ALERT: Federal Reserves Favorite Measure Of Inflation Just Hit A 3 Year High!
In a Nutshell
Core PCE inflation hit a 3-year high at 3.2% and overall PCE at 3.5%, fueling market volatility amid oil at $120/barrel, Japan yen intervention, and geopolitical tensions, yet stocks rallied by ignoring weak GDP (2% vs. 2.2% expected) and labor data. Meta dropped 9% post-earnings on high capex, Intel and SanDisk show massive valuation-fundamentals disconnects (Intel: $470B cap despite $3B annual losses; SanDisk: 3,000% 1-year gain with negative PE), warning of 90-99% downside risks and pump-and-dump precedents like Oaklow and MSTR. Apple earnings loom steadily (EPS $1.93, rev $108B); hold intentional positions, favor momentum like QCOM's 16.5% pop, but brace for corrections without Fed stimulus.
These notes were generated by AI and may contain inaccuracies.
Markets consolidating after 28% up. Meta exceeded earnings expectations but reported more capex spending than expected, spooking investors. Down 9%, peaked at 10-11% loss, $150-160 billion market cap loss. Meta had amazing 2025 performance with great run and consolidation. Overbought, possible recovery.
Nvidia seeing slight retracement, down 4%, earnings in two weeks.
Open Door big sell-off, down over 8% at one point, consolidating. If breaks $5 support, heads to $4 support.
Microsoft exceeded earnings but selling off.
Apple reports earnings after market close.
Intel pulling back after new all-time highs in extended hours due to Trump post on 10% ownership investment, up $30 billion. $470 billion market cap while losing $3 billion a year. Valuation does not align with fundamentals, production, or revenue.
Markets holding well overall despite headlines.
Japan intervened to defend yen. Yields at 27-year highs. Oil at $120 per barrel. Inflation rising.
PCE report: core PCE from 3% to 3.2% (3-year high). Overall PCE from 2.8% to 3.5% (3-year high). Markets rallied after report. Claim: factored in, in line with expectations. But higher inflation at all-time highs.
Labor markets weak, red flags everywhere. 30-year yields touched 5%, 11 basis points from 18-year highs. 10-year Treasury high, mortgages expensive.
Market ignores fundamental data. Oil expense passes to consumers at pump, reduces disposable income, negatively impacts economy.
GDP expectation 2.2%, actual 2% (lower, worse than expected).
AI hype despite issues. Invested in AI companies, but elevated levels unsustainable unless Fed prints money or stim checks (like post-pandemic).
Iran threatening to attack US due to blockade negatively impacting their economy.
Apple solid company, low volatility post-earnings. One day in 2024 moved 8%, otherwise stable. EPS expectation $1.93 (less than prior quarter). Revenue $108 billion.
SanDisk: 3,000% gain in one year (almost exactly one year). 15% downside per analysts. Loses $1 billion, negative PE ratio. Could report worse than expected, markets won't care due to irrationality. Disconnect between valuation and production.
Not advising sell, hold or buy if meets criteria. For beginners: overbought, overvalued. Short-term upside 5-10-20%, but downside risk 90-99%. Corrections happen when fundamentals don't align, especially with market uncertainty. Once hype fades, 20% retracement triggers margin calls, forced selling.
Oaklow: $193 to $46.
MSTR: $500 to $100.
Speculative companies pump and dump. Interested to follow SanDisk and Intel in a year.
Don't compare to unicorns like Nvidia, Amazon, Mag 7 – not outliers. Saying "it's the next" solidifies it's not.
Reminder: be intentional on Apple/SanDisk positions around earnings. Holds Apple long-term (bought lower), pullback opportunity to buy more. SanDisk volatile play.
QCOM exceeded earnings, up 16.5%, momentum with positive catalyst. Let it pump, history of pumping then dumping.
Will follow up, go live with LPP team. Join LPP: one-time payment, lifetime access, watch live trading, discount in description. End year green.
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