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Stocks were mixed today, despite Oracle rising by a ridicoouls 36%. I have to admit, I have never seen a large-cap stock move like that, and it seems like peak stupidity. OpenAI apparently agreed to $300 “B” billion deal for computing with Oracle. I’m not sure where OpenAI is getting $300 billion from, maybe Stargate? Perhaps they will have to go public or issue a lot of debt and venture capital rounds. I mean $300 billion is bigger than the entire market cap of companies like Verizon and Cisco. It is equal to the market cap of two Softbanks, which has a market cap of about $160 billion. The best part is that the contract doesn’t start until 2027.
This excitement led the S&P 500 to open higher, but it gave back nearly all of its gains throughout the day, only to see a final surge on a closing buy imbalance.
So, for the day, the S&P 500 finished up 30 basis points. The RSP equal-weight index slipped 10 basis points, the Nasdaq 100 (QQQ) was flat, and the equal-weight version (QQQE) fell more than 80 basis points. This underscores a familiar theme: a handful of large-cap winners are masking weakness beneath the surface. Notably, the QQQE has moved sideways since August 1—literally sideways.
Tomorrow brings the CPI report, and based on what I see in swaps, I’m not expecting any major surprises. That said, today’s PPI report came in weaker than expected. I’m not sure what’s going on with the PPI data, but both the market and numerous survey indicators continue to point to higher prices, for the CPI
An inline print tomorrow would suggest the market has the CPI path right, keeping us on track for a rate of roughly 3.5% by May 2026.
Finally, the VIX 1-day closed under 14, and that would suggest a very mild volatility crush tomorrow, probably similar to what was seen following the job report.
-Mike
Glossary
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Basis Points (bps): A unit equal to one-hundredth of a percentage point, commonly used to measure changes in interest rates or index performance.
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Closing Buy Imbalance: A situation when buy orders significantly outweigh sell orders at the market close, often causing a late price surge.
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CPI (Consumer Price Index): A measure of inflation that tracks changes in the prices consumers pay for goods and services.
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Equal-Weight Index: An index where each stock is assigned the same weight, preventing large-cap stocks from dominating performance.
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Large-Cap Stock: A publicly traded company with a market capitalization typically above $10 billion.
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Market Capitalization (Market Cap): The total value of a company’s outstanding shares, calculated by multiplying share price by shares outstanding.
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Nasdaq 100 (QQQ): An index of the 100 largest non-financial companies listed on the Nasdaq exchange, heavily weighted toward technology.
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PPI (Producer Price Index): An inflation measure tracking changes in the prices producers receive for goods and services.
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RSP Equal-Weight Index: An exchange-traded fund (ETF) that tracks the S&P 500 with equal weighting for each component stock.
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Swaps: Financial derivatives where two parties exchange cash flows, often used to hedge or speculate on interest rate or inflation expectations.
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VIX 1-day: A measure of expected short-term volatility derived from S&P 500 options pricing.
Disclosure
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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