Macro Events & News
The week started strong as trade war concerns eased, with most impacted parties walking back tariff-related tensions. Strong earnings, including solid reports from the remaining Mag 7, boosted confidence and momentum but not necessarily stock price as guidance was lighter than expected.
Friday’s jobs report was mixed—job openings missed at 143K versus 173K expected, but wage growth and lower unemployment were positives. It should be noted that December and November job numbers were revised up by 100K so there is a large margin of error in the data. The markets turned notably lower after the Trump administration levied another barrage of tariff threats, compounded by a dip in consumer confidence due to short-term inflation fears from hefty tariffs and trade tensions.
The 10-Year Treasury yield, which had retreated throughout the week, spiked above 4.5% on Friday, settling at 4.49%. The VIX followed suit, ending at 16.62—both lower for the week but gaining momentum on tariff and trade war concerns.
All major indexes ended fractionally lower: the Dow down <1%, the S&P 500 down <1%, and the Nasdaq down <1%.
Watchlist News
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Salesforce (NYSE:CRM) looked poised to reclaim $350, but the unexpected resignation of longtime COO Brian Millham sent the stock tumbling on Thursday. Announcing the elevation of board member Robin Washington to a combined CFO and COO role did little to ease investor concerns.
august bear notes
Unfortunate timing for a 25-year veteran to step down, but the market reaction may be overdone since Millham will stay on as an advisor. The decision to merge the COO and CFO roles under Robin Washington suggests this was unexpected, as those responsibilities are highly demanding with little synergy. With Friday’s macro weakness also weighing on sentiment, it could remain under pressure for a while longer.
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Netflix (NASDAQ:NFLX) maintained its strength post-earnings, staying resilient despite tariff-related news and trade war tensions.
august bear notes
Netflix’s strong earnings and pricing power should help shield it from macro pressures. Also with it trading above $1,000, split rumors could spark speculation and investor interest. With tariff threats raising the risk and fears of inflation resurfacing, it may serve as a relative safe haven in a volatile market as there is a level of support.
5% ▼
SoFi Technologies (NASDAQ:SOFI) slid again this week, down 5%, largely due to macro weakness and perhaps a competitor’s strong earnings. There were no other major company-specific news to justify the drop.
august bear notes
SoFi’s narrative remains intact—if not strengthened—by rumors of the Department of Education’s potential dismantling and strong results from Affirm. The price action for this name has never been rational and it appears that will continue despite putting together a string of strong results in FY24.
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Workday (NASDAQ:WDAY) had another strong week, holding up well despite Friday’s macro-driven sell-off. Price target raises from Goldman Sachs and Capital One boosted investor confidence. The company also announced a restructuring, which includes an 8.5% headcount reduction but will incur some charges.
august bear notes
Workday is relatively insulated from the tariff-driven macro concerns, with 75% of its revenue U.S.-based and its SaaS model keeping it out of the trade war crosshairs. However, rising rates will be a headwind given its growth-oriented profile. Plenty to like, but as it nears $300, the risk/reward becomes less compelling.
