Redeye Macro Note: It's Lonely in the Land of Realism, Is Intel About to Become the Communal People’s Chipmaker?

In this Redeye Macro Note - we discuss how lonely it is in the land of realism, as valuations near all-time record highs, in US market history, optimism and speculation soar, and talk Intel.

It's Lonely in the Land of Realism (@DonMiami3, MacroEdge Chief Economist)

Good Friday evening MacroEdge Readers and Community, 

This evening we’ll have a brief note covering some of the latest from the world of technicals and valuations - as markets have continued to rage on one of the most violent 4-month rallies in market history. The Nasdaq has risen almost 50% from the lows, and tech-heavy/AI-heavy baskets have surged higher and higher. 

Tomorrow, we’ll have the first AlphaSights Report out through the Substack distribution list, and our email list as well. This will mark the first AlphaSights Report, though it will not include the ‘Fund Manager Intelligence’ survey that we will begin conducting for Q3 over the next 2-3 months, and release in a subsequent report. If you are an institutional manager, wealth manager/RIA manager, CIO, or work out of a hedge fund – this toolset is designed for you. Learn more about AlphaSights and get information by submitting your information below: 

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PPI Hot, as Expected

The PPI came in hot as expected, though not hot enough to halt the odds of a September rate cut, which are pushing 95% as of the end of the trading day. Today in the data - we also got the retail sales report - which came in slightly lower than expected. The consumer continues to be anchored by a very small percentage of the overall basket - driven mostly by the 1% and asset class. August prices paid from a producer standpoint are showing somewhat of a flat line, though tariff impact usually lags in its impact to consumers. A 25 basis point cut right now, if the labor market remains okay, may be all the market gives the Fed this year, as the 10Y again caught a bid today. 

Technicals Showing Softening 

Technicals are starting to show some similarity and symmetry to February, though we haven’t seen volume or macro signals to back up the reasoning for said divergences. Given the long-term time frame of these divergences, they often take a very long time to resolve 

Bitcoin - speculative mania and liquidity gauge: 

(daily above) In a similar setup to its 2021 days. 

(weekly below) - negative divergences are measurable  

Given the fact that VIX / vol is bottom of the barrel cheap right now, dated hedging seems like cheap protection given the potential for macro risks: 

(VIX) above ^ 

The Nasdaq is at the pathway of duality: 

& certainly stopped at an interesting level this week. (weekly above) 

Some slowing momentum within semiconductors: 

The Nikkei and other global indices continued their charge higher on looser rate expectations. 

Just a slight divergence on the S&P - thus far: 

We’ll continue to watch these signals in the technicals, and in the volume, as we head towards a very likely rate cut in September. 

That is all for a brief Redeye Macro Note, and make sure the catch a recorded version of MacroEdge Radio #56 either on X, or via our YouTube @MacroEdge 

Have a great weekend and we’ll see you tomorrow for the first AlphaSights Report. 

Don

Is Intel About to Become the Communal People’s Chipmaker? (@RealJohnGaltFla, MacroEdge Contributor)

Today was another one of those days where one looks at the Trump administration and wonder to themselves the following:

Did the “R” for the party after his name stand from ‘Republican’ or Ridiculous?

The story of the day was an another artificial pumping up of a company that has been severely mismanaged since the .com days with only a brief burst during the post-pandemic speculative CHIPS act inflationary bubble.

Don’t believe me?

Intel is trading at 2001 to 2003 non-inflation adjusted levels:

Another example of crony state controlled capitalism was introduced via another proposed unconstitutional action proposed by the Trump administration.

From CNBC:

Intel stock climbs 7% on report Trump administration is considering stake in chipmaker

Really? We’re going back to the 1920’s and 1930’s model of capitalism all over again?

For my readers who get annoyed by history, there is precedence for this outside of wartime, just not by an American President who dreams up ideas to pick winners and losers in business and US society. Unfortunately the biggest and best examples come from a very dark era in history, and no you leftist losers, I am not comparing Donald Trump to be anything like Adolf Hitler.

But the government interference in companies and illegal actions of using the government to infer or actually buy shares in major US corporations does have an ominous parallel.'

From the Volkswagen Group website:

The stated purpose of the company is the “planning and technical development of the German People’s Car”. The share capital amounts to 480,000 Reichsmarks, with the capital contributions from “Treuhandgesellschaft für wirtschaftliche Unternehmungen mbH” (Trust corporation for economic enterprises; TWU) totalling 100,000 Reichsmarks and from “Vermögensverwaltung der Deutschen Arbeitsfront mbH” (DAF asset management corporation; VV) totalling 380,000 Reichsmarks.

So if we fast forward to this era, because of the leftist legislature in America wanting to pick winners and losers in capitalism via the Biden era CHIPS Act which will not really produce any measurable results until 2027 at the earliest, America now wants to establish a Volkswagenwerk principle for those industries the Executive Branch deems necessary?

Why not nationalize horse farms to haul the artillery to the front for the US Army during the next war then?

If one is to adhere to capitalist principles, new companies would emerge to replace failing companies like Intel and ensure that our nation would have a strategic supply of advanced chips. This is simply investing in and promoting mismanagement and stifling competition as what fool would want to get on the wrong side of the administration by failing to offer Roman Imperial tribute like AMD and Nvidia did?

What the Trump administration is promoting is stagnation. Stagnation is the ultimate enemy of capitalism and leads to capital fleeing for greener pastures where it is not over-regulated or where political whims determines which companies will be permitted to innovate and succeed.

I just wonder if the US government is going to start “investing” in US aircraft manufacturers because of their ineptness and mismanagement next.

Sort of like another party in history once did in a similar manner with Heinkel and Messerschmitt.

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