Morning Note - 02/04/26: Stocks Bouncing, ADP Payroll at 8:15 a.m. EST

Overnight Summary & Early Morning Trading:

• The S&P 500 finished Tuesday lower by -0.84% at 6917.81 from Monday higher by 0.54% at 6976.44.

• The S&P 500 sees support now at 6900. Resistance is now at 7000.

• S&P 500 hit its fourth All-Time Closing High of 2026 last Tuesday 1/27/26.

• Year to date the S&P 500 is higher by 1.06% from 1.91% on Friday’s close.

• Futures are higher this morning by +6.75 (+0.10%) at 6948.50 on the SP 500 around 6:15 a.m. EST.

• Bond Market is higher today on price with the 10-Year Yield at 4.282% from 4.287%.

Executive Summary:

• Last week we noted that is was, “Highly unlikely that there was a cut with strong Q3 GDP and the Atlanta Fed’s forecast of 5.4% Q4 GDP”. That favors a selloff and yesterday we rallied by 0.54% so extended downside action could be off the table.

• The Government Shutdown is now over as the House cleared a bill approved by the Senate and it went off to President Trump. We are now clear of a government shutdown through September.

• This is another big earnings week. Volatility continues with positive moves in SLAB, ENPH, APPS and SMCI while there were big drops in AMD, NVO and CMG.

• Stocks sold off hard Tuesday but recovered about 25% of their losses by the close. Will the selling return today?

Key Events of Note Today:

• Economic news of note is still delayed due to the government shutdown but we will be producing what is scheduled to be reported.

  • Weekly - MBA Mortgage Applications and Crude Oil Inventories of note.

  • Monthly - January Employment Report and January ISM Non-Manufacturing Index is out.

• Fed Speakers of Note today: Fed Richmond President Barkin (12:00 p.m. EST) and Fed Governor Cook (5:30 p.m. EST)

• President Trump’s schedule:

  • Participates in a TV Interview to be aired before the Super Bowl.

  • Participates in a Policy Meeting at 4:00 p.m. EST.

Notable Earnings Out After The Close: (Beats > $0.13))

• Beats: RNR+3.06, CB +0.75, AMGN +0.56, COLM +0.54, CRUS +0.53, LUMN +0.49, AFG+0.38, CSL +0.32, AMD +0.21, SMCI +0.21 and SWKS +0.14 of note.

• Misses: IAC -1.67, EA -1.18, VOYA -0.15, TTWO -0.11, PRU -0.07, CLX -0.07, BV -0.03 of note.

• Flat: None of note.

Capital Raises:

• IPOs For The Week: None of note.

• New IPOs/SPACs launched/News: None of note.

• IPOs Filed/Priced: None of note.

• Secondaries Filed Or Priced:

  • BNZI: Form S-3.. Up to 149,064 Shares of Class A Common Stock 227,927 shares of Class A Common Stock underlying Convertible Notes.

  • DSS - Launch of Proposed Public Offering.

  • ELPW - Closing of US$7.6 Million Public Offering.

  • FEAM - Closing of $36 Million Upsized and Oversubscribed Public Offering of Common Stock.

  • LASR Proposed Public Offering of Common Stock.

  • RNGR: Form S-3.. 1,998,401 Shares of Class A Common Stock.

  • USAR: Form S-1.. 76,311,179 Shares of Common Stock.

• Notes Filed Or Priced: None of note.

• Convertible Offerings Filed or Priced:

  • BNZI: Form S-3.. Up to 149,064 Shares of Class A Common Stock 227,927 shares of Class A Common Stock underlying Convertible Notes.

  • ZTO - Proposed Offering of US$1.5 Billion Convertible Senior Notes.

  • LBRT - Pricing of Upsized $700 Million Convertible Senior Notes Offering.

• Direct Offering: None of note.

• Exchangeable Subordinate Voting Shares: None of note.

• Selling Shareholders:

  • NRG: Form S-3ASR - Up to 24,250,000 Shares of Common Stock Offered by the Selling Stockholders.

• Private Placements: None of note.

• Mixed Shelf Offerings:

  • LASR: Form S-3ASR -- Mixed Shelf.

  • MMM: Form S-3ASR Mixed Shelf.

  • SPRC: Form F-3.. $50,000,000 Mixed Shelf.

News After The Close:

• States file to appeal Alphabet (GOOGL) antitrust ruling.

• Restaurant stocks drop on weaker Chipotle (CMG) numbers and guidance.

• Iranian officials say they might pull out of talks with U.S. after drone was shot down.

Exchange/Listing/Company Reorg and Personnel News:

• LRCX announces that effective March 6, 2026, Sesha Varadarajan will transition to the role of Chief Operating Officer.

• DOX announces that Shuky Sheffer, President and Chief Executive Officer of Amdocs Management Limited, has decided to retire and will be replaced by Shimie Hortig, currently Group President of the Americas Business Group.

Buybacks:

• INTA authorizes a common stock repurchase program of up to $200.0 million on January 29, 2026.

Dividends Announcements or News:

• Stocks Ex Div Today of note: LEN BRO CFG ATR GHC of note.

• Stocks Ex Div Tomorrow of note: VLO DHI WTFC IDA KBH AZZ FUL of note.

• MMM increases quarterly dividend to $0.78/share from $0.73/share

What’s Happening This Morning: (as of 7:35 a.m. EST)

• Futures S&P 500 +15.75, NASDAQ 100 -10, Dow Jones +122 . Europe is higher ex Germany while Asia is higher ex Japan. Bond yield is at 4.28% from 4.287% on the 10-Year. Crude Oil and Brent Crude are higher with Natural Gas higher. Gold and Silver are higher with Copper lower. The U.S. Dollar is higher versus the Euro, lower against the Pound and higher against the Yen. Bitcoin is at $76,103 higher +0.01% at $58 from $78,166 higher by 0.2% at +14 yesterday.

Sector Action:

• Daily Positive Sectors: Materials, Energy, Consumer Defensive, Utilities and Industrials were higher.

• Daily Negative Sectors: Technology, Communication Services, Healthcare and Consumer Cyclical were lower.

• One Month Winners: Materials, Energy, Industrials, Real Estate and Consumer Defensive of note.

• Three-Month Winners: Materials, Industrials, Energy, Healthcare and Financials of note.

• Six-Month Winners: Materials, Healthcare, Communication Services, Industrials and Energy of note.

• Twelve-Month Winners: Materials, Communication Services, Industrials, Technology and Financials of note.

• Year to Date Winners: Materials, Industrials, Energy, Consumer Defensive and Real Estate of note.

Bolded means the Sector is new to the period in which it falls.

Upcoming Earnings Of Note: (Erlanger Chartroom Software – sorted by market cap, highest to lowest with most visible names)

• Today After the Close: (>$10 billion Market Cap)

• Tomorrow Before The Open: (> than $10 billion Market Cap)

Notable Earnings of Note This Morning:

• Beat: LLY +0.63, PSX +0.32, SWK +0.13, YUMC +0.10

• Missed: UBER -0.65, UBS -0.45, GSK -0.38, JCI -0.16, YUM -0.03 of note.

• Still to Report: FOXA ABBV of note.

Company Earnings Guidance:

• Positive Guidance: After The Close & This Morning - CRUS LITE SMCI SWKS ENPH SIMO of note.

• Mixed - None of note.

• Negative or Mixed Guidance: After The Close & This Morning - AFG MTCH DOX EMR KFRC of note.

Advance/Decline Daily Update:

Gap Ups & Down In Early Pre-Market: (+2% or down more than -2%):

• GapUp: SLAB +28.8%, ENPH +24.1%, APPS +19.8%, EGHT +17.5%, SMCI +11.5%, SONO +10.1%, PERF +9.6%, LITE +9.5%, SIMO +9.5%, MTCH +7.2%, COLM +7.1%, AVNW +7%, ZBIO +5%, TTWO +4.7%, CRUS +4.6%, EMR +4.5%, GSK +4.1%, YUMC +3.9%, APAM +2.8%, DOX +2.7%, WFRD +2.6%, NVA +2.5%, HMN +2.5%, CBT +2.4%, ZWS +2.4%, CSL +2.3%, AMCR +2.2%, ARCC +2.2% of note.

• GapDown: INTA -15.7%, VRNS -14.8%, LASR -10.1%, AMD -8.2%, NGL -7.7%, MRCY -7.4%, CMG -6%, IAC -6%, LUMN -5.3%, NVO -4.3%, CAVA -4.1%, UBS -4.1%, SWK -3.7%, MDLZ -3.6%, CLX -2.6%, BG -2.4%, TXN -2.3%, VOYA -2.1% of note.

Options Activity: Calls and Puts Top Ten Names Sorted Volume. Highlighted names are new to the most active list. No new outliers of note.

Insider Action: DXC sees Insider Buying with dumb short selling. None sees Insider Buying with smart short sellers. Above $100,000 in purchases with high shorts but no history: None.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

• WSJ Lead Story: Software jitters unnerve investors as AI Tools threaten software in some views. (WSJ)

• Markets Wrap: Stocks bounce after AI scare as Gold hits $5,000. (Bloomberg)

• NY Times Business Section Lead Story: Global Economy Warning Signals are Broken. (NYT)

• Bloomberg Lead: Texas Instruments Strikes $7.5 Billion Deal to Buy Silicon Labs. (Bloomberg)

• Thoughtful Money: Markets about to get nasty? (Podcast)

Economic & Geopolitical:

• Federal Reserve Speakers of note today:

  • Fed Speakers are out of the blackout period.

    • Fed Richmond President Tom Barkin speaks at 12:00 p.m. EST.

    • Fed Governor Lisa Cook speaks at 5:30 p.m. EST.

• President Trump’s schedule for today:

  • Participates in a TV Interview [Note: with Tom Llamas of NBC; part to air 2/4, part before Super Bowl]

  • Participates in Policy Meeting at 4:00 p.m. EST.

• Economic Data Out -

  • Weekly

    • MBA Mortgage Applications are due out at 7:00 p.m. EST.

    • Crude Oil Inventories are due out at 10:30 a.m. EST.

  • Monthly

    • January ADP Employment Report is out at 8:15 a.m. EST with estimates of 43,000 from 41,000.

    • January ISM Non-Manufacturing Index is out at 10:00 a.m. EST with estimates of 53.7% from 54.40%.

M&A Activity & Daily Changes: None of note.

Moving Average Table: 56% from 82% of Equities are Positive, and 8% unchanged Bonds are Negative.

Meeting & Conferences of Note:

• Sellside Conferences:

  • DA Davidson Midwestern Bank Summit

  • Oppenheimer Emerging Growth Conference

• Top Analyst, Investor: AGI, ASGN, UTI of note.

• Shareholder Meetings: AMAZE, NDLS of note.

• Fireside Chat: None of note.

• FDA Presentation: None of note.

• R&D Day: None of note.

• Meetings:

  • Federal Reserve Bank of Chicago Automotive Insights Symposium

  • Lake Street Life-Sciences Invitationa

  • Noble Capital Markets Emerging Growth Virtual Equity Conference

Upgrades & Downgrades:

The recommendations listed below in this “Upgrade/Downgrade” section are compiled from what we believe are Tier I, II and III firms. Recommendations posted are taken from a variety of sources each day and we only post upgrades or significant initiations as well as downgrades to underweight or sell. The purpose of this posting is to make the reader aware of market-moving recommendations.

• Upgrades: BR FIVE LITE NET OMCL of note.

• Downgrades: CF of note.