The trading of NVDA into EPS is essentially the worst in 5 year, further adding to probability of a rally post-EPS Wed

VIDEO: NVDA has rarely seen negative returns into its earnings report and in past 8 weeks is down -3.7%.  Outside of 2022 bear market, this has never happened

Please click below to view our Macro Minute (duration: 5:34).

We have several important developments to highlight, including a continued pullback in momentum, renewed policy risk, upcoming earnings from Nvidia, and crucial macro data that could shift the Fed’s rate trajectory.

Momentum continues to weaken, but at a slower pace

• In the last two trading days of last week, MTUM fell by 5%, and despite an attempt to stabilize, it slid another 1% today.
• This ongoing weakness prompts the question of whether markets can turn around this week. Some investors remain optimistic, but the near-term direction is still uncertain.

Late-day policy risk has reemerged following Trump’s press conference

• At around 3:30 PM, President Trump reiterated that tariffs would move forward, rekindling concerns about trade and policy.
• This overshadowed any midday stabilization, dragging equities and momentum stocks lower as investors recalibrated for possible headwinds.

Mark Newton’s technical perspective hints at a possible near-term bottom

• Mark Newton noted that a bounce could occur soon, but a brief failure of that bounce followed by a minor new low might form a final leg of this pullback.
• The 200-day moving average stands out as a critical technical level. This aligns with the pattern seen in the last six pullbacks of 5% or more over the past seven months.

HIMS earnings disappoint, but the bad news may be priced in

• HIMS reported after the close and dropped 17% in after-hours trading. However, considering the stock was trading at $16 six months ago, some see today’s action as pricing in most of the negative news.
• The reported opening price near $42 is not far below the day’s low of $43.81, suggesting the initial shock may already be largely absorbed.

Key macro releases on Monday signal mixed economic conditions:

•  The January Chicago Fed reading came in stronger than expected, while the January Dallas Fed reading was weaker than anticipated:
  – 2/24 Mon 8:30 AM ET: Jan Chicago Fed Nat Activity Index -0.03 vs -0.05e
  – 2/24 Mon 10:30 AM ET: Feb Dallas Fed Manuf. Activity Survey -8.3 vs 6.4e
  – 2/25 Tue 9:00 AM ET: Dec S&P CS home price 20-City MoM 0.40%e
  – 2/25 Tue 10:00 AM ET: Feb Conference Board Consumer Confidence 103e
  – 2/26 Wed 10:00 AM ET: Jan New Home Sales 675ke
  – 2/26 Wed 3:00 PM ET: Fireside Chat with Anthony Scaramucci
  – 2/27 Thu 8:30 AM ET: 4Q S 2024 GDP Annualized QoQ 2.3%e
  – 2/27 Thu 8:30 AM ET: Jan P Durable Goods Orders MoM 2.0%e
  – 2/28 Fri 8:30 AM ET: Jan Core PCE MoM 0.28%e
• There is also Fed speak this week,with three FOMC members speaking tomorrow:
  – 2/25 Tue 4:20 AM ET: Logan Speaks at Balance Sheet Conference  
  – 2/25 Tue 11:45 AM ET: Barr Gives Remarks on Financial Stability With Q&A  
  – 2/25 Tue 1:00 PM ET: Barkin Speaks on Inflation  
  – 2/26 Wed 12:00 PM ET: Bostic Speaks on Economic Outlook, Housing  
  – 2/27 Thu 9:15 AM ET: Schmid Gives Remarks at USDA Event  
  – 2/27 Thu 10:00 AM ET: Barr Speaks on Novel Activity Supervision  
  – 2/27 Thu 11:45 AM ET: Bowman Speaks on Community Banking  
  – 2/27 Thu 1:15 PM ET: Hammack Gives Keynote Speech at Conference  
  – 2/27 Thu 3:15 PM ET: Harker Gives Speech on Economic Outlook
  – 2/28 Fri 10:15 PM ET: Goolsbee Speaks in Moderated Q&A   

Nvidia’s earnings are a pivotal event this season

• NVDA reports after the close on Wednesday, and the stock remains above its 20-day moving average of 129.60.
• Historical trading patterns show Nvidia often rallies into and after earnings, averaging a 16% gain from eight weeks before to one month after results. Currently down 3.7% over the past eight weeks, the stock’s pre-earnings dip is atypical outside the 2022 bear market period.

January Core PCE on Friday may accelerate the likelihood of a May rate cut

• A tame reading could push the probability of a May cut beyond the current 27%, possibly heading toward 100% if inflation trends continue to soften.
• This scenario would be bullish for equities, supporting the notion that the recent pullback could be just a “flesh wound” rather than a sustained downturn.

Bottom Line: A close watch on momentum, policy headlines, and Nvidia’s earnings will be key in determining if this pullback proves to be only a “flesh wound” before markets stabilize.

But the bigger message is that we expect investors to buy the dip. We believe this should be the key takeaway this week. And secondarily, that the market participation is broadening beyond MAG7.

There are six reasons that show 2025 tracking better than our base case:

• Barometer “first 5 days” positive = 82% win-ratio
• Sentiment capitulation on Dec to Jan chop = good
• Inflation tracking “softer” than consensus view
• Fears of “day 1 tariffs” overblown = USD weaker
• Cyclicals leading YTD = risk-on signal
• January barometer “positive” = 89% win-ratio

• January 2025 closed +2.7%. This is the January barometer “as January goes, so goes the year”:
  – The January barometer is as follows:
  – If January positive:
  – Median FY +19%, 89% win-ratio
  – If January negative:
  – Median FY +0%, 50% win-ratio
• The top sector ideas remain:
• Bitcoin
• Small-caps
• Financials
• Industrials
• Technology

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45 SMID Granny Shot Ideas: We performed our quarterly rebalance on 2/18. Full stock list here -> Click here

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Key incoming data February:

• 2/3 9:45 AM ET: Jan F S&P Global Manufacturing PMI Tame
• 2/3 10:00 AM ET: Jan ISM Manufacturing PMI Tame
• 2/4 10:00 AM ET: Dec JOLTS Job Openings Tame
• 2/4 10:00 AM ET: Dec F Durable Goods Orders Tame
• 2/5 8:30 AM ET: Dec Trade Balance Tame
• 2/5 9:45 AM ET: Jan F S&P Global Services PMI Tame
• 2/5 10:00 AM ET: Jan ISM Services PMI Tame
• 2/6 8:30 AM ET: 4Q P Non-Farm Productivity Tame
• 2/6 8:30 AM ET: 4Q P Unit Labor Costs Tame
• 2/7 8:30 AM ET: Jan Non-Farm Payrolls Tame
• 2/7 9:00 AM ET: Dec F Manheim Used Vehicle index Tame
• 2/7 10:00 AM ET: Feb P U. Mich. Sentiment and Inflation Expectation Hot
• 2/10 11:00 AM ET: Jan NY Fed 1yr Inf Exp Tame
• 2/11 6:00 AM ET: Jan Small Business Optimism Survey Tame
• 2/12 8:30 AM ET: Jan CPI Hot
• 2/13 8:30 AM ET: Jan PPI Hot
• 2/14 8:30 AM ET: Jan Retail Sales Data Tame
• 2/18 8:30 AM ET: Feb Empire Manufacturing Survey Tame
• 2/18 10:00 AM ET: Feb NAHB Housing Market Index Tame
• 2/18 4:00 PM ET: Dec Net TIC Flows Tame
• 2/19 9:00 AM ET: Jan M Manheim Used Vehicle index Tame
• 2/19 2:00 PM ET: Jan FOMC Meeting Minutes Dovish
• 2/20 8:30 AM ET: Feb Philly Fed Business Outlook Tame
• 2/21 9:45 AM ET: Feb P S&P Global Manufacturing PMI Tame
• 2/21 9:45 AM ET: Feb P S&P Global Services PMI Tame
• 2/21 10:00 AM ET: Feb F U. Mich. Sentiment and Inflation Expectation Hot
• 2/21 10:00 AM ET: Jan Existing Home Sales Tame
• 2/24 8:30 AM ET: Jan Chicago Fed Nat Activity Index Tame
• 2/24 10:30 AM ET: Feb Dallas Fed Manuf. Activity Survey Tame
• 2/25 9:00 AM ET: Dec S&P CoreLogic CS home price
• 2/25 10:00 AM ET: Feb Conference Board Consumer Confidence
• 2/26 10:00 AM ET: Jan New Home Sales
• 2/27 8:30 AM ET: 4Q S GDP
• 2/27 10:00 AM ET: Jan P Durable Goods Orders
• 2/28 8:30 AM ET: Jan PCE Deflator

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: