• All-time highs again

• Euphoria in Tech…but has it run too far too fast?

• Will AI ever make money?  (token economics are getting there)

• Revenue growth is the focus

• Mixed Employment Report (more jobs, fewer employed, more underemployed)

• Inflation jumps slightly more than expected, energy is the driver

• Quick Hits

• Where did all the crypto money go?

• Chart Crime of the week

• Is the market giving way to the “surreal nature of dreams?”

The market continues to push to new all-time highs.  Earnings and Revenues are still accelerating higher.  Economic growth is still expanding even with noticeable inflation (arguably this is helping equities).  Geopolitics are still a risk with the shaky ceasefire with Iran becoming more fragile.  Political stress in the UK is heating up (the fear is Starmer will be replaced with someone much less market friendly).  But the Trump and Xi kumbaya is providing greater stability.  If China and the US can make more “trade deals,” then not much else matters (even if the “deals” are just the same old deals that have been talked about…Boeing is expected to sell more planes to the Chinese…the first such deal was announced in 2017).  Kevin Warsh was confirmed as the new Fed Chairman.  But the probability of a Fed cut is now nonexistent.  And rate hikes are on the table.  But as Zervos has been saying, this market has not needed rate cuts!

Of course, the narrow nature of this rally is concerning. Tech is dominating the performance with memory stocks and other semiconductor chips rallying like it is 1999.  Even when South Korea floats the idea of levying additional taxes on AI companies to pay a “citizens dividend,” the slight dip is nothing but a momentary lapse of reason.  Energy is still eking out gains.  But the only other sectors in the green over the last week are Health Care and Staples…these are not the typical sector winners in a growing economy with beneficial inflation (to companies…not to consumers).  Despite the great Earnings trajectory, there has been some mounting commentary from companies warning about the health of the lower-end consumer (obviously not a new concern, but fast-food restaurants, airlines, gyms, and others are all pointing to the weakness).