Feb 20th Pre-Market

Good morning.

Futures are sliding after a rough GDP print Core PCE hit 0.4 month over month versus 0.3 expected. Slowing growth and sticky inflation in the same release is exactly what nobody wanted to see heading into this weekend.

This weekend matters. Trump gave Iran 10 to 15 days to make a deal. The U.S. is moving jets and a second carrier group into the Gulf.

S&P flat for the year. Nasdaq trying to snap a five-week slide.

Let’s dig in…

Today's Big Picture

1. Iran Is A Weekend Risk Event Now 

Trump set a 10-to-15-day clock on strikes. The U.S. is moving F-35s, F-22s, and a second carrier toward the Gulf. Brent is near $72, up 6 on the week, and nobody wants to be long risk into a weekend where the Strait of Hormuz carries 14 million barrels a day.

2. Private Credit Stress Is Spreading Blue Owl Capital

$OWL sold $1.4 billion in loans to cover investor redemptions and permanently shut one fund to withdrawals. Blackstone $BX and Apollo $APO both dropped over 5. Financials were the worst S&P sector yesterday. The story is simple: low rates for years pushed private lenders into riskier deals. Rates stayed high and some of those loans aren't holding up. Watch whether redemption pressure shows up at other funds.

3. This Morning’s Data Just Made The Fed's Job Harder 

GDP printed 1.4 versus a 2.8 estimate, down sharply from 4.4 last quarter. Core PCE came in at 0.4 month over month versus 0.3 expected. The GDP price index hit 3.6 against a 2.8 forecast.

That's a crappy combination: people and businesses are spending less but everything still costs more.

The Fed can't cut into rising inflation and can't hold rates steady while growth is falling off a cliff. Markets still have two cuts priced for this year. June odds for a cut already slipped from 62 to 56 before this print. Watch the 2-year yield today for the real verdict.

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Stock Spotlight (pre-market)

Opendoor Technologies $OPEN ( ▲ 7.53% )  
Revenue $736 million versus $549 million expected. Home acquisitions up 46 quarter over quarter. CEO Kaz Nejatian said improvements in pricing accuracy and faster inventory turns are now showing up in the financials. Guiding toward adjusted net income positive by end of 2026. Q1 EBITDA loss expected in the low-to-mid $30 million range. Revenue expected to decline about 10 next quarter.

Akamai Technologies $AKAM ( ▼ 14.07% )  
Q1 earnings guide $1.50 to $1.67 versus $1.75 consensus. The cybersecurity and cloud business is getting squeezed on forward numbers. Stock down about 10 after hours.

Grail $GRAL ( ▼ 50.55% )  
Galleri multi-cancer screening trial missed its primary endpoint. The trial specifically failed to show a statistically significant reduction in Stage III and IV cancer diagnoses. Down 47 after hours.

AppLovin $APP ( ▲ 1.62% )  
Beat on Q4 earnings. Also announced plans to launch a social networking platform. Unconfirmed reports of an OpenAI ad monetization partnership circulating premarket.

Live Nation $LYV ( ▲ 3.31% )  
Q4 revenue $6.31 billion. Concert sales specifically drove a 12 gain, pulling total revenue up 11 year over year.

Nvidia $NVDA ( ▲ 1.02% )  
Reportedly finalizing a $30 billion equity stake in OpenAI at a $730 billion pre-money valuation. Separately, Meta $META is deploying Nvidia Grace CPU-only servers at scale, Nvidia's first big push into traditional CPU territory against Intel $INTC and AMD $AMD. Reports earnings Wednesday.

What to Watch

Supreme Court Tariff Ruling (Possible Today)

The court could decide whether Trump's emergency tariffs are legal. If they get struck down, expect a relief rally.

Fed Speakers: Bostic and Musalem (Afternoon) 

Two Fed officials speak today. Markets will listen for any hints on when rate cuts might start.

Oil Prices (Into The Weekend) 

Brent crude is at a six-month high. If the Iran situation escalates over the weekend, energy names and the broader market might gap on Monday's open.

Fund Flows Are Rotating 

$11.77 billion flowed into U.S. equity funds last week, the largest inflow in five weeks. The money is going into value. Growth funds saw $2.28 billion in outflows. Real capital is rotating from mega cap tech (we will talk more about this in detail on the premium Saturday letter)

Thanks for reading 🙂

- John

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