Updating My Shopping List as We Await Warsh at Jackson Hole
Chips and software rally while the rest of the market struggles.
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Two groups are benefiting Thursday from strong earnings on Wednesday night. Semiconductors are moving on the Nvidia (NVDA) report, and software is rallying on the results from Salesforce (CRM) and Veeva Systems (VEEV).
The broader market is having some problems, though. Only about 47% of stocks are in the green, and 85 new highs against 81 new lows illustrates how choppy the action is.
The AI trade is no longer a single monolith. It continues to sort out winners and losers. The big hyperscalers Amazon (AMZN) and Alphabet (GOOGL) are lower, and Apple (AAPL) is weak as well, but Microsoft (MSFT) is benefiting from the software strength. Speculative action in small-caps is still slow, and there are few names at day highs.
From Nvidia to Warsh
Right now we are still dealing with the ramifications of the Nvidia report, but watch for the focus to shift to Fed Chair Kevin Warsh’s Jackson Hole speech on Friday morning. Nvidia has inflationary ramifications, and it will be interesting to see if he addresses them. While the massive capex spending illustrates the tremendous economic power of AI, there are many less desirable ramifications.
Working the Shopping List
I’ve recently been focusing on my shopping list and have given attention to some names such as National Energy Services Reunited (NESR), Hinge Health (HNGE) and Ondas Holdings (ONDS). Hinge Health is moving higher Thursday with the rest of software.
Amazon is on my list for a buy on weakness, and there is more of that Thursday. I don’t see any good support yet, but I am looking to slowly increase the position. I suspect Amazon will be able to protect margins with its cloud offerings and want to be positioned in it for third-quarter earnings.
Biotechnology
Another group on my shopping list is biotechnology. I have discussed three of my favorites, Xeris Biopharma (XERS), Precigen (PGEN) and Starling Oncology (STLN), many times. They are all acting well, and I want to accumulate them further. Xeris will host a webinar on September 9 to lay out the Phase 3 program for XP-8121, its once-weekly injection for hypothyroidism, and that could be a meaningful catalyst.
A couple of other biotechs on my list are Cullinan Therapeutics (CGEM), Candel Therapeutics (CADL) and Harrow (HROW). I’ll have more details on all of these soon.
My best advice right now is not to get too excited or depressed about this action. Warsh at Jackson Hole on Friday could change everything quickly.
At the time of publication, Rev Shark was long AMZN, NESR, ONDS, XERS, PGEN, STLN, CGEM, CADL and HROW.
