February 14th Market Overview

Executive Summary

• Consumer Pullback: Retail sales slumped 0.9% in January (vs. -0.2% expected), reversing December’s 0.7% gain.

• Trade Policy Watch: The Trump administration outlined an April 1 deadline for reciprocal tariff plans, avoiding immediate levies but sparking sector-specific volatility.

• Yield Relief: The 10-year Treasury yield fell to 4.47%, supporting tech and growth stocks amid softer inflation signals.

• Index Momentum: Major benchmarks closed higher for the week (S&P 500: +1.6%; Nasdaq: +2.5%; Dow: +0.7%) despite today’s low vol trading.

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Key Market Drivers

1. Retail Reality Check: Consumer spending stumbled more than expected in January (-0.9% vs. -0.2% forecast), marking the sharpest drop in a year. December’s upward revision to +0.7% offers a flicker of optimism, but the data underscores lingering caution in discretionary spending.
   

2. Tariff Chess Game: The administration kicked off a 180-day review period for reciprocal tariffs, with a Commerce Department deadline of April 1. Markets breathed a sigh of relief at the lack of immediate levies, but sectors like steel (25% proposed duties) and tech remain on high alert for retaliatory moves.
   

3. Bond Market Tailwind: The 10-year yield dipped 5 basis points to 4.47%, its lowest level in three weeks. The slide reflects easing inflation jitters and acts as rocket fuel for growth stocks—think AI darlings and cloud giants—as lower rates boost future cash flow valuations.
   

4. CHIPS Act Crossroads: A $39B semiconductor manufacturing awards program faces fresh scrutiny, with the administration reassessing terms for Intel, TSMC, and others. Delays or stricter conditions could ripple through domestic chip supply chains and Biden’s legacy tech sovereignty push.

Stock Spotlight

• $ABNB: ▲ 14.40% - Q4 metrics: Revenue $2.5B, bookings 111M, gross booking value $17.6B

• $INTC: ▲ 23% weekly - Domestic AI chip production commitment from VP Vance

• $WRD: ▲ 78.68% - $NVDA position: 1.8M shares valued at $57M

• $MRNA: Q4 EPS: -$2.91 vs expected -$2.68, Revenue: $966M vs expected $942.8M

• $DELL: ▲ 3.07% - Monthly performance ▲ 9% on xAI server negotiations

Big Name Updates

• $AAPL: Weekly ▲ 7% - China AI integration confirmed by Alibaba Chair Joe Tsai

• $TSLA: YTD ▼ 25% - Market cap reduction: $400B since December

• $NVDA: Weekly ▲ 6% - New positions: $WRD (1.8M shares), Nebius Group (1.2M shares)

• $META: YTD leader among tech giants - Record high prices on AI implementation

Other Notable Company News

• $SONY: ▲ 4.36% - Profit forecast: 1.34T yen ($8.7B), PS5 Q3 sales: 9.5M units

• $BABA: ▲ 3.93% - Hang Seng China Enterprises Index ▲ 4.1%, largest day gain since February 2022 (for HSCE index)

• $GME: ▲ 2.81% - Bitcoin investment strategy under consideration

• $COIN: ▼ 6.91% - Q1 guidance indicates increased marketing spend impact on margins

Sector Watch

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Bond Market

The 10-year Treasury yield stands at 4.472%, ▼ 5 basis points. This movement correlates with strong market breadth and supports growth sector valuations.

Policy Watch

• CHIPS Act Review: review affects $INTC, $TSM , Samsung, and SK Hynix under reassessment; stricter terms for China facilities and labor rules on the table.

• CFPB Restructuring: Proposed 95% staff cuts and D.C. headquarters closure to streamline operations.

• Auto Tariffs: 25% duties on select imports expected by April 2; EV battery supply chains at risk.

• Iran Oil Exports: Administration targets 100K barrels/day cap, mirroring Trump-era restrictions.

What to Watch

1. Reciprocal Tariffs (April 1):

   • Commerce Department’s detailed plan release.

   • Progress on country-specific negotiations.

   • Focus on 25% steel/aluminum duties.

2. CHIPS Act Updates:

   • Revised terms for $39B semiconductor awards.

   • Implications for chipmakers’ China operations.

   • Labor/childcare mandate adjustments.

3. Retail Resilience:

   • February sales data post-January’s -0.9% drop.

   • Credit card delinquencies (current: 3.1%).

   • Discretionary vs. essentials spending split.

4. Yield Curve & Data:

   • Feb. 29 PCE inflation report (Fed’s key metric).

   • Regional Fed manufacturing surveys.

   • Rotation between growth (tech) and value (energy, financials).

Note: This newsletter is intended for informational purposes only.