Budweiser keeps pushing higher despite bad headlines (0:30). AI technology segments moving down (3:00). Bitcoin in the short-term and long-term (5:15). Economy not looking as sweet as it was even a month ago (6:55).Show links: Anheuser-Busch Q4 Earnings TranscriptU.S. trade deficit has spiked to record highs amid tariffs fearsA New Age For Crypto With John D'Agostino, John Hoffman And Chris KuiperEpisode transcripts: seekingalpha.com/wsbSign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What are the positive stock movements despite bad headlines?
stocks that have been moving up recently despite kind of the bad headlines that we've been facing one is budweiser keeps pushing higher as we're recording it's been up for 10 consecutive sessions it's only been down twice in the last 17 sessions it had results out last week uh they they were obviously taken positive by the market but it was already drifting higher from there.
Chapter 2: Why is Budweiser outperforming the market?
So that's one stock that's sort of bucking the overall downward trend that the market has seen.
And what are the highlights there?
So that was more of an execution story. They also said that they didn't see a heavy impact from tariffs. At that point, when they were talking, tariffs were more conceptual than they were, something that was definitely on the horizon. But even in that context, they said that they weren't particularly worried about it. And so coming from a global operation like that, investors took that to heart.
But the problem is that that might be very specific to that company. They also showed some signs of weakness. Revenue was up, but volumes were down. So they were taking advantage of higher prices. So that was a situation where inflation was kind of working in their favor.
And they were also benefiting from a cost cutting regime, not an aggressive one, but one that sort of was eyeing cost cutting as a goal. So They were helped margin-wise there. So you can't expect that from every company. And I think what we're learning From the recent past is that when you're dealing with high-risk assets, those can go up very quickly, but those also come down.
So a lot of the damage that's been done recently has been done in kind of those higher-risk areas, technology, crypto, those kind of spaces. But there are pockets of strength in the more defensive sectors. If you look at the performance of the major averages so far, This year, you can see the bifurcation.
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Chapter 3: What are the trends in the tech and AI sectors?
So the NASDAQ is down around 4% year to date, but the Dow is basically flat and you have the worst Dow components are Salesforce and Nvidia, both down about 13% so far this year. But if you flip it around and look at the best Dow components, you have Amgem, you have 3M, You even have IBM as sort of an old fashioned technology play doing well within the Dow.
Chapter 4: How are major indices performing amidst market volatility?
So there are pockets of strength, even though the overall sentiment over the past week certainly has been down. On the upside, like I said, it's kind of limited. It's more companies that are sort of holding up despite the news. The downside, you have a very heavy sort of AI market. technology segments moving down. So Nvidia was down 11% in the past week, you have ARM down 10%, Broadcom was down
Chapter 5: What are the risks and opportunities in AI investments?
10%. Oracle, which has earnings next week, was down 6%. Oracle is a good one to look at because they have the results coming out early next week. They're a company that has been spotlighted as a kind of an AI name. So look for commentary from them about their AI progress.
I would also look at their spending, their CapEx, which has been going up lately as they kind of lay the infrastructure for the push, a bigger AI push. And I think that's a theme that we'll be looking at a lot with the excitement of, say, NVIDIA in the first sort of year and a half of the AI boom rising significantly. All those chips are being bought by somebody.
So one of the things to watch out for is just cost that AI has in actual dollar terms as these companies try and sort of get ready, gird up for the battle ahead.
And is that why tech led the sell-off this week, is because of the higher expenses likely coming?
Chapter 6: Is the economic outlook affecting tech and crypto markets?
I mean, I think that's a worry. I think the worry is that the revenue from additional AI investments is not going to come as fast as we had hoped. Meanwhile, the costs are happening now. So the idea that the profits from this are going to be delayed In terms of actual trading, I think it's more just sort of a high risk, low risk situation.
I think it was a risk off kind of move for the stock market. And I think the test for that is crypto, which is also down kind of in lockstep with tech stocks in general. So if you could kind of look at The NASDAQ is down 4% year to date. Bitcoin is down about 3%. So those two are kind of moving in tandem.
And I think it's just generally people are rotating out of tech and looking for safer investments as the economic picture becomes less enticing.
What would you say about Bitcoin specifically, its movement in the crypto space? I'd like to remind the audience of one of my favorite quotes that we heard from John D'Agostino at our investing summit last summer. And he said in talking about cryptocurrency that volatility is not the same thing as risk, which I think would be wise for us all to keep in the back and front of our minds.
What would you say about where Bitcoin is going and how volatile it's been?
So in the short term, I like to use Bitcoin as a risk asset indicator because unlike an individual company might have fundamentals that are specific to that company, but Bitcoin doesn't have earnings reports or things of that nature that affect it. So you can kind of take its short-term movements as a sentiment indicator, especially as it relates to higher risk assets.
To your point though, there are... structural activities that are changing the way Bitcoin is being viewed by the public. So I think if you're looking long-term at Bitcoin, you're still looking at things like institutional adoption. You're looking at expanding its prevalence as an actual currency, as opposed to an investment.
And if there's progress in those areas, then Bitcoin has kind of an engine higher that's individual stocks might not have. So I think that's a point well taken.
And so if you're an investor out there and you're looking at crypto, you have to kind of take the short term volatility, which is more of a sentiment play against what you view as sort of the longer term fundamentals, which would be sort of the expansion of the adoption of the crypto.
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