Busy weekend with the NYC meetup (thank you to all 350 people who came!) but have been keeping up with weekend events and obviously it has been ugly.
Quick thoughts:
- Most of this selling feels like an over-reaction to Warsh being the new Fed Chair and his hawkish stance around QE. Look, ultimately Trump picked the guy and Trump wants a strong market. I think Warsh understands that and his previous clips of championing AI as a deflationary force may allow him to advocate for significantly lower rates. Bullish.
- I think crypto is down for 2 reasons: Gold/Silver gaining momentum + leverage continues to be wiped out. I really don’t know how low $BTC and $ETH get but it does not strike me as a structural exodus that needs to see Bitcoin at 50K and Ethereum at 1.5K, it can happen but now you are getting into some of the most oversold territories since August 2024. Today will be important to see it buyers come in.
- Growth stocks being sold off after incredible earnings at the level they are being sold off just seems fake to me. I’m sorry, but $MSFT does not deserve a 10% hit on a 2% cloud miss in one quarter when you see the level of demand coming from companies like $TSMC, $MU, etc. It all flows back to the hyperscalers. $SOFI also did not deserve a 15% beating. I think many of these names are at incredible prices especially given they did NOT fall with the S&P (basically $SPX has been flat to slightly red) which means yes they could go lower but their earnings do not seem to justify it.
- Gold/Silver continues to just be weird to me. Margin requirement raises are probably messing with liquidity but the 10% moves on these assets doesn’t feel healthy. I guess we are at this point in Capitalism where these types of assets need to be traded as heavily as they are, but I’m just sitting on the sidelines here. Plenty of stocks that have got hit enough to feel comfortable buying over metals. It feels healthier if the metals stabilized and consolidated.
- Moltbook is genuinely crazy. But, super bullish AI. Agents are only going to get better.
- Earnings matter and so far 80% of companies have beat expectations. Everything else is noise. If companies continue to beat, the market has a chance to continue to reward them. The pressure is high but Q4 earnings have been strong. Still a stock pickers market and core themes like space, memory, drones have been winners to start out the year and February will be important to see if thematics continue to be the winners regardless of large cap tech names putting up big numbers.
- The 10-year US yields need to come down. You would think a potential hawk like Warsh would get them to…not yet. PPI probably was too strong last week. Until yields come down, I think we can see some very weird stock price action.
- Jensen over the weekend affirmed how important memory is to the AI thesis and how much he supports OpenAI…seems like most of the tech industry will continue to support them and make sure they will go public. SpaceX and XAI merger also makes total sense and absolutely should happen in my opinion.
Finally, Palantir $PLTR earnings today. I think we get some good numbers and serious guidance. Macro will determine stock action but this company has changed so many lives and they are just getting started. Real growth on topline and operating margins should continue to brand them as the most important AI software company on the planet. Will be live for earnings 3:30PM EST!
Alright, time to see how the markets react to start off the first week of February…
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