A new Fed era begins this week. Kevin Warsh is officially taking over as Chair of the Federal Reserve, replacing Jerome Powell after eight years. That matters because the next phase of the market may depend less on earnings alone and more on how Warsh handles rates, inflation, and liquidity. Lower rate expectations could support risk assets, small caps, and growth stocks, but if inflation stays sticky, the Fed may not have as much room to ease as investors hope. What do we know about Kevin Warsh? He’s a strong advocate of balance sheet reduction. Warsh may be more open to lower rates if growth weakens, but he also appears committed to reducing the Fed’s balance sheet. So the market...
A Break in the AI-trade Did the “AI bubble” finally start to crack last week? After racing to record highs, AI leaders like Micron, Nvidia, Broadcom, Marvell, and AMD sharply pulled back, with several posting their worst single day losses in weeks. The issue clearly isn’t AI demand. Applied Materials just issued strong guidance, forecasting semiconductor equipment sales growth of more than 30% this year, specifically pointing to AI and memory demand as key drivers. On top of that, AI CapEx is still climbing, directly funding the companies selling the “picks and shovels” behind the infrastructure boom. So what gives? Why the pullback? It comes back to one of the two biggest forces that drive markets: earnings and interest rates....
A Historic Change is Coming to the Stock Market One of the most important changes in the past decade is happening this week one the market as Jerome Powell’s Fed Chair term ends and Kevin Warsh (if confirmed) takes office. Kevin Warsh is Trump’s nominee to become Fed Chair, which has many divided on whether or not he’ll be acting in favor of Fed independence or not. Trump has historically been vocal about Powell, arguing that he is not leading The Fed well and that he showed lower interest rates to as low as 1%. This exact thing is what has some worried…if Kevin Warsh doesn’t stand ground against Trump, he may lower rates, even when the economy doesn’t warrant...
Sell in May and go away’ is the classic Wall Street saying because the market has historically entered a softer, slower stretch after April. This would usually make sense, but after the month we just witnessed, does it still apply? The answer is a yes, but with a nuance. Rarely do we ever saw Wall Street not “shift” capital elsewhere…so what we’re looking for in May is a pullback in the overextended names and a move in the “dormant” names (we’ve been highlighting these names in our watchlists over the past few weeks). The buildup into other sectors takes time…then the move comes suddenly. The Federal Reserve Shake Up The Federal Open Market Committee (FOMC) held interest rates for the...
Weekly Stock Market Update & SPY Technical Analysis This week marks the end of an era…one that was led by a man named Jerome Powell, who served as the Chair of the Federal Reserve since 2018. Since then, Powell has been the most powerful man in the United States financial system, arguably in the world. The Federal Reserve sets monetary policy, controls interest rates, manages liquidity, and oversees the stability of the financial system. Every major asset class: stocks, bonds, real estate, and even crypto, has been directly influenced by the decisions made under his watch. What Happens When Powell and Kevin Warsh Takes over is Gone: While historically known as an “inflation hawk” (someone who prioritizes high interest rates...
