TMTB Morning Wrap

QQQs -1% starting off the month with some risk-off flavor. Why down? A combination of things: AMZN didn’t help things, neg tariff news, follow through from Powell’s hawkish presser vs. weaker jobs data this morning. Price action in tech over the last couple of weeks has also pointed to a market that is tired and needs some refueling.

On the tariff front, Trump set a 10% global minimum tariff, with rates of 15% and higher for countries with significant trade surpluses with the US. Canada is among the hardest hit, with levies increased to 35%, but USMCA goods remain exempt (trump said he is open to further talks). Most levies will take effect Aug 7th.

On the macro front some weaker employment news as Establishment survey showed job creation of only 73K in Jul, down from 147K in June and below the consensus forecast of 104K. Whispers were in the 115-120K range. (h/t VitalKnowledge)

We’ll hit earnings first (AMZN, RDDT, AAPL, NET) and then dive into research/news (v slow morning on that front).

Let’s get to it…

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EARNINGS:

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AMZN -8%: Strong set of #s overshadowed by only 17.5% AWS growth in this “moment in time” and no talk of “acceleration”

Numbers were strong across the board (no nitpicks on retail and op inc landed well above buyside expects), but Jassy did his best Jassy impression on the call: long-winded meandering answers that do nothing to inspire confidence in investors, particularly around AWS.

We liked this take from a TMTB reader:

Lots more good discussion in TMTB chat this morning…

From a long-term perspective, we think the stock is fine and AMZN remains one of our favorite compounders as operating income ramp bull case stays intact. Near-term, we aren’t as excited: we think stock needs some digestion as the narrative of a bad mgmt team is hooking on and against a set of stronger large cap prints from META, MSFT, and GOOGL, AMZN will likely become a funding short among pods. The narrative on those 3 sound better than AMZNs right now. Tariffs add a bit of a wrench into things as well.