✦ AI generated
Michael predicts SpaceX shares will fall below $100 due to the massive lockup expiry and lack of valuation support.
Michael: I think if you want to buy the stock, you're going to get an opportunity under $100 a share. ... I just can't shake this feeling that at a certain point we're going to get an opportunity under 100. Now, that may be because too much stock hits the market at once or the market could turn.
rebuts · 1
Josh argues that Google's earnings report is the key catalyst for the broader market, since the AI trade needs the hyperscalers to participate for further upside.
Josh: I think Google's earnings are the key to the market. I think this is the most determinative moment of earning season for whether or not we're going to have a good summer or a bad summer in the market. The market is overly reliant on tech. ... the only way that's happening is if the AI trade gets back on track.
supports · 2
Josh notes that levered ETF AUM dropped over $100 billion, with $63 billion coming out of semis alone — a 39% reduction — and argues this cleansing of speculative activity is bullish.
Josh: The AUM of levered ETFs has dropped by over $100 billion. ... Of that $100 billion, 63 has come out of semis. To contextualize that 39% of leverage semi-ETF AUM has been reduced. This decrease is one of the healthiest things that can happen for the market. Amen sister.
supports · 1
Josh makes the case that the market's ability to absorb a massive tech selloff — with energy, staples, biotechs, and banks all stepping in — is the most bullish possible resolution of the speculative excess.
Josh: What on earth is more bullish than a situation where the leadership group pukes ... gets absolutely taken to the cleaners and the S&P 500 index doesn't budge because there's so much buying in all of the other almost all of the other sectors ... we go through a margin wipeout and then come out of the other side with a rally in the former leaders.
supports · 1
Josh cites Adam Parker and multiple data sources showing lower-income wage growth reaccelerating, card delinquencies declining, and spending continuing — the bottom of the K is not collapsing.
Josh: Lower income wage growth has recently reaccelerated. Bank of America's deposit account data showed that after tax wage growth for lower income households went from 2.9% in May to 4.1% in June. ... 90-day card delinquencies are the lowest they have been since September 2023. ... The lower-end consumer is employed, generally current on most obligations, receiving improving wage growth, continuing to spend.
rebuts · 1supports · 2
Michael endorses Adam Parker's framing that while wealth inequality is real, the notion that lower-income consumers are financially deteriorating in their day-to-day cash flow is not supported by the bank data.
Michael: To echo what Josh said, like obviously, you know, it sounds insensitive to say this, but we're looking at the data and we're listening to the people with the data inside the banks and they're all saying the same thing. ... it's probably deeply unpopular for people with money to say that things aren't as bad as the people are making it out to be.