PickAlpha Evening Insights | 2025-12-11 - Three Trades For Tomorrow
• Stocks mixed as softer jobless claims and New York Fed Treasury purchases influenced U.S. yields. • After hours: Lululemon beat, raised guidance and authorized a $1bn buyback. • Three Trade Ideas.
Market Wrap
Market Recap — Markets reacted to a mix of softer labor-market data and policy clarity from the New York Fed, while retail and consumer names showed divergent signals. Initial jobless claims jumped, wholesale inventories rebounded and energy fundamentals tightened, leaving growth and seasonal demand themes in focus. Costco’s strong fiscal-quarter sales underpinned defensive retail, and Lululemon’s after-hours beat and buyback lifted sentiment for premium apparel.
Intraday — At 08:30 ET initial jobless claims rose to 236k, a sharp weekly increase from 192k that hinted at labor-market softening; at 10:00 ET wholesale inventories rebounded 0.5% m/m, suggesting inventory rebuilding and GDP upside potential; the EIA at 10:30 ET reported a 177 Bcf natural gas withdrawal, well above the five-year average and tightening seasonal supply; at 11:00 ET the New York Fed posted a SOMA schedule showing roughly $54bn in Treasury reinvestment and reserve-management purchases from Dec 12–Jan 14; late in the session Costco reported fiscal Q1 sales around $65.5bn, driven by traffic and membership-fee growth.
After Hours — At 16:05 ET Lululemon reported Q3 FY2025 revenue of about $2.21bn and EPS of $2.98, with comparable sales up and margin expansion; management raised FY2025 revenue guidance and authorized a $1bn buyback, supporting the stock in after-hours trading.
Three Trades For Tomorrow
1/3 Long $LULU — On Fri Dec 12, buy LULU in the first 5 minutes of the U.S. cash open if it opens within +8% of Thu’s close. Set a stop 4% below entry and a profit target 8% above entry. If the target is not hit, exit any remaining position…
Q3 net revenue grew ~12% to $2.21bn, comps rose ~9%, and direct-to-consumer revenue increased high-teens percent. Gross margin expanded ~80 bp and operating margin reached the mid-20s, lifting EPS to $2.98 from $2.53. Management raised FY2025 revenue guidance and authorized a $1bn buyback, supporting a near-term bid and premium multiple.
Trade credibility: actionability 8.0 | timeliness 8.0 | clarity 8.0
2/3 Long $ZN=F — On Fri Dec 12, around the 09:00 ET NY Fed DSGE model update, compare ZN=F at 08:59 and 09:10 ET. If by 09:10 ET ZN=F is trading at least 0.25% above its 08:59 level, go long at market with a stop 0.15% below entry and a profit…
The NY Fed’s DSGE update will refresh structural projections for output, inflation and the policy rate path, which some desks track after major FOMC moves. A more dovish implied path or lower equilibrium rate should support intermediate Treasuries. Using the immediate post-release move in 10Y note futures as a signal lets us ride any duration-friendly repricing while containing intraday risk.
Trade credibility: actionability 7.0 | timeliness 8.0 | clarity 7.0
3/3 Long $ES=F — On Fri Dec 12, around the 11:45 ET NY Fed Staff Nowcast update, compare ES=F at 11:44 and 12:00 ET. If by 12:00 ET ES=F is at least 0.4% above its 11:44 level, enter long at market, set a stop 0.3% below entry and target 0.8% upside…
The Staff Nowcast provides a high-frequency estimate of current-quarter U.S. GDP growth, integrating recent data on labor, trade and inventories after the latest Fed easing. A meaningful Nowcast upgrade should bolster growth-sensitive risk sentiment. Using a threshold intraday gain in S&P 500 futures post-release as confirmation helps capture a potential pro-cyclical equity move while bounding downside.
Trade credibility: actionability 7.0 | timeliness 8.0 | clarity 7.0