CEO Watchlist: Week In Review

March 2, 2025

Trump, Zelensky row in Oval Office after dispute on compromise with Russia

TOP NEWS AFFECTING THE STOCK MARKET THIS WEEK:

Trump Proposes 8% Cut To Defense Spending (Source)

Stocks mentioned: $LMT, $NOC, $RTX, $PLTR, $AXON

The Pentagon plans to cut $50 billion annually over the next five years while prioritizing military expansion in areas like drones, submarines, and border security. These cuts, driven by President Trump’s Department of Government Efficiency, could result in 55,000 job losses and the elimination of diversity, equity, and inclusion (DEI) programs. While some officials support the focus on military readiness, others worry about the impact on personnel and established defense programs.

Due to this cut in spending we believe stocks such as Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX Corp. (RTX) might face some headwinds, as we have already seen reflected through weak stock prices in the stock market. On the other hand, a company like Palantir (PLTR) which focuses on saving money and efficiency for government spending, may actually be a beneficiary of this decision. In addition, with this proposal, they said they were going to focus on areas such as drones. A company you may not have heard of called Axon Enterprise, Inc. (AXON), who owns the TASER brand, has a focus on drone technology, and we believe the stock has the potential to benefit from this.
Nvidia Beats On Its Earnings, But Tech Isn’t Impressed (Source)

Stocks Mentioned: $NVDA, $CRWD, $MSFT, $GOOG, $SNOW

Tech stocks struggled this week as Nvidia’s (NVDA) strong earnings failed to lift Big Tech, sending the Nasdaq Composite down 4.5% for its worst week since September. The S&P 500 also fell 2%, marking its worst week since November, while the Dow managed to hold onto a slight gain. Investors reacted cautiously despite Nvidia's performance, leading to broad market weakness.

Due to this weakness in tech, high flying stocks such as Microsoft (MSFT), Alphabet (GOOG), and Crowdstrike (CRWD), a major player in cybersecurity, saw big declines in their stock price. Although these stocks are poised to have a strong future due to their dominance in the tech industry, in the short term, the markets seem skittish around these tech names. Unlike these other stocks, a company such as Snowflake (SNOW) recently had a very strong earnings report which allowed the stock to rebound and show strength in a sea of weakness.
Trump's "World War III" Warning Causes Market Jitters (Source)

Stocks Mentioned: $SPY, $QQQ, $VIX

President Trump's stern warning to Ukrainian President Zelenskyy about the potential for "World War III" led to stock market volatility on Friday. Despite initial dips in the stock market, the S&P500 (SPY) and the Nasdaq (QQQ) quickly recovered as investors speculated that the comments were more rhetorical than indicative of policy changes, which led to the CBOE Volatility Index (VIX) to come off of its high of 22.4 to finish the day below 20. Many stocks in the market were oversold at the lows of the day, which also likely led investors to buy the dip.

INSIDER TRADES FROM THE WEEK:

1. Amazon (AMZN) - Markwayne Mullin, Senator of Oklahoma, bought up to $50,000 of Amazon stock on Feb. 12, 2025, but it was reported to the public on Feb. 27, 2025. (Source)

2. Cleveland Cliffs (CLF) - Keith Koci, Executive Vice President (EVP), bought over $100,000 of Cleveland Cliff stock on Feb. 28, 2025, and it was reported to the public later the same day. (Source)

3. Dominos Pizza (DPZ) - Warren Buffett, Chairman & CEO of Berkshire Hathaway, bought ~$1 Billion of Dominos Pizza stock during Q4 of 2024, but it was reported to the public on Feb. 14, 2025. (Source)