The Seasonality Gods are Upon You
Rates ripping, oil sustaining $100 levels, diesel at record highs. All of this is quite upsetting for the macro backdrop, especially with the Fed painted into a corner to keep hiking rates to “fight inflation” that is primarily being driven by a self imposed commodity supply shock. Yet, stocks did well for the week, led higher by datacenter stocks!
Semis rose 5.8%, SPY +1.25%, and the Qs +3.2%, spearheaded by a sudden resurgence at Meta. Conversely, oil stocks shed 3.5%, and financials hit in the kisser again for -1.8%.
I’d like to elucidate another rotation underway.
The summer fav of junior at the trading turret RSP has given way to Mag7.
RSP
MAGS
Before I get into the seasonal trends, I’d like to point out QCOM outperformed all other tera cap stocks for the week, +13.6%, part and parcel of the CPU trade that has been revitalized thanks to Meta’s Muse. Consumption of CPUs will be flowing at an industrial rate for years to come, even more so as AI moves to inferencing. The main plays here are INTC, AMD (fresh recourd highs, BCW is long), ARM (BCW is long) and QCOM (BCW is long).
As for the seasonal trends, it does not get better than this.
UNDEFEATED market returns post mid-terms dating back to 1914.
It’s very possible this time can be different. But I don’t think so.
See you fuckers next week.
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