07/20/26

HERE'S WHAT'S GOING ON IN THE STOCK MARKET SO HAPPY MONDAY LET'S QUICKLY RECAP THE ROLLER COASTER OF A WEEK WE JUST HAD AND TALK ABOUT WHAT'S COMING IN THE WEEK AHEAD SO THROUGH WEDNESDAY OF LAST WEEK THINGS LOOKED RELATIVELY OKAY WE GOT A MUCH COOLER INFLATION REPORT AND THE BIG BANKS REPORTED THE BEST EARNINGS WEEK IN WALL STREET HISTORY GOLDMAN SACHS HAD ITS SINGLE BEST QUARTER EVER EARNING ABOUT 45% MORE THAN EXPECTED AND JP MORGAN'S PROFIT JUMPED 41% NOW ONE BIG REASON FOR THE EXCEPTIONAL RESULTS TRADING REVENUE SO THE RECENT MARKET SWINGS ARE EXACTLY WHAT BANK TRADING DESKS MAKE MONEY ON BECAUSE NERVOUS CLIENTS TRADE A LOT MORE AND MORE TRADES MEANS MORE REVENUE FOR THE BANKS SO WHAT WENT WRONG LAST WEEK TWO THINGS CHIPS AND OIL FIRST THE AI TRADE REALLY STRUGGLED ON WEDNESDAY MICRON FELL ROUGHLY 8% AFTER CHINESE RIVAL CXMT KICKED OFF AN IPO MAKING INVESTORS A LITTLE WORRIED ABOUT HOW MUCH PRICING POWER THESE MEMORY CHIP COMPANIES WILL CONTINUE TO HAVE WILL THEY BE ABLE TO CONTINUE RAISING PRICES AND INCREASING REVENUE IF THERE'S MORE COMPETITION IN THE SPACE THEN ON THURSDAY TAIWAN SEMICONDUCTOR SLIGHTLY SPOOKED INVESTORS BY ANNOUNCING IT'S SPENDING A LOT MORE ON NEW FACTORIES THAN WAS PREVIOUSLY EXPECTED ON FRIDAY A CHINESE STARTUP CALLED MOONSHOT RELEASED A POWERFUL NEW AI MODEL THAT PERFORMS VERY NEAR THE TOP OF THE LEADERBOARD AT A FRACTION OF THE PRICE OF THE AMERICAN MODELS AND THAT REIGNITED A FEAR THAT WE SAW LAST YEAR IF WORLD CLASS AI MODELS CAN BE BUILT MORE CHEAPLY ELSEWHERE ARE US COMPANIES OVERSPENDING ON CHIPS THE CHIP SECTOR FELL THAT IT ENTERED WHAT'S CALLED A BEAR MARKET THAN 20% FROM ITS JUNE PEAK SANDISK ALONE LOST ALMOST A THIRD OF ITS VALUE ON THE WEEK AND MICRON AND AMD BOTH FELL DOUBLE DIGITS TO ILLUSTRATE HOW MUCH FOR A FEW HOURS ON FRIDAY APPLE ACTUALLY PASSED NVIDIA TO BECOME THE MOST VALUABLE COMPANY IN THE WORLD BEFORE NVIDIA QUICKLY GRABBED THE CLOSING BELL I BREAK DOWN WHAT ALL THIS MEANS AND WHAT HAPPENED THE LAST TIME WE SAW A SCARE LIKE THIS AND IN MY NEWSLETTER TODAY THE SECOND BIG THEME LAST WEEK WAS OIL THE ONGOING TENSIONS IN THE MIDDLE EAST PUSHED OIL UP ABOUT 14% FOR THE WEEK A HUGE MOVE WHICH LIFTED ENERGY STOCK LIKE EXXON AND SHELL BUT IT WEIGHED ON CHEVRON AND ALMOST EVERYONE ELSE AND THE MAJOR INDICES FELL THE NASDAQ DROPPED ALMOST 3% LAST WEEK THE S&P 500 ABOUT A PERCENT AND A HALF UP A LITTLE BIT BETTER AND THE DOW HELD UP A LITTLE BIT BETTER IT WAS DOWN JUST UNDER 1% BUT THIS REALLY WAS A CHIPS AND AI REPRICING NOT NECESSARILY A BROAD PANIC NOTICE THE DOW HELD UP FAR BETTER THAN THE TECH HEAVY NASDAQ COOLER INFLATION AND RECORD BANK PROFITS ARE ACTUALLY GOOD NEWS FOR MOST OF THE MARKET THE DECLINE WAS CONCENTRATED IN ONE LARGE AND CROWDED CORNER AI IN OTHER NEWS NETFLIX REPORTED OK RESULTS BUT A SOFTER FORECAST AND SAID IT'LL SHARE LESS VIEWER DATA GOING FORWARD THE STOCK FELL TO A FRESH 52 WEEK LOW NOW DOWN OVER 45% IN THE PAST YEAR THIS MORNING FUTURES ARE ACTUALLY POINTING A LITTLE BIT HIGHER AND CHIP NAMES LIKE MICRON AND SK HYNIX ARE BOUNCING BACK BEFORE THE BELL THE BIG THINGS TO WATCH THIS WEEK A LOT OF EARNINGS INCLUDING ALPHABET AND TESLA ON WEDNESDAY EVERYONE WILL BE ASKING IF THEY'RE STILL SPENDING BIG ON AI IF YOU FIND VALUE IN THESE UPDATES PLEASE CONSIDER LIKING SUBSCRIBING OR SHARING WITH SOMEONE YOU KNOW