Investment Decisions - Malcolm sold Iron Mountain due to concerns that its stock price would decline post-earnings report, similar to the reactions of big banks and big tech companies after their earnings releases [2] - The investor had held Iron Mountain for a year with only a 3% dividend return, and its valuation compared to peers in the XLR was not promising for significant growth [3] - Prolis was also sold because it had been a stagnant stock for the year it was held [7] - The investor used the proceeds from the sales to buy ASML, positioning for future opportunities, anticipating a rate cut that would benefit fintech companies [6] Market Sentiment and Expectations - Expectations for some stocks had become too high [4] - Market sentiment suggests investors are taking profits and anticipating a pullback [5] - Consensus indicates the market is overdue for a pullback [5] Real Estate Market Analysis - Prolis boasts about a 95% vacancy rate, but the industry-wide vacancy rate is increasing [7] ETF Performance - The ETF has repeatedly invested in a particular stock (unnamed) but has not seen positive results [8]

Earnings and Market Performance - 66% of companies have reported earnings, with 82% beating on the top line and 68% beating on the bottom line [2] - Year-over-year growth is running at approximately 82% [2] - Market experienced a slight pullback after a 29% increase leading up to earnings reports [3] - Expectation of market volatility for the next two months, influenced by seasonal factors and Federal Reserve decisions [3] - Setup into the end of the year is anticipated to be positive, presenting opportunities in stocks like Caterpillar and Eaton [4] Economic Indicators and Federal Reserve Policy - Market initially focused on growth concerns due to jobs numbers but recovered quickly [5] - A potential rate cut in September with a 42% unemployment rate would be a favorable scenario [5] - Non-farm payroll report is backward-looking; weekly jobless claims are a more forward-looking indicator [6] - The 4-week moving average of weekly jobless claims is at 220000, up from 200000 six months ago, but down from a recent spike to 245000 [6][7] - Economy is growing above trend at approximately 21% according to the Atlanta Fed tracker [8] - Above-trend growth and slightly higher inflation are preferable for equity portfolio management and earnings [8] Tariffs, Onshoring, and Capital Expenditure - Potential positive impacts of tariffs include increased manufacturing onshoring and reshoring [10] - Google, Microsoft, Meta, and Amazon are projected to spend $400 billion on AI and capex this year [11]

Macroeconomic Outlook - A weaker dollar is generally beneficial for manufacturing and S&P 500 revenues, with approximately 30% of S&P 500 revenues originating from abroad [2] - A 10% depreciation of the dollar could increase inflation by roughly 05 percentage points over the next 9 months, posing a challenge given existing inflation levels [3] - The M2 money supply is growing at its fastest rate since 2022, indicating substantial liquidity seeking assets and yield [4] - The debate centers on whether recent sentiment improvements are sufficient for continued S&P 500 growth, considering headwinds from tariffs and student loan payments restarting [5] Labor Market Dynamics - The consensus expects 100,000 new jobs next Friday, which is still steady job growth [7] - Private sector job growth has slowed down in recent months, raising concerns about the labor market's health [7] - Deportations running at an annualized rate of approximately 1 million people could reduce job growth [7] - The break-even level for long-run non-farm payrolls is estimated to be around 70,000, lower than the 200,000 in 2023 and 2024 [9] Inflation and Pricing Pressures - The market is actively debating inflation, with the expectation of a 27% Personal Consumption Expenditures (PCE) reading next week [10] - There is an expectation of a meaningful increase in inflation over the next several months, particularly in imported goods like footwear, apparel, toys, and tools [11] - Companies are currently paying approximately $400 billion annually in tariffs, impacting either consumers through higher prices or companies through lower earnings [14] - Retailers, particularly those affected by tariffs, are expected to experience margin pressure and potentially lower sales [16]

Earnings Discussion - The segment discusses big tech earnings on deck [1] Market Analysis - The segment analyzes how to balance recent data from Google [1]

Market Outlook - European earnings outlook appropriately reflects tariff risks [1] - Rally is expected to extend in the absence of a trade shock [1]