kenpat06: 

adoller:

"How delusional. I don't know which is worse Elon saying his AI is dumb or that he believes his AI is dumb or that X banned an AI for lying or X banning AI for telling the truth. All of this is beyond irony and well over to psychotic."

As of 4:18 p.m. ET:

- NYSE volume 12% below its one-month average; 

- NASDAQ volume 7% below its one-month average;

- VIX index: up 5.94% to 16.05

Closing Breadth

Sectors

% Movers

Nasdaq 100 Heat Map

Pressing my PLTR short as we move into the close.

I recently purchased a very small starter position in Disney DIS.

In a different era, I would be more aggressive.

But we live in the new (altered) world of artificial intelligence and I am increasingly concerned that AI could disintermediate both Disney's movie and its theme park business. (The latter — admission prices — being priced sky high into a likely consumer slowdown. Come to think of it ,the same can be said of Disney's movie admission prices!)

I don't think many are thinking in these terms.

Wolf Street howls about first-time buyers age, over time: 

"Average Age of First-Time Home Buyers and How it Changed over the Past 25 Years"

Breadth

Sectors

% Movers

Nasdaq 100 Heat Map

I have research calls at 1 p.m. and 4 p.m.

Both should take 40 to 45 minutes.

I have now produced 100 "More Tales From Nvidia."

The increasing cost of electricity due to AI power demand is an interesting issue. It is a problem.

I think the incremental cost should be borne by the incremental consumer, which is the hyperscaler. It should not be averaged into the rate base, forcing everyone to pay for it equally. This is a massive fixed cost industry, too. The capacity in place was generally sufficient for the base power needs of the consumer/normal business population. 

Now there is a massive incremental buildout on the generation and grid side that is happening entirely to serve the needs of the data center players. Therefore, they should bear the entirety of the expense. The consumer should not be subsidizing these guys, that in fact is anti-capitalistic. Not to mention, the consumer is under enough stress as it is, the tech bros do not need to be subsidized by people who are struggling to put food on the table.

"As electric bills rise, evidence mounts that data centers share blame. States feel pressure to act" - ABC News

Dan and Rosie - wonderful broadcast. David Rosenberg & The Decline … - RiskReversal Pod - Apple Podcasts

(Rosie mentions me at 58 minute mark)

I will be appearing on Rosie's podcast later this month.

Out of LLY at $651.

From Peter Boockvar:

Please make it stop here/Shiny crystal ball/Relevant earnings comments

My political head is spinning again with this new pay-to-play plan with Nvidia and AMD and pray for the sake of American free market capitalism and my support and appreciation of low taxes that it stops here.

Fed Governor Michelle Bowman seemingly just got a brand new crystal ball that seems to be very clear to her and the ball tells her now that three cuts by year end is necessary. This, rather than taking each meeting as they come, analyzing the current data in hand and then making an informed decision. I understand going out with your rate move desire ahead of the upcoming meeting but what is the point to put yourself out there for the next three meetings with so much more information to see unless you are politicking for the Fed Chair?

Earnings calls still sound like a no better than 1.5% type US economy with almost all of the earnings growth coming from the tech sector.

The area of the economy that is 'rocking and rolling' outside of AI tech spend continues to be live music. From Live Nation, a stock we still own and rallied 3% Friday:

"Global expansion continues to drive touring growth, with fan attendance hitting new highs and ticket buying strong at every price point from VIP to the back row."

"Over 130 million tickets sold for Live Nation concerts, up 6%, led by the strength of our international markets with double digit attendance increases across stadiums, arenas, and theaters and clubs." Half of their concert business is now overseas.

"Strong ticket sales at every price point from premium to budget friendly seats: Over 40% of global stadium shows sold out 95% of tickets in the first week, up double digits. Over 10% of seats across stadiums, arenas, and amphitheaters in the US priced closer to market value. Ticket to Summer promotion sold 1.5 million $30 lawn seats, consistent with historical levels."

"Continued growth in onsite spending across all venue types, including concession spending at large amphitheaters up double-digits."

I'll add this, yes, some are using Buy Now, Pay Later to buy their concert tickets from what I've heard anecdotally.

From Expedia which rallied 4% Friday:

"The US travel market was muted in the second quarter. Consumers at the higher end of the market remained resilient with those at the lower end taking a more cautious approach to discretionary spending. That said, since the beginning of July, we've seen an uptick in overall travel demand, particularly in the US."

"The US travel market experienced continued pressure on inbound travel with shorter booking windows and higher cancellations."

"International revenue growth was up 13%. We outperformed our bookings and revenue guidance due to the strength outside the US, in particular B2B." They also benefited from FX.

A lay of the real estate land from Barry Sternlicht at Starwood Property Trust, a stock we own:

After saying he expects short end rates to be down by 100 bps by May '26 he said, "the real estate complex is gaining strength and getting healthy as we see the end of the avalanche of new supply created for a different interest rate environment, particularly affecting the multifamily and industrial sectors."

"While construction remains strong and there's tremendous job gains in construction, it really is from data centers and also from the infrastructure bill, the CHIPS Act, and other programs."

"With both lower rates and the firming of the real estate complex, I think you'll see a significant pickup in transaction volumes for the real estate markets in the United States. You already are seeing that in Europe."

"We have our busiest years ever in Europe as a private equity firm in real estate, while transaction volumes in the states are subdued and people are holding on to their best assets, hoping that they can sell into a more favorable climate, supported by these lower rates that we all know are now coming."

He doesn't seem to be a fan of tariffs. "Sadly, the tariffs will impact those in the country who don't have the wherewithal to pay additional costs for the daily needs of their lives. And I think that could create great social anxiety and potential splits in our society to the left and the right. I think we're going to start talking about the November midterms coming up. And by that time, we'll definitely know the impact of these tariffs and whether they're benign or their benefits of increased revenue offset the social cost of companies having lower margins or consumers having less money in their pockets. So the jury is out, and I think we expect the back half of this year to be meaningfully less strong than the first half, and that jobs clash (post the BLS report) was probably the indication of that."

From Restaurant Brands, the owner of Burger King, Popeye's and Tim Horton's and whose stock fell 5.2% on Thursday after numbers:

"While the consumer environment remains dynamic, we've seen encouraging signs of improvement across many of our largest businesses."

Tim Horton's makes up 43% of their revenue and this drove most of their comp growth. International markets were strong too.

With Burger King, in the US comps grew 1.5%, "modestly outperforming the Burger QSR segment." Comps at Popeye's fell .9% in the US.

On overall pricing in the US, "I'd say most of the brands are running sort of low single digits on pricing right now...I wouldn't say we're contemplating any large scale changes in pricing architecture...the value or on deal part of our business has been pretty stable."

Higher beef prices are an issue for Burger King, "Beef is about 25% of our cost basket and we're seeing around 15% inflation on the year to date."

From Texas Roadhouse, whose stock fell 6.6% Friday and speaking of beef:

"Strong traffic growth throughout the quarter drove a 5.8% increase in same store sales....driven by 4% traffic growth and a 1.8% increase in average check."

They are though seeing "negative mix pressure" from the alcohol category but offset by "a positive entree mix." Less people drinking alcohol.

"Looking ahead, we have increased our guidance for full year inflation to approximately 5%, primarily due to higher than previously forecasted beef inflation, particularly in the third quarter. This guidance includes approximately 30 bps of full year 2025 inflation related to tariffs, which remains consistent with our initial estimate from last quarter."

They see full year labor inflation of about 4%.

"We recently completed discussions with our operators regarding menu pricing. Based on those conversations, we will take a menu price increase of approximately 1.7% at the beginning of the fourth quarter. We feel confident this is the right level of pricing to maintain our everyday value while offsetting some of the inflationary pressures we are facing." Overall in Q4, "that will leave us with a 3.1% pricing for the fourth quarter of this year and the first quarter of 2026."

From Ralph Lauren that had a good quarter with its higher income customer but whose stock traded off:

"Our strong first quarter results were once again broad based, driven by every geography and channel. We delivered double digit top line growth in both Asia and Europe and high single digit growth in North America with global comps up 13%."

"While our consumer trends remain consistent with recent quarters, we continue to take a more cautious view on the second half of the year. This is largely based on the potential impact of tariffs and related industry wide price increases in the US."

From Sweetgreen and whose stock got clobbered by 23% as comps fell 7.6% y/o/y with a 2.5% menu price rise, offset by a 10.1% "impact from traffic and mix":

"Let me be clear, we are not satisfied with the results we're reporting today. These results reflect the convergence of several external headwinds and internal actions, which were a more cautious consumer environment starting in April, lapping a tough comparison with last year's successful steak launch, and the transition of our new loyalty program at the beginning of the quarter."

"In the second quarter, we operated in a subdued industry backdrop, particularly in several of our largest urban markets."

From Maersk:

"The rest of the world is more than compensating for weakness in the US...There is a lot of focus on tariffs and what they mean. But it is important to remember that 85% of container traffic is not to and from the US."

"I see a lot of wait and see right now as it's still ambiguous for our customers. The fact that something will need to be done with the supply chain is an accepted view. What that is, is not yet clear. It's more of a muddle through for now."

I sold 3/4 of my LLY at $645 (+$19)

Here are today's things:

* Added to Index shorts - SPY $638.10 and QQQ $575.09

* Added to AAPL short at $227.50

* Added to HOOD short at $117.17, NVDA short at $181.26, PLTR $186.61.

* Initiated a (PSKY) long at $10.51.

* This is funny. But a hard problem to solve for. It can only use what is out there on both sides, and then regurgitate. Same reason Grok went mecha Hitler. Then again, why GPT 5 cannot do simple math is beyond me, but that is another issue:

New chatbot on Trump’s Truth Social platform keeps contradicting him

* OMG – billions upon billions of dollars. Should be good for a $1 trillion valuation in the next round, which will come a month after the current round.

* A man asked ChatGPT how to remove salt from his diet. It landed him in the hospital

* As electric bills rise, evidence mounts that data centers share blame. States feel pressure to act - ABC News

* This is interesting on the CAPEX issue – both the tweet and the subtweet regarding how much debt will be required to fund the theoretical AI buildout:

When cash rich and high cash flow companies like META are turning to 3^rd party sources to finance their initiatives (with interest rates where they are now too), you know their spending is stretched as much as it can be.

The buildout was somewhat de-risked when it was funded by the cash and cash flows from large companies, but when you start relying on the markets for it, well what the markets giveth, they can also take away. Just like post the year 2000.

Then related, the wildly hyped GPT 5.0 is another dud. Gen AI is not scaling at nearly the rate they thought it would, which has already been shown. In fact, the incremental return on all the extra $ being spent is getting worse (lower rate of improvement per extra dollar spent). Ergo diminishing marginal returns. Which is one more reason all of the borrowing needs to happen. More and more $ (and power and water and cooling) are being required for less and less in the way of incremental gains.

It’s here, finally, but not everything people dreamt it would be:

Again, here's Gary Marcus' Hot Take:

... and Still No Whale ...

OpenAI just announced GPT-5. I stand by my predictions from a couple weeks ago; none of the problems I said would not be solved appear to have been solved...

Here’s Gary Marcus' Hot Take:

• Took almost 3 years, many billions of dollars (over a half-trillion fieldwide).

• Good progress on many fronts.

• But still part of the pack, not a giant leap forward (e.g. Grok 4 beats it on ARC-AGI-2 results)

• OpenAI conveniently forgot to include this comparison (ARC-AGI-2) in their livestream recital of benchmark progress, which left the livestream looking like marketing rather than science.

• Fan will still find something to rejoince in, but GPT-5 is not the huge leap forward people long expected.

• Lots of questions TBD about real-world performance.

• GPT-5 is obviously not AGI.

Also:

• Pricing is good, but profits may continue to be elusive; still no clear technical moat.

• What was up with multiple graphs (at least two) in which the bars didn’t match the numbers? Did GPT-5 make them??

Never have 69.1 and 30.8 looked so different. And 52.8 is now less than 69.1??

Quote of the day: “I dont wanna read anything about exponential progress anymore”,

—X user @flowersslop

and for good measure, a deceptive (or just confused?) graph about deception:

“AGI 2027” seems more and more remote by the day.

Gary Marcus thinks that perhaps scaling is not in fact all you need.

* SPY $638.10

* QQQ $575.09

Upside:

-IMXI +60% (Western Union to acquire International Money Express for $500M at ~$16/shr in all-cash transaction; reports earnings)

-EQ +58% (announces Up to $50M Financing to Advance EQ504, a Novel Aryl Hydrocarbon Receptor Modulator, into the Clinic)

-IOBT +58% (announces Clinical Improvement in Progression Free Survival Demonstrated in Pivotal Phase 3 Trial of Cylembio plus KEYTRUDA (Pembrolizumab) for treatment of First-line Advanced Melanoma)

-TGNA +30% (reportedly Nexstar in discussions to buy Tegna; potential terms not disclosed)

-MLNK +23% (to be acquired by Centerbridge Partners at $20.00/shr cash for $2.0B; reports earnings)

-WLDS +23% (secures U.S. patent for Neural Interface Technology)

-SPNS +21% (reportedly Formula Systems is in advanced talks to sell control of the software company at a valuation of ~$2B)

-RUM +13% (confirms 'Intent' to acquire AI Company Northern Data in all-stock deal; reports earnings)

-SPHR +12% (earnings)

-ALB +9.9% (additional lithium supply is offline in China)

-DALN +9.9% (Holder MNG Enterprises submits enhanced offer to acquire all of issued and outstanding shares not already owned for $17.50 per share in cash)

-AMC +7.5% (earnings)

-MU +5.2% (raises guidance)

-PSKY +4.7% (obtains exclusive US rights to UFC in 7-yr agreement with TKO)

-CRWV +4.5% (hearing price target raised at JPM)

-AVAH +4.1% (Raymond James Raised AVAH to Outperform from Market Perform, price target: $9)

-COIN +3.2% (BTC approaches all-time high)

-EVER +3.2% (repurchases $21M shares from largest shareholder)

-INTC +2.9% (CEO expected to visit White House)

Downside:

-AI -32% (prelim earnings)

-AAON -17% (earnings, guidance)

-MNDY -14% (earnings, guidance)

-REPL -9.3% (Dr. Vinay Prasad returns to US FDA; to resume role as Director of the Center for Biologics Evaluation and Research)

-DOCN -7.7% (files to sell offering of $500M of Convertible Senior Notes due 2030)

-UPST -7.5% (files to sell private offering of $500M of Convertible Senior unsecured Notes due 2032)

-CAPR -6.4% (Dr. Vinay Prasad returns to US FDA; to resume role as Director of the Center for Biologics Evaluation and Research)

-B -3.2% (earnings, guidance)

* And buying PARA....

As I wrote in The Comments Section, I wouldn't be surprised to see a down day and down week.

Positioning appropriately in Indices and individual stocks.

Long Paramount ( (PSKY) under $11), first time long time - based upon the UFC deal and other factors . Paramount buys UFC rights in $7.7 billion, 7-year deal PSKY will get an explosion in streaming sign ups now.

From JPMorgan:

US: Futs are up small with RTY outperforming. US asked China to increase soybeans purchases 4x ahead of tmrw’s trade deadline; Lutnick previously said another extension is likely. NVDA / AMD to pay 15% of China chip revenue to US Govt. Geopolitics in focus with a larger impact on EMEA. Pre-mkt, Mag7 names are mixed with Semis lower dragged by NVDA/AMD; Cyclicals over Defensives. Bond yields are lower as the curve flattens and USD is flattish. Cmdtys are lower with Energy/Metals weaker but Ags stronger. There are no major macro data prints today but market will focus on CPI tmrw.

and...

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

Last week, we were bullish but with lowered conviction given the downside surprises in the macro data and the potential for investors to position themselves for a hawkish CPI print. We were too cautious, or perhaps too early, as the SPX had it best performance since late June; and, now some clients are expressing a view that the CPI print does not matter. WHY? Many investors are viewing tariff-induced inflation as transitory and while there may be an inflation spike into year-end, that peak may be lower than expected. Further, some clients think sell-side estimates of future effective tariff rates are too high and that realized inflation will surprise to the downside. The implications here are (i) growth will hold up better than expected as consumers retain more spending power; (ii) if realized inflation is lower, businesses may be more inclined to resume hiring and capex plans; (iii) the Fed will still cut and possibly more aggressively than expected; (iv) the only pullback we are likely to see is one induced by seasonality where the SPX has fallen ~1.5% in Sept on average over the last 25 years only to be followed by +4.1% gain in Q4; (v) earnings expectations may be too low.

We are Tactically Bullish as we see this week’s macro data (Retail Sales, CPI, PPI, Jobless Claims) remaining supportive of bull case, with earnings likely to maintain their positive trend. Separately, we do not think the data points will do much to change the bond market’s forecast of three 25-bp rate cuts this year. The key risk is CPI printing hawkishly. Feroli sees Headline CPI MoM printing 0.26% and Core MoM printing 0.34% which equates to 2.8% YoY for Headline and 3.1% for Core. While inflation is moving higher we have not yet seen evidence of an inflation shock, e.g. Headline YoY seeing a 0.5%-pt increase from previous month like we saw in 2021 and 2022. If the inflation increases are more gradual, then the market is likely to remain unbothered unless / until we get to a level that would make a rate hike a credible threat. That levels may be closer to 4.0% for Core YoY unless that Fed views that type of print as transitory.

· MONETIZATION MENU – We like longs in MegaCap Tech / Mag7, AI-Theme, Chinese Tech, some Cyclicals (e.g., Fins, Industrials, and Semis). Those Cyclicals trades will benefit the most if CPI/PPI print dovishly, but Feroli’s forecast is likely to keep the curve from bear flattening, which would be the headwind to those trades. Also, a dovish print likely weakens the USD making EM Equities a positive play; within EM, we look to Latam as one of the better plays irrespective of US / BZ trade relations. Australia and Japan remain in focus as longs. For hedges / pairs, we like US over Europe / UK. +Quality vs. -Beta is pair that acts a hedge to bullish portfolios.

· OLD MONETIZATION MENU (Aug 4)– We still like most of the previous Monetization Menu but would flag the Cyclicals may struggle if ISM-Srvcs disappoints; the same argument applies to RTY. We like being Tactically Short Europe as both macro and micro environments are challenged. Previous Menu – For Longs, we like Tech (includes a tactical preference for Software over Semis but would not short Semis), Mag7, AI Theme (including Chinese Tech), Cyclicals (esp. Fins and Industrials), and the Quality factor. Keep an eye on the USD rally. For International plays, Japan appears the most attractive, but tariff announcements are driving short-term plays (e.g., Brazil, India). For Shorts or Hedges, consider RTY (higher-for-longer), Beta Factor (overly crowded), Metals / Miners (copper tariff exemptions), some Discretionary plays (e.g., Autos, Homebuilders, parts of Transports). Further, consider using derivative plays to hedge such as SPX puts / put spreads or long VIX plays.

The Divine Ms M is spot on in her observations this morning.

Run don't walk to read her opening missive. AI Stocks Are Eating the Market - TheStreet Pro

Trump Says He's 'Going To Look At' Marijuana, As White House Chief Of Staff Receives Rescheduling Reports - Marijuana Moment

I initiated three new investment longs (deep value) late last week - UNH, LLY and DIS. I plan to add on weakness.

More later in the week.

I initiated several trading short rentals of momentum stocks recently - HOOD NVDA, PLTR (see my Barron's comments) and added to the mother ship of momentum GRNY

John Mauldin's weekly Thoughts From The Frontline - "Soft Data Hardens". TFTF_August_09_2025.pdf

"If you think the food is poison,

you can starve at a banquet."



- Art Cashin

Bonus- here are some great links;

August Volatility ("Jazzy" Jeff Hirsch) August Monthly Option Expiration Mixed and Often Volatile – @jeffhirsch on Tumblr

DeGraaf On The Short Term Jeff discusses SPX internals and implications on CNBC - 8/8/2025 - RenMac

Breaking a 22 Year Ceiling Breaking a 22-Year Ceiling 🚀 Stocks Stuck In Nowhere Land Shortened: Need Help With Your Pond? Increasing Earnings Volatility Bespoke | My Research

The S&P Short Range Oscillator is at -1.52% v -1.38%.

So it's still modestly oversold.

I was mentioned in Randall Forsyth's UP AND DOWN WALL STREET column over the weekend in Barron's. (Re Palantir PLTR which I am now short)

Dougie Kass

STAFF

9 hours ago

- Friday Night Trading 7:40 PM

    Shorting more SPY $638.44 and QQQ $575.74

- Sunday Night Trading 6:01 PM

   Shorting more SPY $637.49 and QQQ $574.59