Nasdaq hits record high as tech surges across Cloud, AI, and Infrastructure

Stocks pushed higher, clawing back some of Friday’s losses, the Nasdaq closing at a new record as the momentum in the tech space continues……And it’s not just AI and datacenters. It’s across the board – It’s cloud computing, Hardware Infrasturcture, Networking, Containerization (tools for managing applications and microservices), Database and Storage, Operating Systems, Software Development, Cybersecurity Infrastructure, and Machine Learning. …..…..

And in BREAKING NEWS – the fun refuses to stop! Dutch firm NEBIUS (NBIS – US ADR - is surging by 45% after MSFT signs a ‘multi-billion dollar’ AI Infrastructure deal. Coreweave (CRWV) – a rival in the space is up 6% on the back of that news!

The Dow added 115, the S&P rose 13, the Nasdaq gained 98; the Russell finished up 4, Transports slipped 4, the Equal-Weight S&P fell 3, while the Mag 7 advanced 27.

So, the bets are on. A week ago, the market was penciling in just one 25 bp cut; now it’s leaning toward three by year-end—some calling for 75 bps by Christmas (3×25) and others hoping for 100 bps (50 + 25 + 25). That shift kept a bid under equities—not a moonshot, but green on the screen.

With inflation front and center starting Wednesday, all eyes are on the data. Do we get a benign read or something hotter? Few expect a softer one—but if we do, hold on to your pants, because a softer print would remove any doubt that rates HAVE to move lower, faster. (think lower inflation and a softer labor market)

If PPI (Wed) and CPI (Thurs) land as expected, at least two 25s are on the table. If they run hot, “no cut” becomes a live option—but I think both PPI and CPI would need to surprise meaningfully to the upside to keep the Fed standing still… and I don’t see that happening.

Now another data point that hits the tape tomorrow is the BLS Benchmark Payroll Revision for the past year….and it is expected to decline by 700k – Now this is on top of the revision that we got in early August that revised May and June numbers significantly lower. Should this number surprise to the upside as well, that will only confirm that the labor market is weakening, and it will send Trump into a tailspin.

Bonds continued to enjoy the ride…. bond investors taking the TLT and TLH higher……up 1.34% and 0.85% respectively. The 10-yr ending the day yielding 4.039% - just a hair off the low of 4.036%. The 30 yr fell as low as 4.62% but ended the day yielding 4.69%. Both yields down more than 6% since last week. This morning, they are each higher by 2 bps. Shorter term duration – 3- and 6-month bills are yielding 3.72% annualized. The 2 yr is only giving you 3.51%. 12-month CD’s are now offering about 3.75% - 4%.

The big question now: does the 10-year retest the April lows at 3.75%? The chart suggests it could — we’ve already broken through the March and May lows at 4.10%, which leaves April’s 3.75% as the next downside target. Whether we get there will depend on what we hear today, tomorrow and Thursday.

Oil appears to have found a temporary low at the $61.25 level seen last week. News over the weekend that OPEC+ was raising production did nothing but cause oil to rise after it fell 11% since August 1^st on the idea that the economy was weakening and that OPEC + was going to raise production. It was as I told you in yesterday’s note – a classic ‘sell the rumor/buy the news reaction’. This morning Oil is up 1.2% or 75 cts at $63.01.

Gold continues to surge…. Yesterday it gained $50 to end the day at $3,635 and this morning it is up another $10 (after being $25 higher overnight) – trading at $3,645. The move being credited to the idea that not only will rates fall 75 – 100 bps this year but will continue to fall next year. I’m not sure where these guys want rates to go – I mean if we cut by 100 bps this year – FED Funds will be at 3.25%-3.5% below what is the historical range of 4-6%. To me – 3.25% rates suggest an economy in NEAR crisis…. Is that where we are – NEAR crisis? I mean, let’s not be ridiculous…. I say that because rates that begin with 2 would suggest the bottom is about to fall out….and 3.25% is much closer to 2 than 4.

The move has now put the RSI (Relative Strength Index) at 80.312 – suggesting a ‘way overbot’ condition, but here’s the thing – when the momo (momentum) guys jump on, they throw traditional metrics out the window, so while gold is ‘technically screaming’ overbot, it may not mean that it is done going up.

Now when the correction comes – and it always does eventually – here is what we can expect. A sharp (but not unusual) pullback as the momo guys are the first ones to hit the sell button when the tape turns. Gold will retest at key moving average support levels -which right now are 3,360 (both short and intermediate) and $3,100 at the long term (200 dma). Stay tuned.

US futures are inching higher - At 5 am Dow futures are +8, S&P’s up 8, Nasdaq up 48 while the Russell is flat.

The tariff battle has now made its way to the Supreme Court after two federal judges ruled that many of the steep “emergency tariffs” were, in fact, illegal. So, buckle up — if the justices agree and decide that Trump had no authority to impose those tariffs, then Uncle Sam could be staring down nearly $1 trillion in refunds owed back to importers. Trump, for his part, has warned that if the government is forced to cut those checks, the economic fallout would be “ruinous, instead of the unprecedented success.”

The bond market will be the victim – as we will be forced to issue bonds to repay that debt – bond prices will fall, and yields will surge, and stocks will get punished.

But here’s where it gets interesting — out of this legal mess comes a brand-new “investing opportunity.” Deal Book has reported that importers are already being approached about ‘selling their rights to potential refunds for pennies on the dollar’. The buyers are betting big that the Supreme Court will side with the lower courts, overturn the tariffs, and turn those discounted rights into a windfall.

Think of it like a viatical settlement — when someone buys your life insurance policy, they hand you real money upfront (not pennies on the dollar) and then wait for you to die. And since death is certain, the buyer knows the payout is coming eventually.

Here, the only certainty is uncertainty. If the Supreme Court sides with Trump (think: you don’t die), those “refund rights” go to zero and the buyers walk away empty-handed. That’s why they’re trading for pennies on the dollar — the risk is enormous. But for those willing to take the gamble, it’s the classic high-risk, high-reward play. Interesting, no?

European markets are mixed as European investors await the latest US data. France is up 0.1% after the country ousted the Prime Minister, Francois Bayrou. Expect more turmoil across the French Countryside as Manny appoints a new PM.

The S&P closed on its high at 6495 up 13 pts after retesting the old closing high at 6508. This morning, it appears that we will test that closing high yet again and if we pierce it, then expect the push to test the most recent intra-day high of 6532 will be the target. Expect the MSFT/Nebius deal to keep the AI trade alive and well.

Pan seared garlic/soy butter rib-eye

This is a simple dish to make and when served with roasted potatoes and a large mixed green salad, makes an easy weeknight dish.

For this you need: butter, softened, 1 tspn minced fresh parsley, minced garlic, 1/4 teaspoon reduced-sodium soy sauce, 1 boneless top sirloin steak (3/4 pound), s&p.

Season the steak with s&p and set aside. Letting it sit for 15 – 20 mins.

Making some garlic butter – mix 2 tblspn of butter, the parsley, garlic and soy sauce. Set aside.

In a ribbed skillet – add 2 tblspn of plain butter over med heat. Next add the steak and sear on both sides for 5 mins – that should give you a med steak. If you want rarer, then cook for 4 mins per side and if you want more well done – then cook for 7 mins per side.

When done – place on a warmed plate and top with the garlic butter. Serve with roasted potatoes and a large mixed salad. Simple and so good.