November 7, 2025 • 14 mins
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Good morning and welcome to the Bulls Bears and the Bell Morning
Edition. Thank you for joining us today.
We're diving straight into what looks like a really critical
institutional market intelligence briefing.
Our mission really is crystal clear.
We need to figure out exactly where the big money, the
institutional capital, is actually flowing because
(00:21):
honestly, the tension out there,it feels really high, almost
contradictory. Yeah, contradictory is a good
word. It's maybe more than just
tension, though. It's what we're calling
structural friction. Think about it like this, The
market's trying to operate almost like a high performance
engine, but it's using 2 completely different kinds of
fuel at the same time. OK, two fuels.
Like what? Well, on one hand, you've got
(00:42):
this constant heavy drag, that'sthe macro caution, you know,
high interest rates, those rising yields we keep talking
about and now record US household debt that's weighing
things down, right? But then fighting against that,
you've got this other fuel, it'slike specialized high octane
stuff. These are the micro catalysts
mostly coming from really selective strong Q3 earnings
(01:02):
from specific companies. OK.
So that difference, that macro drag versus the micro thrust,
that's really the key take away for you, for the listener.
But hang on, if those broad market strategies like index
funds are stuck because of that macro drag, doesn't that make
chasing those individual companywins that idiosyncratic alpha, I
(01:23):
think you called it? Isn't that way riskier?
I mean, are we talking real alpha or is it just, you know,
smart gambling dressed up by a few good earnings reports?
That's exactly the right question.
And yes, the risk is higher, no doubt about it.
But the opportunity, oh, it's just too concentrated, too
specific to ignore right now. It really means the old saying,
a rising tide lifts all boats. That's just not happening now.
(01:44):
OK. But because some of these
company stories, the execution stories are so powerful, the
potential reward for picking theright ones, Yeah, it's still
really high. You just you can't afford to be
passive selection is absolutely crucial.
All right. Let's dig into that macro drag
first. Then in the immediate technical
picture, looking at U.S. equity futures this morning, there's a
(02:05):
definite softness there, foundational weakness, maybe the
S&P 500 E mini, it's showing a bit of a relief bounce, sure, up
about what? Plus 233 points intraday.
But we need to pause there, right?
That little bounce, you have to see it in context.
The bigger picture is still pretty bearish momentum.
We've had a big drop over the last five days, down great .61%.
(02:28):
Three. That's over 110 points gone.
Does that steep decline mean shorts are getting more
confident, or is it still just fear?
I think that strong negative move confirms the structural
skepticism is really taking hold.
It's overriding the day-to-day noise.
The market seems to be pricing and conviction now and that
conviction, well it's rooted in those constraints.
We mentioned the jump in long term bond yields definitely and
(02:50):
crucially that record high US high sold debt figure that just
came out. When consumers are stretched
that thin, it's just a massive headwind for big parts of the
market, especially anything consumer focused.
So technically speaking, where'sthe line in the sand?
What level are the trading deskslaser focus on today?
Where does it technically break if that macro fear really grabs
(03:10):
hold? The immediate focus tactically
is definitely on the S&P 500 E Mini first support level that's
sitting at 6706.17. Now if we fail to hold that
level, it wouldn't just be a small dip, it would likely
trigger a cascade of stop loss. The domino effect.
Exactly. And that would technically
(03:31):
confirm that the macro fears, specifically the anxiety around
yields and debt, are really in the driver seat.
OK. But here's where it gets
interesting, right and points toyour idea about specific alpha
opportunities. While the S&P is looking soft,
the tech heavy NASDAQ 100 futures, they're actually
trading noticeably higher up over plus 133 points.
(03:52):
How do we square that? This deep structural fear across
the board, but then this pocket of strength isolated in tech.
That NASDAQ strength, that relative outperformance, that's
the signal. It tells us capital is moving,
but it's being incredibly selective.
And what's really fascinating ifyou look at the pre market
activity is the extreme bifurcation.
The split is huge. Bifurcation.
Meaning you've got 2 totally different things happening at
(04:13):
once. Yes, you see some crazy high
volume speculation in tiny stocks like Biya.
Up over 30%. Ninety sentence, usual volume.
Pure speculation maybe? Right, the lottery tickets.
Kind of. But right alongside that, you're
seeing really significant high quality moves in established
solid companies. So Capital isn't just chasing
(04:34):
any risk, it's hunting for validated risk stories, places
where the company has actually proven it can navigate these
macro headwinds. OK, validated moves, let's talk
about those. We saw some serious M&A activity
boosting confidence. Bright House Financial BHF
jumped over plus 26% on acquisition news and Golden
Entertainment GDEN wow, up over a + 40%.
(04:56):
That was an acquisition plus a sale leaseback deal, wasn't it?
That's right. So this is company leadership
basically putting their money where their mouth is, signaling
confidence in their own value. Yeah, exactly.
M&A like that always shows conviction.
But the real aha moment, I thinkfor you listening is in the tech
gainers because they reveal whatkind of tech is getting rewarded
right now. It's very specific, OK.
(05:16):
Lay it out for us. But look at snap SNAP up nearly
plus 18% after their Q3 earningsbeat and they specifically
linked it to a perplexity AI deal.
Tangible AI connection. Tangible is the word.
And then you have Datadog DDOG also strong results up over plus
15% that really supports the story around enterprise software
(05:38):
cloud optimization areas that are still seeing investment.
So let me connect the dots here.Yeah, what you're saying is the
money isn't just chasing AI hyper promises anymore.
It's flowing aggressively towards companies like Snap and
Datadog that are showing real, actual monetization from AI
tools. They're making money from it
now. Precisely.
That's the critical distinction,and it stands in stark contrast
(06:00):
to the sort of general anxiety you see at the index level,
where you hear worries about AI valuation concerns resurfacing
for the whole NASDAQ. The market seems to be rotating,
moving out of those broad tech bets the index plays and into
these very select, proven names that are actually delivering
with the technology today. That's textbook idiosyncratic
alpha, right when the broader index is feeling constrained.
(06:21):
OK, makes sense. But we have to look at the other
side of going to the decliners. They often give us clear
warnings about market sensitivity, don't they?
Absolutely. They're Canaries in the coal
mine. Look at Celsius holdings.
CELH down over 21%. That's a huge drop, especially
since the results themselves weren't universally terrible,
were they? So why such a harsh reaction?
(06:42):
CLH is a really crucial case study here.
It highlights just how sensitivethe market is to high yields and
debt right now. The headline results almost
didn't matter because investors immediately zoomed in on this
disclosed what was it a 240 seven, $7,000,000 hit from
termination costs, and it brought back concerns about
their debt load. So it's.
(07:02):
The balance sheet, not just the income statement entirely.
In this kind of high yield environment, the market shows
almost 0 tolerance, extreme intolerance really for any kind
of margin compression or any hint of balance sheet weakness.
They're scrutinizing the cost structure intensely that.
Hypersensitivity to cost and debt, yeah, that sounds like it
could easily spread, right? A contagion risk for other
(07:23):
growth stocks it. Absolutely.
Is it poses a significant risk to any growth company carrying a
lot of debt. If you've got thin operating
margins and your borrowing costsare high, well, the market is
going to punish you very quicklybecause capital just isn't cheap
anymore. Yeah, We also saw this fragility
of the skittishness underscored in biotech.
Sangma Therapeutics SGMO droppednearly 24%.
(07:46):
Why? A big miss on both EPS and
revenue. It just shows how fast capital
will flee clinical stage companies if there's any hint of
failure. Risk sentiment is incredibly
fragile there so. It's a tricky environment.
Then very specific execution gets massively rewarded, but any
slip up, especially on costs or debt, gets punished ruthlessly.
(08:08):
OK, let's pivot now to the macroforces that are really going to
shape things today and later this week.
The calendar looks packed with potential market movers.
Systemic risk feels concentrated.
Yeah. The density on the forward
calendar, it definitely suggestsvolatility is likely to spike.
Just today, November 6th, we've got 4 count 4-4 high impact
Federal Reserve speakers on the docket, including Presidents
(08:28):
Williams and Muslim and. Their timing is interesting,
isn't it? Because we've had these really
contradictory signals from the labor market lately.
A decent ADP report on private jobs but then that quote
horrible layoff report showing 153,000 cuts that.
Contradiction is exactly why their comments are so crucial
today. ADP looks at payroll creation in
(08:50):
the private sector, while the layoff numbers track immediate
cuts. So.
Creation slowing while cuts are accelerating, that seems.
To be the picture emerging, yeah.
And it creates confusion about where the labor market is
actually heading. So with all these Fed officials
speaking today, there's a real amplified risk of what you might
call dissonant messaging, meaning they.
Might not all sing from the samehymn sheet.
(09:11):
Exactly. If they offer different
interpretations of this conflicting data, the market's
going to struggle to figure out the Fed's unified path forward.
And that uncertainty that usually translates directly into
significant swings, intraday volatility, particularly in
Treasury yields. OK.
So watch the Feds speak closely today and looking ahead later in
the week we get the real macro showdown right, growth versus
(09:34):
inflation that's. The main event the market is
bracing for, we get the second estimate for Q3 GDP.
Expectations are it'll confirm pretty solid growth, maybe even
revised up slightly to 2.7% strong.
Growth. But it's released at the same
time as the PCE deflator. That's the Personal Consumption
Expenditures price index, the Fed's preferred measure of
(09:55):
inflation. The one they watch most closely.
The one they. Watch most closely.
So imagine the scenario you get strong GDP confirmed, but it
comes alongside a high PCE reading showing inflation is
still sticky. Yeah, that combination would
basically pour fuel on the fire for the higher for longer
interest rate narrative. If inflation stays hot, even
(10:16):
with slowing job creation and strong growth, well, that would
seriously worsen the existing weakness we're seeing in
futures. The weakness driven by those
yield concerns got. It so a critical data pairing.
Now to get ready for that potential volatility, let's look
at today's earnings watch list. These reports can act like real
time economic checks, can't they?
They. Absolutely can key insights
(10:36):
today which. Ones stand out for signalling
broader economic health I. Keep a close eye on
semiconductors, but specificallythose with diversified exposure
outside of just pure data centerAI.
We've got Qualcomm, QCOM, and onSemi reporting.
They'll give us a read on chip demand in areas like automotive
and industrial sectors. If they post strong results, it
(10:58):
could actually provide a strategic counterweight to that
generalized AI valuation anxietywe talked about earlier.
Show that tech growth isn't justabout AI data centers, OK?
Diversified tech health And whatabout the consumer?
Given everything we've said about record debt, how do we
gauge their pulse today? Starbucks SBUX.
Their earnings are crucial. Why?
(11:18):
Because they provide really immediate high frequency data
points on discretionary consumerspending.
Coffee is a daily habit for many, but still discretionary a
direct. Line into wallets pretty.
Much it acts as a critical leading indicator tells us how
burdened or maybe resilient consumers are feeling with that
record dead and higher rates. If Starbucks misses
expectations, that strongly reinforces the markets deepest
(11:40):
fears about Consumer Financial strain, and that fear that
contagion could spread very quickly to other consumer
stocks. Wow.
OK, We've covered a huge amount of ground here, from specific AI
winners like Snap and Datadog tothe extreme sensitivity around
margins and debt shown by CELH, and now these big concentrated
macro risks on the calendar. But for you, the listener trying
(12:01):
to navigate this, what's the single most important strategic
pivot you need to be thinking about right now?
I. Think the absolute mandate is to
pivot away from just passive index betting.
You need to focus on proven specific company narratives.
So strategically think about overweighting those proven AI
adopters, the ones actually monetizing now like data dog,
(12:21):
like Snap. And conversely, you really have
to consider underweighting companies with high leverage
growth stocks carrying a lot of debt and those discretionary
consumer names, they're just toosensitive to rising debt costs
and margin pressures in this environment that.
Makes sense Be selective now since rising bond yields that
yield risk seems to be the central constraint, the main
driver of this broad market volatility.
(12:44):
What's the primary hedge recommendation?
How do you protect against that given?
That yield risk is front and center.
Yeah, you absolutely need to hedge against the possibility of
more hawkish Feds speak today ora high PCE number later this
week. The primary macro hedge in my
view should involve some kind ofinverse exposure to long dated
U.S. Treasuries.
(13:04):
OK, well you could look at buying put options on an ETF
like TLT which tracks the 20 year plus treasury bond market
or use similar inverse products.The goal is to protect your
portfolio against that rising cost of capital, which is
exactly what we'd expect if we get a hawkish outcome from the
Fed or the data, right? Hedging the core risk that
(13:24):
really crystallizes the picture.This heavy macroeconomic gravity
is pulling the market down, but it's being selectively overcome,
but only by superior company execution, especially those
successful AI or strategic monetization stories that.
Is precisely the tension defining the market today.
It's a real tug of war. And maybe here's a final thought
for you to chew on as you watch the data unfold.
(13:45):
Keep an eye on the upcoming advanced durable goods orders.
If that data confirms A genuine rise in business investment,
specifically in things like automation and technology, that
actually reinforces the productivity story for companies
like Datadog we mentioned. It suggests maybe, just maybe,
economic growth could be driven more by these efficiency gains
by technology rather than just widespread hiring.
(14:07):
So productivity up, but maybe not wages potentially.
It could suppress expectations for future average wage growth
even if the headline GDP number stays strong.
Something to think about. A profound thought indeed,
productivity gains versus paycheck growth that certainly
adds another layer to this complex market.
Thank you so much for guiding usthrough this really insightful
(14:29):
deep dive into the forces driving capital flows today.
And for you listening, we reallyencourage you to continue your
own deep dive into these reportsand analysis.
Thanks for joining us.
Good morning and welcome to the Bulls Bears and the Bell Morning
Edition. Thank you for joining us today.
We're diving straight into what looks like a really critical
institutional market intelligence briefing.
Our mission really is crystal clear.
We need to figure out exactly where the big money, the
institutional capital, is actually flowing because
(00:21):
honestly, the tension out there,it feels really high, almost
contradictory. Yeah, contradictory is a good
word. It's maybe more than just
tension, though. It's what we're calling
structural friction. Think about it like this, The
market's trying to operate almost like a high performance
engine, but it's using 2 completely different kinds of
fuel at the same time. OK, two fuels.
Like what? Well, on one hand, you've got
(00:42):
this constant heavy drag, that'sthe macro caution, you know,
high interest rates, those rising yields we keep talking
about and now record US household debt that's weighing
things down, right? But then fighting against that,
you've got this other fuel, it'slike specialized high octane
stuff. These are the micro catalysts
mostly coming from really selective strong Q3 earnings
(01:02):
from specific companies. OK.
So that difference, that macro drag versus the micro thrust,
that's really the key take away for you, for the listener.
But hang on, if those broad market strategies like index
funds are stuck because of that macro drag, doesn't that make
chasing those individual companywins that idiosyncratic alpha, I
(01:23):
think you called it? Isn't that way riskier?
I mean, are we talking real alpha or is it just, you know,
smart gambling dressed up by a few good earnings reports?
That's exactly the right question.
And yes, the risk is higher, no doubt about it.
But the opportunity, oh, it's just too concentrated, too
specific to ignore right now. It really means the old saying,
a rising tide lifts all boats. That's just not happening now.
(01:44):
OK. But because some of these
company stories, the execution stories are so powerful, the
potential reward for picking theright ones, Yeah, it's still
really high. You just you can't afford to be
passive selection is absolutely crucial.
All right. Let's dig into that macro drag
first. Then in the immediate technical
picture, looking at U.S. equity futures this morning, there's a
(02:05):
definite softness there, foundational weakness, maybe the
S&P 500 E mini, it's showing a bit of a relief bounce, sure, up
about what? Plus 233 points intraday.
But we need to pause there, right?
That little bounce, you have to see it in context.
The bigger picture is still pretty bearish momentum.
We've had a big drop over the last five days, down great .61%.
(02:28):
Three. That's over 110 points gone.
Does that steep decline mean shorts are getting more
confident, or is it still just fear?
I think that strong negative move confirms the structural
skepticism is really taking hold.
It's overriding the day-to-day noise.
The market seems to be pricing and conviction now and that
conviction, well it's rooted in those constraints.
We mentioned the jump in long term bond yields definitely and
(02:50):
crucially that record high US high sold debt figure that just
came out. When consumers are stretched
that thin, it's just a massive headwind for big parts of the
market, especially anything consumer focused.
So technically speaking, where'sthe line in the sand?
What level are the trading deskslaser focus on today?
Where does it technically break if that macro fear really grabs
(03:10):
hold? The immediate focus tactically
is definitely on the S&P 500 E Mini first support level that's
sitting at 6706.17. Now if we fail to hold that
level, it wouldn't just be a small dip, it would likely
trigger a cascade of stop loss. The domino effect.
Exactly. And that would technically
(03:31):
confirm that the macro fears, specifically the anxiety around
yields and debt, are really in the driver seat.
OK. But here's where it gets
interesting, right and points toyour idea about specific alpha
opportunities. While the S&P is looking soft,
the tech heavy NASDAQ 100 futures, they're actually
trading noticeably higher up over plus 133 points.
(03:52):
How do we square that? This deep structural fear across
the board, but then this pocket of strength isolated in tech.
That NASDAQ strength, that relative outperformance, that's
the signal. It tells us capital is moving,
but it's being incredibly selective.
And what's really fascinating ifyou look at the pre market
activity is the extreme bifurcation.
The split is huge. Bifurcation.
Meaning you've got 2 totally different things happening at
(04:13):
once. Yes, you see some crazy high
volume speculation in tiny stocks like Biya.
Up over 30%. Ninety sentence, usual volume.
Pure speculation maybe? Right, the lottery tickets.
Kind of. But right alongside that, you're
seeing really significant high quality moves in established
solid companies. So Capital isn't just chasing
(04:34):
any risk, it's hunting for validated risk stories, places
where the company has actually proven it can navigate these
macro headwinds. OK, validated moves, let's talk
about those. We saw some serious M&A activity
boosting confidence. Bright House Financial BHF
jumped over plus 26% on acquisition news and Golden
Entertainment GDEN wow, up over a + 40%.
(04:56):
That was an acquisition plus a sale leaseback deal, wasn't it?
That's right. So this is company leadership
basically putting their money where their mouth is, signaling
confidence in their own value. Yeah, exactly.
M&A like that always shows conviction.
But the real aha moment, I thinkfor you listening is in the tech
gainers because they reveal whatkind of tech is getting rewarded
right now. It's very specific, OK.
(05:16):
Lay it out for us. But look at snap SNAP up nearly
plus 18% after their Q3 earningsbeat and they specifically
linked it to a perplexity AI deal.
Tangible AI connection. Tangible is the word.
And then you have Datadog DDOG also strong results up over plus
15% that really supports the story around enterprise software
(05:38):
cloud optimization areas that are still seeing investment.
So let me connect the dots here.Yeah, what you're saying is the
money isn't just chasing AI hyper promises anymore.
It's flowing aggressively towards companies like Snap and
Datadog that are showing real, actual monetization from AI
tools. They're making money from it
now. Precisely.
That's the critical distinction,and it stands in stark contrast
(06:00):
to the sort of general anxiety you see at the index level,
where you hear worries about AI valuation concerns resurfacing
for the whole NASDAQ. The market seems to be rotating,
moving out of those broad tech bets the index plays and into
these very select, proven names that are actually delivering
with the technology today. That's textbook idiosyncratic
alpha, right when the broader index is feeling constrained.
(06:21):
OK, makes sense. But we have to look at the other
side of going to the decliners. They often give us clear
warnings about market sensitivity, don't they?
Absolutely. They're Canaries in the coal
mine. Look at Celsius holdings.
CELH down over 21%. That's a huge drop, especially
since the results themselves weren't universally terrible,
were they? So why such a harsh reaction?
(06:42):
CLH is a really crucial case study here.
It highlights just how sensitivethe market is to high yields and
debt right now. The headline results almost
didn't matter because investors immediately zoomed in on this
disclosed what was it a 240 seven, $7,000,000 hit from
termination costs, and it brought back concerns about
their debt load. So it's.
(07:02):
The balance sheet, not just the income statement entirely.
In this kind of high yield environment, the market shows
almost 0 tolerance, extreme intolerance really for any kind
of margin compression or any hint of balance sheet weakness.
They're scrutinizing the cost structure intensely that.
Hypersensitivity to cost and debt, yeah, that sounds like it
could easily spread, right? A contagion risk for other
(07:23):
growth stocks it. Absolutely.
Is it poses a significant risk to any growth company carrying a
lot of debt. If you've got thin operating
margins and your borrowing costsare high, well, the market is
going to punish you very quicklybecause capital just isn't cheap
anymore. Yeah, We also saw this fragility
of the skittishness underscored in biotech.
Sangma Therapeutics SGMO droppednearly 24%.
(07:46):
Why? A big miss on both EPS and
revenue. It just shows how fast capital
will flee clinical stage companies if there's any hint of
failure. Risk sentiment is incredibly
fragile there so. It's a tricky environment.
Then very specific execution gets massively rewarded, but any
slip up, especially on costs or debt, gets punished ruthlessly.
(08:08):
OK, let's pivot now to the macroforces that are really going to
shape things today and later this week.
The calendar looks packed with potential market movers.
Systemic risk feels concentrated.
Yeah. The density on the forward
calendar, it definitely suggestsvolatility is likely to spike.
Just today, November 6th, we've got 4 count 4-4 high impact
Federal Reserve speakers on the docket, including Presidents
(08:28):
Williams and Muslim and. Their timing is interesting,
isn't it? Because we've had these really
contradictory signals from the labor market lately.
A decent ADP report on private jobs but then that quote
horrible layoff report showing 153,000 cuts that.
Contradiction is exactly why their comments are so crucial
today. ADP looks at payroll creation in
(08:50):
the private sector, while the layoff numbers track immediate
cuts. So.
Creation slowing while cuts are accelerating, that seems.
To be the picture emerging, yeah.
And it creates confusion about where the labor market is
actually heading. So with all these Fed officials
speaking today, there's a real amplified risk of what you might
call dissonant messaging, meaning they.
Might not all sing from the samehymn sheet.
(09:11):
Exactly. If they offer different
interpretations of this conflicting data, the market's
going to struggle to figure out the Fed's unified path forward.
And that uncertainty that usually translates directly into
significant swings, intraday volatility, particularly in
Treasury yields. OK.
So watch the Feds speak closely today and looking ahead later in
the week we get the real macro showdown right, growth versus
(09:34):
inflation that's. The main event the market is
bracing for, we get the second estimate for Q3 GDP.
Expectations are it'll confirm pretty solid growth, maybe even
revised up slightly to 2.7% strong.
Growth. But it's released at the same
time as the PCE deflator. That's the Personal Consumption
Expenditures price index, the Fed's preferred measure of
(09:55):
inflation. The one they watch most closely.
The one they. Watch most closely.
So imagine the scenario you get strong GDP confirmed, but it
comes alongside a high PCE reading showing inflation is
still sticky. Yeah, that combination would
basically pour fuel on the fire for the higher for longer
interest rate narrative. If inflation stays hot, even
(10:16):
with slowing job creation and strong growth, well, that would
seriously worsen the existing weakness we're seeing in
futures. The weakness driven by those
yield concerns got. It so a critical data pairing.
Now to get ready for that potential volatility, let's look
at today's earnings watch list. These reports can act like real
time economic checks, can't they?
They. Absolutely can key insights
(10:36):
today which. Ones stand out for signalling
broader economic health I. Keep a close eye on
semiconductors, but specificallythose with diversified exposure
outside of just pure data centerAI.
We've got Qualcomm, QCOM, and onSemi reporting.
They'll give us a read on chip demand in areas like automotive
and industrial sectors. If they post strong results, it
(10:58):
could actually provide a strategic counterweight to that
generalized AI valuation anxietywe talked about earlier.
Show that tech growth isn't justabout AI data centers, OK?
Diversified tech health And whatabout the consumer?
Given everything we've said about record debt, how do we
gauge their pulse today? Starbucks SBUX.
Their earnings are crucial. Why?
(11:18):
Because they provide really immediate high frequency data
points on discretionary consumerspending.
Coffee is a daily habit for many, but still discretionary a
direct. Line into wallets pretty.
Much it acts as a critical leading indicator tells us how
burdened or maybe resilient consumers are feeling with that
record dead and higher rates. If Starbucks misses
expectations, that strongly reinforces the markets deepest
(11:40):
fears about Consumer Financial strain, and that fear that
contagion could spread very quickly to other consumer
stocks. Wow.
OK, We've covered a huge amount of ground here, from specific AI
winners like Snap and Datadog tothe extreme sensitivity around
margins and debt shown by CELH, and now these big concentrated
macro risks on the calendar. But for you, the listener trying
(12:01):
to navigate this, what's the single most important strategic
pivot you need to be thinking about right now?
I. Think the absolute mandate is to
pivot away from just passive index betting.
You need to focus on proven specific company narratives.
So strategically think about overweighting those proven AI
adopters, the ones actually monetizing now like data dog,
(12:21):
like Snap. And conversely, you really have
to consider underweighting companies with high leverage
growth stocks carrying a lot of debt and those discretionary
consumer names, they're just toosensitive to rising debt costs
and margin pressures in this environment that.
Makes sense Be selective now since rising bond yields that
yield risk seems to be the central constraint, the main
driver of this broad market volatility.
(12:44):
What's the primary hedge recommendation?
How do you protect against that given?
That yield risk is front and center.
Yeah, you absolutely need to hedge against the possibility of
more hawkish Feds speak today ora high PCE number later this
week. The primary macro hedge in my
view should involve some kind ofinverse exposure to long dated
U.S. Treasuries.
(13:04):
OK, well you could look at buying put options on an ETF
like TLT which tracks the 20 year plus treasury bond market
or use similar inverse products.The goal is to protect your
portfolio against that rising cost of capital, which is
exactly what we'd expect if we get a hawkish outcome from the
Fed or the data, right? Hedging the core risk that
(13:24):
really crystallizes the picture.This heavy macroeconomic gravity
is pulling the market down, but it's being selectively overcome,
but only by superior company execution, especially those
successful AI or strategic monetization stories that.
Is precisely the tension defining the market today.
It's a real tug of war. And maybe here's a final thought
for you to chew on as you watch the data unfold.
(13:45):
Keep an eye on the upcoming advanced durable goods orders.
If that data confirms A genuine rise in business investment,
specifically in things like automation and technology, that
actually reinforces the productivity story for companies
like Datadog we mentioned. It suggests maybe, just maybe,
economic growth could be driven more by these efficiency gains
by technology rather than just widespread hiring.
(14:07):
So productivity up, but maybe not wages potentially.
It could suppress expectations for future average wage growth
even if the headline GDP number stays strong.
Something to think about. A profound thought indeed,
productivity gains versus paycheck growth that certainly
adds another layer to this complex market.
Thank you so much for guiding usthrough this really insightful
(14:29):
deep dive into the forces driving capital flows today.
And for you listening, we reallyencourage you to continue your
own deep dive into these reportsand analysis.
Thanks for joining us.
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