Each morning after I’m cooking breakfast, I put Bloomberg on my iPad within the background. Lisa Abramowitz and the Plucky British Man are often on, speaking concerning the “entrance and middle” narrative for the markets.
It’s been getting repetitive.
Market members have been hyperfocused on inflation and charges all through the summer season. Costs are transferring on CPI and PPI information, and everybody’s specializing in the Fed into the (potential) September fee reduce.
I predict that the following huge transfer might be pushed by a catalyst or quick narrative shift to one thing that comes out of left area. The Fed has develop into a distraction.
Some Speculative Headlines
Right here’s a sampling of what might occur within the markets sooner or later:
- Draw back skip danger in housing as a result of deportations reveals up in information
- AI hyperscalar capex has overshot potential future cashflows, which turns into evident with one other “Deepseek” effectivity occasion
- Or, emergent agentic AI proves itself quick and we’re off to the races, once more
- Russo-Ukrainian détente causes unwind in protection shares, PLTR unwinds which takes out the momentum advanced
- US authorities turns into extra aggressive with single firm investments; MP and INTC are the beginning of a brand new sovereign technique that causes industrials to ramp
- China hack of DoD results in investigation in MSFT, unwinding the tech commerce
My sense is that I’m early on this concept, and it may very well be yet another opex cycle, as we close to the Fed September determination, the place one thing else captures the market narrative
The Subsequent Part of the SOLBAT Commerce
Photo voltaic shares had a tough push on Friday:
The catalyst was that the Feds offered new steering on tax credit for clear power tasks.
Given how Hyperscalars are constructing out, the photo voltaic commerce is sensible. I’ve acknowledged the case right here and right here.
Photo voltaic doesn’t want subsidies, AI energy demand is simply too nice. But if the Trump administration goes to proceed interventions in markets, don’t be shocked if they permit photo voltaic subsidies to stay round as they’re (hopefully) conscious that the AI arms race is definitely an Electrons arms race.
There’s one other half to the SOLBAT commerce, and that’s batteries. If photo voltaic buildout hits laborious, then power storage is simply as profitable of a commerce.
One battery ecosystem play to look at is lithium. SQM simply noticed an enormous push final week:
And LIT, a lithium ETF, is beginning to present indicators of a backside:
In case you’ve traded lithium shares earlier than, it is best to know the tickers. In case you haven’t traded them earlier than, simply know in some unspecified time in the future your coronary heart will get damaged.
Names to look at: LAC, LITOF (OTC), LAR, SGML.
Free Alpha in EOs
The pace of this administration is unbelievable. They’re utilizing a “flood the zone” tactic, transferring on a number of fronts in order that it’s tough for political opposition to mount a protection, a lot much less any spin within the media.
That is additionally giving us unbelievable alternatives to play beneath the radar shares. When the Trump administration points an Government Order, I’m instantly throwing it in GPT to course of it.
The latest EO that has my curiosity: Enabling Competitors within the Industrial House Business. I feel you possibly can guess what shares to take a look at— RKLB, PL, ASTS.
There’s additionally one identify that’s new to the markets – VOYG
It’s had a tough go of it:
I’m not interested by bottom-fishing, but when it does begin to present indicators of reversal, then this might have some stable tailwinds going for it into the tip of the 12 months. And there’s one crucial sign I’ll be searching for above all else to inform me it’s time to purchase… click on right here and I’ll break it down in a dwell coaching replay.
