Wall Street spent Thursday removing another brick from the Fed's rate-hike wall. |
First Wednesday's CPI behaved. Then producer prices PPI didn't rise at all in July, versus the 0.2% increase economists expected. In the space of a week, the odds of a September hike have gone from 55% to roughly 35%. |
With that cloud getting smaller, investors spread out the picnic blanket. |
The S&P 500 climbed 0.65% to a fresh record, the Nasdaq added 0.81%, the Russell 2000 added 0.24% to another record, and even the usually less-excitable Dow gained 0.13%.
For once, Big Tech didn't have to carry the entire market upstairs by itself. |
Macro Moves:
10-year yield: slipped to 4.65% as traders bought Treasuries and pushed the next expected hike further down the road. |
Dollar: basically went nowhere at 99.98. Apparently, two inflation reports weren't enough to get everyone excited. |
Big picture → CPI behaved, PPI behaved even better, and the market is slowly taking September off the Fed's calendar. |
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Google's DeepMind CEO says AI will be "10X bigger than the Industrial Revolution. And maybe 10X faster." |
Best-selling financial author Alexander Green has identified three companies positioned to soar. |
He was right about Apple. In 1996. Under $1 a share. |
He was right about Netflix. At $1.62. |
He was right about Amazon. Under $2. |
He warned his readers about the dot-com crash. One month before it peaked. |
He warned about the housing crisis. Nine months before Lehman Brothers collapsed. |
Now Alexander Green says the biggest wealth-creation event of his 40-year career is unfolding right now. |
He calls it Phase 2 of the AI Supercycle. |
And he's identified three stocks he believes could dominate the next phase. |
CLICK HERE TO FIND OUT IF HE'S RIGHT
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#TRUTH:
❗❗❗ ❝ It is never too late to be what you might have been. ❞ ~ George Eliot |
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AI’s Achilles’ Heel. |
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The AI boom has Nvidia chips, trillion-dollar hyperscalers and enough data centers to strain the power grid. |
Steve Eisman thinks its weak spot is much smaller: OpenAI and Anthropic. |
The investor made famous by The Big Short argues that roughly 70% of AI revenue at Microsoft, Amazon, Google and Oracle comes from those two companies. If that estimate is right, a surprisingly large piece of the AI spending boom ultimately depends on two private AI labs continuing to grow — and continuing to spend. |
That becomes more interesting when you look east. |
Cheaper Chinese open-weight models are getting increasingly competitive, raising the possibility that AI eventually turns into a price war. Great news if you're paying for tokens. Less great if you're OpenAI or Anthropic and need enormous revenue growth to support enormous infrastructure bills. |
And the valuations aren't exactly leaving much room for a bad quarter. Anthropic is reportedly heading toward an IPO that could value it around $2 trillion. |
Eisman isn't calling for another Big Short, though. In fact, he says he wants Anthropic to go public so investors can finally see the numbers. |
Until then, his concern is surprisingly simple: |
Four of the world's biggest tech companies may have built an AI gold rush where two of their biggest customers are also holding the shovels. |
What This Means → The AI trade looks enormously diversified from the outside. Eisman's argument is that follow the money far enough, and the crowd gets surprisingly small.
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SPONSOR BREAK presented by MarketWise* |
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President Trump just went on record: the AI data center buildout sweeping America is unstoppable. s Communities across the country have been pushing back – over rising electricity bills, strained water supplies, and projects landing next door to homes and schools. But the AI buildout isn't slowing down. In fact, Elon Musk's master plan – hidden inside SpaceX – avoids every obstacle. Analyst Rob Spivey says folks who understand what Elon is building – and why – could make a lot of money in the right stocks. |
Get the name and ticker of the No. 1 stock at the center of it FREE (not Tesla or SpaceX). |
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Ackman Checks Out. |
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Hertz just lost one of the passengers Wall Street was watching most closely. |
Bill Ackman’s Pershing Square confirmed it had sold its Hertz stake, saying it lost confidence in management after the rental-car company announced a financing plan the firm believed was unnecessary. |
That matters because Ackman wasn't exactly a casual shareholder. Pershing owned nearly 20% of Hertz last spring, although that position had already fallen to 4.3% by March. |
The timing made Thursday particularly awkward. |
Hertz had just rallied 85% in six sessions after Q2 losses came in better than feared. Before that, the stock had fallen 70% since late June, eventually touching an all-time low of $1.51 on August 4. |
So, Hertz in roughly six weeks: |
→ −70% to an all-time low
→ +85% in six sessions
→ −16.25% Thursday after Ackman's exit |
That's less a stock chart and more a rental-car damage report. |
The bigger concern is why Pershing left. Hertz is already heavily leveraged, and management's decision to raise money through a stock sale and bond deal convinced one of its highest-profile backers that the turnaround had changed. |
What This Means → Hertz may still have a turnaround story. It just lost one of the investors Wall Street trusted to tell it. |
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Growth Got 86’d |
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Wall Street used to pay a premium for restaurant chains that could grow fast. Lately, it’s been rewarding the ones that can fill the seats they already have. |
Over the past three months, established chains like Cheesecake Factory, Darden, Texas Roadhouse, Brinker and BJ’s have dramatically outperformed growth favorites Chipotle, Wingstop and Shake Shack, which have collectively gone almost nowhere. |
The performance gap between the two groups is now roughly 62 percentage points — the widest seen since at least 2016. |
The reason is hiding in the menu: |
→ 3.3% vs. 2.3% — same-store sales growth
→ 22x vs. 35x — forward P/E
→ +2.9% vs. +0.9% — recent earnings revisions |
In other words, the established chains are currently delivering better growth at existing restaurants, stronger earnings revisions and much cheaper stocks. |
Cheesecake Factory’s comparable sales rose 5.8% last quarter. BJ’s rose 6.5%. Wingstop’s domestic same-store sales? Down 7.5%. |
What This Means → Wall Street still likes growth. It just wants to see some of it walking through the front door. |
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Gains & Pains: |
Gains:
→ Accelerant Holdings (ARX): ▲ 43.35% › Shares exploded higher to $19.51, making the insurance-tech company one of Thursday’s biggest gainers.
→ Workday (WDAY): ▲ 17.78% › Shares surged after reports that private-equity giant Silver Lake is in talks to acquire the enterprise-software company.
→ Wix (WIX): ▲ 16.45% › The website-building platform jumped to $80.06, joining a strong day for several software names.
→ SanDisk (SNDK): ▲ 13.67% › The memory-chip name soared as enthusiasm around AI infrastructure and memory demand continued to spill across the semiconductor trade.
→ Netflix (NFLX): ▲ 5.4% › Shares rallied after Bill Ackman revealed a new Netflix position as part of Pershing Square’s biggest portfolio overhaul in years.
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😬 Pains:
→ Cellebrite (CLBT): ▼ 29.18% › Shares suffered the day’s biggest drop on your screen, closing at $10.80.
→ Liftoff Mobile (LFTO): ▼ 20.59% › The mobile advertising company sank to $20.06 in heavy selling.
→ Resideo Technologies (REZI): ▼ 20.42% › Shares tumbled to $20.46, wiping out more than a fifth of their value in one session.
→ Tapestry (TPR): ▼ 16.49% › The Coach owner plunged after its annual revenue-growth forecast came in softer than investors wanted.
→ Cisco (CSCO): ▼ 8.4% › Shares posted their worst day since February after an upbeat annual revenue forecast still failed to clear Wall Street’s increasingly high bar.
Most Active🔥:
→ Opendoor Technologies (OPEN): ▲ 4.58% › The heavily traded housing-tech name climbed to $3.65.
→ Ondas (ONDS): ▼ 8.80% › Shares dropped to $8.91 as heavy trading put the drone and autonomous-systems company among the day’s most active names.
→ Super Micro Computer (SMCI): ▲ 4.12% › Shares added another 4.12% after Wednesday’s 19% surge, extending the momentum around its strong fiscal 2027 revenue forecast.
→ SpaceX (SPCX): ▼ 3.33% › Shares slipped to $141.29, giving back some ground amid another heavily traded session.
→ UiPath (PATH): ▲ 9.31% › The automation-software company jumped to $16.68, finishing among Thursday’s most actively traded names. |
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Escapes: |
Cannon Beach📍 Oregon 🇺🇸 |
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Commodities Check : ✔️ |
→ WTI Crude: ▼ 2.4% to $81.25/barrel › U.S. inventories posted their biggest weekly build since January 2023 while OPEC trimmed its 2026 demand-growth forecast. Even Hormuz couldn’t keep the rally going. |
→ Brent Crude: ▼ 2.2% to $87.07/barrel › Oil snapped a six-session winning streak as weaker demand expectations finally outweighed the geopolitical premium. |
→ Gold: ▼ 1.2% to $4,354.58/oz › Bullion briefly touched a two-month high near $4,449 before profit-taking kicked in after a roughly 9% run in a week. |
→ Silver: ▼ 1.2% to $64.51/oz › Silver followed gold lower as traders took some money off the table following the recent precious-metals rally. |
→ Platinum: ▼ 2.4% to $1,715.54/oz › Platinum joined the broader metals retreat as Thursday’s rally in risk assets pulled attention elsewhere. |
→ Palladium: ▼ 3.9% to $1,316.28/oz › Palladium took the hardest hit of the major precious metals, dropping nearly 4%.
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The stinger: |
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Disclaimer: |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
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