Feb 5, 2025
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“The reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down” – Sundar Pichai
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equity futures are lower this morning but off their overnight lows. Weakness is concentrated in the Nasdaq where negative earnings reports are weighing on some notable names. Crude oil and Treasury yields are lower on the morning while gold makes a run for $2,900 per ounce.
For Alphabet (GOOGL), the last two months must feel like Charlie Brown trying to kick the football. For several weeks, the stock made multiple attempts to break above $200, and each time it got there, the rug was pulled out from under it and it finished back below that level by the end of the day. Last week, GOOGL finally got and stayed above $200. Yesterday, the stock traded up more than 2.5% to a record high. Then the Q4 earnings report hit.
While the company reported better-than-expected EPS, revenues came in slightly weaker than expected due to slower-than-expected growth in its cloud services business. The company also shocked the street by saying that it plans to spend approximately $75 billion on cap ex this year, up over 40% from 2024 and significantly above forecasts of around $59 billion.
While company officials attributed the slowdown in cloud sales growth to a problem with capacity rather than demand, and most other divisions within the company saw better-than-expected results, shares of GOOGL immediately traded lower in after-market trading. While the stock is modestly off its overnight lows, it’s still down 7.2% relative to Tuesday’s close. As shares open for trading this morning, rather than being at record highs, shares of GOOGL will be struggling to hang on to their 50-day moving average.
Feb 4, 2025
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“I think that people just have this core desire to express who they are. And I think that’s always existed.” – Mark Zuckerberg
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equity futures are flat this morning after a wild Monday that saw the major indices gap down 1%+ but recover about half of that during the trading day. While Mexico and the US came to an agreement to delay tariffs by 30 days around lunch time, Canada and the US didn’t agree to their short-term truce until just after the close.
Today is the 21st birthday of Facebook, which was launched by Mark Zuckerberg in his Harvard dorm on 2/4/2004. Below is a snapshot of one of the first versions of the Facebook profile, which was entirely used on desktops and laptops at that point because the iPhone was still a few years away.
It took eight years from launch for Facebook (now META) to IPO. Below is a look at the growth of a $10,000 investment in META at its IPO price back in May 2012. $10k at the IPO held through yesterday’s close would now be worth roughly $184,200, but it certainly didn’t get there in a straight line.
Recall that META went “all-in” on the metaverse in the early 2020s, which, combined with a nasty bear market for growth stocks, resulted in a 76% drawdown from September 2021 to November 2022.
At its lows in late 2022, a $10k investment at META’s IPO in 2004 had fallen from more than $100k at its 2021 peak all the way down to just $23,400.
Zuckerberg reversed course on the metaverse to try and stop the bleeding, and he dubbed 2023 the “year of efficiency” for the company. Around the same time, ChatGPT came along to start the AI Boom. Since its lows in 2022, META has rallied nearly 700% and currently sits at all-time highs.
Feb 3, 2025
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“As has been often noted but seldom heeded, selling during a selling panic is rarely an effective strategy.” – Bill Miller
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Last Monday it was DeepSeek, this Monday it’s tariffs that have US equity futures trading down 1-2% ahead of the open. With President Trump ordering tariffs on imports from China, Mexico, and Canada over the weekend, below are price charts of ETFs covering these three countries plus the US (SPY). We include where each ETF is currently trading in the pre-market so you can see how big this morning’s declines are relative to the last six months of action. Yes, all four are set to open quite a bit lower, but all four will also still be above their lows seen over the last month or so. Mexico (EWW) is the only ETF of the group that will be near six-month lows if it opens at current levels.
Jan 31, 2025
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“The most important lesson an investor can learn is to be dispassionate when confronted by unexpected and unfavorable outcomes.” – Peter Bernstein
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The S&P 500 ETF (SPY) is currently trading up roughly 0.4% pre-market, while the Nasdaq 100 ETF (QQQ) is up 0.8%. Apple (AAPL) is driving futures higher with a 4% pre-market gain after reporting mostly weaker-than-expected earnings yesterday after the close.
As shown below, all of the key US index ETFs across markets caps are currently in “neutral” territory.
Below is a look at how the biggest decliners during Monday’s sell-off have done since. There were 25 stocks in the S&P 1500 that fell more than 15% on Monday, and those names have averaged a bounce-back gain of 8.06% since Monday’s close. However, they’re still down an average of 13% on the week, so they have some work to do to recover Monday’s losses.
Jan 30, 2025
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“I think in terms of next year, our constraints, I think it’s likely to be just regulatory.” – Elon Musk
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
When you see a quote like the one above from Tesla’s conference call last night, it’s understandable why Elon Musk took such an active role in last year’s Presidential election. The chart below is from our annual outlook published in December and shows the annual number of pages in the Published Code of Federal Regulations since 1950. While death and taxes are the only certainties in life, the growth of government is right up there. For nearly every year since 1950, the number of pages in the published code has increased, and for the most recent year available (2023), it hit a record high of over 190,000. As we highlighted in our outlook back in December, the potential for a halt or slowdown to what has essentially been uninterrupted growth in government over the last several decades is certainly a pro.
Jan 29, 2025
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“Discrepancies – and hence opportunities – in securities originate most often when events move faster than quotations.” – Benjamin Graham
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Markets bounced back on Tuesday from Monday’s DeepSeek drop, and the S&P is entering Wednesday trading down just 58 bps on the week. Investors sold first and asked questions later on Monday, but once they did start asking questions, it seems as if cooler heads might be starting to prevail.
While AI Infrastructure stocks have fallen this week, the DeepSeek news has caused investors to contemplate an overall lower cost to compute on the AI front, which should benefit margins for companies in the AI Implementation space and also increase overall demand from consumers in the long run.
As shown below, NVDA’s drop in market cap this week has mostly been offset by gains in market cap for the other major mega-cap Tech and Tech-adjacent stocks. Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta (META), and Microsoft (MSFT) have seen a combined increase in market cap of $299 billion so far this week, while NVDA has seen a drop of $334 billion. On a net basis, the market cap for all six of these behemoths has only fallen $34.8 billion on the week.
Below is a quick snapshot of the six mega-caps mentioned above run through our Trend Analyzer tool. While NVIDIA (NVDA) is down 8.4% over the last week and in oversold territory, Meta (META) and Apple (AAPL) are both up more than 7%.
