Financial News vs. Noise
Today is the long awaited launch of BTCL (2x Long Spot Bitcoin) and BTCZ (2x Short Spot Bitcoin).
I am going to be on Wolf_Financial spaces Thursday at 2pm to talk about our new 2x Bitcoin ETFs.
https://x.com/WOLF_Financial/status/1809986104394764594
That’s what you would be doing if you were watching Powell yesterday.
Today I am not going to be sending any signals about the timing of any future actions." In later questioning, he delivered the balanced response "I'm going to try to avoid sending any really specific signals about timing today because it's going to depend on the data. It also matters what's going on in the labor market though. You know we've also said that if the labor market weakens unexpectedly that could be a case for loosening policy."
We have more Powell today followed by CPI and PPI to end the week. SPY puts for Thursday and Friday are really not showing much of a bump in implied volatility, leading me to believe that most people think that the inflation numbers are not going to move things much. That usually means that they will.
From Nickileaks…
Powell Inches the Fed Closer to Cutting Rates-WSJ
Looking like September.
Will get even worse if the Fed messes this up. More Americans are struggling even as inflation cools — here’s why-CNBC
“Cooling inflation is not the same as a substantial reduction in prices,” said Mark Hamrick, senior economic analyst at Bankrate. “Elevated prices have largely persisted, which means that Americans continue to face affordability challenges on a range of things both necessary and discretionary, including homes, vehicles, car insurance, food, electricity and travel.”
Software is really starting to come in now after going parabolic. I almost never chase moves like this, but love pullbacks in an uptrend.
ORCL, ADSK, and MSFT all popped up on our long watchlist for today.
This caught my eye from Goldman on AI.
GEN AI: TOO MUCH SPEND, TOO LITTLE BENEFIT?
Tech giants and beyond are set to spend over $1tn on AI capex in coming years, with so far little to show for it. So, will this large spend ever pay off? MIT’s Daron Acemoglu and GS’ Jim Covello are skeptical, with Acemoglu seeing only limited US economic upside from AI over the next decade and Covello arguing that the technology isn’t designed to solve the complex problems that would justify the costs, which may not decline as many expect. But GS’ Joseph Briggs, Kash Rangan, and Eric Sheridan remain more optimistic about AI’s economic potential and its ability to ultimately generate returns beyond the current “picks and shovels” phase, even if AI’s “killer application” has yet to emerge.
Elsewhere in AI….
Why Nvidia’s stock can scale the ‘wall of worry,’ according to UBS-MarketWatch
UBS’s Arcuri said investors see a “wall of worry” of sorts for Nvidia NVDA, +2.48%, but that’s one that the company should be able to climb, provided his outlook pans out. Arcuri is upbeat about Nvidia’s new Blackwell chip lineup, which will start shipping later this year.
And…
This depends on what type of investor you are. I have trading models for AI stocks that I trade in and out of, mostly daily, but I also have a long term basket using longer dated options. It Might Be Time to Sell Some of Your AI Stocks-Barron’s
Pettit believes we aren’t in an AI bubble, because looking at the longer term, things haven’t gotten too frothy: “The difference versus the Tech Bubble, and even the post-Covid unwind, is the fundamentals. Our estimates suggest stock prices imply lofty expectations, but long-run consensus estimates suggest most are attainable. Essentially, sentiment is very optimistic but still seems shy of a full-blown bubble.”
Earnings are a binary bet, I would never buy something ahead of earnings just because it looked cheap. Wall Street has a way of making cheap even cheaper. 4 Cheap Stocks to Buy Ahead of Earnings-Barron’s
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