JPM US Market Intell | Afternoon Briefing 03 08

· MKT UPDATES – Thoughts on Tech rally, US/Iran and Bond Yield (Fedspeak, ISM-Mfg, JPY intervention).

· DESK COMMENTARY – Trading desk views on Tech and Consumer.

· HYPERSCALER CAPEX AND ROIC – JPM Spec sales Mark Schilsky has a great note on hyperscaler CapEx and ROIC, which includes helpful earnings quotes. We included some excerpts below and his full note is here.

· US MKT INTEL VIEW – Tactically Bullish and we update the Monetization Menu

AFTERNOON UPDATES (NEWS LINKS)

· SPX +1.5%, NDX +1.8%, RTY +1.7%. WTI -535bps at $80.14, NatGas +69bps to $2.77, UK NatGas -139bps to £1.4227, Gold +21bps to $4,055, Silver +87bps to $58.10, 10Y @ 4.684%, and VIX @ 15.86.

· US: Stocks closed higher, led by Tech. We saw a broad-based rally across multiple cyclical sectors and themes (Tech, Hormuz reopening, short squeezing, etc.). Two core drivers today: (i) another 5% decline in oil amid a de-escalation tone in the weekend headlines drove bond yields lower (2-, 5-, 10- and 30y yields are 6bp, 7bp, 6bp and 5bp lower, respectively), and airlines and housing both rallied over 1.5% today. (ii) A risk-on rally across multiple pillars of tech was led by the Mag 7; the narrative on FCF and ROI seems to be improving after AMZN and MSFT earnings, as we saw rotation back into Mag 7 names.

· EU/UK: Major markets closed higher, led by Germany. Thematically, EU Defence, Luxury, Momentum Short and cyclicals are among the top-performing baskets. The Momentum L/S pair fell 1.4%, a 1.4z move, driven by short-squeezing. UKX -0.1%, SX5E +1.1%, SXXP +0.4%, DAX +1.5%.

CATALYSTS TOMORROW (FULL WEEK CALENDAR) ●​ US MACRO DATA TOMORROW: Trade Balance at 8.30am ET. Factory Orders, JOLTS Job Openings, Durable/Cap Goods Orders (Revision) at 10am ET. ●​ US EARNINGS TOMORROW: ○​ BMO: ADM, AME, APO, BRBR, CAT, CIFR, CMI, DD, DOCN, DUK, ENTG, EOSE, ET, FIS, HUT, IDXX, IT, KMB, LDOS, MCD, MPC, MRK, NRG, NSA, PFE, PRAX, Q, ROK, SYY, TDG, TPG, W, WAT, XMTR, ZBRA ○​ AMC: ALAB, AMD, AMGN, ANET, ARWR, BKNG, BRKR, CC, CE, COMP, CPNG, CRNX, DVA, DVN, EMR, GILD, HNGE, IFF, J, KTOS, LCID, LIME, LSCC, MAT, MOS, MTCH, OPEN, PINS, PRIM, PRU, PSKY, SPCX, TOST, TREX, VSAT, ZETA ●​ GLOBAL MACRO DATA TOMORROW: (Japan) Labor Cash Earnings at 7.30pm ET. (Japan) PMIs (Revision) at 8.30pm ET. (China) RatingDog PMIs at 9.45pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

TODAY ●​ TECH-LED RALLY – Tech outperformance across the board was led by the Mag 7, as AMZN and MSFT earnings shifted the narrative on hyperscalers’ CapEx and ROI. JPM Tech Spec Sales Mark Schilsky tells us that management teams have been giving clearer messages “that the ROIC on their CapEx is more than sufficient to justify spending the annual GDP of a small country on building out compute