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THE WOLF LETTER — Friday, February 20, 2026
Good afternoon. The Supreme Court, the GDP report, and the White House all had something to say today. Markets couldn't decide how to feel about any of it, which is actually the correct response.
S&P 500 closed at 6,909 (+0.69%). Nasdaq finished at 22,886 (+0.9%). Dow added 231 points. Gold held above $5,044. Bitcoin bounced to ~$68,000.
THE RUNDOWN
BREAKING › The Supreme Court ruled 6-3 that President Trump exceeded his authority by imposing tariffs under emergency powers. The decision potentially triggers $175 billion in refunds to businesses. Amazon ($AMZN) jumped 2%. Alphabet ($GOOGL) rose nearly 4%. Within hours, Trump signed an executive order imposing a new 10% global tariff. So the tariff saga isn't over, but the legal landscape just shifted significantly.
MACRO › Q4 GDP came in at 1.4%, well below the 2.8% estimate. The government shutdown gets most of the blame. Full-year 2025 GDP grew 2.2%, down from 2.4% the year before. Core PCE inflation held at 3%, which keeps the Fed stuck. Kashkari said Thursday that rates are "pretty close to neutral," but also called crypto "utterly useless," which was a fun bonus.
EARNINGS › Walmart ($WMT) beat on the quarter (EPS $0.74 vs $0.73, revenue $190.7B vs $190.4B) but tanked on forward guidance: $2.75-$2.85 adjusted EPS vs the $2.96 analysts expected. The CEO said most spending growth is coming from households making over $100K. Stock fell 1.5%. Meanwhile, Amazon officially passed Walmart as the world's largest company by revenue at $716.9B over the last four quarters. That's a sentence nobody would have believed five years ago.
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NVDA WEEK › Nvidia reports next Wednesday (2/25). Consensus EPS is $1.52. Options flow is building: multi-million dollar call sweeps at the $200 strike for 3/20 expiry have been hitting the tape all week. Analysts at Oppenheimer and Citi both reiterated buy ratings ahead of the print. This will be the most-watched earnings report of the quarter.
GEOPOLITICAL › The U.S. has assembled its largest air power presence in the Middle East since the 2003 Iraq invasion, per the WSJ. Iran nuclear talks remain fluid. Oil is hovering around $66.50. This is the backdrop that has gold sitting above $5,000 and defense stocks quietly printing new highs.
THE PLAY: The Nvidia Earnings Playbook
Nvidia ($NVDA) reports Wednesday after the bell, and options market makers are already pricing in a ~9% move in either direction. That's roughly $400 billion in market cap swinging on a single print. Here's what to watch and how to think about positioning.
The options flow is loud. Over the past three sessions, traders have been buying call sweeps at the $200 strike for the March 20 expiry, with multi-million dollar premiums attached. There have also been deep in-the-money call blocks, which typically signal institutional positioning rather than retail speculation. The skew is bullish, but the premium is expensive.
The consensus expects $1.52 EPS and datacenter revenue north of $40B. But this quarter, the number matters less than the guide. Specifically: gross margin trajectory, Blackwell chip ramp commentary, and any update on the Vera Rubin timeline. If Jensen Huang signals margins are stabilizing above 70% and demand visibility extends into 2027, the stock probably rips. If there's any hint of margin compression from competition or pricing, the "sell the news" crowd will be aggressive.
For traders, the volatility crush after earnings makes raw calls expensive. Defined-risk strategies (call spreads, risk reversals) give you upside exposure without paying full IV premium. If you're buying March calls, the math only works on a big move.
For longer-term holders, the better play might be patience. Nvidia has sold off after three of its last five earnings reports before recovering within two weeks. If you believe in the datacenter buildout (and the 13F filings from last week suggest institutions still do), any post-earnings dip is probably a better entry than chasing before the print.
The key number to circle: gross margin. Everything else is noise.
RALLIES RADAR 🎯
Nvidia's options flow, earnings estimates, and institutional positioning are all tracked on Rallies.ai. If you want to see how the biggest funds are positioned on $NVDA heading into Wednesday, the data is there.
Thanks for reading! Catch you in the next one!
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