Mid-Morning Look

Tuesday, October 14, 2025

After stocks rebounded Monday in solid fashion, posting best one day returns in months following Friday’s sharp declines on tariff/trade concerns with China, U.S. futures slumped overnight as trade concerns were renewed after the U.S. and China will begin charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil. In addition, Beijing announced that it has taken countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean and separately said it has launched an investigation into how a U.S. Section 301 probe affects its domestic shipping industry. These comments were not well received and followed comments by Treasury Secretary Scott Bessent added fuel to the fire in an interview in the Financial Times where he accused Beijing of trying to damage the global economy. Global shares tumbled, and safe havens such as bonds and gold rallied on Tuesday with gold hitting new all-time highs, as investors grew uneasy over tensions between the United States and China. Trade and tariffs have been the main focus since dramatic market moves on Friday when U.S. President Donald Trump threatened to slap additional 100% tariffs on goods from China, in response to Beijing’s curbing of exports of critical minerals.

However, stock markets have already bounced off lows after testing near Friday lows for the S&P 500 (SPX) as investors continue to buy dips, keeping declines shallow thus far (Nasdaq more than 250-point bounce off lows). Big banks are mixed after mostly better earnings with WFC outperforming, Citigroup little changed and JPM, GS falling after results. Cryptocurrency-linked stocks slide amid a drop in Bitcoin prices, falling as much as -4.5% below $110K before paring losses following a flare-up in trade tensions between the US and China. Gold making another new high hitting highs of 4,190 this morning and silver also rising. Markets brace for busier earnings this week, while Federal gov’t shutdown rolls into Day 14 with no deals close to being made.

• Investment/Alternative Managers: Oppenheimer upgraded shares of ARES and HLNE to Outperform from Perform following a recent pullback from September after a massive rise after the November 2024 election; says given the latest pullback where the stocks are now at a 108% relative multiple on average (vs. 140% prior to September), thinks this marks an attractive entry point. BLK reported Q3 adjusted EPS $11.55 vs. consensus $11.31; Q3 revenue $6.51B vs. est. $6.29B; Q3 AUM rose 17% y/y to a record $13.46T, up from $11.48 trillion y/y.
• In Industrials: CARR was downgraded from Outperform to Perform at Oppenheimer heading into Q3 while saying CAT, MOD top picks in earnings preview. Opco said Industrial Efficiency stocks levered to the AI infrastructure buildout have outperformed, while names tied to resi/construction have lagged. OPCO expects Q3 fundamentals to largely align with those trends, and are raising price targets on AAON, MOD, VRT and ROK while downgrading CARR to Perform.
• In Software: Barclays with Q3 preview saying sees positive setups on TYL, CHKP, VRNS, HNGE; downgrade CYBR to EW and EVCM to UW; reinstate rating on WAY at OW. The firm said was pounding the table on TYL as think SaaS bookings could improve in 2H as comps ease and DOGE concerns have faded, which could help turn the narrative on the stock around. CHKP checks were strong and slipped deals could drive 10% billings growth in 3Q; continue to like VRNS as checks sounded good with GenAI driving interest and we see upside to the FY25 ARR guide; for HNGE are now tracking app download data which shows better than seasonal activity this 3Q, supporting potentially better billings; downgrade EVCM as revenue growth and retention rates continue to decline, combined with limited float and catalysts.

• ATXS +41%; BCRX said it would acquire ATXS for a mix of cash and stock representing an implied value of $13.00 per Astria share, and approximately $700 million in enterprise value
• CRML +21%; Rare earth stocks (CRML, METC, MP, UAMY, USAR) extend gains on rising trade tensions/China hits US with more retaliatory measures on the shipping industry. Since September, Chinese rare earth magnet companies have been facing more scrutiny on its export license applications.
• DPZ +4%; following earnings; Q3 revs rose 6.2% y/y to $1.15B vs. est. $1.14B; Q3 U.S. same-store sales grew 5.2% during the quarter, compared with analysts’ expectations of a 4.01% rise; Q3 EPS of $4.08 topped ests $3.97 on high order volume.
• NVTS +14%; after unveiling its 100 V GaN FETs, 650 V GaN and high voltage SiC devices for NVDA’s 800 VDC AI factory architecture.
• PCH +3%; as said they will merge with RYN in an all-stock deal valued at about $8.2 billion, including debt, to create one of North America’s largest publicly traded timber and wood products companies. The combined company will own about 4.2M acres of timberland across 11 U.S. states.
• PII +9%; after saying it would separate Indian motorcycle into a standalone company, will sell majority stake to Carolwood LP; says sale expected to be accretive to adjusted EBITDA margins and adjusted EPS.
• WFC +3%; shares outperformed in big banks after topping Wall St estimates for Q3 profit and raised its profitability target after regulators removed an asset cap imposed on the bank; Q3 EPS $1.66 vs. est. $1.53; Q3 revs $21.44B vs. est. $21.16B; Q3 Net Interest Income $11.95B vs. est. $12.01B.
• WMT +2%; after announced a new partnership with OpenAI to create AI-first shopping experiences for its customers. Through this collaboration, Walmart and Sam’s Club members will soon be able to shop via ChatGPT using Instant Checkout, streamlining the process from inspiration to purchase.

• COIN -2%; as shares of cryptocurrency and blockchain-related names (MSTR, RIOT, MARA, IBIT) dropped following a decline in Bitcoin and Ether prices; follows a sharp decline this weekend following a record crypto liquidation.
• JNJ -2%; reported Q3 adj EPS $2.80 above consensus $2.76; Q3 revenue $24.0B vs. consensus $23.76B; Q3 medical device sales rose 6.8% to $8.43B, mainly driven by electrophysiology products; said it plans to separate its orthopedics business into a standalone company named DePuy Synthes.
• OEC -18%; said sees Q3 adj Ebitda of $55M, well below consensus of $70.9M as results were hurt by lower volumes, partially a result of weakness in the Western tire industry and oil price-driven inventory revaluation; guided full-year adj Ebitda of $220M-$235M vs. est. $269M.
• WULF -4% after announces proposed offering of $3.2b of senior secured notes; to use the net proceeds from the offering to finance a portion of its data center expansion at its Lake Mariner campus in NY.