Behind the video
*The Critical Release of the PPI & Retail Sales Report* FED RATES
Overall Thesis
Kevin attributes falling Treasury yields despite hot producer inflation to investors rotating out of technology stocks as large capital raises drain liquidity. He expects further near-term pressure but maintains a year-end QQQ target of $800, favors Apple and long-duration Treasuries, and sees an Iran agreement as a potential rally catalyst.
Narratives
TLTiShares 20+ Year Treasury Bond ETFKevin considers TLT attractive as investors seek Treasury exposure during technology-market stress. He identifies $78.77 as a historically respected support floor and expects an Iran agreement to provide another catalyst for bond appreciation.
Key Arguments
- Treasury buying persists despite inflation data that would ordinarily push yields higher.
- Rotation out of equities can support long-duration bond prices.
- The cited $78.77 support zone has repeatedly held, with a notable exception in 2023.
- An Iran agreement could reduce fuel-related inflation pressure.
Risks acknowledged
- Hot inflation data fundamentally argues for selling bonds.
- TLT prices fluctuate and the historical support floor has been breached before.
- The timing and occurrence of an Iran agreement are uncertain.
AMDAdvanced Micro DevicesKevin recounts having called AMD overbought and recommended selling year-end calls before its decline. He uses that historical example to illustrate hardware vulnerability during a liquidity squeeze, without clearly issuing a fresh AMD downside forecast.
Key Arguments
- AMD initially rose after his earlier call but subsequently fell below the level where he made it.
- He argues that selling calls would have benefited from the subsequent decline.
- AI hardware is particularly exposed to capital-raising-driven volatility.
Risks acknowledged
- The initial rise made his earlier timing look wrong.
- He expects a broader hardware rally after deleveraging.
QQQInvesco QQQ TrustLarge technology and AI capital raises are draining liquidity and pressuring QQQ despite a still-resilient economy. Kevin anticipates additional near-term downside risk but retains his $800 year-end target.
Key Arguments
- Capital raising can force leveraged investors to sell without an economic collapse.
- QQQ failed to reach the earlier $765 objective, peaking around $762.
- The loss of $725 puts $715 support in focus, with $700 identified below it.
- AI provider revenue and manufacturing activity support the view that the broader investment cycle is continuing.
Risks acknowledged
- Labor bargaining power and consumer spending show early weakness.
- Inflation remains elevated and complicates Federal Reserve policy.
- Additional forced selling may occur before recovery.
AAPLAppleKevin identifies Apple as a defensive destination during the technology liquidity squeeze. He explicitly contrasts its expected upside with pressure on capital-intensive AI hardware companies.
Key Arguments
- Apple is described as a flight-to-safety stock.
- Kevin argues that Apple avoids the capital-raising pressure affecting other technology companies.
- He reiterates an existing Apple-up and TLT-up investment view.
Risks acknowledged
- The broader technology market remains under pressure.
Predictions (1)
CRWVCoreWeaveKevin examines CoreWeave's sharp prior-session decline as evidence of stress in the AI trade. He cautions that premarket behavior does not establish that selling has finished.
Key Arguments
- Most of the cited prior-day decline occurred during regular trading hours.
- Premarket prices provide insufficient evidence that the selling pressure has ended.
Risks acknowledged
- He does not establish a specific further price decline or downside target.
Hedges & Caveats
- Consumer and labor-market weakness remains preliminary; the economic data does not yet establish a recession.
- AI revenue growth remains strong, but major model providers are spending heavily and are not meaningfully profitable.
- Further deleveraging and bankruptcies could precede a technology rebound.
- TLT carries price fluctuation risk and differs from holding an individual Treasury to maturity.
- An Iran agreement and its timing remain uncertain.
- Investment suitability depends on the individual portfolio; the description disclaims personalized financial advice.