📈 Microsoft's Quantum Leap

Good morning.

⚡ The Fast Five → Carvana reports sales and profit beat, United Healthcare is offering buyouts, Hims & Hers health surges, Palantir plunges on mixed news, Microsoft deploys first quantum computing chip

🔎 Market Trends → S&P 500 edges to record closing high as Fed minutes parsed; US Futures Point to Lower Open

And now…

⏱️ Your 5-minute briefing for Thursday, February 20, 2025:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

S&P 500 Extends Record Streak as Investors Weigh Fed, Tariffs

The S&P 500 gained 0.2% to 6,144.2, notching another record close, while the Dow also rose 0.2% to 44,627.6. The Nasdaq edged up 0.1% to 20,056.3, with health care leading the way as materials lagged.

The Big Picture:

Investors continue to embrace risk, even as the Federal Reserve signals caution on interest rate cuts. Minutes from the January meeting show policymakers want to see more inflation cooling before easing monetary policy.

The Fed's hesitation comes as tariffs loom. President Donald Trump floated a 25% tariff on auto, semiconductor, and pharmaceutical imports, adding to existing trade measures. Markets shrugged off the news—for now.

Bond yields edged lower, with the 10-year Treasury yield down 1.1 basis points to 4.53%, while the two-year yield fell 2.5 basis points to 4.27%. Meanwhile, WTI crude climbed 0.7% to $72.34 per barrel, brushing off global trade concerns.

Market Movers:

• Garmin (GRMN) jumped 12.6%, leading the S&P 500, after posting strong Q4 earnings and raising its full-year outlook.

• Analog Devices (ADI) climbed 9.7%, as the chipmaker’s bookings showed improvement, even though its fiscal Q1 results declined year over year.

• Cadence Design Systems (CDNS) fell 8.8%, one of the worst S&P 500 performers, as its 2025 earnings outlook underwhelmed investors despite a strong Q4.

• Etsy (ETSY) sank 10%, after the e-commerce platform missed revenue expectations and warned of continued weakness in gross merchandise sales.

What They’re Saying:

"Rate cuts are not happening anytime soon, and the Fed will likely wait for some of the dust to settle on tariffs before providing better forward guidance," Oxford Economics said.

WHAT WE’RE WATCHING
Events

• Today: Department of Labor - Unemployment Claims - 8:30am

• Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.

Earnings Reports

• Today: Consolidated Edison, CenterPoint Energy, Alibaba Group, Live Nation Entertainment, Walmart, Block, Inc., Booking.com

• Tomorrow: UScellular, Telephone and Data Systems, Farmer Mac, Uniti Group, Oil States International, Galiano Gold

MARKET BRIEF
Leading News

Microsoft's Quantum Leap: The Long Game Just Got Shorter

Why it matters:

Microsoft's (MSFT) breakthrough in quantum computing could reshape the entire tech landscape, potentially unlocking trillion-dollar opportunities in drug discovery, AI optimization, and materials science.

Zoom Out:

After nearly 20 years of research, Microsoft has finally unveiled its quantum computing chip, the Majorana 1. But here's the twist: they had to create an entirely new state of matter to make it work. That's not just moving the goalposts — it's inventing a new sport.

While competitors like Google (GOOGL) and IBM (IBM) have been playing with traditional quantum approaches, Microsoft took the road less traveled with "topological qubits." Think of it as the difference between building a house of cards and engineering a pyramid — one is flashier but fragile, the other's built to last.

Key Insights:

• Follow the money: Quantum pure-plays IonQ (+237% YTD) and Rigetti (+1,500% YTD) have been on fire, despite modest combined revenues of just $14.8M. The market's appetite for quantum exposure is ravenous.

• The AI angle: Microsoft's $13B annualized AI revenue could get a quantum boost. Imagine training next-gen AI models at speeds that make today's supercomputers look like pocket calculators.

Market Pulse:

"There's a lot of speculation that we're decades off from this. We believe it's more like years." — Jason Zander, Microsoft EVP.

Bull’s Take:

While the Majorana 1 isn't ready for prime time, Microsoft's quantum breakthrough could accelerate the timeline for commercial quantum computing from "someday" to "soon." For long-term investors, this represents a rare chance to position themselves ahead of a technological revolution that could dwarf the AI boom. The quantum computing race isn't just about processing power — it's about reshaping the future of technology itself. Consider building exposure through established players like Microsoft or high-risk/high-reward pure-plays in your speculative portfolio allocation.

Headlines

• UnitedHealthcare is offering buyouts to employees in benefits unit, could pursue layoffs (link)

• Coach parent Tapestry to sell Stuart Weitzman footwear brand for $105 million (link)

• Carvana reports Q4 sales and profit beat, but stock drops (link)

• Hims & Hers Health surges on acquisition for at-home testing (link)

• Palantir plunges after CEO Karp changes share sales plan, Pentagon budget cut report (link)

• JetBlue talking to ‘multiple airlines’ about a new partnership (link)

CRYPTO
Fear & Greed

Headlines

• Bitcoin Rewards App Fold Goes Public, Begins Trading on Nasdaq (link)

• TradFi Investors Piled $38.7B Into Bitcoin ETFs, Three Times More Than Previous Quarter (link)

• Donald Trump Shares CoinDesk's XRP Article on Truth Social, Spurring Bullish Sentiment (link)

DAILY SHARE
On the Socials