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DJIA: 52,759
Just say yes to drugs… especially those of the Biotechs. It’s two for one, you can make money and live to spend it. And it’s just possible the Wednesday rally might pull us out of a dreaded technical condition, they call it August. Of course, the rotation is nothing new, but when most Oil stocks act better than most Semis, you can’t help but laugh, or is it cry? The Semis have a problem with the 50-day, or what we think of as a thermos. The thermos keeps things hot or cold – how does it know? In similar fashion, the 50-day stops declines or in this case rallies – see the SMH (563) or most of the Semis. After big rallies most of the stocks are in big corrections, but big uptrends don’t die easily. They will rally back but then there’s the head game of sell, buy more or do nothing. Stay tuned.
Pain relief also came Wednesday in the form of a bond rally. If you haven’t been worried about the chart there either you haven’t been looking, or like us you’ve been waiting for damage in the Financials – yet to happen. Not quite sure why the rally was so helpful to the precious metals and Copper, but we will take it. If the latter is indeed an AI play, it acts better than the rest of them. Meanwhile, the MAG 7 has been considerably less so lately, do in part to META (546) and its particular world of hurt. We dare not walk on the dark side of funnymentals, so we will simply report, in this case from the New York Times. The net profit for the MAG 7 was derived primarily from investments, without which second quarter profit would have been flat. Over 70% of Google’s (GOOGL – 341) income came from investments, primarily SpaceX (SPCX – 134), and 65% of Amazon’s (AMZN – 260) net income came from its stake Anthropic. These are investment companies?
Frank D. Gretz
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