seng Index fell 0.6% as trading resumed after a three-day holiday, with local technology stocks mirroring earlier global declines.

    Among the laggards were Alibaba Group and Baidu Inc, which tumbled between 4% and 6% after being briefly named on a U.S. government list of firms allegedly linked to the Chinese military. BYD Co, also cited in the list, slipped 1.6%.

    Elsewhere, markets were subdued. Australia’s S&P/ASX 200 dipped 0.2%, Singapore’s Straits Times Index edged up 0.1%, and India’s Nifty 50 was little changed, with local tech shares remaining cautious despite reports of new artificial intelligence ventures.

    Risk sentiment remained fragile after U.S. President Donald Trump gave Iran a 10–15 day deadline to reach a nuclear agreement or face potential U.S. action, with multiple reports suggesting further strikes were under consideration.

    South Korea outperforms as KOSPI hits record

    South Korea’s KOSPI bucked the regional trend, climbing more than 1.6% to a record 5,768.61 points and marking its second straight session at an all-time high.

    While Thursday’s gains were driven by technology stocks, Friday’s advance was led by strong performances in brokerage, defense, and insurance names.

    Local media reported a surge in buying by retail investors, even as foreign investors continued to pare holdings.

    Separately, South Korea’s top court on Thursday sentenced former President Yoon Suk-Yeol to life imprisonment over charges linked to an attempted insurrection in late 2024.

    Sources: Ambar Warrick

  • Nvidia’s Earnings Wrap-Up: A Grand Finale to the Season

    As fourth-quarter 2025 earnings season draws to a close, Nvidia (NVDA) is once again set to headline the finale, with its results due on February 25. Following Super Micro Computer (SMCI) reporting an impressive 123% surge in sales, expectations are high that Nvidia will once more capture investors’ attention.

    Additional momentum came from Taiwan Semiconductor Manufacturing Company (TSM), which posted a 37% jump in January revenue—its fastest pace in months and well above its 30% growth outlook for 2026. As a key supplier of advanced chips for Microsoft Surface devices, Apple computers, and Nvidia’s GPUs, TSM’s strong performance reinforces the view that the AI expansion is accelerating, a positive signal for Nvidia’s forward guidance.

    On the geopolitical front, U.S. Secretary of State Marco Rubio received a warm reception, including a standing ovation, for his remarks at the Munich Security Conference. While European leaders praised his speech, they reiterated their commitment to Net Zero emissions targets and emphasized their desire to play a central role in discussions regarding Ukraine and Russia.

    Meanwhile, French President Emmanuel Macron has publicly suggested that President Trump aims to weaken the EU. Facing domestic political pressure, including strong influence from Marine Le Pen in parliament, Macron appears to be rallying pro-EU supporters ahead of the 2027 European elections, where anti-EU parties are expected to gain ground.

    Tensions between France and Germany have added strain to the European Union, though Germany and Italy have recently aligned more closely due to their interconnected manufacturing sectors. Poland, by contrast, stands out for its strong economic growth. At the Munich conference, a Polish official voiced disagreement with U.S. policy on the EU’s Net Zero agenda—an interesting stance given Poland’s continued reliance on coal. However, its relatively low electricity costs have supported industrial expansion, potentially attracting manufacturing activity under stricter EU emissions rules.

    Elsewhere, Iran has reportedly floated the idea of temporarily halting uranium enrichment and exploring potential commercial arrangements with the U.S. President Trump commented that Iran likely prefers a deal to facing the consequences of failing to reach one. Hopes of incremental diplomatic progress have slightly eased gold prices, although a comprehensive agreement between the two nations appears unlikely in the near term.

    Sources: Louis Navellier

  • 3 Dividend Stocks That Could Fly Under the Radar in Volatile 2026 Markets

    Volatility in the S&P 500 has led to repeated swings without the steady upward momentum that characterized much of late 2025. With concerns about a potential correction—such as the bursting of an AI-driven bubble—investors may look toward more defensive options like dividend-paying stocks.

    That said, dividend investing spans a wide spectrum. While many gravitate toward globally recognized, ultra-stable companies favored by figures like Warren Buffett, lesser-known firms can sometimes offer both dependable income and greater growth potential. Three under-the-radar dividend payers worth noting are Hancock Whitney Corp., NewMarket Corp., and Horace Mann Educators Corp..

    A Well-Capitalized Southern Bank Gaining Momentum

    Hancock Whitney Corp. is a bank holding company best known in the Gulf South. Through Hancock Whitney Bank, it provides commercial and retail banking along with wealth management services.

    The company offers a solid 2.53% dividend yield and maintains a conservative payout ratio of 31.7%. In Q4 2025, earnings per share narrowly exceeded expectations by one cent, though revenue fell short.

    Looking ahead to 2026, several factors strengthen its outlook. The company recently completed a bond portfolio restructuring expected to lift net interest margin by about 7 basis points and boost annual EPS by roughly $0.23. Loan growth is improving, and a strong capital position supported share buybacks totaling about 3% of outstanding shares in Q4 alone. That same capital base reinforces dividend sustainability, making it appealing for risk-conscious investors.

    NewMarket: Resilient Income Despite Market Pressures

    NewMarket Corp., a specialty chemicals company focused on lubricants and petroleum additives, has seen its shares decline roughly 14% year to date following its latest earnings release.

    Lower net income and EPS in 2025—largely due to a higher effective tax rate—pressured results, while fourth-quarter petroleum additive shipments fell about 6% year over year amid softer demand.

    However, its specialty materials division has performed strongly, bolstered by the October acquisition of aerospace propellant firm Calca. The company plans to invest $1 billion to expand this segment further in 2026.

    Despite a Wall Street “Hold” rating, NewMarket continues generating strong cash flow. Last quarter alone, it returned $183 million to shareholders through dividends and buybacks. The stock yields 2.01%, carries a payout ratio just over 27%, and has consistently raised its dividend over multiple years.

    Horace Mann’s Broad Strength Supports Its Dividend

    Horace Mann Educators Corp., which provides retirement, property, and casualty insurance products tailored to U.S. school employees, has posted several strong quarters.

    Its latest results included a 3-cent EPS beat and record full-year EPS of $4.71. Forecasts for 2026 align with the company’s 10% compound annual growth target.

    Much of this improvement stems from its property and casualty segment, where both the combined ratio and core earnings improved significantly—more than doubling last year. Growth in individual supplemental and group sales has further diversified the business.

    An early retirement initiative is expected to generate $10 million in annual savings, helping the company reduce its expense ratio by 100–150 basis points over the next three years. This should enhance cash flow for additional buybacks—after $21 million in repurchases in 2025—and continued dividend support. The stock currently offers a 3.25% yield with a 35.9% payout ratio.

    In a market environment marked by uneven performance, these lesser-known dividend stocks combine income stability with strategic growth initiatives, making them compelling options for investors navigating potential turbulence in 2026.

    Sources: Nathan Reiff

  • U.S. stock futures were little changed as uncertainty over the interest rate outlook lingered, with Walmart earnings in focus.

    U.S. stock index futures were largely unchanged Wednesday night after the minutes from the Federal Reserve’s January meeting delivered mixed signals on interest rates, adding to uncertainty about the longer-term policy path.

    Investors are now turning their attention to upcoming earnings from retail heavyweight Walmart Inc (NYSE:WMT) for fresh insight into the health of the U.S. economy.

    Markets were also pressured by rising geopolitical tensions involving Iran, as reports pointed to a stronger U.S. military presence in the Middle East despite continued talks between Tehran and Washington.

    As of 20:00 ET (01:00 GMT), S&P 500 Futures dipped slightly to 6,892.0, Nasdaq 100 Futures edged down nearly 0.1% to 24,942.75, and Dow Jones Futures slipped 0.1% to 49,685.0.

    Futures held steady after Wall Street posted gains in the regular session, driven mainly by an ongoing rebound in technology stocks and data showing resilience in the U.S. economy. However, caution surrounding the Fed’s outlook kept major indexes below their intraday peaks.

    Fed minutes reveal divisions on inflation and rates

    Minutes from the Fed’s January meeting showed officials unanimously agreed to keep interest rates steady at 3.50%–3.75%. Still, policymakers appeared divided over the next move. Several members warned that inflation could take longer than expected to return to the central bank’s 2% target.

    A number of officials also suggested that rate hikes could be considered if inflation remains elevated for an extended period — a tone that contrasts with market expectations for further easing this year.

    Artificial intelligence emerged as a key area of debate, with officials split on whether the rapidly expanding sector will ultimately fuel inflation or help contain it.

    Walmart earnings in focus

    Walmart Inc (NYSE:WMT) is scheduled to report fourth-quarter results on Thursday, with particular attention on its 2026 outlook, which may offer broader clues about U.S. consumer strength.

    According to Investing.com data, Walmart is expected to post earnings per share of $0.7269 on revenue of $190.4 billion.

    As the world’s largest retailer by valuation and a widely followed barometer of U.S. consumer spending, Walmart’s results come at a time when sticky inflation is showing signs of straining retail demand.

    Also due Thursday are U.S. December trade data and weekly jobless claims.

    Wall Street gains led by tech rebound

    Wall Street ended higher on Wednesday, led by technology stocks as the sector extended its recovery from recent declines.

    Still, both major indexes and tech shares retreated from session highs amid lingering concerns about the impact of artificial intelligence. Worries over AI-driven disruption have recently weighed on software and logistics companies, while concerns about heavy AI-related capital spending have pressured firms exposed to data centers.

    The S&P 500 rose 0.6% to 6,881.32, the NASDAQ Composite gained 0.8% to 22,753.64, and the Dow Jones Industrial Average added 0.3% to 49,662.66.

    Sources: Ambar Warrick

  • CPI Breakdown: 5 Rate-Sensitive Stocks to Watch

    The inflation print investors had been bracing for came in cooler than expected.

    Friday’s January CPI showed headline inflation at 2.4%—below the 2.5% consensus forecast and the lowest annual reading since May 2025. Core CPI, which excludes food and energy, eased to 2.5%, marking its softest level since April 2021. On a monthly basis, prices rose just 0.2%, the smallest increase since July.

    Markets reacted swiftly. Homebuilder stocks rallied sharply, small caps climbed 1.2%, and the 10-year Treasury yield slid to its lowest point since early December.

    My takeaway: the market may have just received the confirmation it was waiting for. And the most compelling opportunities from here likely aren’t the mega-cap tech leaders that have dominated performance, but rather rate-sensitive sectors that were punished under the “higher for longer” narrative and are now repricing for a potentially different 2026 backdrop.

    What the CPI Report Really Signals

    Shelter—by far the largest CPI component and the category that has stubbornly kept headline inflation elevated—rose only 0.2% in January, bringing the annual rate down to 3%. That’s a notable slowdown and perhaps the clearest indication yet that the housing inflation lag is beginning to unwind.

    Energy prices declined 1.5%, with gasoline tumbling 3.2% during the month. Food inflation held at 2.9% year over year—still somewhat elevated, but not alarming. Importantly, core goods prices were flat, helping to counter concerns that renewed tariffs would reignite goods inflation.

    “Headline CPI inflation was a touch softer than expected in January, delivering a welcome surprise to the downside at the beginning of the year,” said Bernard Yaros, lead economist at Oxford Economics. He added that tariff-related price pressures “are largely behind us.”

    Lindsay Rosner of Goldman Sachs Asset Management was even more direct: “Trust the groundhog. The Fed’s path to normalization cuts appears clearer now.”

    The timing is critical. A stronger-than-expected January jobs report—130,000 payrolls versus forecasts of 55,000—had pushed expectations for rate cuts further out, likely into the summer. This softer CPI reading shifts that outlook. Economists surveyed by Bloomberg now anticipate as much as 100 basis points of easing this year, with the first cut potentially arriving in June—or even March if disinflation continues.

    Why Rate-Sensitive Stocks Stand Out

    One key dynamic investors often overlook is that by the time the Federal Reserve actually begins cutting rates, much of the upside in rate-sensitive sectors has already played out. Markets tend to price in policy shifts well in advance.

    Friday’s CPI data appeared to give institutional investors the confidence to begin reallocating toward sectors poised to benefit from lower yields. The equal-weight version of the S&P 500 and the Russell 2000 both climbed 1.2%, notably outperforming the traditional cap-weighted S&P 500, which was little changed.

    That divergence is often viewed as a textbook signal of sector rotation—away from mega-cap dominance and toward more rate-sensitive, economically cyclical areas of the market.

    Capital is rotating down the market-cap ladder and into economically sensitive groups. Three segments stand out most clearly: homebuilders, REITs, and small caps.

    How to Position

    D.R. Horton (DHI)

    Closing Friday at $167.78, DHI is arguably the purest expression of the housing-affordability theme. The largest U.S. homebuilder by volume posted solid fiscal Q1 results in January, with revenue of $6.89 billion (ahead of $6.59 billion estimates) and EPS of $2.03 (vs. $1.93 expected).

    At roughly 15.3x trailing earnings, the stock trades at a notable discount to the broader market. Beyond the rate backdrop, there’s also a policy angle: the Trump administration’s reported “Trump Homes” initiative has involved direct engagement with builders around affordability measures—potentially creating a dual tailwind of lower mortgage rates and regulatory support.

    The median analyst price target is $170, with UBS as high as $195—suggesting upside potential of roughly 16%.

    Lennar (LEN)

    Trading at $122.28, Lennar offers a slightly different profile as the second-largest U.S. builder. Its “land-light” model—optioning land instead of holding it outright—reduces balance-sheet risk and positions it well for a rate-cutting cycle.

    The stock has rebounded about 40% from its April 2025 lows but remains below its 2024 peak. With fiscal Q1 earnings due in late March, improving mortgage application trends could serve as a near-term catalyst if rates continue to ease.

    SPDR S&P Homebuilders ETF (XHB)

    At $121.36, XHB is up nearly 18% year-to-date and recently marked a fresh 52-week high of $123.13. As an equal-weighted ETF, it offers diversified exposure across the housing ecosystem—not just large builders, but also building products manufacturers, home improvement retailers, and construction suppliers.

    For investors who prefer sector exposure over single-stock risk, XHB provides a balanced approach.

    Vanguard Real Estate ETF (VNQ)

    Trading near $94.59—close to its 52-week high—VNQ provides broad exposure to the REIT space, one of the most rate-sensitive areas of the market. The ETF holds over 150 REITs across healthcare, industrial, data center, and retail subsectors.

    Its largest holdings include Welltower, Prologis, and American Tower.

    With an average analyst target near $100.81, implied upside sits around 8%, in addition to a dividend yield of roughly 3.6%. After significant underperformance during the rate-hiking cycle, REITs are positioned to benefit mechanically as yields decline.

    iShares Russell 2000 ETF (IWM)

    At approximately $263, IWM tracks small-cap equities—arguably the most interest-rate-sensitive segment of the equity market. Smaller firms tend to carry more floating-rate debt and are disproportionately affected by elevated borrowing costs. That dynamic can reverse sharply when policy eases.

    IWM surged 1.6% on Friday’s CPI release alone. With its 52-week high of $271.60 within reach, sustained rate declines could drive a prolonged catch-up rally in small caps.

    The Big Picture

    If inflation continues to moderate and rate-cut expectations firm, the leadership baton may continue shifting away from mega-cap growth and toward housing, real estate, and smaller domestically oriented companies. Markets typically front-run the policy cycle—and this rotation suggests that repositioning may already be underway.

    The Bear Case (and Why It May Be Overstated)

    There are valid reasons for caution. Fox Business pointed out that January’s CPI could carry a downward bias tied to last fall’s government shutdown. During that period, the Bureau of Labor Statistics missed portions of October data collection and relied on a “carry-forward” methodology that may influence inflation readings into spring 2026. In short, the 2.4% headline figure could be somewhat understated.

    There’s also the Federal Reserve itself. Policymakers are not signaling urgency. Oxford Economics continues to project cuts in June and December rather than March. Meanwhile, although the labor market is cooling—annual benchmark revisions show 2025 job growth was the weakest since 2003 outside recessionary periods—it is far from collapsing. Jerome Powell has consistently emphasized the need for a sustained disinflation trend, not a single favorable report.

    The Counterargument

    Even if the Fed waits until June, markets won’t. Yields have already declined meaningfully. Mortgage rates are edging lower. And sectors that trade on rate expectations—rather than the actual fed funds rate—are beginning to reprice now. By the time the first official cut arrives, much of the move in rate-sensitive equities could already be behind us.

    What to Watch

    Three near-term catalysts will likely shape the next phase:

    1. Fed Minutes (Feb. 18): The release of the latest policy meeting minutes could shift expectations quickly. Any dovish commentary on inflation progress or labor-market softness may pull forward rate-cut pricing.
    2. Walmart Q4 Earnings (Feb. 19): As the largest U.S. retailer—now with a market cap above $1 trillion and up 13% year-to-date—Walmart’s guidance will offer real-time insight into consumer spending trends. If easing inflation is translating into stronger purchasing power, that reinforces the soft-landing narrative.
    3. PCE Price Index (Later This Month): The Fed’s preferred inflation gauge will be pivotal. Confirmation of CPI’s cooling trend would likely solidify expectations for a June cut and intensify debate around a possible March move—potentially fueling the next leg higher in rate-sensitive stocks.

    Bottom Line

    The inflation backdrop has shifted in a way that favors investors. The opportunity isn’t complex—but it does require stepping away from the mega-cap tech trade that has dominated for the past two years and leaning into sectors positioned to benefit most from falling yields.

    Sources: Jaachi Mbachu

  • S&P 500: Close Below 6,780 Signals a 60% Chance the Rally Has Ended

    The Elliott Wave (EW) framework seeks to measure and interpret investor sentiment, which unfolds in recognizable wave patterns. These waves can span extremely short periods—such as minutes—or stretch across decades and even centuries. At its core, the pattern reflects a “three steps forward, two steps back” progression. Because this structure repeats across multiple timeframes, it is considered fractal in nature.

    Given that markets are non-linear, stochastic, and probabilistic, Elliott Wave analysis does not predict certainties but instead identifies the most probable path forward—so long as key price levels remain intact. If those levels are breached—such as a downside break signaling a potential top—the outlook shifts, providing a clear framework for adjusting positions to protect profits or limit losses.

    Turning to the S&P 500, we have been monitoring an advance labeled green Wave 5, forming what appears to be an overlapping ending diagonal (ED) since the November 2025 low (green Wave 4). As illustrated in Figure 1, we first identified this developing structure in mid-December and have been tracking its progression closely to assess how the pattern ultimately resolves.

    Figure 1. Intermediate-term Elliott Wave count for the S&P 500 (SPX).

    An ending diagonal is made up of five overlapping waves—here labeled gray Wave i through v. Importantly, each of those gray waves unfolds as its own three-wave structure. Three-wave patterns are notoriously difficult to forecast, and the current sideways action in the index reflects that overlapping, indecisive character. (See Figure 2.)

    At present, the S&P 500 is trading near the same levels seen in late October. The 6,985 area has been tested ten times (red arrows), while support around 6,780 has held on four occasions (green arrows). This repeated interaction with resistance and support suggests a developing range.

    Range-bound conditions tend to frustrate traders because the absence of a clear directional trend makes forecasting more challenging. From a symmetry standpoint, an upside breakout projects toward approximately 7,190 (6,985 + 6,985 − 6,780), highlighted by the green box. Conversely, a breakdown below support would imply a downside target near 6,575 (6,780 − 6,985 + 6,780), marked by the red box.

    With today’s price action, the bulls appear to be on the brink. However, if the index manages to close higher, a positive divergence could form on the daily RSI(5) (green arrow), signaling that downside momentum may be fading and giving way to emerging upside strength.

    Figure 2. The S&P 500 since October 2025 has largely traded within a defined range.

    As noted earlier, Elliott Wave analysis outlines the most probable path forward—provided key price levels remain intact. Once those levels are breached, the outlook shifts, giving traders a clear signal to protect gains or limit losses.

    In this case, the pivotal level is the November low at 6,521. A decisive break beneath that threshold would signal that the ending diagonal has completed and that a larger corrective phase—black Wave 4 in Figure 1—is underway, with a preferred target zone between 5,500 and 6,125, ideally toward the upper end of that range.

    For now, the focus remains on 6,780. If the bulls can defend that level—our third warning threshold—we can still allow for a final gray Wave v advance toward roughly 7,120–7,190, potentially extending into the April turn window. However, a daily close below 6,780 raises the probability to about 60% that the broader uptrend has already topped.

    Should support fail, attention quickly shifts to 6,575 as the next downside level to monitor.

    Sources: Arnout ter Schure

  • U.S. stock futures tick down as the tech rebound loses steam; investors look ahead to the Fed minutes.

    U.S. stock index futures slipped modestly on Tuesday night as a fragile rebound in technology shares showed signs of strain, with investors remaining cautious ahead of a wave of economic data and Federal Reserve signals.

    Futures pulled back following a mildly upbeat session on Wall Street, where tech stocks attempted to bounce from recent declines. The recovery, however, was uneven, as lingering concerns over AI-driven disruptions continued to cloud sentiment in the sector.

    By 19:55 ET (00:55 GMT), S&P 500 futures were down 0.1% at 6,851.50, Nasdaq 100 futures fell 0.2% to 24,721.0, and Dow Jones futures slipped 0.1% to 49,553.0.

    Economic data, Fed minutes in focus

    Attention now turns to several key economic releases and the minutes from the Fed’s January meeting, due Wednesday afternoon. Investors are looking for greater clarity on the central bank’s interest rate outlook after policymakers kept rates steady last month and signaled ongoing caution over persistent inflation and softening labor market conditions.

    January industrial production figures are scheduled for Wednesday, followed by December’s PCE price index on Friday — the Fed’s preferred inflation measure and a key input into its longer-term rate projections.

    Uncertainty surrounding the Fed has weighed on markets in recent weeks, particularly after President Donald Trump’s nomination of Kevin Warsh as the next Fed Chair was interpreted as a less dovish shift in leadership.

    Nvidia, Meta pare gains; AMD cuts losses

    NVIDIA and Meta Platforms gave back some after-hours gains but still rose about 0.6% each after announcing a multi-year partnership to expand AI infrastructure, with Nvidia set to supply millions of chips to Meta.

    Rival AMD, which had dropped as much as 4% following the announcement, reduced its losses to trade roughly 2% lower.

    Technology stocks remain sensitive after weeks of declines fueled by concerns about AI-related disruption — especially within software — as well as skepticism over elevated AI spending and the sector’s long-term growth outlook.

    Wall Street posts modest gains

    Major indexes ended Tuesday slightly higher, supported by a patchy tech rebound and strength in financial stocks. The S&P 500 rose 0.1% to 6,843.22, the Nasdaq Composite added 0.1% to 22,578.38, and the Dow Jones Industrial Average gained 0.07% to 49,533.19.

    While some dip-buying helped tech shares recover modestly, heavyweight names including Microsoft, Tesla, Alphabet, and Oracle extended last week’s declines.

    Markets also drew limited support from reports of progress in U.S.-Iran nuclear discussions, easing some concerns about escalating geopolitical tensions in the Middle East.

    Sources: Ambar Warrick

  • Bears in the S&P 500 E-Mini are aiming for a downside breakout below key support.

    The S&P 500 E-mini bears are targeting a decisive breakdown below the February 5 low and the 20-week EMA, followed by strong and sustained selling pressure. In contrast, bulls want the 20-week EMA to hold as support, and if prices decline, they are looking to the November 21 low as a key support level.

    S&P 500 E-Mini Futures – Weekly Chart

    This week’s candlestick formed an inside bear bar that closed in the lower half of its range while testing the 20-week EMA. As mentioned last week, the market was likely to continue moving sideways in the near term, and so far it remains confined within an 11-week tight trading range.

    From the bearish perspective, the chart shows a wedge top (December 11, December 26, and January 12), a double top (October 29 and January 28), and a smaller double top (January 12 and January 28). Bears want the October 29 high to serve as resistance. Their goal is a strong breakout below the February 5 low and the 20-week EMA, followed by continued selling that could project a measured move down toward 6,500, based on the height of the 11-week range. To shift the market into an Always In Short condition, bears need consecutive strong bear bars closing well below the 20-week EMA. If the market moves higher, they prefer weak follow-through buying to raise the probability of a failed breakout.

    Bulls, on the other hand, see a large double-bottom bull flag (December 17 and February 5), along with a High 4 buy setup. They need a powerful breakout above the January 28 high with sustained follow-through to increase the likelihood of trend continuation, targeting a measured move toward 7,300, based on the range height. Bulls want the 20-week EMA to hold as support, and if prices fall, they expect the November 21 low to provide backing.

    The market has traded in a tight range for 11 weeks, reflecting a balance between buyers and sellers as bearish pressure has caught up with the prior uptrend. Over the past two weeks, bulls have been unable to break above previous highs and have seen progressively lower closes within the range.

    Until a decisive breakout occurs, traders may continue to apply a Buy Low, Sell High strategy within the range. Market participants will watch whether bears can push through the bottom of the 11-week range with strong follow-through selling, or whether bulls can retest and break above the all-time high. However, even if a new high is reached, lack of sustained buying would increase the risk of a failed breakout.

    Alternatively, the market may continue to consolidate around the October 29 high. Most traders will likely wait for a clear breakout with strong follow-through—either above the all-time high or below the 20-week EMA—before committing aggressively. The longer price stalls near the October 29 high without breaking higher, the greater the probability of a deeper pullback.

    Daily S&P 500 E-Mini Chart

    The market edged higher early in the week. Although Tuesday and Wednesday opened with gap-ups, both sessions reversed and closed as bear bars. On Thursday, a large bear bar formed, testing the 100-day EMA, and Friday printed a doji, signaling hesitation.

    Last week, traders were monitoring whether price would stall near the 20-day EMA and develop a second sideways-to-down leg, or whether bulls could produce enough follow-through buying to push to new all-time highs. So far, price action is pausing around both the 20-day EMA and the all-time high zone.

    From the bullish perspective, the chart shows a large double-bottom bull flag (December 17 and February 5), a wedge bull flag (January 2, January 20, and February 5), and a smaller double bottom (February 5 and February 13). Bulls are aiming for a decisive breakout above the January 28 high with sustained buying momentum, targeting a measured move toward 7,300 based on the height of the 11-week range. If the market declines, they want the November 21 low or the 200-day EMA to provide support. To improve the odds of a successful breakout and renewed uptrend, bulls need consecutive strong bull bars.

    Bears, meanwhile, want the 20-day EMA to cap price as resistance. Their objective is a clear breakdown below the 11-week trading range, with a projected move toward 6,500 based on the same range measurement. To shift the market into an Always In Short condition, they need consecutive strong bear bars breaking below the December 17 low and the 100-day EMA. If the market rallies to a new all-time high, bears prefer to see weak follow-through buying to raise the likelihood of a failed breakout.

    The market continues to trade within a range that began in late November, with bulls seeking an upside breakout and bears pushing for a downside resolution. Since late December, price action has shaped an expanding triangle, which can serve as either a continuation or reversal pattern and often traps traders with false breakouts before reversing.

    Over the past two weeks, bear bars have been more pronounced than bull bars, suggesting gradually increasing and cumulative selling pressure. Traders are closely watching whether the market keeps stalling around the 20-day EMA and the all-time high area. A pattern of slightly lower highs accompanied by stronger bear bars would increase the probability of a downside breakout. Conversely, if bulls manage a breakout to new highs, traders will look for strong follow-through; without it, the risk of a failed breakout rises.

    Until a decisive move with sustained momentum occurs in either direction, traders may continue applying a Buy Low, Sell High (BLSH) approach — buying near the lower third of the range and selling near the upper third.

    Sources: Al Brooks

  • Top Pick and Stock to Avoid This Week: Analog Devices and Walmart

    The upcoming holiday-shortened trading week will spotlight the Federal Reserve’s FOMC minutes and Walmart’s earnings report.

    Analog Devices enters its earnings release with Wall Street projecting a strong 41% increase in EPS alongside 28% revenue growth. Meanwhile, Walmart may face downside risk, as expectations appear stretched and the stock looks “priced for perfection” ahead of results.

    On Friday, U.S. equities finished largely flat as investors digested softer-than-expected inflation data, reinforcing expectations that the Federal Reserve remains on course to cut interest rates this year.

    Despite the muted close, major indexes posted weekly losses. Concerns over AI-driven disruption extended beyond technology shares, weighing on brokerages, commercial real estate companies, and logistics firms.

    The S&P 500 declined 1.4%, marking its second straight weekly drop. The Dow Jones Industrial Average lost 1.2%, while the Nasdaq Composite slid 2.1%, notching its fifth consecutive weekly loss — its longest downturn since May 2022.

    The week ahead is shaping up to be active as investors continue evaluating the outlook for growth, inflation, and monetary policy. U.S. markets will be closed Monday in observance of Presidents Day.

    With limited economic data on the calendar, attention will center on the minutes from the Fed’s January FOMC meeting, which could provide further clues on the interest-rate trajectory. Friday will also bring the release of the latest core PCE price index, a key inflation gauge.

    As of Sunday morning, markets are pricing in two 25-basis-point rate cuts by the end of 2026, with about a 50% probability of an additional reduction, according to Investing.com’s Fed Monitor Tool.

    On the corporate front, Walmart’s earnings will headline the final stretch of reporting season. Other notable reports due include Deere, Palo Alto Networks, and Toll Brothers.

    Investors are also awaiting a U.S. Supreme Court decision expected Friday regarding the legality of President Donald Trump’s global tariffs.

    Regardless of market direction, below are one stock that could attract buying interest and another that may face renewed selling pressure in the week of Monday, February 16 through Friday, February 20.

    Stock to Buy: Analog Devices

    Analog Devices (NASDAQ: ADI) remains well-positioned at the center of the industrial semiconductor recovery. The company is set to release its fiscal first-quarter results on Wednesday at 7:00 a.m. ET, with analysts forecasting a 41% jump in earnings per share and 28% revenue growth, driven by accelerating demand in robotics, automation, and AI-related infrastructure.

    Sentiment heading into the report has been increasingly upbeat. InvestingPro data shows that 23 of the past 25 EPS revisions have been upward, reflecting rising confidence in the company’s growth trajectory. In the options market, traders are pricing in a potential post-earnings swing of approximately ±4.2%.

    Analog Devices continues to benefit from long-term structural themes, including electrification, factory automation, and data-center expansion. Following prior inventory adjustments, recent quarters have demonstrated a solid rebound, supported by strong free cash flow generation that underpins dividends and share repurchases.

    Technically, ADI has maintained a firm uptrend, recently reaching highs near $344 before experiencing a modest pullback. The stock remains comfortably above key moving averages and is showing relative strength versus the broader market. Immediate support lies in the $325–$330 range, while resistance stands near its record high around $344.

    Across multiple timeframes, indicators point to strong bullish momentum. If earnings meet or exceed expectations, the technical setup suggests the potential for a breakout move.

    Trade Setup:

    • Entry: Near current levels (~$337)
    • Target: $350–$360 (approximately 4%–7% upside)
    • Stop-Loss: $325 (around 3.5% downside risk)

    Stock to Sell: Walmart

    Walmart (NASDAQ: WMT) has just crossed the historic $1 trillion market cap milestone and is set to release earnings Thursday at 7:00 AM ET. Fundamentally, the company remains strong: it’s expanding grocery market share, scaling its high-margin advertising segment, and leveraging AI to improve efficiency.

    However, valuation is the key concern. With a forward P/E of 50.6x, the stock appears priced for flawless execution. That leaves minimal margin for disappointment. Even a slight miss in forward guidance could spark a notable pullback as expectations reset. Options markets are implying a post-earnings swing of just over 8 points in either direction.

    Wall Street expects EPS of $0.73 (around 10% year-over-year growth) on roughly $190 billion in revenue. This will be the first earnings report under new CEO John Furner, adding another layer of scrutiny. Analyst sentiment has turned more cautious recently, with more than half of the latest estimate revisions skewing lower.

    Oppenheimer anticipates solid results but cautions that guidance may underwhelm—similar to last year’s Q4 report, when the stock dropped about 8%. Jefferies notes that Walmart benefits from price normalization and tighter consumer spending, but much of that optimism seems fully reflected in the share price.

    After a sharp rally to fresh record highs in the $134–$135 range, momentum appears stretched. Short-term technical indicators, including RSI, signal overbought conditions. Buying volume has begun to fade, and a negative surprise could push shares back toward support near $125.

    Trade Idea

    • Entry: Around $133–$134
    • Target: $125–$128 (approximately 7% downside)
    • Stop-Loss: $136 (around 2.5% risk)

    Sources: Jesse Cohen

  • European stocks inch up as miners kick off earnings calendar this week

    European equities moved modestly higher on Monday, helped by a broadly supportive earnings season, though trading volumes were thin due to holidays in both Asia and the United States.

    At 03:02 ET (08:02 GMT), Germany’s DAX advanced 0.4%, France’s CAC 40 added 0.2%, and the UK’s FTSE 100 gained 0.2%.

    Earnings season supports sentiment

    The week began quietly, with much of Asia observing the Lunar New Year holiday and U.S. markets closed for George Washington’s birthday. Still, investor mood in Europe remained constructive, as corporate results have generally exceeded expectations amid signs of a gradual economic recovery.

    According to LSEG data, companies accounting for 57% of Europe’s total market capitalization have reported fourth-quarter results so far, delivering average earnings growth of 3.9%—well above earlier projections for a 1.1% contraction. Around 60% of firms have beaten analyst estimates, compared with a typical quarterly average of 54%.

    While Monday’s earnings calendar is light, attention this week will center on Europe’s four largest mining groups—Rio Tinto, Glencore, Anglo American, and Antofagasta—as metals prices hover near recent highs.

    Meanwhile, Volkswagen is in focus after Manager Magazin reported that the carmaker plans to reduce costs by 20% across all brands by the end of 2028.

    In the U.S., the key earnings event will be results from Walmart on Thursday, with the retail heavyweight’s report expected to provide fresh insight into consumer spending trends.

    Economic data and oil markets

    On the macro front, Eurozone industrial production data for December is due later Monday and is forecast to show a 1.5% monthly decline.

    In the UK, property website Rightmove reported that average asking prices for newly listed homes dipped by just £12 in February to £368,019, following a sharp 2.8% rise in January.

    Earlier in Asia, Japan’s fourth-quarter GDP rose just 0.2% on an annualized basis, significantly below the 1.6% forecast, reinforcing the case for stronger fiscal support under Prime Minister Sanae Takaichi.

    Oil prices were broadly steady in holiday-thinned trading. Brent Crude futures edged down 0.1% to $67.66 per barrel, while West Texas Intermediate slipped 0.1% to $62.68. Both benchmarks had already fallen between 0.5% and 1% last week after comments from U.S. President Donald Trump suggesting a potential deal with Tehran.

    The U.S. and Iran are scheduled to hold a second round of talks in Geneva on Tuesday as they continue efforts to address longstanding tensions over Tehran’s nuclear program.

    Sources: Peter Nurse

  • S&P 500: Market volatility widens as AI concerns trigger a valuation reset, says Deutsche Bank.

    Analysts at Deutsche Bank say mounting concerns about artificial intelligence have sparked a dramatic repricing in global equities, wiping out more than $1 trillion in market value and spreading volatility far beyond the technology sector. They note that softer U.S. economic data and mixed growth signals also contributed to a strong rally in Treasuries and weekly declines in the S&P 500.

    AI fears deepen and broaden the sell-off

    Over the past two weeks, markets have erased well over $1 trillion in global equity value amid worries that AI could fundamentally alter business models and squeeze profit margins across industries ranging from software and legal services to IT consulting, wealth management, logistics, insurance, real estate brokerage, and commercial property.

    What began as tech-driven volatility earlier in the month evolved into a more indiscriminate market downturn last week. The low point came on Thursday with a sharp drop in software stocks, but losses were widespread. Companies in wealth management, real estate, and financials posted double-digit declines, highlighting the breadth of the pullback.

    Market breadth reflected the shift: the equal-weighted S&P 500 fell 1.37% on Thursday before ending the week up 0.29% (including a 1.04% gain on Friday). Overall, major U.S. indices closed the week weaker, with the S&P 500 down 1.39%, the Nasdaq Composite off 2.10%, and the “Magnificent 7” sliding 3.24%.

    While AI-related fears dominated sentiment, a busy run of U.S. economic data also influenced markets. Early-week releases—including flat December retail sales, a softer fourth-quarter Employment Cost Index, and downgraded Q4 growth estimates from the Atlanta Fed—helped drive Treasury yields lower across the curve.

    Sources: Fxstreet

  • Top stocks of the week

    C.H. Robinson, Charles Schwab, CBRE

    The AI-driven displacement trade weighed on multiple sectors this week.

    Logistics companies were particularly pressured, with C.H. Robinson (CHRW) dropping more than 14% on Thursday amid AI-related concerns. The stock has fallen over 10% for the week.

    Brokerage firm Charles Schwab slid starting Tuesday and is down roughly 9% over the past week. Its CEO told Bloomberg TV that management was “disappointed and surprised” by the sell-off, noting the firm is actively integrating AI to benefit clients.

    Real estate services company CBRE sank sharply on Wednesday and Thursday, leaving shares down about 15.2% for the week. While AI-related concerns contributed to the decline, weaker-than-expected revenue in its latest earnings report also weighed on sentiment.

    Applied Materials

    Applied Materials is on track to finish the week higher, surging more than 8% Friday (as of 13:20 ET) after posting quarterly results.

    The company exceeded consensus estimates and delivered strong second-quarter guidance. Brokerage Summit Insights upgraded AMAT to Buy, citing anticipated strength in wafer fabrication equipment (WFE) spending through the second half of 2026.

    Pinterest

    Shares of Pinterest tumbled more than 18% Friday following its post-close earnings release Thursday, bringing its weekly loss to over 22%.

    The company reported fourth-quarter earnings and revenue below analyst expectations and issued first-quarter guidance that also missed consensus. Loop Capital analyst Rob Sanderson said that while Pinterest has a compelling platform and strong user growth, challenges in monetization and exposure to unusual macro conditions are overshadowing its strengths.

    Sanderson downgraded PINS to Hold, noting it may take several quarters to complete its sales reorganization, manage higher spending, and rebuild investor confidence.

    Cisco Systems

    Shares of Cisco Systems dropped more than 12% Thursday following earnings.

    Although Cisco beat profit and revenue expectations and offered upbeat guidance, investors reacted negatively to weaker-than-anticipated gross margins. UBS analyst David Vogt noted that higher memory input costs are expected to pressure margins over the next several quarters, lowering FY26 gross margin forecasts.

    Unity Software

    Unity Software plunged more than 26% Wednesday after earnings, with losses extending into Thursday and Friday. The stock is now down 21% over the past week.

    While fourth-quarter results beat expectations, first-quarter revenue guidance disappointed investors. Despite that, Citizens analyst Andrew Boone maintained a positive stance, arguing that despite uncertainty around AI’s long-term impact, Unity’s platform remains essential for developers given the complexity of game creation and operations.

    Oracle

    After several weeks of declines tied to AI data center concerns, Oracle rebounded strongly, gaining more than 15% this week.

    On Monday, DA Davidson analyst Gil Luria upgraded Oracle to Buy from Neutral. He suggested that a restructured OpenAI could reestablish itself as a leading challenger to Google and meet its commitments to Oracle this year, potentially removing a key overhang for the stock.

    Sources: Sam Boughedda

  • U.S. futures wavered after a tech-driven Wall Street slump, with focus on CPI data.

    U.S. stock index futures edged down Thursday night after a sharp selloff in technology shares triggered heavy losses on Wall Street, with investors now awaiting key inflation data for further direction.

    Wall Street declines as tech losses deepen; Cisco plunges.

    Tech stocks slid as markets worried about fresh disruptions linked to artificial intelligence, while disappointing earnings from Cisco added to the pressure. Lingering uncertainty around U.S. rate cuts—particularly after this week’s strong nonfarm payrolls report—kept buyers cautious and prompted some profit-taking. By 19:57 ET, S&P 500 and Nasdaq 100 futures were each down 0.1%, while Dow futures were slightly lower.

    On Thursday, major indexes fell steeply, led by renewed weakness in technology amid concerns over AI-driven disruption. Logistics and transportation stocks were also hit following reports that a new tool from Algorhythm Holdings could significantly streamline freight operations, potentially dampening demand across the sector.

    The news sent trucking and logistics shares sharply lower, while Algorhythm surged nearly 30%. Meanwhile, Cisco Systems dropped 12% after posting weaker-than-expected results, dragging other major tech names lower, with the “Magnificent Seven” declining between 0.6% and 3%. The S&P 500 lost 1.6%, the Nasdaq Composite fell 2%, and the Dow Jones Industrial Average dropped 1.3%.

    Investors await CPI report as interest rate uncertainty intensifies.

    Attention now turns to January’s consumer price index data due Friday, which is expected to show a modest cooling in both headline and core inflation.

    However, CPI has exceeded expectations in January for the past four years, keeping markets wary of an upside surprise. Stronger-than-expected jobs data earlier this week reinforced views of a tight labor market, reducing the Federal Reserve’s urgency to cut rates. Persistent inflation could further dampen sentiment, with CME FedWatch indicating markets see a high likelihood that rates will remain unchanged in March and April.

    Sources: Ambar Warrick

  • Asia stocks dip after Wall Street tech selloff, but still eye solid weekly gains.

    Asian equities retreated on Friday, following a decline in U.S. technology stocks overnight as fresh concerns about stretched artificial intelligence valuations weighed on investor sentiment. Despite the pullback, regional markets remained on track for solid weekly gains after a strong rally earlier in the week fueled by AI enthusiasm and upbeat corporate earnings.

    On Nasdaq Composite, shares fell as investors reassessed elevated AI-related valuations, pressuring semiconductor and growth stocks across Asia. Meanwhile, U.S. stock index futures were mostly flat by late evening trading (22:04 ET / 03:04 GMT).

    KOSPI climbed to a new all-time high and is on track to post a weekly gain of about 9%.

    In South Korea, the KOSPI rose 0.5% to a fresh record of 5,558.82, bucking the broader regional weakness and heading for an impressive weekly gain of nearly 9%, driven by major chipmakers. Samsung Electronics climbed almost 15% this week on optimism surrounding its HBM4 high-bandwidth memory rollout and expanding edge AI prospects, while SK Hynix was poised for a roughly 6% weekly advance.

    Japan’s Nikkei 225 slipped 0.7% after reaching record highs above 58,000 in the prior session but remained on course for a weekly rise of about 6%, supported by renewed trade optimism following the election victory of Sanae Takaichi. The broader TOPIX fell 1% on Friday, though it was still set for a weekly gain of around 4%.

    Australian shares were poised for a weekly advance, supported by strong earnings from major banks.

    Elsewhere, Australia’s S&P/ASX 200 dropped 1.3% on the day but remained on track for a 3% weekly increase, supported by strong bank earnings. Singapore’s Straits Times Index fell 1%, while futures linked to India’s Nifty 50 were little changed.

    Hong Kong’s Hang Seng Index declined 2% on Friday and was poised to finish the week flat, diverging from the broader regional trend. In mainland China, the CSI 300 slipped 0.5% and the Shanghai Composite fell 0.7%, though both were still set for modest weekly gains of around 1%.

    Investors were also looking ahead to upcoming U.S. consumer price index data for further guidance on the Federal Reserve’s rate outlook, after stronger-than-expected U.S. employment figures earlier in the week reduced expectations for near-term interest rate cuts.

    Sources: Ayushman Ojha

  • S&P 500: Technical Pressures Mount Behind a Composed Surface

    The S&P 500 climbed early in the session, gaining roughly 50–60 basis points at its intraday peak, but those advances faded as the volatility crush quickly ran out of steam. As mentioned previously, the 1-day VIX had closed at 13.6—levels that typically coincide with 50–60 basis-point moves when volatility compresses. However, the 1-day VIX opened near 9, steadily increased during the session, and finished around 12, making the volatility unwind even more short-lived than anticipated.

    More notably, subtle signs of stress are emerging beneath the surface. The VVIX—which tracks implied volatility of the VIX itself—moved higher, and the S&P 500 left-tail index also rose. While the index may appear calm on the surface, these indicators suggest that underlying volatility is building and becoming harder to ignore.

    Single-stock volatility, reflected by VIXEQ, remains unusually elevated compared with the headline VIX, which measures index-level volatility. The spread between the two sits near 21.5. Historically, when this gap widens to such levels, it has often preceded meaningful market pullbacks.

    Although the surface looks stable, significant shifts are occurring underneath, serving as a cautionary signal. As earnings season progresses, implied volatility for individual stocks should continue to ease, as is typical. If that happens, the spread is likely to compress. That normalization process may require the unwinding of positioning, which could trigger a sharp downside move. This risk has been a recurring theme in prior commentary.

    Meanwhile, several sectors appear technically stretched. The Materials ETF (XLB) now shows a weekly RSI of 77 and is trading above its upper weekly Bollinger Band—classic overbought signals that suggest near-term vulnerability.

    The Industrials ETF (XLI) is even more extended, trading above its upper monthly Bollinger Band with an RSI of 78.3. Historically, similar conditions—in 2007, 2013–2014, and 2018—have led to prolonged consolidation phases. When monthly momentum reaches these extremes, sustaining further upside typically becomes difficult without first easing overbought pressures.

    The complication is that Industrials, Materials, Staples (XLP), and Energy (XLE) have been key drivers of the equal-weight S&P 500 (RSP) outperforming the cap-weighted index. This rotation helps explain why the headline S&P 500 often appears relatively steady: leadership shifts from one group to another, offsetting weakness elsewhere. The large-cap “Mag 7” stocks alone are no longer carrying the market.

    One possible factor behind this dynamic is the growing influence of zero-DTE options and heavy trading in short-dated contracts. While definitive proof is lacking, the pattern suggests dealer hedging flows may be shaping price action around heavily concentrated strike levels.

    For instance, if substantial open interest exists at a strike like 6,950, positioning could effectively pin the index near that level. As a result, underlying sector rotation may occur to keep the index aligned with options pricing. This could drive increased dispersion beneath the surface, with individual sectors making larger moves even as the broader index appears relatively unchanged.

    Sources: Michael Kramer

  • Asian stocks surged, with the KOSPI at a record high and the Nikkei above 58,000, as markets awaited U.S. jobs data.

    Most Asian equities advanced on Thursday, led by a record-breaking surge in South Korea, where chip stocks powered gains. Japanese shares were mostly steady after earlier climbing to a new all-time high above 58,000, supported by optimism surrounding the so-called “Takaichi trade.”

    Regional upside was limited, however, after stronger-than-expected U.S. employment data underscored the resilience of the labor market. While the figures eased worries about the health of the world’s largest economy, they also reduced expectations for near-term interest rate cuts by the Federal Reserve.

    On Wall Street, major indexes finished largely unchanged overnight, with futures trading flat during Asian hours.

    KOSPI sets record as Samsung rallies on AI momentum

    In Seoul, the KOSPI surged nearly 3% to a historic high of 5,515.8, extending gains fueled by robust demand for AI-related semiconductors.

    Samsung Electronics jumped more than 6% to record levels after a senior executive emphasized the firm’s technological leadership in next-generation HBM4 (high-bandwidth memory) chips. The comments boosted confidence in Samsung’s production plans and its competitive positioning in advanced AI memory markets.

    Investors are increasingly viewing HBM4 as a key driver of the next phase of AI hardware expansion, supporting profit margins and earnings visibility.

    SK Hynix also rose 3.5%, buoyed by expectations of sustained demand for high-end memory chips used in AI servers.

    Nikkei surpasses 58,000 milestone

    Japan’s Nikkei 225 briefly broke above the 58,000 mark for the first time, hitting a new record before trimming gains to trade flat. The broader TOPIX index climbed 1.5% to a fresh all-time high of 3,888.94.

    The rally has been partly linked to optimism over Prime Minister Sanae Takaichi’s election win. Investors have responded positively to her pro-growth agenda, which includes backing domestic industries, increasing defense spending, and maintaining supportive financial conditions—policies seen as favorable for exporters and cyclical sectors.

    Strong U.S. jobs data tempers Fed cut expectations

    U.S. data released Wednesday showed nonfarm payrolls increased by 130,000 in January, well above forecasts, while the unemployment rate unexpectedly dipped to 4.3% from 4.4%. The figures highlighted ongoing strength in the labor market.

    Although the report eased fears of an economic slowdown, it also dampened hopes for imminent Federal Reserve rate reductions.

    Elsewhere in Asia-Pacific, Australia’s S&P/ASX 200 gained 0.5% and Singapore’s FTSE Straits Times rose 0.7%. China’s CSI 300 and Shanghai Composite were mostly unchanged, while Hong Kong’s Hang Seng fell more than 1%, diverging from regional trends. India’s Nifty 50 futures edged up 0.1%.

    Sources: Ayushman Ojha

  • What’s Next for Sysco (NYSE: SYY)? Assessing the Impact of the Whistleblower Ruling and Continued Margin Pressure on the Stock

    Short Trade Setup

    Consider initiating a short position between $84.57 (the lower boundary of the horizontal support range) and $87.35 (the upper boundary of that support zone).

    Market Index Overview

    Sysco Corporation (SYY) is a constituent of the S&P 500 Index.

    While the index is trading near record highs, declining trading volume raises concerns about the sustainability of the rally. The Bull Bear Power Indicator has turned positive but remains below its downward-sloping trendline, suggesting that bullish momentum lacks full confirmation.

    Market Sentiment

    Equity futures are edging lower after the Dow Jones Industrial Average posted another all-time high, with the S&P 500 closing in on a record level of its own.

    Retail sales data may introduce short-term volatility today, though the primary macro catalyst this week is tomorrow’s January Nonfarm Payrolls (NFP) report. Investors are also watching Coca-Cola’s earnings and price swings in gold, silver, and Bitcoin.

    Despite a recent two-day rebound, technology stocks face renewed downside risks as rising memory costs pressure margins. Meanwhile, Alphabet is reportedly planning to issue its first 100-year bond since the dot-com era.

    Fundamental Analysis of Sysco Corporation

    Sysco is the world’s largest foodservice distributor, serving more than 700,000 customers through 340 distribution centers across ten countries.

    Why Bearish After a 22%+ Rally?

    Despite its strong rally, several factors support a cautious outlook:

    • The $52 million whistleblower ruling, while not materially damaging on its own, adds headline risk.
    • Continued margin compression reinforces broader profitability concerns.
    • The latest earnings report lacked strong positive catalysts.
    • Insider selling has increased in recent weeks.
    • The stock is trading near the consensus analyst price target, limiting apparent upside.
    • Elevated debt levels and negative free cash flow raise financial concerns within a structurally low-margin distribution business.
    • Signs of market saturation may restrict organic growth potential.

    Taken together, these factors suggest limited upside and increasing downside risk at current levels.

    Sysco’s price-to-earnings (P/E) ratio of 23.31 suggests the stock is relatively inexpensive. In comparison, the S&P 500 trades at a higher P/E multiple of 29.90.

    Meanwhile, the average analyst price target of $89.94 implies limited upside from current levels, while downside risks appear to be increasing.

    Sysco Corporation Technical Analysis

    Today’s SYY Signal

    The daily (D1) chart for SYY shows the formation of a new horizontal resistance area. Price is currently trading between the 0.0% and 38.2% levels of the ascending Fibonacci Retracement Fan.

    The Bull Bear Power Indicator remains in bullish territory but is displaying a negative divergence, signaling weakening upside momentum. Additionally, average bearish volume exceeds average bullish volume, suggesting stronger selling pressure.

    Although SYY has moved higher alongside the S&P 500 — typically a positive confirmation — bearish signals are beginning to build.

    SYY Short Trade Setup

    • Entry Zone: $84.57 – $87.35
    • Take-Profit Target: $71.23 – $73.67
    • Stop-Loss Range: $89.94 – $91.74
    • Risk-to-Reward Ratio: 2.48

    Sources: Adam

  • S&P 500 Analysis: Record Highs Amid Cautious Optimism and Active Buying

    Despite ongoing noise around elevated valuations, rapid price swings, and a general sense of unease surrounding major U.S. equity indices, the S&P 500 continues to hover near record territory. Futures have edged higher again this morning, with the index trading around the 6,979.50 level.

    Early last Friday, the S&P 500 dipped toward the 6,738.00 area, marking its lowest point since mid-December. However, a swift rebound restored upside momentum, pushing the index back within striking distance of all-time highs. The 7,000.00 mark remains a powerful psychological milestone for investors and short-term traders alike, especially those closely monitoring daily price action.

    The 7,000 Milestone in a Cautious Environment

    Although the S&P 500 typically moves less aggressively than the Nasdaq 100, it remains a popular vehicle for speculative positioning, particularly among retail traders using CFDs. Recent weeks have brought heightened volatility, yet the index has consistently stayed near the 7,000.00 threshold—a level it briefly surpassed in late January and early February.

    Still, maintaining sustained breakouts has proven challenging. For bullish conviction to strengthen, traders may look for a decisive and lasting move above 7,000.00. Until such confirmation materializes, choppy and range-bound conditions are likely to persist—especially with key economic releases on deck, including Retail Sales, employment data, and Friday’s Consumer Price Index report.

    Short-Term Positioning Amid Lingering Caution

    While it may seem contradictory to speak of nervousness with the index near record highs, institutional sentiment appears notably guarded. This caution could serve as a defensive posture in case markets experience renewed downside volatility, similar to the sharp pullbacks seen in recent weeks.

    Although the S&P 500’s ability to test upper-tier levels is encouraging, persistent headwinds have so far prevented a confident breakout into fresh territory. A series of strong U.S. economic readings may be needed to fuel a sustained advance. Whether that catalyst emerges remains to be seen.

    S&P 500 Short-Term Outlook:

    • Current Resistance: 6,982.00
    • Current Support: 6,972.00
    • Upside Target: 7,015.00
    • Downside Target: 6,957.00

    Sources: Robert

  • U.S. stock futures edged up as investors awaited the postponed employment report.

    U.S. equity futures moved slightly higher Tuesday night following a modest decline in the regular trading session, as investors assessed softer retail sales figures and looked ahead to a series of postponed U.S. economic reports due later in the week.

    By 20:11 ET (01:11 GMT), S&P 500 futures rose 0.2% to 6,978.25, Nasdaq 100 futures advanced 0.3% to 25,291.75, and Dow Jones futures added 0.2% to 50,385.0.

    Wall Street declined ahead of the upcoming jobs report, while the Dow posted a fresh record closing high.

    During Tuesday’s regular session, the S&P 500 declined 0.3% and the Nasdaq Composite dropped 0.6%, pressured by losses in technology and other growth-oriented stocks.

    In contrast, the Dow Jones Industrial Average managed a slight advance, closing above the 50,000 mark at a new record high for the third consecutive session.

    Earlier, investors reacted to U.S. retail sales figures showing flat monthly consumer spending, missing expectations. The softer data fueled worries that elevated borrowing costs may be starting to curb household demand, despite broader signs of economic resilience. This strengthened expectations that the Federal Reserve could move toward rate cuts later this year if growth continues to ease.

    Attention now shifts to the delayed monthly employment report, set for release Wednesday following the recent government shutdown. The data will offer the first detailed snapshot of labor market conditions in weeks, as policymakers monitor for indications of cooling.

    Markets are also awaiting the postponed U.S. consumer price index report on Friday, which could play a pivotal role in shaping near-term market sentiment.

    Robinhood and Lyft slide in after-hours trading.

    In company-specific developments, Robinhood Markets (NASDAQ: HOOD) fell 7.5% in after-hours trading after posting earnings that came in below expectations, as weaker-than-anticipated revenue and user figures pressured the stock.

    Shares of Lyft (NASDAQ: LYFT) plunged more than 17% in extended trading after the ride-hailing firm reported results that missed forecasts, further weighing on consumer-focused tech stocks.

    Meanwhile, Ford Motor Company (NYSE: F) delivered quarterly earnings that fell short of Wall Street estimates, citing costs related to its electric vehicle operations and ongoing supply chain challenges. Despite the miss, the automaker projected improved earnings in 2026. Ford shares rose 0.5% in after-hours trading.

    Sources: Ayushman Ojha

  • Domestic stocks could outperform as globalization pulls back and growth becomes more home-focused.

    Last week, I attended the 2026 Harvard Presidents’ Seminar with leading executives and thinkers, where Ambassador Kevin Rudd, former Australian prime minister, stood out. He warned that the post–World War II rules-based global order is likely fading, giving way to a more 19th-century style world defined by power politics and spheres of influence. Rudd, a realist rather than an alarmist, argued that a strong U.S. remains essential for global stability, while a weakened U.S. risks creating power vacuums that China and Russia are ready to exploit.

    A Fracturing Global Order?

    For roughly eight decades after World War II, the United States played a central role in shaping the global order—promoting open markets, free trade, democratic expansion, and the U.S. dollar as the world’s reserve currency—underpinning a period of relative stability.

    According to Rudd, that chapter may now be closing. Democratic governance is weakening worldwide, while the number of armed conflicts has climbed to its highest level since World War II.

    China and Russia are making their ambitions increasingly explicit. Just last week, Xi Jinping and Vladimir Putin reaffirmed their deepening partnership, pledging mutual support across economic, military, and ideological fronts. With the New START treaty expiring this month, the final pillar of nuclear arms control between the United States and Russia has now fallen away.

    Redrawing the Global Playbook

    Rudd, who has written two major books on Xi Jinping, cautioned that China’s current leader is far from a pragmatist in the mold of Deng Xiaoping, whose market-oriented reforms in the 1970s set China on its path to global prominence. Instead, Xi is best understood as a Marxist-Leninist nationalist.

    Under his leadership, China has moved beyond simply operating within existing global rules to actively reshaping them. The Chinese Communist Party is pursuing an all-encompassing strategy that spans nearly every sphere—military modernization, industrial leadership, energy self-sufficiency, and more. As I noted back in October, I see China’s expansive Belt and Road Initiative as a Trojan horse.

    For Xi’s government, economic strength and national security are inseparable, a reality most evident in its approach to energy and technology.

    China’s Sweeping Energy Expansion

    As the U.S. continues to oscillate on energy policy, China has been pressing ahead at full speed. Since 2021, it has added more power-generating capacity than the United States has built over its entire 250-year history—an astonishing feat achieved in just four years.

    In 2025 alone, China brought online 543 gigawatts of new capacity across solar, wind, coal, nuclear, and gas. Looking ahead, BloombergNEF projects an additional 3.4 terawatts over the next five years—nearly six times what the U.S. is expected to add. The objective is clear: to ensure that China’s next wave of industries, including AI, robotics, and advanced manufacturing, is never constrained by energy shortages.

    Clean Energy Emerges as the Next Growth Engine

    As I’ve noted before, both Elon Musk and NVIDIA CEO Jensen Huang have warned that China’s enormous power surplus could give it a decisive edge in AI computing—and the data backs that up.

    In 2025, clean energy accounted for more than a third of China’s GDP growth and over 90% of new investment. Industries such as solar, electric vehicles, and battery technology generated more than $2.1 trillion in economic output, roughly on par with the GDP of Canada or Brazil. Viewed on its own, China’s clean energy sector would rank as the world’s eighth-largest economy.

    Meanwhile, in Washington, progress remains stalled by politics.

    By contrast, the United States has struggled to execute large-scale energy buildouts amid political gridlock and partisan divides. While China plans decades ahead, U.S. policymakers too often remain focused on the next election cycle.

    According to a recent report from the Information Technology and Innovation Foundation (ITIF), China is on course to overtake the U.S. across a wide range of what it terms “national power industries.” These span military sectors such as guided missiles and tanks, dual-use industries like electronic displays and semiconductors, and enabling industries including automobiles and heavy construction equipment.

    That said, the U.S. continues to commit heavily to defense spending. Congress recently approved an $839 billion defense bill—$8 billion more than requested by the Pentagon—with funding directed toward key systems such as the F-35, the B-21 bomber, and the Sentinel intercontinental ballistic missile program. More than $13 billion is also allocated to space and missile defense under President Trump’s Golden Dome initiative.

    What This Means for Investors

    Equity markets may already be signaling the start of a new investment cycle. In January, leadership shifted toward small-cap, domestically oriented stocks. While the S&P 500 hit new highs with a gain of about 1.4%, the Russell 2000 jumped 5.4%, markedly outperforming large caps. Small caps also logged a 15-day streak of outperformance versus the S&P—the longest since May 1996.

    This strength does not appear to be a one-off. Since the beginning of Trump’s second term, the Russell 2000 has edged ahead of the S&P 500, rising roughly 17% versus 15% as of Friday, February 6. Some small-cap companies, though not all, tend to be less exposed to tariffs and could benefit over time in a less globalized world.

    That said, careful stock selection is critical. Around 40% of Russell 2000 constituents are currently unprofitable.

    Finally, with precious metals retreating from recent highs, investors may want to consider buying the dip. A 10% allocation to gold—split evenly between physical bullion and high-quality mining stocks—can help diversify portfolios, with regular rebalancing remaining essential.

    Sources: Frank Holmes

  • Amazon is preparing to roll out an AI-driven content marketplace, according to a report by The Information.

    Amazon has indicated to publishing executives that it intends to introduce a marketplace allowing publishers to license their content to companies developing artificial intelligence products, according to a Monday report by The Information.

    The report said Amazon Web Services shared presentation slides ahead of its conference on Tuesday that referenced a planned content marketplace, citing two sources familiar with discussions with Amazon.

    Those slides reportedly place the marketplace alongside AWS’s main AI offerings, such as Bedrock and Quick Suite, positioning it as a tool publishers could use in their operations.

    The move comes as publishers and AI firms continue negotiations over how digital content may be used for AI training or for generating responses, with publishers seeking fees tied to the level of content usage.

    An Amazon spokesperson said the company had no specific comment on the report, noting its long-standing partnerships with publishers and its ongoing focus on innovation.

    The development follows Microsoft’s recent announcement that it is working on a Publisher Content Marketplace, an AI licensing platform that reflects publishers’ usage terms.

    Sources: Reuters

  • Asian stocks rose on tech strength, with the Nikkei hitting a new high near 58,000 after Takaichi’s win.

    Asian equities climbed further on Tuesday, led by tech stocks, with Japan’s market hitting new records as investors embraced the “Takaichi trade” after PM Sanae Takaichi’s election win. Sentiment was supported by modest gains on Wall Street overnight, where the Nasdaq outperformed on a rebound in tech and AI shares, while U.S. futures were mostly flat in Asian trading.

    Nikkei jumps to a fresh record, closing in on 58,000 after Takaichi’s victory.

    Japan’s Nikkei 225 surged as much as 3% to a fresh record of 57,960, while the broader TOPIX advanced about 2.2% to an all-time high of 3,863.90. The gains followed a strong session on Monday, when the Nikkei rose nearly 4% and the TOPIX added 2.3%.

    The rally underscored growing investor confidence in Prime Minister Sanae Takaichi’s policy agenda, widely seen as supportive of economic growth, corporate earnings, and domestic investment. Her decisive election victory over the weekend has reinforced expectations of continued pro-business reforms, expansionary fiscal policy, and initiatives to boost capital spending, innovation, and strategic sectors.

    ING analysts said the landslide win strengthens the case for “responsible but expansionary” fiscal spending and a more Japan-centric foreign policy, adding that risk-on sentiment is likely to dominate markets in the near term.

    Asian tech stocks extend gains

    Technology shares across Asia extended recent gains after last week’s sharp global sell-off driven by AI and valuation concerns. South Korea’s KOSPI rose 0.5% after a more than 4% surge previously, while Hong Kong’s Hang Seng added 0.5%, led by a 1% gain in the tech subindex. Mainland Chinese benchmarks were flat, Australia’s ASX 200 edged up 0.2%, Singapore’s STI slipped 0.3%, and India’s Nifty 50 futures were little changed. Investors are also awaiting key U.S. jobs and inflation data later this week for signals on interest rates and global growth.

    Sources: Ayushman Ojha

  • Week Ahead: Tech volatility weighs on markets ahead of jobs, CPI and retail sales data

    Key Highlights

    Japan equities rally: Japanese stocks surged after Prime Minister Sanae Takaichi’s landslide election victory, boosting expectations of higher government spending on defense and AI. The Nikkei jumped as much as 4.2% to a record high, while the Topix rose up to 2.6%, led by gains in electronics and banking stocks.

    Gold rebounds: Gold climbed above $5,000 an ounce, rising as much as 1.6% early on as dip buyers returned following a volatile week. The move was supported by Japan’s election outcome, which fueled expectations of looser fiscal policy and a weaker yen—both supportive for bullion. Gold remains about 11% below its Jan. 29 peak but is still up roughly 15% year to date.

    Oil slips: Oil prices edged lower as easing Middle East tensions reduced near-term supply disruption risks. Talks between Iran and the U.S. in Oman on Tehran’s nuclear program were described by Iran as “a step forward.”

    Asia markets higher: Asian equities opened higher, tracking Friday’s rebound on Wall Street. Stocks jumped in Japan and South Korea, with the Kospi—popular among AI-linked trades—surging 4%. U.S. futures were firmer after the S&P 500 closed about 2% higher on Friday amid dip-buying and improved consumer sentiment.

    Algo-driven risks flagged: Goldman Sachs warned that trend-following algorithmic funds could accelerate U.S. equity selling this week. A renewed decline could trigger around $33 billion in automated sales immediately, with a break below 6,707 on the S&P 500 potentially unleashing up to $80 billion more over the next month. Thin liquidity and short-gamma positioning may keep volatility elevated.

    AI fears spark selloff: Concerns over AI’s economic impact intensified after Anthropic unveiled new tools, triggering a broad selloff that erased $611 billion in market value across 164 software, financial services, and asset management stocks. Despite the selloff, fundamentals remain intact, with S&P 500 software and services earnings expected to grow 19% in 2026 and valuations becoming more attractive.

    Wall Street rebound: U.S. equity futures ticked higher late Sunday after a strong rebound on Friday. Bitcoin jumped following steep losses, the Dow hit a fresh record above 50,000, and the S&P 500 reclaimed its 50-day moving average. The Nasdaq, however, remained below that key level and ended the week notably weaker.

    U.S. Economic Data and Corporate Earnings Schedule

    Investors are set to focus on the delayed January labor market data, alongside upcoming consumer inflation (CPI) and retail sales releases. The jobs and CPI reports were postponed due to a brief government shutdown last week, while December retail sales figures were also delayed following the 2025 shutdown.

    The Federal Reserve continues to view inflation as “somewhat elevated,” with January’s CPI report, due Friday, expected to provide further clarity. As the central bank assesses risks to both inflation and employment as having eased, markets are pricing in no additional rate cuts before the June meeting. By then, Kevin Warsh—President Trump’s nominee for Fed chair—could be in office.

    Despite the Fed’s year-end rate cut, futures markets still anticipate roughly two additional 25-basis-point cuts by December, a pricing stance that has remained largely unchanged since Warsh’s nomination last month.

    Economic calendar:

    Monday, Feb 9
    Remarks from Fed officials including Governors Stephen Miran and Christopher Waller, along with Atlanta Fed President Raphael Bostic.

    Tuesday, Feb 10
    Key U.S. data releases include December retail sales, NFIB Small Business Optimism, the Q4 Employment Cost Index, December import prices, and November business inventories.
    Cleveland Fed President Beth Hammack is also scheduled to speak.

    Wednesday, Feb 11
    The January U.S. employment report is due, alongside remarks from Vice Chair for Supervision Michelle Bowman.
    The monthly U.S. federal budget for January will also be released.

    Thursday, Feb 12
    Data highlights include January existing-home sales and weekly initial jobless claims for the week ending Feb 7.
    Governor Stephen Miran is scheduled to speak.

    Friday, Feb 13
    The January Consumer Price Index (CPI) will be released.

    Earnings Calendar:

    Monday, Feb. 9
    Earnings are due from Apollo Global Management, Onsemi, Loews, and Principal Financial.

    Tuesday, Feb. 10
    A heavy earnings slate includes Coca-Cola, AstraZeneca, Gilead Sciences, BP, CVS Health, Spotify, Duke Energy, Marriott, Ferrari, Ecolab, Robinhood, Cloudflare, Ford, Honda Motor, and Barclays.

    Wednesday, Feb. 11
    Reports are expected from Cisco, McDonald’s, T-Mobile, AppLovin, and Shopify.

    Thursday, Feb. 12
    Applied Materials, Arista Networks, Unilever, Vertex Pharmaceuticals, Brookfield, Airbnb, and Coinbase Global are scheduled to report.

    Friday, Feb. 13
    Enbridge and Moderna round out the week.

    Cisco is set to report fiscal Q2 results after Wednesday’s close. Consensus estimates call for adjusted EPS of $1.02, up 9% year over year, on revenue of $15.1 billion, an 8% increase. Product orders are expected to soften slightly following 13% growth last quarter, while AI-related orders may cool after reaching $1.3 billion in Q1. Investors will be watching for upside tied to Cisco’s AI-networking partnership with Nvidia and signs of a recovery in its security segment following a weak prior quarter despite the Splunk acquisition.

    AstraZeneca reports Q4 results early Tuesday, with analysts forecasting flat adjusted EPS and roughly 4% sales growth. The company’s recent move from Nasdaq to the NYSE has helped propel shares sharply higher, up around 108% in February.

    Robinhood is expected to post a roughly 38% decline in EPS to $0.63, even as revenue is seen rising nearly 34% to $1.36 billion on stronger options, equities, and transaction activity. Crypto revenue is projected to fall about 28% to $259 million. The company has recently faced regulatory scrutiny related to prediction markets, including halting sports-related contracts in Nevada, contributing to a sharp pullback in the stock last week.

    Elsewhere, McDonald’s earnings are expected to show about 8% EPS growth—its strongest quarter since late 2023—while Coca-Cola is forecast to report modest slowing growth, despite shares gaining around 8% since breaking out in January.

    By the end of the week, more than 80% of Dow Jones Industrial Average constituents will have reported earnings.

    Technical Analysis:

    DJIA Index
    The index confirmed a breakout from a bullish rectangular consolidation on Friday. As long as support at 49,970 holds, the upside target remains at 51,000.
    DJIA daily candlestick chart.

    Nasdaq 100 Index
    The NDX broke below the 25,200 support level last Wednesday, in line with the view that a sustained move under 25,200 would open the door toward 24,650. The index subsequently dropped to 24,455 before reclaiming 24,650. It is now rebounding toward 25,200, with further upside toward 25,370. A decisive break above 25,370 would expose resistance near 25,850.
    NDX daily candlestick chart.

    SPX Index
    The SPX successfully defended the 6,790–6,780 support zone during its second pullback of the year. The index is now consolidating within a rectangular range. As long as support at 6,780 holds, the upside target remains 7,010.
    SPX daily candlestick chart.

    Weekly Probability Outlook for U.S. Indices

    The U.S. weekly market probability map for Feb. 9–13, 2026 points to a mixed open for U.S. equity indices, followed by a stronger close and a rally developing midweek. The probability maps are based on historical seasonality trends, with sentiment readings generated through a seasonality-driven scoring model.

    Sources: Ali Merchant

  • Top Weekly Picks: Buy Cisco, Sell Moderna

    • Key U.S. economic data—including the jobs report, CPI inflation, retail sales—and another round of corporate earnings will be in focus this week.
    • Cisco is expected to post strong earnings along with upbeat guidance, positioning the stock as a high-conviction potential outperformer in the near term.
    • By contrast, Moderna faces pressure from declining revenue and anticipated losses, leaving the stock vulnerable to downside risk this week.

    Wall Street stocks surged on Friday, posting their strongest gains in months as the Dow Jones Industrial Average finished above the landmark 50,000 level for the first time.

    The rally came after three consecutive sessions of declines driven by artificial intelligence-related concerns, with software stocks particularly pressured on fears that AI could intensify competition across the sector.

    For the week, the benchmark S&P 500 and the tech-heavy Nasdaq Composite edged lower by 0.1% and 1.8%, respectively, while the 30-stock Dow Jones Industrial Average gained 2.5% and the small-cap Russell 2000 advanced 1.8%.

    Volatility may remain elevated in the days ahead as investors weigh the outlook for economic growth, inflation, interest rates, and corporate earnings.

    On the economic front, delayed December retail sales data is set for release on Tuesday. However, Wednesday’s postponed January U.S. jobs report could prove more influential amid mounting concerns over labor-market conditions. January CPI inflation data due on Friday will also be closely watched for further evidence on whether price pressures are truly easing.

    Earnings season also rolls on, with a busy slate of high-profile results due in the coming days. Notable reports include Coca-Cola, McDonald’s, Ford, Cisco, Robinhood, Coinbase, and Arista Networks, alongside key software names such as AppLovin, Shopify, and Datadog.

    Regardless of broader market direction, below I highlight one stock that is likely to attract buying interest and another that could face renewed downside pressure. Note that this view is strictly short term, covering the week ahead from Monday, February 9 through Friday, February 13.

    Stock To Buy: Cisco 

    Cisco’s upcoming earnings report is the key catalyst for the stock this week, with the risk–reward profile appearing skewed to the upside. CSCO is set to report fiscal second-quarter results after the market closes on Wednesday at 4:05 p.m. ET.

    Market expectations remain relatively modest, suggesting that even a small beat on revenue and earnings per share, coupled with steady or slightly optimistic guidance, could be enough to spark a post-earnings rally.

    Analyst sentiment has been notably constructive heading into the release. According to InvestingPro data, 14 of the last 16 EPS revisions have been upward, underscoring growing confidence in Cisco’s ongoing expansion.

    As a leading player in networking hardware, cybersecurity, and an increasingly important provider of AI infrastructure, Cisco is well positioned to capitalize on multiple tailwinds that could support a strong quarterly performance despite a mixed macroeconomic backdrop.

    Consensus forecasts call for adjusted earnings per share of $1.02, representing a 9% increase from a year earlier. Revenue is expected to rise 8% year over year to $15.1 billion, supported by AI-driven demand and solid product sales.

    Analysts see potential for longer-term upside from Cisco’s partnership with Nvidia to develop AI networking solutions for the enterprise market. Meanwhile, Cisco’s security segment underperformed in fiscal first quarter results despite the acquisition of Splunk, and investors will be watching closely for signs of a rebound in that business.

    Cisco’s shares have been on a strong run, notching a string of fresh 52-week highs in recent sessions. The stock closed at $84.82 on Friday, underscoring solid momentum heading into the earnings release.

    Valuation and sentiment also remain supportive. Cisco continues to trade at a reasonable earnings multiple relative to both the broader technology sector and its own historical averages, while offering an appealing dividend yield underpinned by robust free cash flow.

    Trade setup:

    • Entry: Near current levels (~$84–85)
    • Target: $90–$95 (potential upside of ~5.8%–10.8%)
    • Stop-loss: $80 (downside risk of ~5.8%)

    Stock To Sell: Moderna

    Moderna, meanwhile, faces a tougher setup this week as it heads into its fourth-quarter earnings release scheduled for before Friday’s opening bell at 6:35 a.m. ET. Options markets are pricing in a sharp post-earnings swing of around ±16%, underscoring the heightened risk of a downside surprise.

    After its blockbuster pandemic-era success with the mRNA COVID-19 vaccine, the biotech company has struggled with the transition from reliance on a single product to a broader—yet still largely unproven—development pipeline.

    Analyst sentiment has turned increasingly cautious ahead of the report, with consensus sales estimates cut by roughly 14%, reflecting growing concerns over Moderna’s near-term revenue outlook.

    Consensus expectations point to a sizable loss, with earnings per share projected at around –$2.62 on revenue of $662.8 million, representing a steep year-over-year decline of more than 30% from sales of $966 million.

    Moderna is grappling with slowing revenue growth and a lack of near-term catalysts to counter weakening demand, as vaccine sales continue to fade.

    At the same time, the company must maintain elevated spending on research, development, and manufacturing to advance a broad pipeline spanning respiratory viruses, oncology, and other therapeutic areas. This combination is weighing on near-term profitability and increasing pressure on cash burn.

    Moderna’s share price has started to lose momentum after a strong recent rally, ending Friday at $41.01. While the stock remains up 67.1% over the past three months and 21.1% in the last month, last week’s 7% decline points to waning upside traction.

    In a market increasingly favoring growth and AI-linked themes, high-beta biotech stocks like Moderna are vulnerable to rotation, particularly if earnings fall short or forward guidance disappoints.

    Trade setup:

    • Entry: Near current levels (~$40–41)
    • Target: $35 (potential gain of ~15%)
    • Stop-loss: $45 (risk of ~12.5%)

    Whether you’re a newer investor or an experienced trader, tools like InvestingPro can help uncover opportunities while managing risk in a challenging and fast-moving market environment.

    Sources: Jesse Cohen

  • Wall Street futures edge higher on tech recovery ahead of delayed jobs and CPI data

    U.S. stock futures ticked higher on Sunday evening after Wall Street mounted a strong rebound late last week, even as investors remained cautious ahead of delayed U.S. employment and inflation data scheduled for release in the coming days.

    S&P 500 futures rose 0.4% to 6,978.75 points, while Nasdaq 100 futures advanced 0.6% to 25,319.0 points by 19:12 ET (00:12 GMT). Dow Jones futures were up 0.2% at 50,327.0 points.

    Wall Street bounced back late last week as AI disruption fears eased

    Wall Street’s major indexes surged on Friday after several days of losses, as investors stepped in to scoop up beaten-down technology stocks and found reassurance in easing bond yields.

    The S&P 500 advanced 2%, while the Nasdaq Composite climbed 2.2%. The Dow Jones Industrial Average rose 2.5%, notching its first close above the 50,000-point mark.

    Gains were led by chipmakers and AI-linked stocks, which had faced intense selling pressure amid concerns over technology disruption and lofty valuations.

    Earlier in the week, the technology sector had suffered sharp declines as investors rotated away from high-growth names, worried that rapid advances in artificial intelligence could upend software business models and squeeze profit margins.

    For the week as a whole, the Dow gained roughly 2.5%, supported by strength in industrial and financial stocks. The S&P 500 slipped 0.1%, while the Nasdaq fell about 2%, underscoring the sector’s pronounced weakness.

    Jobs, inflation data in focus with major earnings ahead

    Market attention is shifting toward key U.S. economic data releases that were postponed due to the partial government shutdown.

    The closely watched January employment report, originally due last week, is now scheduled for release on Wednesday. A private-sector jobs report published last week showed weaker-than-expected hiring, sparking concerns that labor market momentum may be starting to cool after months of strength.

    Focus will then turn to January consumer price index data, set for release on Friday following the shutdown-related delay. The inflation report will be closely examined for indications that price pressures are easing enough to give the Federal Reserve scope to consider interest rate cuts later this year.

    Corporate earnings may also influence markets in the days ahead, with companies such as Coca-Cola Co (NYSE:KO) and Ford Motor Company (NYSE:F) among the notable firms due to report quarterly results this week.

    Sources: Ayushman Ojha

  • Asian stocks rallied, with the Nikkei surging past 57,000 after Takaichi’s election victory.

    Most Asian markets climbed sharply on Monday, tracking Wall Street’s tech-led rebound, while Japanese shares jumped to record highs after Prime Minister Sanae Takaichi’s coalition won a decisive lower-house victory. Risk sentiment improved across the region following Friday’s strong U.S. rebound from AI-driven losses, with U.S. stock futures also edging higher in Asian trade.

    Nikkei tops 57,000 following Takaichi’s election victory

    Japan’s Nikkei 225 jumped as much as 5.6% to a new record of 57,337.07, supported by improved political certainty after Prime Minister Sanae Takaichi’s coalition won a commanding majority in Sunday’s lower-house election. The broader TOPIX index also surged 3.4% to an all-time high of 3,825.67.

    Analysts said the decisive victory gives Takaichi greater latitude to push through policy initiatives, with markets anticipating higher public spending, tax incentives, and measures to lift wages and corporate investment, alongside continued backing for key sectors such as technology, defense, and energy. While the outcome is seen as positive for Japanese equities, it is expected to pressure government bonds and the yen.

    Asian tech stocks jump, with South Korea’s KOSPI surging nearly 5%

    Asian tech stocks rallied at the start of the week, supported by gains in U.S. chipmakers and AI-linked shares. South Korea’s KOSPI surged nearly 5%, rebounding from sharp losses, as Samsung Electronics jumped more than 5% on reports it will begin mass production of HBM4 chips later this month, while SK Hynix also climbed over 5%.

    Elsewhere, Hong Kong’s Hang Seng rose 2% with the tech subindex up 1.5%, while China’s CSI 300 and Shanghai Composite gained 1.3% each. Australia’s ASX 200 advanced 2%, Singapore’s STI added 1%, and India’s Nifty 50 futures edged higher. Despite the rebound, investors remain cautious amid recent volatility in tech stocks and ahead of key U.S. jobs and inflation data due later this week.

    Sources: Ayushman Ojha

  • Alphabet Signals AI Confidence as Capital Spending Ramps Up

    Google plans to increase capital expenditures to as much as $185 billion this year, significantly exceeding market expectations of around $120 billion. Robust growth in search advertising and Google Cloud has provided Alphabet with the financial flexibility to pursue this aggressive investment strategy. According to Morgan Stanley analysts, the sharp rise in spending signals that AI is driving higher engagement and improved monetisation across Google’s core businesses, with search revenue climbing 17% and cloud revenue surging 48% in the most recent quarter.

    Meta conveyed a similar message after projecting annual capital expenditures of $135 billion, supported by evidence that AI is enhancing advertising effectiveness. However, not all technology giants have been able to convince investors that rising capital spending is justified. Microsoft, for example, saw its shares fall sharply—erasing more than $350 billion in market value—after its cloud performance disappointed, even as its own capital investment ramped up.

    Amazon is also under pressure to sustain strong growth at AWS while continuing to expand data-center capacity. In contrast, Alphabet’s sharply rising cloud backlog highlights growing demand for AI infrastructure and tools, lending credibility to its aggressive spending plans.

    The trade-off, however, is immediate. Morgan Stanley estimates that Alphabet’s free cash flow per share could decline by 58% in 2026 and by as much as 80% in 2027 as higher capital expenditures flow through the business. In effect, the company is sacrificing near-term cash returns in exchange for longer-term strategic positioning.

    Alphabet now stands at a crossroads. Strong advertising and cloud growth point to early benefits from AI investments, but the sheer scale of spending increases execution risk. If the added capacity delivers sustained revenue growth, the strategy will appear well-timed. If growth slows, Alphabet could face a thinner cash buffer and heightened expectations. For now, the company is betting that leading with investment is essential to staying ahead—and the market will be watching closely to see whether returns keep pace.

    Sources: Pratyush Thakur