The 'bro bubble' in stocks and crypto has popped. (0:16) Target sees profit pressure. (2:12) Uber/Waymo driverless rides start in Austin. (3:15) Show NotesStocks best insulated from tariffsOkta rallies post-earningsEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What is the 'bro bubble' and how has it impacted stock gains?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.
Chapter 2: How have recent tariffs affected global markets?
afternoon today is tuesday march 4th and i'm your host kim khan our top story so far the bro bubble has popped stocks have now wiped out all of the gains since election day as tariffs go into effect the trade war escalation is weighing heavily on global growth expectations george saravellos head of fx strategy at deutsche bank says up until today many trump administration policies could be rationalized under the negotiating tactic mantra
but the scale of the trade and geopolitical policy shift now actually happening is of historical proportions. There is a huge rise in uncertainty taking place in the U.S., he added. The major averages are falling further after Monday's sell-off. The S&P 500 is down more than 1% and is below where it traded on November 5th. The Nasdaq and Dow are also shedding more than 1%.
The VIX volatility index, also known as the fear gauge, is topping 25%, a high for the year. With cash moving from risk to safety, treasury yields continue to fall. The 10-year treasury yield is now below 4.15%, and the two-year is below 4% for the first time since October. And crypto is back on the back foot, with Bitcoin around $83,000.
Chapter 3: What are the technical indicators signaling a market shift?
All of this is leading to a collapse of what BOA strategist Michael Hartnett calls the bro bubble. Hartnett said on Friday the breach of four technical levels would send nouveau bulls, those jumping on the Trump trade bandwagon, heading for the exits. Those levels were the post-election volume-weighted average prices of Meta, Palantir, the SPY ETF, and the QQQ ETF.
Volume-weighted average prices are a ratio of price-to-trade volume similar to a moving average and used for intraday and short-term strategy. Yesterday, SPY fell through the $5.97 VWAP that needed to hold, and QQQ broke through B of A's $5.19 VWAP level. Today, Meta has lost its VWAP of $6.39, and Palantir is the last holdout, just above its VWAP of $80.
The Bitcoin VWAP since the election was $97,600, and the inability for the crypto to stay above $97,000 was the first sign that the bro bubble was popping, Hartnett added. The VWAP for Tesla was $3.71, and that fell in the first week of February.
Among active stocks, Target beat Q4 EPS in sales estimates, but said it expects to see meaningful year-over-year profit pressure in Q1 relative to the remainder of the year due to ongoing consumer uncertainty, tariff uncertainty, and the expected timing of certain costs within the fiscal quarter. Target expects full-year EPS of $880 to $980, mid-point $930, versus the consensus mark of $924.
Chapter 4: What pressure is Target facing in the upcoming fiscal quarter?
Net sales growth is expected to be in a range of around 1%, reflecting comparable sales growth around flat. Okta is rallying post-earnings, winning upgrades from DA Davidson and Stiefel today. DA Davidson analyst Rudy Kess said he sees 11-13% year-on-year revenue growth, as likely in full year 2026, versus current guidance of 9-10% year-on-year.
With increasing new product mix, enterprise traction, channel momentum, and sales productivity, we now believe double-digit growth is sustainable. And sales of Tesla's China-made electric vehicles fell 49.2% year-on-year in February as intense competition continues to disrupt the EV maker's share in China's EV market.
In other news of note, the partnership between Alphabet's Waymo and Uber goes into action today in Austin. Riders who request an UberX, UberGreen, UberComfort, or UberComfort Electric in the 37-square-mile area of Austin could be matched with a Waymo fully autonomous, all-electric, Jaguar I-Pace at no additional cost.
Before a nearby Waymo vehicle is sent, customers will have the option to accept or switch to a driver. Once the Waymo arrives, riders can unlock the vehicle, open the trunk, and start the trip from the Uber app. The service will expand to Atlanta later this year.
Waymo also plans to begin offering rides in Miami next year through its own app to add to its service that is already running in Phoenix, San Francisco, and Los Angeles. And in the Wall Street Research Corner, Morgan Stanley analysts highlighted companies they think are more insulated from tariffs compared to their industry peers and more able to defend their pricing and market share.
Strategist Mike Wilson sees tariffs as more of a rotational driver than an index-centric one, as the impact should be concentrated in a few industries, including consumer discretionary and more specifically autos, technology hardware, and capital goods.
Services industries across financials, software, media, and entertainment, and consumer services are less directly impacted, and we maintain our favorable views on these pockets of the market in relative terms, Wilson said. Among the names are Levi Strauss, United Rentals, Fastenal, Zoom Communications, Albertsons, Dollar General, and Ulta Beauty.
Check out the whole list in our story on Seeking Alpha. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at seekingalpha.com. And make sure you're getting the most out of your portfolio with quant, news, and analysis by heading to seekingalpha.com.
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