The Compound and Friends
Tradeable Lows, Nvidia’s Data Center Finance Deal, Surprise Comebacks for Schwab and Expedia
· Summarized
Key takeaways
- Identifying tradable lows involves watching for volume spikes, higher lows, and retests at key technical levels.
- Despite fears of AI disruption, stocks like Schwab, Expedia, and travel-related companies are reaching new highs, indicating sector resilience.
- The rapid growth in AI infrastructure investing, led by major Wall Street firms, may signal a coming market peak or a powerful growth phase in compute assets.
- Sector trust and regulation (e.g., rating agencies) are likely to remain resilient against AI-driven disruption, maintaining their vital role in financial markets.
- Private markets, such as mortgage and private credit sectors, are volatile and risky, but opportunities persist for investors with risk tolerance and insight.
Summary
Introduction and Audience Engagement
Josh Brown and Michael Batnick welcome viewers to the live stream, emphasizing its popularity with nearly 2,700 live viewers. They introduce the show, discuss the format, and engage with the audience through chat comments and shout-outs, setting a lively, interactive tone.
Market and Technical Analysis of Stocks and Levels
The hosts delve into technical analysis, focusing on identifying 'tradeable lows' in stocks like Meta, Uber, Netflix, Disney, Nike, and Home Depot. They explain key concepts such as volume spikes, higher lows, and retests as signals of bottoms, and discuss specific levels, such as Meta’s $5.25, as potential tradable lows. They assess whether certain stocks are in a 'no-man's land' zone or ready for bounce.
Big Picture and Thematic Stock Discussions
A major part of the episode is dedicated to understanding broader market themes. They explore the resilience of stocks like Schwab and Expedia despite AI fears, highlighting the strength in travel stocks and the importance of consumer discretionary ETF holdings. The hosts also analyze sectors likely unaffected by AI disruptions, such as rating agencies (Moody’s, S&P), emphasizing trust and regulation.
AI and Data Center Infrastructure Investment Boom
Josh and Michael analyze NVIDIA's massive data center financing deal and the rise of compute as a crucial asset class. They discuss how Wall Street's coordinated efforts and partnerships—featuring titans like BlackRock, Goldman Sachs, and KKR—are reshaping AI infrastructure investments. The conversation covers financing strategies, political benefits of infrastructure projects, and the importance of compute hardware, with insights on how this may signal a top or a long-term growth trend.
Specific Stock and Sector Commentary
The hosts examine several stocks that have recovered or are poised for recovery post-AI disruption fears, such as Snowflake, Schwab, Expedia, and cybersecurity stocks like CrowdStrike. They highlight their own investment positions, including bullish sentiments and technical breakouts. Discussions include the risks, the impact of macroeconomic factors, and the high potential for these stocks to join new all-time highs.
Private Market and Mortgage Sector Analysis
A detailed examination is given to United Wholesale Mortgage's (UWM) troubled history, including its IPO blunder and massive losses on interest-rate hedges. Host insights cover the competitive mortgage landscape, company leadership, and the impact of interest rate environments, illustrating broader themes of risk and volatility in private credit and mortgage markets.
Conclusion and Upcoming Content
The hosts wrap up with upcoming show topics, including audience Q&A and episodes from their other podcast, 'Animal Spirits.' They promote engagement opportunities like submitting questions for prizes, thank the audience for support, and encourage ongoing viewership and interaction.
Sponsors
- Betterment Advisor Solutions · Betterment Advisor Solutions, your biggest regret will be not doing it sooner. Learn more at betterment.com/advisors.
Show notes
Join Downtown Josh Brown and Michael Batnick for another episode of What Are Your Thoughts as they discuss six major stocks that may be setting up for a bounce: Meta, Uber, Netflix, Disney, Nike, and Home Depot.
Plus, Nvidia’s latest data center financing deal and the rise of compute as an investable asset class, why stocks like Schwab, Expedia, and Booking are hitting all-time highs despite fears that AI would disrupt their businesses, and the $1.5 billion rescue deal for United Wholesale Mortgage after a massive loss on interest-rate hedges.Josh makes the case for Expedia, Michael brings the Mystery Chart, and much more!
This episode is sponsored by Betterment Advisor Solutions. Learn more at https://betterment.com/advisors
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
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