Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:07 AM

February 7, 2026

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

The Gmail app usually clips the bottom quarter of our emails, we recommend you reading our full article online here.

Executive Summary: What Moved Markets Last Week

The trading week ending February 6, 2026, will be recorded in financial history not merely for the milestones achieved, but for the structural rotation that underpinned them. The Dow Jones Industrial Average (DJIA) shattered the 50,000-point ceiling for the first time, closing at a record 50,137 on Friday. This 2.5% intraday surge masked a fracture in the broader equity landscape. While the industrial and financial heavyweights of the Dow rallied on the prospect of a "hard money" regime and a resurgence in the physical economy, the technology-laden Nasdaq Composite extended its losing streak to four weeks, falling 1.59%, while the S&P 500 erased over $1 trillion in market capitalization year-to-date, marking its third consecutive week of losses.

Three distinct, converging macro-narratives drove this bifurcation:

1. The "Warsh Shock" and the End of Easy Money: The nomination of Kevin Warsh as the successor to Federal Reserve Chair Jerome Powell acted as an accelerant for a regime shift. Viewed as a monetary hawk committed to dollar stability, the "Warsh Shock" triggered an unwinding of the debasement trade. Gold, the primary beneficiary of the prior liquidity regime, collapsed 11% from its January peaks, signaling a rotation from safe-haven assets into value-oriented equities.

2. The AI Capex Crisis: The "Magnificent Seven" earnings season crystallized investor fears regarding the return on investment for generative AI. With Meta, Alphabet, Amazon, and Microsoft signaling a collective 2026 capital expenditure (Capex) bill exceeding $650 billion—a 60% year-over-year increase—the market is no longer awarding premiums for spending without immediate margin expansion. This "Capex Indigestion" sparked a sell-off in software and cloud hyperscalers, even as earnings beats were reported.

3. The Data Vacuum: A partial government shutdown forced the Bureau of Labor Statistics (BLS) to delay the critical January jobs report, originally scheduled for Friday. In the absence of official non-farm payroll data, the market priced risk off secondary indicators. A surge in January layoffs to 108,000 (a 17-year high for the month) and a plunge in JOLTS job openings to five-year lows painted a picture of a cooling labor market, complicating the Federal Reserve’s terminal rate calculus.

The following analysis dissects these drivers across four key sectors, utilizing our framework of sentiment gauging, analyst-versus-whisper comparisons, options positioning analysis, and earnings-to-guidance evaluation.

Sector I: Technology & Growth

Themes: The AI Capex Wall, The "SaaS-pocalypse," and Hardware Resilience

The technology sector is navigating a "show me the money" phase. The euphoria of 2024-2025 has evaporated, replaced by a scrutiny of capital allocation. The divergence between software/cloud providers (who are spending the capital) and hardware providers (who are receiving it) has never been starker.

Amazon.com Inc. (AMZN)

Closing Price (Feb 6): $209.83 (-5.78% Weekly)

The Capex Shock: Amazon became the poster child for the market's anxiety over AI spending. While the company reported Q4 revenue of $213.4 billion, beating the consensus of $211.02 billion, the narrative was hijacked by its 2026 guidance. Management outlined a capital expenditure plan of approximately $200 billion for 2026, a figure that shocked the street and stands 50% higher than 2025 levels. This spending is earmarked for AWS data centers and the Project Kuiper satellite constellation, but investors viewed it as a threat to free cash flow margins.

Earnings vs. Whisper:

• Consensus EPS: $1.97

• Actual EPS: $1.95

• Whisper Number: The buy-side whisper was likely higher, closer to $2.00, given the historical tendency for AMZN to beat during holiday quarters. The $0.02 miss, combined with the Capex explosion, triggered a repricing.

Options Positioning & Sentiment: The options market signaled distress going into the print.

• Max Pain: The max pain point for the February 6 expiration was $227.50, higher than the post-earnings trading level. This suggests that market makers were positioned for a milder move, and the gap down to the $200-$210 range inflicted damage on bullish premium sellers.

• Sentiment: Sentiment flipped from "Buy" to "Show Caution." While major brokerages maintained bullish ratings, price targets were slashed across the board. DA Davidson downgraded the stock to Neutral, citing "execution risk" and "cash flow strain." The heavy put skew at the $195 strike indicates traders are hedging against a breach of the $200 support level.

Alphabet Inc. (GOOGL)

Closing Price (Feb 6): $324.72 (+1.97% Weekly)

Efficiency in Spending: Alphabet offered a counter-narrative to Amazon’s sprawl. The company delivered a "beat and raise" quarter, with Q4 revenue climbing 18% to $113.8 billion and annual sales topping $400 billion for the first time. Crucially, while Alphabet also guided for a capex ramp ($175B–$185B for 2026), the market afforded it more leniency due to tangible AI monetization results.

Earnings vs. Whisper:

• Consensus EPS: $2.64

• Actual EPS: $2.82 (+6.82% Beat)

• Whisper Number: The street was whispering a beat, but the magnitude validated the bull case.

• Guidance: The Google Cloud run rate hitting $70 billion and the successful launch of Gemini 3 provided the "revenue receipts" investors demanded to justify the Capex.

Options Positioning:

• Max Pain: $330.00 for GOOGL (Feb 6 Expiration).

• Analysis: The stock closed slightly below max pain at $324.72, indicating that call sellers at the $330 strike defended their positions. However, the volume in calls at $335 and $337.50 for future expirations suggests institutional accumulation is ongoing. The market views Google’s infrastructure advantage as a "structural moat" compared to competitors relying on external capital.

Meta Platforms (META)

Closing Price (Feb 6): $662.61

The Agentic Pivot: Meta is caught in the Capex crossfire, with projected 2026 spending estimated around $135 billion. However, the stock’s resilience suggests the market is pricing in the success of its open-source AI strategy. The "Warsh Shock" and broader rotation hit Meta less than Amazon, due to its balance sheet and the monetization of AI in its ad stack. The emerging threat from Anthropic’s "Claude Cowork" poses a long-term question for Meta’s enterprise ambitions, but for now, it remains a "defensive growth" play.

Microsoft (MSFT)

Closing Price (Feb 6): $401.40 (+1.96% Weekly)

The ROI Question Mark: Microsoft is in the "penalty box" relative to its historical premium. The stock is down roughly 18% over the last three months, a rare period of underperformance. The core concern is the "profitability gap" in its AI division. While Capex remains aggressive ($37.5B last quarter), investors are spooked by the revelation that 45% of its future cloud contracts are tied to a single entity: OpenAI.

Sentiment Analysis: Sentiment has soured on the "Copilot" narrative. Reports that the $100 billion "Stargate" project with OpenAI may be stalled added to the bearish noise. However, the stock managed a gain on Friday, suggesting that at $400, valuation support is emerging. The market is waiting for evidence that enterprise software seat expansion can offset the GPU depreciation costs.

Salesforce (CRM)

Closing Price (Feb 6): $190.48 (+0.27% Daily, -14% Weekly)

The "SaaS-pocalypse": Salesforce was the victim of the week’s most violent thematic trade. The stock collapsed 14% to levels not seen since 2023. The catalyst was technology: the launch of Anthropic’s Claude Cowork. This "agentic" AI capability—which allows AI to navigate computer interfaces and execute workflows without humans—strikes at the heart of Salesforce’s "per-seat" pricing model.

Analysis: The market is pricing in a terminal risk: if one AI agent can do the work of ten human analysts using Salesforce, seat counts could drop by 90%. Despite Salesforce’s own "Agentforce" initiative, the market perceives them as a legacy incumbent vulnerable to disruption. Options positioning is skewed to the put side, reflecting a capitulation of holders.

Apple Inc. (AAPL)

Closing Price (Feb 6): $278.64 (+0.99% Weekly)

Defensive Positioning: Apple remains a relative safe harbor. Trading at $278.64, it is hovering below the consensus target of $293.00. Unlike the hyperscalers, Apple is not engaging in the "Capex Arms Race" to the same degree, which is viewed as a virtue. The stock is down roughly 5% year-to-date, but its buyback program and the "replacement cycle" narrative for the iPhone 17 (expected late 2026) provide a floor.

Nvidia (NVDA)

Closing Price (Feb 6): $186.88 (+8.73% Weekly)

The Indispensable Supplier: Nvidia remains the ultimate hedge against the AI spending bubble. While software stocks fell on Capex fears, Nvidia rose because it is the recipient of that Capex. Shares surged nearly 8% on Friday after CEO Jensen Huang reiterated that demand is "incredibly high".

Guidance vs. Noise: Despite rumors of the OpenAI deal stalling, the broader market data—specifically Google’s $185B Capex and Amazon’s $200B Capex—confirms that Nvidia’s order book is pristine for the next 18-24 months. The stock is técnicamente breaking out, with momentum traders buying calls at the $190 and $200 strikes.

Broadcom (AVGO)

Closing Price (Feb 6): $332.82 (+7.18% Weekly)

The Custom Silicon Hedge: Broadcom is the quiet winner of the Capex war. As hyperscalers like Google and Meta seek to reduce reliance on Nvidia by building custom chips (TPUs/MTIA), Broadcom is the primary partner. Reports indicate Google secured $21 billion in orders from Broadcom for custom TPU accelerators.

Valuation & Growth: The stock jumped 4% Friday morning on this news. With AI revenue guided to $8.2 billion for Q1 2026 (up 100% YoY), Broadcom is successfully pivoting from a legacy networking firm to a critical AI infrastructure play. Analysts see a path to $543.00 long-term, implying upside from the current $332 level.

Tesla (TSLA)

Closing Price (Feb 6): $413.52 (+4.11% Daily)

The Unification Premium: Tesla is trading on a unique idiosyncratic catalyst: the merger of Elon Musk’s empire. Reports that SpaceX and xAI might merge with Tesla sent shares up 5% mid-week.

Analyst Marks: Morningstar raised its fair value estimate to $400.00 (from $300), validating the price level. The thesis is shifting from "EV manufacturer" to "AI Robotics Conglomerate," with the valuation of the Optimus robot and Robotaxi fleet carrying the stock. The technical setup shows support at $400, with options open interest building at the $420 and $450 calls for March expirations.

Netflix (NFLX)

Closing Price (Feb 6): $82.02 (-1.8% Weekly)

Split Dynamics: Netflix is trading in a post-split consolidation phase following its 10-for-1 stock split in November 2025. At a P/E of 32.9x, it is historically cheap, but the market is digesting the execution risk of its pending acquisition of Warner Bros. Discovery ($82.7 billion enterprise value).

Earnings Outlook: Management has guided for 12-14% revenue growth in 2026, a deceleration from the 16% seen in 2025. The lack of a scheduled price hike in North America for 2026 removes a short-term catalyst, leaving the stock to drift with broader market beta.

Sector II: Financial Institutions

Themes: The "Warsh" Rotation, The 7,000 Call, and Dividend Safety

Financials were the standout winners of the week’s rotation. The "Warsh Shock" implies a higher-for-longer rate environment or a floor on rates, which benefits net interest margins (NIM). Additionally, the sector is viewed as a value sanctuary relative to the tech trade.

JPMorgan Chase (JPM)

Closing Price (Feb 6): $310.16 (Approx. derived)

The Macro Bull: JPMorgan is leading the charge on the "2026 Market Pivot" narrative. The bank’s strategists are forecasting that the S&P 500 will test the 7,000 level, driven by a 13-15% earnings growth rate across the broader economy. This "Goldilocks" view posits that AI productivity gains are finally spilling over into non-tech sectors.

Sentiment: Rated "Strong Buy". The bank’s $844 billion market cap reflects its fortress balance sheet. Institutional flows have been steady, with the stock acting as a proxy for the entire US financial system.

Berkshire Hathaway (BRK.B)

Closing Price (Feb 6): $503.89 (+0.94% Daily)

The Cash Fortress: Berkshire Hathaway is the ultimate option on market volatility. Following Warren Buffett’s retirement as CEO at the end of 2025, the company sits on a record $381.6 billion cash pile.

Sentiment & Positioning: The stock hit a 52-week high of $542.07 recently and closed the week strong at $503.89. Investors view Berkshire as the primary beneficiary of the "Great Gold Correction" and tech volatility, expecting the firm to deploy its massive cash reserves if equity valuations compress further. It remains the largest financial company by market cap ($1.1T for Class A/B combined).

Visa (V) and Mastercard (MA)

Closing Prices (Feb 6): V $329.13, MA $551.89

Earnings Divergence: While both networks reported double-digit growth, Mastercard demonstrated superior momentum.

• Mastercard: Q4 EPS soared 24%, vs. Visa’s Q1 EPS growth of 17%.

• Strategic Moves: Mastercard announced a 4% workforce reduction to free up capital for AI and digital currency initiatives.

• Valuation: Both trade at premium multiples (V: 32.8x, MA: 34.8x), but Mastercard is increasingly favored for its higher growth ceiling as it closes the market share gap.

Bank of America (BAC)

Closing Price (Feb 6): $55.38

Yield & Stability: Bank of America is trading near its all-time highs ($57.25), supported by the "Warsh" trade. The bank declared a $0.28 quarterly dividend, payable in March 2026, reinforcing its status as a reliable income generator.

• Analyst Action: HSBC raised its price target to $57.00, citing the bank’s leverage to a stabilizing yield curve. Options activity is muted, suggesting investors are content to hold the stock for yield and slow appreciation.

Sector III: Consumer Staples & Healthcare

Themes: The Trillion-Dollar Club, Medicare Shocks, and The Weight-Loss Duopoly

This sector provided the week's dramatic single-stock stories, characterized by extreme dispersion based on regulatory exposure and product cycles.

Eli Lilly (LLY)

Closing Price (Feb 6): $1,056.16 (+3.46% Daily)

The Decoupling: Eli Lilly has officially decoupled from the broader pharma pack, re-entering the $1 trillion market cap club. The catalyst was a divergence in guidance between Lilly and its main rival, Novo Nordisk. While Novo warned of a potential 13% sales decline in 2026, Lilly guided for a 25% revenue surge to $80-$83 billion.

Drivers:

• Volume Defense: Lilly is successfully using its manufacturing scale to push GLP-1 volumes (Mounjaro/Zepbound) high enough to offset federal price cuts.

• Pipeline: The anticipation of its oral obesity drug, Orforglipron, is driving a valuation premium. Sentiment is bullish, with the stock viewed as a "must-own" growth asset in a defensive wrapper.

UnitedHealth Group (UNH)

Closing Price (Feb 6): $273.49 (-1.84% Daily)

The Regulatory Knife: UnitedHealth is in a full-blown crisis of confidence. The stock is down 46% over the last 12 months. The immediate trigger was the Trump administration’s proposal to increase Medicare Advantage rates by a microscopic 0.09% for 2027—effectively a massive cut when adjusted for inflation.

Guidance & Positioning: Management forecasts a revenue decline of at least 2% in 2026. Short interest has moderated slightly (down 3.9%), but this likely represents profit-taking by shorts rather than genuine buying interest. The "max pain" for existing holders is severe, and the stock is technically broken until regulatory clarity improves.

Johnson & Johnson (JNJ)

Closing Price (Feb 6): $237.79 (+1.42% Daily)

Clinical Wins: JNJ reached an all-time closing high of $237.79 this week. The driver was real-world data for its prostate cancer drug, Erleada, which showed a 51% reduction in death risk compared to competitors.

• Risk: A recall of its Cerepak coil systems due to safety concerns was a negative headline but failed to dampen the stock’s momentum, highlighting the market’s focus on the pharmaceutical pipeline over medtech legacy issues.

Walmart (WMT)

Closing Price (Feb 6): $126.94

The New Trillionaire: Walmart joined the $1 trillion market cap club this week, driven by a 15% year-to-date rally.

• Catalyst: A new trade deal between the US and India is seen as a boon for Walmart’s supply chain diversification and its 80% stake in Flipkart.

• Sentiment: The market views Walmart as the ultimate "defensive growth" play—immune to tech valuation concerns and benefitting from consumer trade-down behavior.

Costco (COST)

Closing Price (Feb 6): $994.06

The Membership Moat: Costco continues to defy gravity, up 13% year-to-date. January sales data was robust: $21.33 billion (+9.3% YoY) with membership renewal rates at a staggering 92.3%.

• Valuation: Trading near $1,000/share, the stock is priced for perfection, but the consistency of its execution keeps the "buy the dip" crowd active.

Sector IV: Energy & Industrial

Themes: The Physical Economy Resurgence

With the "Warsh Shock" signaling a return to hard assets and industrial production, this sector attracted significant inflows.

ExxonMobil (XOM)

Closing Price (Feb 6): $147.59 (+2.69% Daily)

The Permian King: ExxonMobil hit an all-time high of $147.84 intraday on Friday. The stock rallied 17.5% in January alone.

• Drivers: The successful integration of Pioneer Natural Resources has allowed XOM to hit record Permian production of 1.8 million barrels of oil equivalent per day.

• Strategy: The "value over volume" strategy—returning 40-70% of free cash flow to shareholders—has turned XOM into a "utility-like" income generator that appeals to the new macro regime.

Home Depot (HD)

Closing Price (Feb 6): $384.64 (-1.31% Daily)

The Interest Rate Victim: Home Depot remains the lagard, trading ~17% below its highs. The company’s preliminary 2026 outlook was cautious, guiding for flat to 2% comparable sales growth.

• Macro Connection: The rise in the 10-Year Treasury yield to 4.21% directly impacts mortgage rates, keeping a lid on the housing turnover that drives Home Depot’s "Pro" business. Until rates stabilize, HD is viewed as "dead money" relative to the broader industrial sector.

Gold Analysis: The "Warsh Shock" Correction

Spot Gold Price (Feb 6): $4,957.87/oz (-11% from Jan Peak)

The gold market experienced a "flash crash" event starting January 30 and extending into early February. The trigger was singular: Kevin Warsh.

The Mechanism of the Crash:

• Sentiment Shift: Warsh is perceived as the antithesis of the "debasement" trade. His nomination recalibrated expectations for the US dollar, making non-yielding assets like gold less attractive.

• Positioning: The CME Group hiked margin requirements for gold and silver futures mid-week to curb speculation. This forced a "liquidation cascade" among leveraged retail traders and managed money funds who had crowded into the trade.

• Technical Damage: Gold plummeted from a record $5,608 to test the $4,900 support level. While it bounced slightly on Friday due to bargain hunting, the medium-term uptrend has been structurally damaged. The capital that fled gold is rotating into the Dow (Industrials/Financials), confirming a "Risk On / Inflation Off" dynamic.

We don’t take shortcuts, chase headlines, or push narratives. We just bring you the news, straight and fair. If you value that, click here to become a paid subscriber—your support makes all the difference.

Baked with love,

Anna Eisenberg ❤️