ThinkEquity Morning Briefing: BofA Sees Sell Signal, Trumps Fed Reveal
Morning Brief

Disclosures for Think Equity Morning Brief, January 30, 2026

Sources: Bloomberg LP; The Wall Street Journal

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(Bloomberg) -- US stock futures are in retreat, as the Trump administration prepares for Kevin Warsh to be nominated as Fed chair. BofA strategists warn global stocks are overbought, and the proportion of MSCI indexes above key moving averages has breached their sell-signal threshold.

S&P 500 futures were down 0.9% as of 5:25 a.m. in New York, with Nasdaq 100 contracts dropping 1%. 

The choice of Warsh as Trump's nomination to be the next Federal Reserve chair is viewed as more hawkish than other contenders. 

Prediction markets showed a surge in bets on Warsh being chosen. Long viewed as an inflation hawk, his prospects have rippled through markets, with the dollar gaining versus all its major peers while Treasuries fell, led by the long-end as 30-year yields jumped five basis points. 

Some 89% of MSCI stock indexes traded above their 50-day and 200-day moving averages in the week ended Jan. 28, a Bank of America team led by Michael Hartnett wrote in a note. That breached the 88% threshold that they view as a sell signal. Inflows into US stocks resumed in the week at $9.2 billion, according to BofA, citing EPFR Global data. Gold had the biggest inflows since October at $6.7 billion. 

Apple Inc. (AAPL:NASDAQ) earnings reassured tech investors after a volatile Thursday that included a Microsoft Corp. (MSFT:NASDAQ) selloff that wiped out $357 billion in value, the second-largest loss for a single session in stock market history.

Apple reported the fastest year-on-year revenue growth in 16 quarters and is projecting between 13% and 16% sales growth for the March quarter, the highest since March 2021. Focus on the conference call centered on costs, specifically surging memory prices, although Apple's midpoint of gross margin guidance for fiscal 2Q at 48.5% would be higher than 1Q's reported 48.5%.

"Beyond Q2 — we don't obviously provide outlooks beyond the current quarter, but we do continue to see market pricing for memory increasing significantly. As always, we'll look at a range of options to deal with that. So hopefully, that gives you the full view," Tim Cook.

Memory prices remain in focus with Sandisk's blowout guidance, with a surge in after hours trading only adding to gains that have lifted the storage and memory maker more than 1,100% over the last six months. The rally has pushed it to th etop of the S&P 500 leaderboard, with the second-, third- and fourth-best performers exposed to the same dynamic. 

SpaceX is said to be considering a potential merger with Tesla Inc. (TSLA:NASDAQ) or an alternative combination with AI firm xAI. An IPO is also possible with SpaceX said to weigh a June listing, around Musk's birthday, and could seek to raise as much as $50 billion. In other AI news, Amazon.com Inc. (AMZN:NASDAQ) is said to be in talks to invest as much as $50 billion in OpenAI and expand an agreement that involves selling computer power to the AI startup. 

Today's Taking Stock column highlights extreme moves in some corners of the market - highlighting extended positioning, risk taking and crowding in certain assets — already an issue for some time as large cap stocks skewed index performance, but now spreading. 

Elsewhere, Trump also reached a tentative deal with Senate Democrats to avert a disruptive US government shutdown, though lawmakers are almost certain to miss the Friday night deadline to enact the measure. Oil retreated after a three-day rally as risk-off sentiment swept across broader markets, even as Trump's escalating threats against Iran kept the market on edge.

In corporate news, US law enforcement is investigating allegations that Meta Platforms Inc. (META:NASDAQ) personnel can access WhatsApp messages, despite the company's claims that the chat service is private and encrypted. Federal government is considering handing fintech Robinhood Markets a key role in overseeing the new "Trump accounts" it's creating for millions of children.

Earnings: Out of the 155 S&P 500 companies that have reported so far in the earnings season, 78% have managed to beat analyst forecasts, while 16% have missed. 

Colgate-Palmolive (CL:NYSE), Chevron Corp. (CVX:NYSE), Exxon Mobil Corp. (XOM:NYSE), American Express (AXP:NYSE), and Verizon (VZ:NYSE) are among companies expected to report results before the market opens. An uplift in downstream margins, won't offset upstream price stress in Exxon Mobil's 4Q results, according to Bloomberg Intelligence.

A list of of S&P 500 members reporting in the coming days for which the options market is over- or underpricing volatility relative to fluctuations on sessions following past results can be found here. 

Economy: PPI for December is scheduled at 8:30 a.m. ET, followed by January MNI Chicago PMI at 9:45 a.m. and ISM manufacturing for January at 10 a.m. Fed's Musalem and Bowman are scheduled to speak at events. 

Equity Insights:

• When it comes to consumer-facing stocks, some earnings are getting lukewarm reactions from investors. The Goldman Sachs retail basket is down 580 basis points on a five-day rolling basis relative to the S&P 500, as of Wednesday's close. That is the biggest five-day underperformance over the past year.
• Individual investors extended their share of options market activity last week to new highs, with robust trading of high-fliers like Tesla, Nvidia Corp. (NVDA:NASDAQ), and Meta, according to Arun Jain at JP Morgan Securities LLC. The firm also noted a substantial increase in the volume of calls within materials and energy, as well as technology and communications stocks.
• The more than 11% decline in shares of Microsoft is not only the biggest drag on the S&P 500 Index on a points basis, but its also dragging down the shares of other software companies, accounting for most of the broader market's selloff Thursday.
• Both gold and silver are screening as overbought, raising the risk of profit-taking or mean reversion in both metals over the near term. However, if investors keep piling into gold as a hedge, then significantly more gains are on the table in the coming years, according to JPMorgan strategists.

 Sectors in focus:

• Shares in precious metals miners tumbled in premarket trading, set to extends Thursday's losses, as gold and silver sold off heavily.

US Premarket Movers of Note:

• SNDK US (+19.8%): Kioxia Shares Surge After Extending Sandisk Flash Memory Venture
• DECK US (+13%): Deckers Outdoor Rises as Hoka, Ugg Boost Sales: Street Wrap
• COHR US (+5.8%), LITE US (+4.9%): High volume, no story
• CPNG US (+4.4%): Coupang to Continue to Cooperate With S. Korea's Investigations
• V US (-2.0%): Visa Earnings Beat Estimates, Bolstered by Stronger Spending
• DVN US (-2.1%): Coterra, Devon Are Said to Be in Advanced Talks on Merger
• RBLX US (-2.1%): Dutch Regulator Starts Probe into Roblox Child Safety Risks
• MRNA US (-2.4%): Moderna Partners With Recordati To Advance PA Therapy
• XOM US (-3.5%): DaVita, Disney, Exxon, Palantir, Regeneron: Earnings-Day Vol
• KLAC US (-9.2%): KLA Corp Shares Drop as 2Q Earnings Fail to Support Rally

M&A:

• Coterra Energy (CTRA:NYSE) and Devon Energy Corp. (DVN:NYSE) are in advanced talks about a combination, according to people familiar with the matter, in what would be one of the largest oil and natural gas deals in years.
• Blackstone Inc. (BX:NYSE) is said to be considering selling Interplex's information and communications technology unit amid interest from other private equity firms and industry players

Macro:

• The euro-zone's largest economies all grew at the end of last year, demonstrating resilience to the trade turmoil unleashed by Donald Trump.
• Ukraine is ready to halt strikes on energy infrastructure if Russia agrees to abide by a US proposal for a week long truce.
• The arrival of a US aircraft-carrier strike group in the Middle East has given Trump new, more forceful options to carry out his threats to attack Iran, but the choices carry serious risks of retaliation from Tehran.

Europe/Asia:

Europe Trading: European shares rose on Friday, supported by positive earnings news.

Asia Trading: Asian equities fell, with tech driving broad declines, as investors eyed the impact of rising AI costs and the chances for US rate cuts under a new Federal Reserve chair. The MSCI Asia Pacific index fell as much as 1.2%, with TSMC, Alibaba and Tencent among the biggest drags. Benchmarks in Hong Kong, mainland China and Taiwan dropped more than 1%. Indonesian equities rebounded after a two-day market rout that led to the bourse's chief stepping down. 

Other Company News:

• Microsoft Heads for Worst Market Loss Since DeepSeek Hit Nvidia
• US Has Investigated Claims That WhatsApp Chats Aren't Private
• Ryan Reynolds' Wrexham Tied Up in Collapse of FX Broker Argentex
• Elon Musk's SpaceX Is Said to Consider Merger With Tesla or xAI
• Apple Results to Give Clues on How Hard Memory Prices Are Biting
• SpaceX In Merger Talks With xAI Ahead of IPO, Reuters Reports
• US Issues License for Oil Companies to Work in Venezuela
• Defense Firm York Space Shares Dip 1% After $629 Million IPO
• Visa Earnings Beat Estimates, Bolstered by Stronger Spending
• Novo Nordisk Obesity Pill Spurs Rebound From Stock's Worst Year
• Permira Buys Stake in Fund Platform Carne at €1.4 Billion Value
• Blackstone Said to Weigh Sale of Interplex's $1 Billion ICT Unit
• Blackstone-Backed Liftoff Mobile Seeks $762 Million in US IPO
• Precious Metals Miners Fall Most Since October as Gold Tumbles

Economic Data (All Times ET):

• 8:30 am: United States Dec PPI Final Demand MoM, est. 0.2%, prior 0.2%
• 8:30 am: United States Dec PPI Ex Food and Energy MoM, est. 0.2%, prior 0%
• 8:30 am: United States Dec PPI Final Demand YoY, est. 2.76%, prior 3%
• 8:30 am: United States Dec PPI Ex Food and Energy YoY, est. 2.9%, prior 3%
• 9:45 am: United States Jan MNI Chicago PMI, est. 43.65, prior 43.5, revised 42.7

CENTRAL BANKS (All times ET):

• 11:10 am: United States Fed's Miran Speaks on CNBC
• 1:30 pm: United States Fed's Musalem Speaks on Economy and Policy
• 3:00 pm: United States Fed's Miran on Bloomberg TV
• 5:00 pm: United States Fed's Bowman Speaks on Monetary and Regulatory Policy

Main Rating Changes:

Upgrades:

• Ameriprise Raised to Neutral at Piper Sandler; PT $530
• Circle Internet Raised to Neutral at Compass Point; PT $60
• Deckers Outdoor Raised to Outperform at KGI Securities; PT $129
• Hexcel Raised to Equal-Weight at Morgan Stanley; PT $90
• International Paper Raised to Equal-Weight at Wells Fargo
• Royalty Pharma Raised to Buy at UBS; PT $49
• Sandisk Raised to Outperform at Raymond James; PT $725
• Southwest Air Raised to Outperform at BMO; PT $57.50
• Spotify Raised to Buy at Citi; PT $650
• Valley National Raised to Strong Buy at Raymond James; PT $15

Downgrades:

• Arthur J Gallagher Cut to Neutral at Cantor; PT $282
• Dollar Tree Cut to Sell at CFRA
• Kenvue Cut to Hold at Jefferies; PT $18
• PagSeguro Cut to Neutral at Banco BTG Pactual; PT $13

Initiations:

• Arista Networks Rated New Buy at William O'Neil
• Definium Therapeutics In Rated New Buy at Jefferies; PT $30
• Figure Technology Rated New Buy at Texas Capital; PT $82
• Medtronic Rated New Outperform at CICC; PT $121