Hello Reader, The Nasdaq 100 lost 5.5% this week, and chips did most of the damage. The S&P fell almost 2%, its worst week since June. The Russell 2000 dropped 3% and is now more than 10% below its August high. The Dow finished up 0.7%. (Source: https://www.ctvnews.ca/business/article/us-markets-weighed-down-by-extended-sell-off-in-the-tech-sector/) Friday also got compared to October 16, 1987, the Friday before Black Monday, and this Monday is the anniversary. So my feed this weekend is full...
6 days ago • 4 min read
Hello Reader, No trades from me this week. I spent the whole week at SF Tech Week, and between the events, the networking and a stack of private meetings, I didn't have time to focus on trading. But I came back with something I want to share with you all, and it ties directly to the whole AI buildout. While I was gone the 10-year hit its highest level since 2002, OpenAI's revenue numbers knocked the AI names around for a day, SpaceX wrecked the phone companies, and the S&P still closed the...
12 days ago • 5 min read
Hello Reader, The Economy Added 29,000 Jobs and Stocks Went Up September payrolls came in at 29,000 against 83,000 expected. Unemployment ticked up to 4.2% and wages only grew 0.1% on the month. The revisions took another 60,000 off the two months before that. July went from +21,000 to -10,000, so we actually lost jobs that month, and August went from 162,000 down to 133,000. That August number is the one I wrote about over Labor Day weekend, when it came in at 3x what everyone expected....
19 days ago • 5 min read
Hello Reader, The AI Slowdown Lasted About a Week Two weeks ago Dario Amodei put out his essay asking the industry to slow down, Altman said OpenAI won't go public this year, and AI stocks sold off the next Monday. Nasdaq futures were down 1.5% premarket and SoftBank closed almost 11% lower in Japan. Last week I said most of that was noise, nobody had actually cut spending, and Anthropic was about to ship a new model right before its IPO. Tuesday, Anthropic released Claude Opus 5.5. About 90...
27 days ago • 4 min read
Hello Reader, Warsh Told You How He's Going to Decide The Fed raised rates Wednesday. 25 basis points, to 3.75% to 4.00%, unanimous. First hike in about three years. Inflation is too high and has been for too long, and the summer readings don't tell him underlying trends have improved. By his own numbers, total PCE ran around 3.6% in August, core PCE around 3.2%, and too many categories still printing above 3%. He said he was hard pressed to call financial conditions restrictive, so the...
about 1 month ago • 5 min read
Hello Reader, Core Inflation Looks Fine. Gas Prices Are Doing All the Work. Rates have sat at 3.50% to 3.75% all year. This is the first meeting where a hike is actually the base case, and two prints last week are why. Thursday's producer prices came in at 0.4% for the month, in line, but the annual number jumped to 5.4% against 5.3% expected. Energy alone was up 4.2% on the month and diesel jumped 24.1%. Core PPI, which strips food and energy out, actually came in soft at 0.2%. Hike odds...
about 1 month ago • 4 min read
Hello Reader, Happy Labor Day weekend. Market's closed Monday, so I hope you're off doing something that isn't staring at a chart. You Can Be Right and Still Lose Last week I said Friday was the one that decides September. It was. The August jobs number printed at 162,000. Expectations were 55,000. Almost triple. July got revised up by 43,000 and flipped positive. Unemployment came in at 4.1%, right in line.(Source:...
about 2 months ago • 3 min read
Hello Reader, Before we get into this week, I need a favor from you. I get a lot of emails from you guys, and they're all over the place. Some of you are asking how to even start trading or open a brokerage account. Others are asking about more advanced tactics and risk management. Some want the perfect TA setup that keeps working. I get emails about blowing up accounts, trading psychology, position sizing, all kinds of stuff. I've been answering these one at a time, but I keep seeing the...
about 2 months ago • 9 min read
Hello Reader, Monday the CEO of BlackRock compared Nvidia's new financing structure to the invention of mortgage-backed securities. He meant it as a compliment. Nvidia had just signed six agreements to put over $500 billion of outside money behind AI infrastructure, and the pitch was that GPUs are collateral now. Four days later Nvidia cut the guarantee it was willing to put behind OpenAI's Ohio campus from $250 billion to under $120 billion. Let's get into it. Macro Nvidia Cut Its Own...
2 months ago • 9 min read