The Woke Street Journal
Matthew Tuttle Keeps Challenging the Establishment-ETF.com
ETF Innovator Offers Early Exposure to Hot Stocks-ETF.com
How Covered Call Strategies Are Evolving to New Structures-NASDAQ Trade Talks
What a week, Politics is usually pretty boring, but they definitely made it interesting again. It would be funny, if it wasn’t so sad of course. Trump got shot by what appears to be a 20 year criminal mastermind who was able to outwit the secret service and law enforcement. The RNC had teamsters and Hulk Hogan. Biden got Covid and wasn’t going to step aside, then all the sudden he did. All the major Democrats lined up behind Harris, except Obama. Obama Does NOT Endorse Kamala Harris For President: ‘We Will Be Navigating Uncharted Waters’-Daily Wire
Meanwhile, you have this guy who crushes Trump in the polls and certainly has the pedigree. Problem is he is more of a danger to the establishment than Trump is.
I do not believe this is a positive for Trump. I also believe that the Republican strategy of going after Harris on what she knew about Biden’s condition and when is a mistake. I can’t imagine that the average American struggling with inflation and watching what is going on in the world is going to care that much. Anyone with eyes and ears knew Biden was mentally compromised.
Biden
How the Bet on an 81-Year-Old Joe Biden Turned Into an Epic Miscalculation-WSJ
How the Democratic Party came to the brink of nominating a candidate with an obvious flaw is a story of allies eager to look the other way, Biden advisers who worked to stamp out doubts about his vigor and a party apparatus that boxed out alternative candidates.
Trump
Trump-the-Uniter Couldn’t Last for One RNC Speech-Bloomberg
Ben Shapiro said it best I think. Trump’s first 20 minutes or so was perfect, he should have spent another 10 minutes or so on policy, and called it a night. What he did was like a baseball game where you are up 3 runs with one out in the 6th and the bases loaded with a chance to blow the game open. You strike out and pop out, missing an opportunity. That’s kind of what Trump did at the RNC.
This whole thing continues to get more and more weird as we find out that Crooks had a drone in the air, while the Secret Service didn’t.
Was it an inside job? Was it incompetence? and if so, was it because of DEI? FOIA suit targets Secret Service director’s DEI push-Judicial Watch
“The catastrophic security failure behind the attempted assassination of former President Trump shows how the management and quality of Secret Service personnel are urgent issues,” Judicial Watch President Tom Fitton said.
“The Secret Service’s illicit cover-up of these documents about the Kamala Harris protective detail incident is not reassuring,” Fitton added.
I’m all for diversity, but I’m sorry, if I am being protected by Secret Service I want big men with military and/or law enforcement experience.
Woke
Vance Grilled Woke Biden Nominees Over LGBT Agenda For Months, Blocking Confirmations: Leaked Memo-Daily Caller
Negative or positive?
Companies go un-woke in embarrassing U-turn telling their staff to 'be silent'-MSN
A string of companies are going "un-woke" after deciding to be "more realistic" about environmental, social, and governance efforts.
Firms including Unilever - owner of Dove, Vaseline and Hellmann's - have axed their new ESG initiatives and will instead "be silent versus to take a stance".
In January, computing giant Dell cut part of its marketing team that focused on sustainability and other ESG-related marketing roles.
ESG
US appeals court orders judge to reconsider Biden ESG investing rule-Reuters
A U.S. appeals court on Thursday ordered a Texas judge to reconsider his decision upholding a Biden administration rule that allows socially conscious investing by employee retirement plans, in light of a major recent Supreme Court ruling.
A group of 25 Republican-led states and oil drilling company Liberty Energy (LBRT.N), opens new tab are suing to block the U.S Department of Labor rule. U.S. District Judge Matthew Kacsmaryk in Amarillo, Texas, in September declined to block it, and the states and Liberty appealed.
DEI
Or maybe because ESG and DEI have nothing to do with a company’s performance. Companies drop DEI targets from bonus plans on pressure from conservatives Criticism from asset managers is increasingly leading big employers to walk back diversity and environmental measures-FT
The 12 companies were among 60 that dropped environmental, social and governance incentives from their executive pay plans after pressure from Strive, the anti-ESG asset manager founded by Donald Trump ally Vivek Ramaswamy. Launched in 2022, Strive has more than $1.6bn of assets under management.
Market
Tough week for the markets. The supposed culprit was talk that there would be tougher restrictions on semi conductor sales to China, but things were weakening before that. Then there was this on Friday.
Tech Took Down the World on Friday. Is the Market Next?-Barron’s
Not sure if there will be any further ramifications this week. CRWD is down another 4% at the moment.
This week we see 23% of the S&Ps market cap announce earnings (GOOGL and TSLA are the highlights), GDP, and PCE.
Few investors saw the shift coming, and many are puzzled by what is behind it: Changing forecasts for Federal Reserve interest-rate cuts? Expectations that Donald Trump will return to the White House? A technology trade that grew precariously crowded?
How does this take you by surprise? Market’s had gotten historically narrow, something had to give.
Markets were overbought and traders took any excuse they could find. So we are not in a great looking spot. The uptrend in SPY has clearly broken. SPY broke below the 10 day MA and now the 20 day EMA.
QQQs are same, but a bit worse.
The “rotation” into Dow names fizzled.
As did small caps.
Rates popped on Friday, but they are still clearly in a downtrend.
Moves like this suck, but they are necessary and part of the game. Nothing can move up in a straight line. That’s why I love running a long/short portfolio. At this point I think this is just a normal sell off as we are back into Fed easing mode. Just like you didn’t want to fight the Fed in 2022 when they were tightening, you don’t want to fight them now that easing is about to start.
We took off another slew of shorts on Friday and plan to take off some more today. Our long watchlist is small—-TSLA, MPWR, KLAC, ANET, and TER. You will notice 3 semi names along with ANET, which is related.
Chip Stocks Have Gotten Hammered. Why the Damage Might Be Overdone.-Barron’s
Pushing them down: A weaker-than-expected inflation print that investors bet would give the Federal Reserve cover to cut interest rates in September; comments by former President Donald Trump, who said that he would force Taiwan to pay for the protection it receives from the U.S.; and news this week that the Biden Administration floated the possibility of stepped-up restrictions on certain semiconductor equipment makers’ sales to China.
Still, enough of the theoretical damage to semiconductor companies’ profits might be reflected in the stocks.
Nothing on my individual name short watchlist for the second straight day.
This is the wrong Trump trade. The Trump Trade Is Back. But Did It Ever Work? Investors are buying small-cap and ‘old economy’ stocks in a way reminiscent of 2016. It won’t necessarily pan out.-WSJ
Until late last week, 2024 was all about the rise of megacorporations linked to artificial intelligence. Then the Russell 2000 index of small-capitalization stocks suddenly went from being roughly flat year-to-date to up 10% Wednesday, when it recorded its strongest weekly outperformance on record against the Russell 1000, which contains larger firms. At the same time, the technology-heavy Nasdaq had its largest one-day percentage decline since December 2022, even as cheaper “value” stocks rebounded.
That’s not the “Trump Trade”, that’s the market broadening out from historic narrowness. The Trump Trade is DJT, which you can trade but don’t own. Then it’s the law and order stocks like GEO, CXW, AXON, SWBI, etc. You could also throw in short clean energy, but I would be careful as AI is going to need so much power it won’t matter where it comes from. I do not think Biden dropping out is a positive for Trump and we could see a bit of an unwind on some of the Trump trade.
From BTIG’s Washington analyst…..
How We Are Thinking About Harris. On the one hand, Harris is 22 years younger than Biden and does not have the same cognitive concerns that ultimately ended Biden’s campaign. From a polling perspective, she has fared relatively better than Biden in a couple swing state polls, but campaign contacts are far more excited with polling suggesting that she could perform well with women and independents. On the other hand, there is concern about how she will fare in the spotlight given the missteps she made in her 2020 presidential campaign and Republicans will tie her to the Biden administration’s record on issues such as inflation and immigration. From a polling perspective, the next few weeks of surveys could be noisy, but it is important to note that Biden’s net favorability of -17 points compares with Harris’ of -14 points. All said, Harris should be viewed as a stronger candidate than Biden, but she carries her own political baggage. In talking with contacts, there is a recognition that Harris is far from a perfect candidate, but there is optimism given her capacity to spar with Trump and the fact that Biden’s exit has led to a surge in campaign donations.
Trump Trade Unwind? With a new Democratic presidential challenger expected, we could see a reversal in some market moves linked to the “Trump Trade.” This is understandable as markets will be forced to reassess the odds of Trump winning without knowing his official challenger. Furthermore, we believe that Biden exiting leaves the House as more of a toss up than lean Republican. With that being said, we continue to view Trump as the slight favorite and note that beneficiaries of a second Trump administration are based on administrative shifts rather than legislative changes. These beneficiaries include private prisons, digital assets, and firms exposed to an uptick in M&A. Trump’s trade policy would likely be largely the same in a divided government scenario as well. We continue to expect a punt and extension of most of the $4.6T in expiring tax provisions, but as a general matter spending should be relatively easier in a divided government scenario.
Your 60/40 portfolio isn’t safe because it’s a stupid idea. Your 60/40 Portfolio Isn’t Safe. Inflation Is the Reason.-Barron’s
The views and opinions expressed herein are those of the Chief Executive Officer and Portfolio Manager for Tuttle Capital Management (TCM) and are subject to change without notice. The data and information provided is derived from sources deemed to be reliable but we cannot guarantee its accuracy. Investing in securities is subject to risk including the possible loss of principal. Trade notifications are for informational purposes only. TCM offers fully transparent ETFs and provides trade information for all actively managed ETFs. TCM's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. Trade notification files are not provided until full trade execution at the end of a trading day. The time stamp of the email is the time of file upload and not necessarily the exact time of the trades.
TCM is not a commodity trading advisor and content provided regarding commodity interests is for informational purposes only and should not be construed as a recommendation. Investment recommendations for any securities or product may be made only after a comprehensive suitability review of the investor’s financial situation.
© 2024 Tuttle Capital Management, LLC (TCM). TCM is a SEC-Registered Investment Adviser. All rights reserved.
