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NEWS
Bears Pounce Despite Nvidia’s Beat

Source: Tenor.com

It was another rough day for stock market bulls, with Nvidia’s results failing to quell investor fears about artificial intelligence (AI) industry growth. There continue to be many potential downside catalysts, with market participants unclear what the next bull case will be. As a result, many feel the risk remains to the downside. 👀 

Today’s issue covers a popular sentiment reading flashing red, Amazon’s quantum computing push, Coinbase’s case being dropped, and much more! 📰

Here’s the S&P 500 heatmap. 3 of 11 sectors closed green, with financials (+0.50%) leading and technology (-3.62%) lagging.

Source: Finviz.com

And here are the closing prices: 

STOCKS
A Sentiment Check You Need To See 👀 

The U.S. stock market indexes remain under pressure for the many reasons we’ve already discussed this week, including tariff uncertainty, inflation resurgence concerns, geopolitical tensions, and a lack of a catalyst for the tech sector.

Below is a chart of the S&P 500 ETF breaking below its uptrend line from its November 2023 lows, with momentum nearly reaching oversold territory. Traders have their eyes on a prior breakout area and 200-day moving average near 565-560 as the next major level of support. But clearly, the short-term trend has shifted lower, and the mid-term trend is sideways, giving bulls pause. ⏸️ 

Source: TradingView

From a sentiment perspective, things are much harier than expected in a market less than 5% from its all-time highs. The American Association of Individual Investors (AAII) sentiment poll showed 61% of respondents as bearish, the highest reading ever relative to the market’s drawdown level. In essence, people have never been this scared by such a small retreat in market prices. 🤯 

Source: Matt Cerminaro

One theory is that the pumelling of high-growth stocks like Palantir, AppLovin, Hims, and others in the last two weeks has caused sentiment to shift sharply lower despite the major indexes holding up well. After all, these high-growth stocks are popular among retail investors, so many likely felt the pain of their pullbacks. 😬 

Nevertheless, bulls see this sentiment reading as one sign of potential market capitulation. Typically, this level of bearishness occurs near market lows following much steeper declines.

As for Stocktwits sentiment, it’s currently sitting in ‘neutral’ territory as investors and traders assess the recent pullback and identify opportunities on both sides of the tape. Regardless, the 200-day moving average remains a key technical level many are watching in the major indexes and market leaders. 📍 

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COMPANY NEWS
Amazon Enters The Quantum Computing Race 🤖 

Consumer tech giant Amazon is entering the quantum computing race alongside Microsoft and Google by revealing its “Ocelot chip.” 

Amazon Web Services (AWS) revealed via a blog post that the product is still a research prototype, meaning it’s not commercially available. Still, it aims to address the “quantum error correction” problem to enable practical quantum computers. ⚙️ 

Oskar Painter, head of quantum hardware at AWS, said that rather than “take an existing architecture and then try to incorporate error correction afterwards,” the team selected its architecture with error correction in mind.

While just a prototype, AWS called this chip a “promising start” to fixing a key problem the quantum computing industry is battling. In layman’s terms, they’re looking to address the core problem rather than using even more chips to address the mistakes caused by it in real time. A “measure once, cut twice” approach. 👍️ 

Sentiment on Stocktwits remains bullish, but shares of Amazon are under pressure alongside the rest of the tech and AI sector. Bulls are closely watching the $180-$190 price level in Amazon, as that’s been a level of interest for the stock since 2021 and is where shares broke out above during the fourth quarter. 🧐 

Source: Stocktwits

STOCKS
Other Noteworthy Pops & Drops 📋️ 

Root Inc. ($ROOT +23%): The insurance company surged after posting strong fourth-quarter results, with revenue rising 68% YoY and earnings per share coming in at $1.30 vs. an estimated loss of $0.48.

B. Riley Financial ($RILY +9%): Entered into a new $160 million senior secured debt facility provided by funds managed by Oaktree Capital Management, L.P., retiring its Nomura Senior Secured Credit Facility.

Unum Group ($UNM +7%): Announced a $3.4 billion long-term care reinsurance transaction with Fortitude Reinsurance Company, which is expected to generate a $100 million capital benefit.

Super Micro Computer ($SMCI -15%): Euphoria over the regained Nasdaq listing standard compliance tempered, and weakness in Nvidia dragged down the stock.

Vistra Corp. ($VST -11%): The utility’s fourth-quarter results and reaffirmed full-year guidance were positive. Still, overall weakness in Nvidia and jitters about the broader AI industry’s growth prospects weighed on the stock.

Pure Storage ($PSTG -14%): The data storage solutions provider posted a fourth-quarter earnings beat, but guidance was in line. Investors are reacting primarily to the QoQ slowdown in key metrics like remaining performance obligation (RPO).

IonQ ($IONQ -16%): Revenue topped estimates, but its loss widened YoY. Management announced a common stock offering. It also agreed to acquire a controlling stake in ID Quantique via an all-stock transaction and landed a strategic partnership with South Korean telecom operator SK Telecom.

Snowflake ($SNOW +5%): Thirteen brokerages raised their price targets following the company’s Q4 results, with Cantor Fitzgerald setting the highest target at $228.

Warner Bros. Discovery ($WBD +5%): The media and entertainment conglomerate issued upbeat commentary about its streaming business, comprising Max and Discovery+ services. Still, its loss per share widened from $0.16 to $0.20.

Marathon Digital ($MARA +6%): The Bitcoin miner reported record revenue and signaled a push into artificial intelligence (AI) infrastructure.

Flywire Corporation ($FLYW -3%): JPMorgan lowered its price target on the payments enabler from $21 to $16 while keeping a ‘Neutral’ rating. It cited more education via headwinds emerging to drive a fourth-quarter sales miss.

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CRYPTO
Crypto Prices Drop Even As SEC Backs Off 🙃 

The crypto market has been waiting for two key catalysts: clearer regulation and a Securities and Exchange Commission (SEC) that isn’t chomping at the bit to take on every major player in the space.

Well, they’ve finally got it…and yet the prices of Bitcoin and other cryptocurrencies are not trending to the upside as many had anticipated. 🤔 

Coinbase is down over 40% from its 2024 highs, even as the stock market hangs near all-time highs. The stock didn’t move much after the SEC completely dropped its case accusing the company of running an unregistered exchange.

Source: Stocktwits

In the long term, the pro-crypto regulatory push will be a tailwind for the industry. However, the fact that the sector can’t get going even as fundamentals improve says a lot about the market’s current sentiment and risk appetite.

Also, in late-day news, the SEC says most meme coins are not securities. 🤪 

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Daily Rip Live’s Shay Boloor outlines his bull case for Unity Software, diving into why it could be one of the year’s top growth stocks and turnaround stories. 👑 

WHAT’S ON DECK
Tomorrow’s Top Things 📋

Economic data: Core PCE Price Index (8:30 am ET), Retail/Wholesale Inventories (8:30 am ET), Chicago PMI (9:45 am ET). 📊

Pre-Market Earnings: FuboTV ($FUBO), TeraWulf ($WULF), Nordic American Tankers ($NAT), Recursion Pharmaceuticals ($RXRX), Frontline ($FRO), . 🛏️

After-Hour Earnings: Longeveron ($LGVN), BIT Mining ($BTCM). 🎧

P.S. You can listen to all of these earnings calls and more straight from the Stocktwits app or website. You’ll find them on the calendar page and individual symbol pages once they’re set to begin! We’ll see you there. 👍

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🛑 Economic Blackout: Will a 24-hour boycott make a difference?

🥶 Seven & i shares plunge over 12% as management buyout falls through

😡 CFPB moves to drop suit accusing Capital One of cheating customers out of $2 billion

🏡 Housing contract activity sinks to all-time low in January amid high rates, cold weather

📺️ Venu is done. Here’s how Fox, Disney and WBD plan to go it alone in sports streaming

😬 Meta says it fixed ‘error’ after Instagram users report a flood of graphic and violent content

🚀 Katy Perry and Gayle King will join Jeff Bezos’ fiancee Lauren Sanchez on Blue Origin spaceflight

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