This week started ominously, with a crash in speculative momentum stocks and more concerns about the US/China trade relationship. Many unprofitable stocks in hyped sectors fell 40% or more from their highs. Even gold and silver, which were up over 30% in two months, struck out.
But toward the end of the week, trade concerns seemed to ease as Trump confirmed his meeting with Xi next week. We got a cool CPI print on Friday which allayed fears about rising inflation, allowing the Fed to continue on its cutting path. These two events hit stocks out of the park to new all-time highs.
All eyes are back on the AI bubble now. With Mag 7 set to report earnings next week, this is a pivotal moment. In this post, we predict how the bubble will progress; we think it is early innings. We also made a portfolio change this week that capitalizes on these trends.
The rest of this article is for premium members. Today’s post covers:
Momentum crash
OpenAI taking over the internet
AI bubble not done
Strong start to earnings season
Macro without the data
Our portfolio (including last week’s change)
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