Market Update: AI Volatility, Fed Policy, and Yields If you made through last week alive, you did better than the “prodigy” Leopold Aschenbrenner, whose hedge fund, Situational Awareness, reportedly lost roughly more than 65% of its value after a collection of highly leveraged AI trades moved violently against it. The firm was forced to unwind much of its approximately multibillion dollar public stock portfolio,. The crazy part? Citadel was able to take advantage of the forced selling just as several of the same AI stocks began rebounding. It was another reminder that leverage does not care how intelligent you are, how convincing your thesis sounds, or how much money investors have trusted you with. As smart as Leopold may have...
The stock market faces one of its most important weeks of the summer as investors prepare for the Federal Reserve’s interest-rate decision, fresh inflation data and earnings from Apple, Microsoft, Amazon and Meta. Meanwhile, Israeli Prime Minister Benjamin Netanyahu’s meeting with President Trump could influence oil prices, inflation expectations and geopolitical risk.
Weekly Stock Market Update & SPY Technical Analysis “Timberrrr!” went memory and semiconductor stocks last week as investors took profits and began questioning just how much upside remains in the AI trade. After months of relentless gains, many of the market’s biggest winners suddenly became its biggest losers, reminding investors that even the strongest themes eventually need a breather. Is the AI rally over? The market should start getting its answer over the coming weeks as the world’s largest technology companies involved in the AI buildout report quarterly earnings. Right now, there are only two things that can restore investor confidence…strong corporate earnings and lower interest rates. The interest rate picture remains uncertain. Rising energy prices have complicated the inflation...
Weekly Stock Market Update & SPY Technical Analysis The stock market has been “boring” over the past few weeks, but things are about to get exciting again as investors receive important economic data and earnings season kicks off. Since Kevin Warsh took over as the new Federal Reserve Chair, investors have been increasingly uncertain about the future of monetary policy. Warsh was initially viewed as someone who could favor lower interest rates, making his appointment appear bullish for stocks. However, his first remarks and Fed meeting were far more hawkish than many investors expected. The main problem? Inflation. Ongoing inflation pressures (primarily because of the Middle East chaos) have made it extremely difficult for the Federal Reserve to justify additional...
Weekly Stock Market Update & SPY Technical Analysis New Fed Chairman Kevin Warsh spoke last week ahead at the annual European Central Bank (ECB) Forum in Sintra, Portugal. One key remark that stood out to the Hyper Stocks team was his promise to “disappoint” anyone who thinks he will target inflation running higher than 2%. The reason this is worth noting is because it ties directly to The Fed’s interest rate decisions. Trump & Warsh Shortly after being nominated by Trump to replace Jerome Powell, worries surfaced that Warsh would cut rates to appease Trump rather than stick to the Fed’s dual to serve the American public. We’ve covered the implications behind all this many times in our analysis. Markets...
