My Supercharged Memory Stock Trade, Military Upgrade, Peace on the Strait?

Song of Myself (excerpt)

The past and present wilt - I have fill'd them, emptied them,

And proceed to fill my next fold of the future.

Listener up there! What have you to confide in me?

Look in my face while I snuff the sidle of evening,

(Talk honestly, no one else hears you, and I only stay a minute longer)

Do I contradict myself?

Very well then, I contradict myself,

- Walt Whitman (1855)

Giving Peace Another Chance?

Secretary of State Marco Rubio on Tuesday addressed the media at the White House. Rubio made clear that he believed that offensive operations against Iran had concluded. He made clear that U.S. policy had shifted toward protecting seafaring commercial vessels as they resumed passage through the Strait of Hormuz. Almost simultaneously, reports came out of the U.K. that another cargo ship in that strait had been struck by some kind of projectile.

Nonetheless, by Tuesday evening, U.S. Pres. Donald Trump had paused "Project Freedom," which is the U.S.-led effort to get stranded ships through that narrow waterway without being attacked by what's left of the Iranian military. The president posted to his Truth Social account, "Project Freedom will be paused for a short period of time to see whether or not the Agreement can be finalized and signed."

The president went on to explain that a request to pause the operation had been made by Pakistani leadership. Pakistan has been acting as a mediator between Washington and Tehran for several weeks. Pres. Trump cited "great progress" toward something that might resemble a peace deal. Do markets believe that peace has a chance?

Yes, given that the local New York City kids that used to run the trading floors no longer control the point of sale, having been replaced by keyword reading algorithms, markets do believe. Let's hope they are correct. Overnight, front-month prices for crude oil are trading lower after having already sold off on Tuesday. Treasury debt securities are trading higher (yields lower) overnight after having traded higher on Tuesday. Oh, and U.S. equity index futures are trading higher overnight after stocks rallied broadly on Tuesday.

The Memory Basket & More...

I wrote the piece on April 29: The section of that day's market Recon column that I refer to was titled "The Memory Basket." I wrote to my readers that day that I had purchased a basket of not necessarily semiconductor stocks, but memory / storage stocks after the closing bell the night prior. I explained that all four of the stocks that I had placed in the basket had been on the march since mid-2025 and that I had enjoyed at least part of the ride in a couple of names, but that I need to broaden my exposure to the space.

The stocks included were Micron Technology (MU) , Seagate Technology (STX) , Western Digital (WDC) and SanDisk (SNDK) . The run just since that purchase one week ago has been simply incredible. I don't know how many readers were already there or worked their way in there after reading that piece, but this is just incredible.

My average price for STX is $683.75. I saw that name trading with a $796 handle this morning. My average price for WDC is $432.17. I saw this stock trade with a $482 handle this morning. My average price for MU is $528.47. That stock is trading with a $682 handle early on Wednesday morning. Finally, there is SNDK. I added to that one on the dip after entering, so there were two days of purchases last week. My average there is $1,055.73. The shares are trading with a $1,493 handle right now.

These runs amount to gains of 16.4%, 11.5%, 29.1% and 41.5% respectively, in just a week's time. I don't want to exit any of these names. But don't forget to manage these positions. I will leave something in place, but windfall profits do not knock on our door every day. I will be making sure something gets banked. Then there is the case of Advanced Micro Devices (AMD) , which is not a memory stock, but is a key name in the semiconductor space. That stock is up a stunning 18.5% overnight after earnings. All hail CEO Lisa Su of Queens, NY. Wow. Readers of Doug's Diary know that I had canceled my $334 target price. Those shares are trading with a $421 handle this morning. Rock & Roll! We'll have to cover that name in depth in a couple of hours when everyone wakes up. At least this more than washes away in my mind the botched Intel (INTC) short.

Defense Goes Higher Tech

Defense already was high-tech. You ain't seen nothing yet, sport. Bloomberg News is reporting that Secretary of the Army Dan Driscoll is putting together an initiative known as "Right to Integrate Hackathon," which will aim to correct a long-standing problem in the military. That problem is weapons systems that operate in silos and require costly programs and add-ons in order to connect. Perhaps that's changing. Legacy defense contractors Lockheed Martin (LMT) , Northrop Grumman (NOC) , RTX (RTX) , Boeing (BA) , General Dynamics (GD) and L3Harris (LHX) will be working closely with AI platform operators such as Palantir Technologies (PLTR) and Andruil to help connect and modernize procurement. This should enable quicker deployment to and improved AI-driven decision making in the field.

Tuesday's Child

They say that Tuesday's child is "full of grace" and at least for this week, investors were likely to agree. On Tuesday, as oil prices sagged and Treasury prices heated up, investors raced back into stocks. For the regular session, the Nasdaq Composite popped for a gain of 1.03% as the S&P 500 added 0.81%. The small to midcap indexes all ran from 1.31% to 1.75%. The Dow Transports added 2.11% back on and the Philly Semiconductors soared 4.23% on the day. That particular index is up 55% year to date. It's early May. That's not a misprint.

Breadth

Nine of the 11 S&P sector SPDR exchange-traded funds ended the Tuesday session in the green, obviously led by tech (XLK) . The materials (XLB) also had a very nice day. Only communication services (XLC) closed in the red, while the utilities (XLU) closed unchanged.

Winners beat losers by a nine-to-four margin at the NYSE and by a rough five to three at the Nasdaq. Advancing volume took a 64.7% share of NYSE-listed trade and a 63.1% share of composite Nasdaq-listed activity. Aggregate trading volume increased on a day over day basis, by 3.1% across Nasdaq-listing, by 1.2% across NYSE-listings and across the membership of the S&P 500 as well.

What Does That Mean?

It means that we absolutely nailed it yesterday.

Readers will see how the market responded to the "pause" day on Monday. Bulls rejoice, for this is exactly what you needed to see... a reconfirmation of a reconfirmation of the bullish trend. It really doesn't get any better for the long-equity crowd. This has been an April and early May for the ages. Both the relative strength index and daily moving average convergence divergence for the S&P 500 support the idea of further upside.

Yes, We Can...

My hand is asking to be held

If you listen hard, you'll hear it say

Give it what it needs and don't let go

Your hand is cold and so is mine

They'll get warmer side by side

In a while, they'll be fine

- Gregor Kempor (Gregor), 2018

Economics

(All Times Eastern)

07:00 - MBA 30 Year Mortgage Rate (Weekly): Last 6.37%.

07:00 - MBA Mortgage Applications (Weekly): Last -1.6% w/w.

08:15 - ADP Employment Report (Apr): Expecting 84K, Last 62K.

10:30 - Oil Inventories (Weekly): Last -6.233M.

10:30 - Gasoline Stocks (Weekly): Last -6.075M.

The Treasury & The Fed

(All Times Eastern)

08:30 - Treasury Refunding Announcement

09:30 - Speaker: St. Louis Fed Pres. Alberto Musalem.

1:00 p.m. - Speaker: Chicago Fed Pres. Austan Goolsbee.

1:30 - Speaker: Cleveland Fed Pres. Beth Hammack.

Today's Earnings Highlights

(Consensus EPS Expectations)

Before the Open: (CVS) (2.21), (UBER) (.69), (DIS) (1.50)

After the Close: (APP) (3.64), (ARM) (.58), (DASH) (1.07), (SNAP) (.10)

At the time of publication, Guilfoyle was long SNAP, STX, WDC, MU, SNDK, AMD, PLTR equity. Short INTC equity.