Buy.
Overall Thesis
Market leverage unwind from corporate capital raises and yield increases is creating a buying opportunity as support levels hold and recovery is anticipated around early August.
Narratives
Kevin cites Google's $80 billion capital raise in early June as a key contributor to liquidity being pulled out of markets, part of his broader 'great suckening' narrative. He doesn't offer a direct directional view on the stock itself beyond this macro context.
Key Arguments
- Google's $80 billion raise in June helped drain market liquidity, contributing to the broader market pullback
Microsoft earnings are flagged as one of the major near-term catalysts (within the next two days) alongside Meta, Amazon, and Apple, but no specific directional thesis is given.
Key Arguments
- Microsoft earnings are among the big catalysts expected in the next two days
Apple earnings are mentioned as one of the major near-term catalysts within the next two days, without a specific directional call.
Key Arguments
- Apple earnings are among the big catalysts expected in the next two days
Kevin argues the market has been depressed by a 'great suckening' of capital via huge corporate raises (Google, SpaceX, Meta) and higher yields, causing a leverage unwind in ETFs and memory stocks. He expects this deleveraging to end around August 3rd, making him short-term bullish on a bounce, while remaining longer-term cautious due to a decaying labor market that markets aren't yet pricing in.
Key Arguments
- Massive capital raises (Google $80B, SpaceX $85B, Meta) sucked liquidity out of markets over the past six weeks
- Leveraged ETFs and hedge funds have deleveraged significantly (JPMorgan: hedge funds 50% delevered, leveraged ETFs 75% deleveraged)
- S&P 500 equal-weight index is already at all-time highs, showing the pain is concentrated in hardware/leverage-heavy names
- Labor market is decaying week-over-week, which is a longer-term (2-5 year) risk not yet priced into stocks
Predictions (1)
Meta is mentioned as one of the companies that went to the markets to raise money, contributing to the liquidity drain Kevin describes, and its earnings (alongside Microsoft, Amazon, and Apple) are flagged as a near-term catalyst within the next two days.
Key Arguments
- Meta raised capital, adding to the 'great suckening' liquidity drain
- Meta earnings are one of several major catalysts expected within the next two days
Amazon earnings are mentioned as one of the major near-term catalysts within the next two days, without a specific directional call.
Key Arguments
- Amazon earnings are among the big catalysts expected in the next two days
Hedges & Caveats
- Fed decision uncertainty on the day of recording
- Upcoming major tech earnings (Meta, Microsoft, Amazon, Apple) within two days
- Geopolitical risk from Iran tensions resuming
- Leveraged ETF deleveraging creating market volatility
- South Korean memory chip sector concentration risk
- Support levels are being 'respected so far' - not guaranteed to hold