Hey everybody, welcome back to the channel. We are back on another episode of the daily recap. First daily recap for the week. Missed yesterday because I was with my family for Dvali. Happy Dvali to all those that celebrate. Uh been a pretty crazy two days as we start off this week in the stock market.

We officially have big tech earnings that begin today. Netflix, we'll talk about Netflix results. Down 5% after hours. Wasn't the best earnings, wasn't the worst earnings, but we'll talk about that. Amazon, Google, and OpenAI, all three of them. Tons of different announcements today. We'll talk about those.

Trump made some more comments on China as always. Hopefully, this negotiations will be starting soon, which we'll be discussing as we get into the end of October.

Uh, and then the other main thing that we got to talk about today is gold. Gold is going down. Lost its worst amount of market cap, 1.75 trillion with a T since April 2013.

At the same time, the S&P 500 basically all-time highs. Dow Jones was like 40 bucks away from all-time highs.

and a lot of the Oaklows and Quantum stocks and nuclear names and drone stocks and big bear AIs took a hit today. We got to talk about what's going on with the broader market, what's going on with commodities, and what's going on with these momentum plays that might be losing some momentum. Let's get into it.

Okay, so let's get started with what's going on in the broader market in regards to some of these momentum stocks because I think it is very very important to talk about this.

So over the past week, Oaklow is down 10%, D-Wave down 27, Big Bear down 21, Regetti down 27, andQ down 29, SM SMR down 14, nanuclear down 22, MP and US AR, rare earth companies, MP is down 25%, US AR is down 20%.

There's a lot of other names on that list. Ondos down 30%, we can go through a variety of different names that have essentially picked up tons of momentum over the past couple of weeks, really the the past couple of months. They're all getting hit.

Now, here's the question and and then then I want to get to my opinion on kind of what's happening right here. I would love to know what people think in the comments.

Do you think the decline we're seeing in some of these names that don't really have the most earnings potential, revenue potential?

I mean, they're not really showing anything other than the narrative Big Bear AI is guiding to negative, let me say that again, negative 5% growth in the sector where companies are growing over 50%, which is AI.

So, you've got companies that have AI in their ticker that cannot grow at all. They're negative growing this year that are up 80% year to date.

A lot of these companies are not the worst companies in the world, but they are companies that have been essentially cultivated by a narrative. That narrative has not resulted in any meaningful earnings growth, any meaningful revenue growth.

But those stocks, if you look at all of them, a lot of them are up four to 5x a year to date. I mean, it is quite incredible.

My question to everyone here is do you think the momentum that is dying out objectively which it you know so far we've seen no real reversal of that momentum coming back is that a structural momentum decline in these stocks or are they taking a breather?

My take on this is that I don't know and I don't think anyone can really know. We're all just guessing here in terms of what's or how this is playing out.

But if you have to look at some of the data that we're getting, it does feel like they're losing more momentum than not.

The reason they're losing momentum is because, simply put, they've gone up a lot and people want to take some profits.

And when you have a stock that goes up a lot like an Nvidia, and it can, you know, keep putting up earnings growth, you might have people that might not want to take some profits.

I've not sold a single share of Nvidia all year. My average is 122, stocks at 180. I'm up 50%. But I don't want to sell because I think Nvidia can continue the earnings growth.

For a lot of these names, if you bought it off the idea that, well, Oakllo is going to be big because it's nuclear energy and we need nuclear energy, there's nothing really holding you into the narrative outside of that one sentence.

There's no earnings, there's no revenue, there's not any of these massive deals, and you know, there have deals in the pipeline, but it's not manifesting anything you can tangibly say is actually helping the company right now.

Same thing with a lot of the quantum names. And again, this is not being bearish or skeptical of all these different companies that are out there. I don't have positions on them. I don't have shorts on them. I don't have puts on them.

It's not to say that. It's rather saying, hey, for the health of this bull market, can we figure out, do these names have the validity, the legitimacy to keep going higher?

And the the thing about momentum is that when momentum dies, we were talking about this last week, it's really hard to get it back.

It's re the only way you get it back is if you put up good earnings growth. Pounder and Robin Hood were momentum stocks back in 23 24. would not have had the 2025 they had if those companies did not put up the gigantics earnings growth. Both of them over 50% that they did in the past nine months.

And so you can disagree with Palantra's multiple. You can disagree with Hood's multiple. You can disagree with freaking Apple's multiple. Apple trading at 35 times earnings growing like 5% a year.

You can't say they don't deserve a multiple because they are growing and they are buying back stock. Apple with 100 billion and they are quality companies that are putting out products and services in the world that really do matter.

Aka they have a moat. A lot of these other stocks don't really have a moat, don't really have earnings. A lot of them don't have revenue.

They essentially got bid up in the span of over basically call it two months. I know year to date they've done very very well, but over the past two months that's where they really got the bid and that bid might be fading.

And so I think it's important for all of us to just understand what is happening right now. The S&P 500 is $2 away from alltime highs.

A lot of these stocks that were up 30 to 40% when the S&P 500 was at all-time highs two weeks ago are down 30 to 40%. The S&P 500 is barely down 1%.

Nvidia back to 180. I mean, yes, it's down from 195 to 180. But Nvidia has not collapsed. Palunter has not collapsed. Robin Hood's not collapsed.

Yes, down from 150 to 130, but Palter's up from or Hood's up from 97 to 130 after S&P inclusion. I think that's a pretty big run for Robin Hood, but did it deserve 150? Probably not.

So, it's taking a breather. Some of these stocks, I don't know if they're taking breathers or structurally they've lost the bid because once you've lost the bid, once you've lost the momentum, once you've lost the narrative, I mean, it's really hard to get it back.

And so, that is my question to everybody. My final take on this is very simple. I think to keep the bull market going, you need quality companies like an AMD or an Apple that hit all-time highs yesterday to get those all-time highs.

You cannot have a meaningful bull run when you have lots of stocks. There's like over 30 to 40 of them that run up for no reason.

And again, those stocks could go to zero, doesn't affect the broader market. Those stocks could go up to, you know, 30, 40 billion market cap. Probably still doesn't affect the broader market.

But it's not healthy. We know it's not healthy. If we're if if we're not, you know, kidding, if we're calling a spade a spade, we're not kidding with ourselves. We know that's not healthy.

And so, it's not about being bearish the market. It's ironically being as bullish as you can about the market. And to keep that bull market momentum going, everything shouldn't be running for the hell of running.

That is not a bull market. That is a bubble. That is a top. That is euphoric. That is what we saw in the.com bubble and in 2021.

And given most of us live through 2021, you know, not everyone lived through 2008 or the docom bubble. But 2021, these stocks didn't deserve their mult multiple. They got the multiple.

And we're not just talking about the random stocks. We're talking about the metas, Amazons, etc.

The fact that those stocks, Meta, Amazon, Google, etc. are not getting a massive multiple. But these random stocks are getting a massive multiple I think is bullish because it means there's not a bubble in the big stocks.

And now if those random stocks can lose their froth and the big stocks can slowly continue to expand their multiple because it's justified on earnings growth. I think that's one of the best case scenarios for the broader market.

But very curious to hear what people think. Momentum stocks potentially losing their losing their momentum might end up coming back. But we're going to have to give it a lot more time to see what the data tells us.

Okay, next up is what's going on with Amazon, Google, and OpenAI. So Google fell intraday to 245.

We were actually live when the market open. I think it actually got to 244 when this happened. OpenAI announced a new browser uh called Atlas. And when the browser was announced, everyone shrugged.

Anyway, so the uh you know, the browser I thought was kind of interesting. I'm a bit skeptical on the idea of the browser really mattering. I mean, look, I use Chrome. I'm sure a lot of people use Chrome, Safari, Microsoft Edge.

I mean like it's just one of those things where for us to switch to a new browser and when I mean us I mean us as consumers because of some AI bot on the side that you can ask questions to based on whatever web page you're on which is essentially what Perplexity launched and I tried it. I liked it. It was cool.

It didn't get me to use stop using Chrome. This OpenAI thing I don't know if I'm going to actually stop using Chrome especially when Chrome adds it to their browser.

Like a lot of these new innovations I'm seeing by some of these companies. You look at big tech and you're like man big tech's going to be able to do that and they have the distribution which is the most important thing in the world.

Ironically, Austin made a good point in the chat today that Microsoft Bing is a browser, Microsoft Edge, but Bing is like their search thing uh for Microsoft.

The fact that OpenAI is not working on making that better and like interacting with Microsoft to like already serve the distribution that Microsoft has, which is pretty massive, just means that OpenAI doesn't care about Microsoft and this relationship with Nadella might not be as good as it seems in terms of a working relationship.

And so, they're doing it on their own. Google fell to 244. Google's back up to 252.

In fact, Google's even more green after hours because there is a rumor from Bloomberg that Anthropic, which is one of the leading LLM companies, is now going to be working with Google for a cloud contract which will include tens and tens of billions of dollars.

That is the exact headline that we have. Google right now after hours is up 2% at 25575. I think that's really interesting.

And the one of the reasons that's really interesting as well is because Amazon already has a deep relationship with Google. Amazon's actually down one and a half% after hours. Amazon was up almost 3% on the day.

a lot of that froth momentum stock potentially, you know, people took profits and got into something safer like an Amazon, but Amazon's down after hours because Anthropic, which they own a majority of, I think a majority of over in the context of Google, it's almost like a four or five billion dollar stake. Um, well, Anthropic is deciding to go with Google for cloud computing over AWS.

What is my take on this? I think two things. Number one, the OpenAI browser is not killing Google.

So, I think Google going it down to 244 today was a gift for shareholders and I thought that was stupid. Makes sense that Google recovered.

Number two, I think AWS is a massive business based on what we saw with the AWS outage yesterday. That was crazy.

76 million websites run on AWS and I think the moat for AWS had a bit of a crowd strike moment back in July of 2024.

When something goes down, everyone realizes how unbelievably important it is today, which is part of the reason I think Amazon was actually up 3%.

However, it is not bearish for Amazon to lose Anthropic or to not get as much money from Anthropic because I think for Anthropic, OpenAI, Gemini, XAI, all these foundation model companies, they are trying to diversify the cloud computing and hyperscaler companies that they work with.

I mean, Oracle, AMD, Broadcom, Nvidia, all of them are working with OpenAI. A ton of them, by the way, Mazuo came out today and said that Broadcom's mystery client that's going to be paying them $10 billion in revenue. That is probably anthropic.

So, you've got a lot of these companies diversifying the cloud spend that they do. Yes, that's less revenue going to AWS, which could potentially be bad for Amazon Web Services, but that doesn't mean that they shouldn't be working with Amazon.

In fact, there was a report that came out yesterday that said Anthropic has paid Amazon already $2.6 billion in the past nine months just for AWS. So, I wouldn't say it's bearish AWS.

It's just more bullish Google because now some of that money is going to Google.

Now, the one thing about AWS that I will say is that although they're getting a ton of business from Anthropic, and now Google potentially is getting some of that business as well.

I think AWS could hurt Amazon on earnings, and I think the stock could go down below 200 uh if AWS shows any level of de acceleration or the guidance isn't that good going into Q4.

And why would the guidance not be that good going into Q4? Well, uh they just had an outage.

Now, I think the service credits that they are going to have to give out to a Robin Hood that was down for 10 hours and Coinbase was down and Snapchat was down, Slack was down, etc. That shouldn't be that big of a deal.

I mean, that should be kind of like maybe tens of millions, maybe hundreds of millions of of an expense for Amazon. That shouldn't really make a difference to the bottom line.

But if AWS doesn't accelerate or if there is no potential hope of acceleration based on this earnings uh and the rest of the business around commerce and advertising and all that stuff is just flat or like not that exciting. Yeah, I can see Amazon tanking. I really could.

We're going to talk about Netflix in a second. Netflix tank because they couldn't beat their estimates.

Uh I think that would be a buying opportunity. Again, I'm buying Amazon as a cornerstone stock of the portfolio. I really don't care what happens in the short term.

10 years from now, I think Amazon is going to be much bigger company. But AWS acceleration will help the stock go up after earnings.

If we see any level of just like basicness, you know, Street wants 18% growth. They come in at 17.9 or 18.1. If we don't get a real beat, I think the stock is flat or it sells off, which is okay because long term, I think AWS is going to be a very, very important business for Amazon and that's not slowing down anytime soon.

It just not it might not be accelerating to the level of a GCP or Azure.

Now, the question then becomes, well, do I sell Amazon and get Microsoft and Google? Sure. It's just that's discounting everything else that is important when it comes to understanding Amazon.

It's also discounting the fact that Amazon is red year to date. Google and Microsoft are up a lot. So I think the riskreward might be better on Amazon.

But then again, these are max seven companies where whichever one you buy over the next 10 years, theoretically all of them should do really well.

Uh however, that is something to watch out for going into earnings. AWS needs to grow. We know how important AWS is based on the outage yesterday that shut down half the country, at least in the United States, in regards to the internet.

That simply didn't work for a lot of these companies. and websites, but any de acceleration, the stock could get hit going into earnings.

All right, Netflix earnings, let's get into that. Uh, look, Netflix didn't have the best earnings, and it's kind of weird how these earnings turned out.

If you were live on the market close, you saw the reaction to earnings. Uh, down 7% after hours. Kind of feels like it's isolated to Netflix, but it's not the best.

So, they missed on EPS by 16%. And the question becomes why did Netflix miss as badly?

By the way, Capital One, Intuitive Surgical, a lot of other companies had a great earnings. Chub Limited Insurance Company, that was good. Texas Instruments missed EPS by 1%, beat revenue by 2%. But Netflix is kind of the main story right here.

So 587 versus 697, that's what the street expected. That's why you have that massive move down as soon as the numbers came out. 11.5 billion on revenue. That came in line with the streets expectations.

Now, what did Netflix give as the reason for why they had a crappy quarter? Well, operating margin was 28% below the guidance of 31.5%. That's not good because that hurts EPS.

Uh, and that's why you saw that EPS miss. And then the reason for this is because they had an ongoing dispute with Brazilian tax authorities that was not in their forecast.

So, Netflix is blaming the Brazilians and that's why the stock is down. Uh, operating margins for 2025 came in line with expectations for Q4. So for the fiscal year it was okay.

For Q4 uh it is 2% above year-over-year what is expected. It is down 5% for the quarter quarteron quarter. That tends to be what happens to Netflix in Q4.

But nonetheless it's not like a massive reaceleration in operating margins going into the end of the year. My take on this I mean look Netflix at the end of the day phenomenal company.

Uh if you're a long-term shareholder you probably don't care that much because Netflix over the next 10 years will be a bigger company than it is today.

the the the broader issue with Netflix, I think, right now, is this idea that, hey, um, look, stocks up 40% here to date. You've got tons and tons of, you know, we're talking about hundreds of millions of subscribers that are on the platform. How does Netflix grow?

And ironically, one of the stories we talked about in the market open this morning and why WBD, Warner Brothers Discovery, was up 10% of the day.

There are rumors, as per Bloomberg, that Comcast or Netflix is thinking of buying Warner Brothers. And you've got some really important media properties there like HBO Max that a lot of people already pay for separately including myself even though I barely watch it so I don't know why I pay for it.

Uh but HBO Max could be integrated into Netflix. So I think the EPS miss based on Brazilian tax authorities the street will forgive it. Not that big of a deal.

Stocks up 30% year-to date or 40% year to date now 35%. And overall it has been proven to be recession proof.

However, if we do have a recession, I don't know if people are going to be that quick to not cancel their Netflix or other streaming subscription service providers because maybe the content is just not that good enough and people say, "I don't care."

And the other problem is the Elon Musk backlash around sensitive content for kids that has been on Netflix. I think the sort of like cancel your Netflix um movement started in October.

So, I don't think that had an impact on Q3. Potentially will have an impact on Q4.

Uh, but if it happened towards the end of September and Elon Musk, who has 250 million followers, got people to unsubscribe, that's not the best thing for Netflix either.

So, look, at the end of the day, I don't think this was a quarter that people should be upset about. I don't think this is indicative of big tech in general missing on their earnings.

If big tech does miss on their earnings, it's not going to be pretty. But Netflix did seems like it was isolated because of Brazilian tax authorities.

Overall, I don't think there's going to be any broader issues with Netflix. I will say though, just as a content creator, I'd rather buy Google over Netflix.

I mean, if Netflix does acquire Warner Brothers Discovery, that would be a 30 to40 billion dollar acquisition just to get content onto the platform.

Google has creators that connect with audiences, and as a result, Google doesn't really need to pay for the content. Google just creates the platforms that allows people to produce the content.

So, I think both are phenomenal companies. I would not want to be paying the multiples that Netflix is trading at right now that are more expensive than Nvidia.

I would rather just buy Google, but long term, I think this is a nothing burger for Netflix. It's just one of those quarters where they had a Brazilian tax issue and that's why they missed on earnings.

All right, last thing we're going to talk about today is what is going on with gold. Gold took a pretty ugly hit on the day, down about 1.3%.

And I mean, look, or sorry, not down 1.3%. Down a little bit more than that. Down about 5% on the day.

So, here's the question to everyone in the chat. Uh, this was the worst day for gold since April 2013. Lost $1.75 trillion in market cap. Is gold a bubble?

I hesitate to say it's a bubble. I think it is getting overcrowded and I think some of that frothiness of the overcrowdedness of the trade kind of left today, which is probably bullish.

Silver, by the way, down 7%. So, silver and gold both took it on the chin. I will say that we looked at a chart last week that said central banks are now having 20% of their reserves, 20% of all central banks globally in gold. Gold is being treated like US treasuries.

And because the dollar is going down, you know, you might be saying people are using gold as a hedge. Now again, the 10ear going down is weird because that means people are not anticipating inflation.

Gold going up at the same time is again weird because people are anticipating inflation. So why is that happening?

One argument you can make is that geopolitically the reason gold took a hit today is because there is a bit more peace in the Middle East with the Israel Hamas deal.

There might be some peace around Russia Ukraine. And if that geopolitical instability starts turning into stability, which really over the past two years we haven't had that much stability and that could also explain the massive 70% move that gold has had this year.

If that starts to become more stable, it might not be that bad for gold or it might not be that good for gold, which ends up becoming more ugly, you know, to the downside in terms of price action.

The other narrative here is retail euphoria. I don't know. And I think I asked this question on a daily recap on Wednesday last week. How many people are in gold?

And you know, I think 5% of you in the comments said you're in gold, but the majority of us are not in gold.

Ironically, Bitcoin was up 2% today. So, maybe there was a rotation out of physical gold to digital gold.

So, my take here is that I would not touch this trade because I think the risk of being wrong and entering into a very crowded trade that is now going to have the bottom potentially fall out, which doesn't mean gold has to go down 30%.

But if gold goes down another 5%, you're going to get a lot of people that are like, h, why am I in this in the first place and you might have more sensitive price pricing action in terms of the selling.

But if central banks buy the dip on gold, which is possible if they're thinking of gold is better than the dollar, then maybe gold's going back to 5,000.

I think it's really hard to make the prediction right here unless you have a sophisticated understanding of commodities. Silver going down 7% today also wasn't the best.

Um, but because I don't have that really sophisticated view of commodities, and because I'm not willing to take a chance on something that's up 70% year to date, that never goes up 70% year to date. Like that doesn't happen for gold. I'm not willing to jump in at these levels.

Ironically, I would I I would actually rather buy Bitcoin. You know, I feel like it's a little bit more of a hedge against currency debasement.

And as a result, Bitcoin only moving up 15 20% this year versus gold. Maybe it be ends up becoming a better opportunity.

But at the end of the day, the move in gold can't be understated. losing a 5% rally or or losing a 5% um uh move on today's price action after a 65% rally makes you wonder just like the high momentum stocks we talked about at the beginning of the show is it structural or is it a breather?

I think we need some more data to see but if it is structural then you might have a lot of that money exiting into the asset class and then the question becomes where does that money go money market funds S&P 500 Nvidia Google that is the broader question.

But it does seem like some of that momentum is getting hit. And so I think over the next couple weeks, the question is, can gold regain the footing? Is this a buy the dip? Do central banks come in? Does retail come in to buy the dip or is this one of those things where look, it had a good run and it's going to chill out, consolidate for a bit?

Maybe it goes sideways. It doesn't have to tank 20%.

But it doesn't have to go back up 20%. And that wouldn't be the worst thing in the world for gold.

All right, that's it for me. Thank everybody for listening and watching. deeply appreciate everyone who tunes into these daily recaps and um

big big thank you to everyone who subscribed to the Substack. Uh I'll put the link in the description. We did our first two deep dives, Dualingo and BMR.

Uh I have kind of fallen in love, I'm not going to lie, with the art of written word. I never thought I would really get into writing, but I think after four years of talking, I needed a new challenge for a medium to express my thoughts and ideas.

And uh I really am grateful that people are finding value in the in the content. I've already started working on the next two deep dives. The grab one, you know, I've already did a grab thesis, but I'll refine it for Substack. That'll probably be out on Friday.

The other one might be out on Friday as well. Depends on how fast I can finish it. But I've already started the extra two deep dives because I just I'm excited for this stuff, dude.

It's kind of fun to put all the research together into one thing and then put it out into the world. And Substack is a pretty cool platform to do it on. So, thank you for everyone who subscribed. Means the world. No payw all. You can subscribe and get everything for free.

And it means a lot. Thank you everybody. I'll see you guys on the market open tomorrow. And uh if you're already watching this and the market open has happened, I'll see you later throughout the day.

And um yeah, you know, OpenAI introduced a new browser called Atlas. And everyone shrugged.

You either get it or you don't. You either get it or you don't. The self-rationalization of agency will help you get it. So there you go. All right. Thank you everybody. I'll see you guys tomorrow.