Closing Volume

- NYSE volume 10% below its one-month average;

- NASDAQ volume 22% below its one-month average;

- VIX index: up 3.36% to 20.28

Breadth

S&P 500 Sector ETFs

% Movers

Nasdaq 100 Heat Map

Closing S&P 500 Heat Map

I am ack short Carvana  (CVNA)  at $332.30 (we covered yesterday at $288). 

(Note: I don't think this is a great entry point, so I am going quite small and working a scale higher!)

From yesterday:

Covering My Carvana Short

Carvana (CVNA) just announced quarterly earnings.

Here is the report:

Carvana Announces Record Fourth Quarter and Full Year 2025 Results | Carvana

I am covering my short -$62 at $288.

I plan to re-short on strength.

Position: Short CVNA (VS)

By Doug Kass Feb 18, 2026 4:14 PM EST

No one should follow this trade for the reasons previously mentioned!

For kicks and giggles, let's repost my most recent market review:

FEB 18, 2026 9:30 AM EST

Trouble Ahead, Trouble Behind

Earnings After the Close Thursday, Feb 19 

Earnings Before the Open Friday, Feb. 20

Wolf Street howls about the decline in home sales.

* Another surprise seemingly being realized — private equity stocks crater...

About one of 'em... Apollo  (APO) :

Private equity stocks are getting schmeissed today (down by between -4% to -7%), led by Blue Owl  (OWL) , Ares  (ARES) , KKR  (KKR)  and the others mentioned below.

From my 2026 Surprise List.

Surprise #6: The bill finally comes due from the 2020-2022 LBOs that relied on low-cost debt that now can’t be effectively rolled over

Valuation opacity, a compression in exit multiples and unrealistic net asset value marks (mark to model delays volatility but doesn't remove it) in private equity come into focus in 2026. The greatest problems are companies tied to commercial real estate and Saas companies. There are a number of high-profile bankruptcies in notable private equity portfolios.

A market for stranded LP interests trading at deep discounts becomes widely followed. Further, the IPO market continues to not be a viable exit for most holdings. Gated redemptions become common place. Apollo (APO) , TPG (TPG) , KKR (KKR) and Ares (ARES) each fall by 30%. 

16.3k  (MSOS)  $4 calls (for tomorrow) just traded.

Sectors at 1:23 pm:

Quoth The Raven says it's getting ugly in one sector.

Cyber security is going to be a huge growth area for the AI sector, says Wedbush's Dan Ives

Marijuana Legalization Is On The Ballot In Texas During The Primary Election That's Happening Now - Marijuana Moment

Here are today's things;

* I added to  (MSOS)  at $3.74 and (MSOX) at $2.68.

Back in the office.

Getting my sea legs back. 

Earnings reports that had either gapped up or down pre-open, as of 10:43 a.m.:

Upside:

-ETSY +21% (earnings, guidance; eBay to acquire C2C fashion marketplace Depop from Etsy for $1.2B in cash)

-RELY +21% (earnings, guidance)

-ENVB +17% (reports EB-003 BRET Receptor Engagement Assay Data)

-NP +16% (earnings)

-HLF +13% (earnings, guidance)

-LMND +12% (earnings, guidance)

-FIG +9.2% (earnings, guidance)

-EBAY +7.1% (earnings, guidance)

-KNTK +6.6% (said to receive takeover interest from Occidental Petroleum-backed Western Midstream Partners)

-DASH +6.4% (earnings, guidance)

-DE +6.1% (earnings, guidance)

-PWR +5.6% (earnings, guidance)

-TS +5.1% (earnings, guidance)

-CMPS +4.6% (prices 17.5M shares at $8.00/shr for gross proceeds $150M)

-CHWY +4.1% (Raymond James Raised CHWY to Outperform from Market Perform, price target: $28)

-TROX +3.8% (earnings, guidance)

-HIMS +3.7% (acquires digital health firm Eucalyptus for $1.15B)

-ITGR +2.4% (earnings, guidance)

-MD +2.1% (earnings, guidance)

Downside:

-EPAM -16% (earnings, guidance)

-KLAR -15% (earnings, guidance)

-BTDR -14% (announces Proposed Registered Direct Offering of Class A Ordinary Shares)

-CAR -13% (earnings)

-CVNA -8.6% (earnings)

-POOL -7.9% (earnings, guidance)

-YETI -6.9% (earnings, guidance)

-MDGL -6.3% (earnings)

-CAKE -6.0% (earnings, guidance)

-LKQ -5.8% (earnings, guidance)

-UPBD -5.7% (earnings, guidance)

-TAP -5.5% (earnings, guidance)

-W -5.4% (earnings, guidance)

-WMT -2.5% (earnings, guidance)

-OWL -2.0% (certain Blue Owl BDCs to Sell $1.4B of Assets to Institutional Investors

From Peter Boockvar

Nothing like economic insight directly from those who produce a good and/or service

I’ll start with notable earnings comments since it always provides such great insight both macro and from a micro, on the ground viewpoint. Today’s comments focus mostly on the consumer in retail, restaurants and travel. Note in particular what Sonic said on car prices.

From Walmart’s press release where they slightly beat both top and bottom line forecasts but lowered full year guidance relative to expectations which is why the stock is down pre-market after an amazing run:

In Walmart US, “Sales momentum continued with growth in customer transactions led by digital, with broad based share gains...Customers responding favorably to our omni strategy of low prices and increased convenience.”

At Sam’s Club US, “sales strength led by grocery and general merchandise with continued share gains.”

More info will come from the call.

From Sonic Automotive, the auto dealer, up 8% yesterday but off a near 52 week low:

“Fourth quarter new vehicle volume faced headwinds from pull forward consumer demand for electric vehicles ahead of the expiration of the federal tax credit in the third quarter, combined with strong luxury demand in the prior year fourth quarter.”

As for pricing this year, the tariff situation is NOT over. To a question asking “are you starting to see indications that the OEMs are planning to push on more more costs? The answer, “Absolutely. They’re lowering margin rebates that we get, they’re pushing - prices are going up. There’s no question that you’re going to see that. They’re not going to sit back and lose billions and billions of dollars. They can’t, it’s just not going to happen. And so it’s going to be really interesting to see the elasticity in new car pricing as we move forward over the next six months.”

“And look, January was a hell of a month. Without the snowstorms, it would have been a magnificent month. So we’ll see, I don’t know if it’s the tax stuff that’s helping that, but definitely prices are higher and so maybe there’s some great elasticity, but it does bring in the affordability discussion, and it really rings a bell from a used car perspective. We’re going to have that gap that we’ve been missing between new car and pre-owned cars again, and that’s just going to be fantastic for the industry and really, really good for EchoPark (their used car division).”

One last thing on price. “I am cautioning and concerned about what is going to happen, how far, how much elasticity can we deal with or can the consumer deal with from a new car perspective? And something is going to happen and that the prices are just getting too high. And it didn’t show up in January. It’s really not showing up in February. We’ll see. I think a lot people are counting on big tax returns. We’ll learn a lot this summer.”

Carvana is down more than 10% but has more to do with margins rather than the top line.

On housing, the other highly interest rate sensitive sector and this from Toll Brothers, down 2.3% yesterday:

“Since mid-January, we have seen an increase in overall traffic and sales consistent with the start of the spring selling season. While it is early, we are cautiously encouraged by the increase in activity over the past months. Our strategy of balancing price and pace worked well in the first quarter.”

They of course cater to the upper income consumer with an average sales price of $1,033,000 as “we continue to benefit from our more affluent customer base, which is less sensitive to the affordability pressures that continue to impact the entry level buyer. Over 70% of our business is luxury move up and luxury move down, which serves a wealthy cohort that has benefited from growth in their home equity and stock market appreciation.”

“The remaining 25% to 30% serves the more affluent first time buyer who is less impacted by affordability pressures. Many of them are older millennials buying their first home later in life when they have higher incomes and are more financially secure. The average delivered price of our first time buyer was approximately $670,000 in our first quarter.”

“Our overall incentive remained flat compared to the fourth quarter at 8% of sales price. This is the third consecutive quarter that incentives remained flat on a percentage basis.”

On the rental home side for single family, Invitation Homes in their earnings release said in Q4 (again, the slowest seasonal time of the year), saw renewal rent growth of 4.2% and new lease decline of 4.1% with a blended rent growth pace of 1.8%. For the full year 2025, blended rent growth was 3.1%. We’ll get more color from their earnings call this morning.

From La-Z-Boy, down 6% yesterday:

Their retail business saw sales up 11% y/o/y while wholesale grew just 1%. They referred to the “ongoing challenging consumer environment” but they are trying to “create our own momentum, led by retail expansion.”

“Continued challenging traffic consistent with our industry was partially offset by strong in-store execution, including higher conversion rates, average ticket, and design sales.”

“Within the quarter, same store sales trends were strongest in January, turning positive versus a year ago, until widespread adverse weather slowed traffic in late January and continuing into early February across much of the United States.”

Wingstop jumped 11% yesterday after a 14% bump on Tuesday. They said this of note:

Comps were down by 5.8%, though better than the estimate of down 6.7%, and “which is attributable to the macro pressures our core consumer continued to face.”

“Similar to what we shared on our last call, and as we entered 2026, we expect that the consumer environment to remain choppy with continued pressure on our core consumer.” They expect flat to up low single digit comps this year.

From Cheesecake Factory and whose stock is down 7% pre-market:

“While the restaurant industry continued to face a more challenging operating environment, including weather-related impacts, our business remained steady, with revenue for the quarter finishing within our expected range.”

“Industry sales decelerated in the fourth quarter, as reflected by the Black Box casual dining index declining sequentially by 410 bps from the third quarter. The Cheesecake Factory’s comparable sales were negative 2.2% in the fourth quarter, down from .3% in the third quarter, demonstrating relative stability in comparison to the industry sequential declines.”

Their North Italia chain saw comps down 4%, “reflecting broader industry sales trends” among other one offs.

Flower Child, which I was at one a few days ago, is doing well with a comp gain of 4% and is “meaningfully” outpacing the fast casual segment.

For their current quarter they are modeling in “low single digits” for commodity inflation and low to middle single digits for labor inflation which includes “the latest trends in wage rates and minimum wage increases as well as other components of labor.”

From Doordash that initially traded down more than 10% last night after a top and bottom line miss but this morning is trading higher:

“growth in the business continues to be quite strong. And we are seeing that from both existing consumers as well as newer consumers where MAU (monthly average users) growth continues to be strong, order frequency continues to be strong.”

From Booking Holdings, little changed pre market;

“Despite volatility in the broader global markets, the underlying fundamentals of our business are solid. Travel demand remains resilient.”

“Asia continues to be one of the most attractive growth opportunities. Travel demand in the region remains structurally strong, supported by rising incomes and increasing cross border travel.”

I’ll add, I’ve argued for years that the growing middle class in Asia is the most exciting economic growth story in the world.

“The booking window in the US remained steady in the fourth quarter, though we continue to see slightly lower ADRs and a slightly shorter length of stay versus the prior year, which may indicate that some consumer segments are continuing to be thoughtful on their discretionary spending.”

From Celanese, the chemical company and down about 7% the past two days:

On their markets, “electronics is what I would say the bright spot is right now...We’re seeing a global build out from AI as well as data centers and that’s positive in the electronic space, but it’s a small part of the overall base of the business.”

“So, certainly auto is a much larger piece of the base and the business is going to trend kind of where that goes at least at this point. And I would say auto is more mixed. You’ve got some uncertainty in China with some of the EV credits and stimulus rolling off in China to start the year. So we’ve seen some softness in auto in China. Europe has been relatively stable to start the year, and US with the fleet mix becoming a little more certain and a focus of the OEMs around ICE and hybrids.”

Shifting to stock market sentiment. We’ve seen a reduction in the number of Bulls in the weekly Investors Intelligence survey over the past few weeks after Bulls got above 60. They now stand at 54.7 vs 59.6 last week. But, they all moved to the ‘Correction’ side as Bears stand at just 15.1 vs 15.4 last week. The Bull/Bear spread of around 40 is thus still very stretched. The Citi Panic/Euphoria index is still well in Euphoria land. The Bank of America Bull/Bear gauge from Michael Harnett is in flashing red mode on the bullish side which means it’s bearish from a contrarian standpoint. The much more fickle retail gauge from AAII though has switched to more Bears than Bulls with the former at 36.9 and the latter at 34.5.

Overall, the mood is still very optimistic and maybe why the market has been so choppy over the last few months from a contrarian perspective.

In the monthly TIC data, foreigners were net sellers of US notes and bonds in December as they continue to shrink their overall holdings relative to the US outstanding debt. Japan, the largest holder, sold $17.2b worth. China also trimmed their holdings but just by a touch. Hong Kong though increased their holdings but that could be any Asian country thru some Hong Kong bank so tough to parse that.

What foreigners did pile into again in 2025 were US stocks but they did so on a hedged basis in a much bigger way relative to the prior years.

Overseas, Australia reported its January jobs report that was about as expected and Aussie bond yields are higher with a one tenth drop in their unemployment rate.

The UK CBI industrial orders index for February rose 2 pts m/o/m but is still very negative at -28. The CBI said “The downturn in manufacturing output eased in February after a downbeat period around the turn of the year. However, many firms continue to report consumers holding back amid low confidence and elevated cost pressures.”

Treasury Auctions: 

11:00 a.m.: Treasury announces a 3 and 6 month bill auction; 

11:30 a.m.: Treasury hosts a $105B 4 and $95B 8 Week Bill Auction; 

1:00 p.m.: Treasury hosts a $9B 30-Year TIPS Auction.

Fed Speakers: 

8:20 a.m.: Fed Bank of Atlanta President Bostic (Non-Voter) gives opening remarks before the Banking Outlook Conference: "The Next Horizon in Banking" hosted by the Federal Reserve Bank of Atlanta, Atlanta, GA (No embargoed text. No Q&A. Livestream link here);

8:30 a.m.: Fed Vice Chair for Supervision Bowman (Voter-Dove) gives opening remarks before the Banking Outlook Conference: "The Next Horizon in Banking" hosted by the Federal Reserve Bank of Atlanta, Atlanta, GA 9 Text available. No Q&A. Livestream link here.;

9:00 a.m.: Fed Bank of Minneapolis President Kashkari (Voter) gives keynote before the Midwest Summit: Economic Outlook 2026 hosted by the Fargo Moorhead West Fargo Chamber of Commerce, West Fargo, ND (No text. No audience/media Q&A. Livestream at minneapolisfed.org); 

10:30 a.m. & 2:30 p.m.: Federal Reserve Bank of Chicago President Austin Goolsbee (Non-Voter) gives Opening Remarks at the 2026 Joint Conference on Financial Crises (Livestream, Embargoed Text: TBD); 

5:05 p.m.: Fed Bank of San Francisco Mary C. Daly (Non-Voter) will sit down for a conversation moderated by former Federal Reserve Bank of Dallas President and CEO Rob Kaplan, who currently serves as Vice Chairman of Goldman Sachs. President Daly will discuss her latest thinking on U.S. economic conditions and the Bay Area economy, San Francisco, CA & Livestream link is here.

Economic Calendar

* Walmart delivers weak guidance...

* From Jim Chanos...

I covered my Carvana  (CVNA)  at $288 yesterday (-$66),

I plan to re-short strength.

Bonus — Here are some great links:

February Seasonality (Peaks Mid Month)

The Ex U.S. Trade

Higher But Off the Highs

An Analysis of the Nasdaq 100

Position for Reflation

I have a board meeting between 10 AM and noon.

After another day of the equity market having several chapters (up, down, up...) stock futures were higher most of the night but, several minutes ago, turned lower:

* S&P futures -19

* Nasdaq futures -88

The likely reasons for the turndown in futures seems to be a breakdown in diplomatic discussions in Geneva and the growing evidence that more U.S. military hardware is moving towards Iran. (By some accounts we are sending the most fighter jets since the attack on Iraq in the 2003).

It appears that these are still deterrents as the Administration is reported to have given Iran until the end of the month to negotiate.

This means that there will likely face a volatile, unpredictable and newsy market for the next 10 days or so.

For me, this also means I want to stay nimble and keep an eye on my VAR (value at risk) of my portfolio by keeping gross positions lower than usual.

But that's me and my risk appetite!

The S&P Short Range Oscillator is at 3.18% vs. 3.16% — that's in a solid overbought.