February 2nd Market Overview

Happy Monday

Gold and Silver continue the slaughter today but the overall stock market didn't blink. The Dow finished up 500 points on hot manufacturing data, first bullish expansion in a year. The speculative corners are bleeding out while sound equities look right past it.

Let’s dig in...

Today's Big Picture

Factory Data Wakes Up 
Manufacturing expanded for the first time in a year. ISM hit 52.6 when everyone expected 48.4. New orders and production are at their highest since February 2022. The economy is running hotter than the recession crowd thought, and yields jumped on the news.

The Speculative Fever Breaks
Silver and gold had their worst day since 1980 on Friday. Bitcoin fell below $80,000 for the first time since April's tariff panic. BTIG thinks silver could fall to $55 before finding a bottom. Stocks shrugged it off entirely, the pain stayed in the speculative corners.

Oracle's $50 Billion AI Bet Oracle 
$ORCL is raising $45-50 billion this year to build data centers for OpenAI, Meta, and xAI. Half debt, half equity. The stock couldn't hold its early gains, but the message is clear: the AI infrastructure buildout isn't slowing down.

Market Overview

Index Performance

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Stock Spotlight

Walt Disney $DIS ( ▼ 0.03% ) 
beat earnings estimates but the stock got hit hard. Management warned that international tourists aren't visiting US parks like they used to. Q2 entertainment guidance came in below consensus. Goldman still likes it, saying the feared downside case didn't materialize.

Nvidia $NVDA ( ▼ 3.14% ) 
dipped on rumors its OpenAI investment stalled, though CEO Jensen Huang called that "complete nonsense." He says the deal is absolutely happening and they're making a "huge investment."

Tyson Foods $TSN ( ▼ 1.49% ) 
profits took a beating because there aren't enough cattle. The beef division lost $319 million for the quarter. They don't expect herds to recover for at least two years.

Big Name Updates

Tesla $TSLA ( ▼ 0.48% ) 
European sales struggles continue. France registrations hit the lowest in over three years. Norway collapsed.

Amazon $AMZN ( ▼ 1.73% ) 
got a price target raise from Citizens to $315. Anthropic keeps raising revenue projections and AWS captures most of that compute spend.

Microsoft $MSFT ( ▼ 2.87% ) 
now trades at its lowest valuation in eight years. Under 23 times earnings. Matrix Asset Advisors calls it an entry point.

Strategy $MSTR ( ▼ 5.21% ) 
sold off as Bitcoin retreated. The stock is tracking crypto almost tick-for-tick and hit its lowest since September 2024.

Other Notable Company News

Robinhood $HOOD ( ▼ 3.16% ) 
fell as the crypto pullback hurt sentiment. Piper Sandler reiterated overweight with a $155 target.

United Airlines $UAL ( ▲ 3.25% ) 
helped drag the Dow Transports to a new all-time high. Airlines are working while the metals market melts down.

Best Buy $BBY ( ▼ 0.62% ) 
got downgraded by JPMorgan over worries about tough comparisons after the Nintendo Switch 2 launch and Windows 10 end of support.

McDonald's $MCD ( ▲ 0.52% ) 
upgraded to Buy on franchise checks showing consistent traffic growth. CosMc's beverage platform expected in the first half.

Humana $HUM ( ▲ 3.11% ) 
downgraded to underweight at Morgan Stanley with target slashed to $174 from $262. Medicare Advantage bid strategy concerns.

Micron $MU ( ▼ 4.2% ) 
server DRAM contract prices seen up substantially in Q1 with pricing talks finalizing in February.

Sector Watch

Bond Market

Treasury yields moved higher after that surprising manufacturing expansion. The 10-year hit 4.28%. Bond traders are quickly pricing out recession risk.

• Jobs report delayed indefinitely due to shutdown, so we're flying blind on labor data

• Bank of America sees the dollar index potentially falling below 95 this year

Volatility could stay elevated until we get clarity on employment.

Policy Watch

Fed Chair 
Markets seem comfortable with Kevin Warsh as the pick. He's viewed as an inflation hawk, which is keeping the dollar firm. Warsh spent over a decade working for Stanley Druckenmiller, who also mentored Treasury Secretary Bessent.

Trade & Geopolitics

• India deal: Tariffs drop from 25% to 18%. Modi agreed to stop buying Russian oil.

• Iran: Trump said they're "seriously talking" with the U.S., which pushed Brent to around $66.

• Natural gas collapsed on the session.

Data Blackout 
The Bureau of Labor Statistics confirmed we aren't getting the jobs report Friday. Second time in five months the agency has gone dark. Release gets rescheduled whenever funding resumes.

What to Watch

Big Tech Earnings Amazon $AMZN and Alphabet $GOOGL report later this week. I want to see if cloud revenue justifies the massive capex spending Oracle just hinted at.

Disney CEO Vote The Walt Disney $DIS board meets this week and might finally vote on Bob Iger's replacement. Josh D'Amaro is the rumored frontrunner. He runs the parks business.

Commodity Volatility BTIG sees silver testing $55. Deutsche Bank still has gold at $6,000 year-end. Someone's going to look foolish. Watch if margin calls in commodities start forcing liquidation elsewhere.

Palantir Tonight Palantir $PLTR reports after the close. Government AI contracts in focus.

Thanks for reading - you are now the more informed 🙂

- John

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