Daily Rundown: February 27

JD DURKIN: Let's do it, members. Good morning, one and all. Chris Versace and I are back to help get you ready for the week ahead.

But before that, let's take a quick moment to review the week that was, because a lot happened last week. Chris, good morning. You held off on making any moves. As the market reconsiders the Fed's next move, I wonder first and foremost, any update or change on that line of thinking?

CHRIS VERSACE: No. I mean look, the big thing that you pointed out about last week was spot on, JD. The market is once again rethinking the prospects of what the Fed's going to have to do. We've gotten a string of inflation data points that show that yes, it is far more persistent than the market previously thought. That is, again, leading some thoughts about what the Fed's going to have to do going forward, bigger, longer than previously expected.

And as the market wrestles with that, it's also going to continue to think about what does that mean for the prospects for the economy. What does that mean about the prospects for earnings? And all is that is happening, what we're continuing to bounce back and forth between, technical support and technical resistance. So it's going to be a very choppy market, to use the language from AAP-- AAP, excuse me, team member Helene Meisler.

JD DURKIN: All right, choppy indeed. That note is well taken. A few names have been on our members' minds.

I'd like to briefly check in on each of them with you. Let's kick things off with your thoughts on ChargePoint. We love talking ChargePoint.

CHRIS VERSACE: So ChargePoint's going to report their earnings later this week. Before that happens, however, we're going to hear from competitor Blink Charging. So we're going to want to parse that report, understand what the puts, the takes are, of course.

But the focus for us is going to be the guidance and what they see is the continued rollout. Not only for EV charging stations, but the key catalyst that we've been watching for ChargePoint, that is going to be the deployment of funds from the Federal government stimulus dollars that will accelerate the build-out for the EV-charging network.

What we hear from Blink on that, going to set the tone for what we'll really expect from ChargePoint later in the week. ChargePoint shares, we know, have been volatile. If we have confirmation that the fund flows are indeed coming and the shares continue to be around where they are, we might look to top off the portfolios position.

JD DURKIN: Yeah, great work from our team there, to pull up the 12-month chart. Let's talk Clear Secure, Chris. How about that name?

CHRIS VERSACE: Well, Clear Secure is a name that we like quite a bit. As we talked about in our AAP morning notes this morning, digital privacy is going to continue to be a big issue in 2023. Setting the stage for Clear Secure, however, they did have some news out this morning that they added yet another airport customer for their Clear Secure screening process.

We think all of this sets the stage for an upbeat report later this week. We're a little bit in no-man's land, however, with the stock. Our price target is $34. We said we'd be buyers of the stock closer to $28. So if they report, we see the stock pull back, we will most likely wade back into the shares and scoop them up.

JD DURKIN: Finally, got to ask you about Costco. We always love talking Costco. What's top of mind there?

CHRIS VERSACE: There's a couple things here with Costco. We continue to see the data that consumers are increasingly taking on credit. I have a lot of concerns about that, what that means for consumer spending ahead.

It rather reinforces my view that consumers will continue to lean in to Costco. But at the same time this week, JD, we're going to get a lot of other retailers reporting. Macy's, Lowes, Target. And we're going to see renewed concerns from investors about inventory levels, margins, and what they have to say about the consumer.

And we have to remember that Costco is a very, very different animal from all of these because of its membership business model, which is why when they report later this week, among the other key items, the one thing that I really want to understand is what will the pace be for warehouse expansion in the coming 12 months? If they reiterate what their previous guidance was, that's going to be a very big positive for the name. We're also going to want to hear about when might we finally see that membership fee increase? That would be a very big catalyst for Costco shares.

JD DURKIN: All right. On now to our Hindsight is 20/20 check-in. What do you wish went down a little differently, I wonder?

CHRIS VERSACE: From the portfolio perspective, like I said, we've been watching that 4100 level and those concerns that we talked about at the top of this edition of the rundown where the market is. Once again, rethinking the path ahead. If I could go back and do one thing probably a little differently, I might have contemplated adding to the inverse ETF positions.

But the caveat there is that the 3800, 4100 levels, those are pretty tight. The last thing I would want to do is do something and have to whipsaw it around on members. So I think the prudent path that we've been taking, being very cautious, as you mentioned at the top of the rundown. Not really taking a lot of action last week. I think that's the prudent manner for the next couple of days, as we get a lot of earnings and a lot of data.

JD DURKIN: Yeah, certainly. As we're having this conversation, the S&P 500 is exactly at 4000, so we'll track it from there. A few holdings, as well as some bullpen names set to report this week. People are like, it's still earnings? Yeah, it's the end of earnings season, but we got some good ones. What's topping your watchlist, Chris?

CHRIS VERSACE: The one that we really are going to take a closer look at is going to be Marvell, in the bullpen. Members know that we're watching this one very closely. We'd like to add it closer to $40. But if we get some positive comments on the data center market, as well as favorable updates from its automotive business and in other end markets, we might be inclined to pull the trigger on a small position later this week and begin the wading-in process, as it were.

Outside the portfolio, Salesforce is going to report what they say about corporate spending, about dollar headwinds, those are going to be the things that we're looking for. Because they're going to help us understand how the vast majority of multinationals are going to end the quarter.

JD DURKIN: What else is on the plate, in terms of economic data that we're looking for in the week ahead?

CHRIS VERSACE: We have those usual start of the month, two scoops if you will, JD. PMI data for February, final from S&P Global. Then, of course, the analogous data from the Institute for Supply Management, or as most people call it, ISM. The two things that we're going to want to understand, what's the speed of the economy, the vector, the velocity, if you will?

Particularly in the new order front, because that'll tell us, what is March looking like? But given the string of those persistent inflation data that we've been getting, we're going to want to understand what the anecdotal comments are in both the manufacturing sector, as well as in the service sector. Because that's going to tell us what the February data, or the CPI, PPI, and other inflation metrics are likely to be, so I expect the market to really key in on that.

JD DURKIN: Chris, anything else members should be paying closer attention to?

CHRIS VERSACE: There's just two things I would say. We're not involved with the shares of Tesla, but they will be I think their big investor meeting later this week. Of course, given our position in Ford, ChargePoint, we're going to want to understand what they have to say about the outlook for the EV market. Both in general and from a competitive landscape perspective.

Then the other thing is, given we're a little towards the tail end, if you will, of the current earnings season, we will see a number of investor conferences start to happen. As we parse the comments from companies that are reporting, we're going to want to understand what is different, if anything, compared to several weeks ago when they reported? Is there more caution in their voice?

Are they seeing input pressures a little more pervasive than they were looking for previously? Those sorts of things because that's going to give us a sense as to what's the next leg for earnings revisions for the S&P 500 and therefore, the next path, step, if you will, for the market.

JD DURKIN: All right, Chris Versace, thank you as always, for taking the time to join us here to kick off a busy week.

CHRIS VERSACE: Happy to do it, JD, thank you.

JD DURKIN: All right, my man, see you soon. Chris will be back tomorrow for more on the earnings and the economic data catching his attention this week. And we'll see you then.