Where to Buy Back Palantir, Intel Pops and Presidential ... Peacemakers?

Pres. Trump welcomed Ukrainian Pres. Volodymyr Zelenskyy to the White House on Monday along with a bevy of Europe's leaders. After a previously unsuccessful first trip to the Trump White House, Zelenskyy ditched his traditional olive drab tee shirt and military style trousers choosing instead to don a black dress shirt and black blazer. The subtle show of respect appeared to go over well with both the U.S. president and the press corps.

The U.S. president is pushing for a peace deal between the warring nations that would likely require the Ukrainian side to swap territory already held by Russian forces and then even some land still held by the Ukrainian army in exchange for a security guarantee that would involve both European and U.S. forces but not directly involve the NATO military alliance. With Pres. Zelensky present, Pres. Trump said, "This gentleman wants it to end, and (Russian Pres.) Vladimir Putin wants it to end. We're going to get it ended."

The U.S. president skipped over the more orthodox step of officially achieving a ceasefire prior to trying to get the warring factions to talk peace. Against the preferences of both German Chancellor Friedrich Merz and French Pres. Emmanuel Macron, Pres. Trump actually called Pres. Putin during the discussions and tried to get a meeting set up between Putin, Zelenskyy and very likely Trump himself, where discussions could be taken to the next level. Russian media alluded to the fact that high-level meetings were likely, but did not clearly state that President Putin would be part of those meetings.

It's a Big Ask

The region that Ukraine is probably being asked to cede over to Russia is rich with rare earth minerals and has not yet been completely occupied by Russian forces. It's believed that the area that Pres. Putin is asking for in exchange for peace in eastern Ukraine is between 20% to 25% still under Ukrainian control. On the other side, Ukraine would receive a security guarantee that -- though not a NATO mission -- would largely involve NATO powers and include some kind of deal akin to a NATO Treaty-like article 5. Article 5 of the NATO Treaty states that an armed attack against one signed member would be considered an attack against all signatories.

Found This Gem

I know many readers are not all that crazy about Judy Shelton, the first-term Trump nominee to the Federal Reserve Board of Governors who did not get through the Senate confirmation process. Many consider her ideas about the backing of what is currently fiat currency with something tangible to be antiquated. I, on the other hand, as an Austrian-style economist at heart, think of her as something of a modern-day monetary hero. I think her theories on how to stabilize U.S. dollar valuations using the issuance of asset-backed treasury debt securities are a stroke of genius and should be eventually considered by the U.S. Treasury.

All of that is neither here nor there at the moment. I found this gem of a quote in a Sept. 3, 2008 op-ed written by Shelton for the Wall Street Journal. It seems so fitting to cite here, given all that is going on in eastern Europe these past few years. Might have staved off a lot of grief, and death. Check out Shelton's words from 17 years ago:

"The most farsighted move Western governments could make would be to set up a fast-track approach to European Union membership for the most vulnerable of Russia's neighbors: Ukraine. As a parallel step, an interim monetary facility should be arranged to help the country make an early transition to the euro: if the EU balks, the US should offer Kiev the opportunity to dollarize. Investors will be drawn to the stability and freedom of conducting business in a major reserve currency."

Arming Ukraine 

News broke that as part of any peace deal or security guarantee; Ukraine is committing to the purchase of between $90 billion and $100 billion of U.S. military hardware. The U.S. would also purchase Ukrainian drones as part of the arrangement once peace is achieved, and Ukraine can resume normalized international trade relations. Lockheed Martin LMT, RTX Corp RTX, Northrop Grumman NOC, and L3Harris LHX all closed in the green on Monday. Note that this deal would not in theory do much for U.S. unmanned aircraft producers such as Kratos Defense KTOS or AeroVironment AVAV though I am not especially worried about either one of those firms finding markets for their goods.

Marketplace

Of course, markets are as much (if not more) focused on this Friday's speech by Fed Chair Jerome Powell as they are on the prospects for world peace. Markets were, as advertised in this column24 hours ago, quiet. Treasuries showed some slight weakness on the day as did equities. The U.S. Ten-Year Note paid 4.33% by day's end, which was up a single percentage point.

On the equity side, the S&P 500 lost 0.01% while the Nasdaq Composite gave up 0.03%. In short, these two "major" equity indexes closed as close to "unchanged" as possible in the digital, decimalized age. Looking for any kind of action? The KBW Banks gained 0,52% for the regular session while the Russell 2000 lost 0.35%.

Not one of the 11 S&P sector SPDR exchange-traded funds managed to move a full percentage point for the day. Four of the 11 closed in the green led by the Discretionaries XLY, while the REITs XLRE led the losers. As far as breadth is concerned, winners beat losers by a 4-to-3 margin at the NYSE and by about 5 to 4 at the Nasdaq. Advancing volume took a majority share of both NYSE-listed and Nasdaq-listed activity as well. 

That said, trading volume dropped sharply across NYSE-listings as well as across the membership of the S&P 500. Trading volume edged slightly higher across Nasdaq-listings from Friday's levels but remained well below its 50-day simple moving average. Monday was not a consequential day for U.S. markets.

Intel Pops!

Beleaguered U.S. computer chip designer and manufacturer Intel INTC is trading more than 6% overnight after dropping almost 4% on Monday. The stock sold off during the day as a report circulated that instead of making a new investment in the firm, the U.S. government was considering converting up $10.9 billion in grants from the Chips Act into an equity stake that would amount to a rough 10% for something close to 442 million new shares that would dilute the equity for current shareholders.

After the closing bell on Monday, however, Japan's Softbank announced a $2 billion investment in the embattled chipmaker. Hence the overnight rally. The investment is being seen as a vote of confidence in the former tech star that still holds a spot in the Dow Jones industrial average. In recent years, Nvidia NVDA has blown Intel away in creating a market for AI-capable processors while Advanced Micro Devices AMD has stolen Intel's lunch in the PC and gaming markets. Making matters worse, Intel's foundry business has struggled to make inroads in a market dominated by Taiwan Semiconductor TSM. ​​

What gives? Intel needs to crack the $27 level to break out of a long flat base that stretches back to early August 2024. My target price for the stock should the federal government and Softbank take on sizable equity stakes is $33. I am long these shares. Readers will also see that INTC needs to trade at $28.89 to completely fill the gap created by the early August 2024 melt-down.

Where I'm Buying Palantir

Readers of the Dougie Kass Diary on days that I fill in as his substitute are well aware that I took some profits in my beloved PLTR last week at an average price of $185.60. With the stock's all-time high at $190 and the overnight last sale that I saw in the $172 area, I could claim my action to be a stroke of genius.

If I were dishonest. That is. The truth is that I was simply right-sizing my position because as my most heavily weighted position, it had become too much of my portfolio. An original entry price with a $6 handle will do that to you. Well, my family office is also facing a redemption from a member who is not just leaving the business but leaving the family altogether. So, I sold even more shares of the stock last week than I had intended to protect her gains. So far, so good.

But where to buy PLTR back? We're getting close. Kind of... ​

Readers will see that as PLTR has sold off over the past four sessions, Relative Strength has come down from the stratosphere, while within the daily Moving Average Convergence Divergence, the 12-day exponential moving average has crossed below the 26-day EMA. That's not usually a positive. As the stock approaches its 21-day EMA, we'll see what the swing crowd does. If they take profits, the stock could eventually test its 50-day simple moving average. Keep in mind that there remains an unfilled gap from early August that would need a tick as low as $161.40 to fill.

In the meantime, even with the sales that I was forced to make through both discipline and circumstance, this name remains the most heavily weighted position on my book and my target price remains $205.

Economics

(All Times Eastern)

08:30 - Housing Starts (Aug): Expecting 1.3M, Last 1.321M SAAR.

08:30 - Building Permits (Aug): Expecting 1.39M, Last 01.393M SAAR.



08:55 - Redbook (Weekly): Last 5.7% y/y.

4:30 p.m. - API Oil Inventories (Weekly): Last +1.5M.

The Fed

(All Times Eastern)

2:10 p.m. - Speaker: Reserve Board Gov. Michelle Bowman.

Today's Earnings Highlights

(Consensus EPS Expectations)

Before the Open: HD (4.69), MDT (1.23), VIK (1.00)

After the Close: KEYS (.53), TOL (3.60), ZTO (2.86)

At the time of publication, Guilfoyle was long RTX, LHX, NOC, KTOS, INTC, NVDA, AMD, PLTR equity.