Industrial Policy & Economic Nationalism - The report critiques the Trump administration's "rule by deal" approach, where individual companies gain public investment through White House negotiations without transparency or consideration of the broader industrial landscape [3][4][5] - The report argues for a comprehensive, institutional approach to industrial policy, particularly for critical minerals, with a clear mission, institutional capacity, and streamlined processes [8][9][10] - The report highlights the need for government intervention in areas like rare earths and semiconductors due to China's dominance, emphasizing the importance of securing these industries [7][8] - The report mentions the CHIPS program, where $40 billion was allocated to semiconductor manufacturers, as an example of a thorough but slow process [11] Tariffs & Trade - The report suggests that broad tariffs across all imports can negatively impact trade and economic growth [20] - The report acknowledges that targeted tariffs, like those on electric vehicles from China, can be strategically useful [21] - The report warns that excessive tariffs could lead to higher prices for consumers and a less competitive domestic car market [22] AI & Data Centers - The report suggests caution regarding government investment in AI data centers, given the significant private capital already flowing into the sector, estimating close to $500 billion this year [15][16] - The report expresses concern about a potential bubble in the AI space due to excessive private investment [16]

Uh Korea is going to be um uh growing tremendously in semiconductors in the coming years and the reason for that as you know uh Samsung and SK helped me invent the AI supercomputer. Without the HBM memory there is no AI supercomputer and over the next decade uh memory technology and semiconductor growth here in Korea will be very significant with with with respect to China. Uh, China is now 0% of our business.We used to have 95% share of the AI business in China. Now we're at 0% share. And I'm disappointed ...

Economic & Financial Market Analysis - The Federal Reserve cut its benchmark interest rate by a quarter of a percentage point (025%) for the second consecutive time this year to spur demand in the economy [1] - The Federal Reserve is concerned about the labor market slowdown, with companies like UPS (over 40,000 jobs) and Amazon (over 10,000 jobs) announcing layoffs [1] - The government shutdown delayed the release of important federal government data, impacting the Federal Reserve's decision-making process [1] - Two members of the Federal Reserve's decision-making body did not support the interest rate cut, with one advocating for no cut and another for a steeper cut of half a percentage point (05%) [2] US-China Trade Relations - The US and China have agreed to a framework for a trade deal, with potential discussion points including lower tariffs, easier access to rare earth minerals, and harder measures against fentanyl [1][2] - The United States would likely hold off on the 100% tariffs that President Trump threatened recently, so we'll probably have tariffs around 55% [3] - China will delay imposing its rare earth export controls on the United States, currently, it's scheduled to begin in December 2025, but China could push it for another year if likely fenol be part of the deal [3] - President Trump is not going to completely get rid of the 20% fentanyl tariff but maybe go down to as low as 10% [3] - China has purchased about 180,000 metric tons of fentanyl, which is still less than 1% of its total purchases from 2024, but that's a good sign [3] US Government Shutdown - The government shutdown is in its 29th day, with funding for critical food assistance programs for tens of millions of Americans set to lapse in just two days [3] - The largest union representing federal workers is calling on Congress to pass a clean short-term funding bill to reopen the government [3] - 65% of Americans live from paycheck to paycheck [4] Hurricane Melissa Impact - Hurricane Melissa made landfall in Cuba as a category 3 hurricane, with forecasters warning of a storm surge of up to 12 feet, leading to the evacuation of more than 700,000 people [22] - Hurricane Melissa made landfall in Jamaica as a Cat 5 storm with winds of 185 miles per hour, leaving more than 3/4 of the entire country without electricity [22][23] - Over 200,000 people were evacuated in Holin Province [27]

Honda is cutting or suspending production at some of its North American plants due to a shortage of critical semiconductors that threatens to spread throughout the industry’s automotive supply chain. https://t.co/fZyiTju6C8 ...

Market Outlook - The market is overbought but has been since September, a decent pullback would extend market health [1][2] - S&P is expected to reach 7,000 by year-end and 7,200 in early 2026 [2] - Long-term secular trends suggest the S&P could reach 10,000 to 13,000, a double from current levels [4] - Interest rates are expected to decline into 2026, potentially with the 10-year close to 2% [9] Key Drivers and Sectors - AI and tech-related sectors, including infrastructure and utilities, are key drivers expected to lead through the end of the decade [3] - Semiconductor is the true leadership in this market, followed by tech and tech-related AI [12] Economic Factors - Current nominal growth is tracking at 250% for the quarter, with inflation at 250%, an unusual environment for multiple Fed rate cuts [5] - There is concern that inflation may not return to the 2% level, posing a risk [6][7] Investment Strategy - Great buying opportunities exist in the market [3] - Some subsectors like drone technology and quantum computing are running hot, making it hard to chase them [10][11] - The VIX does not currently indicate a sell signal [13]

Interest Rate Cut Expectations - Partners Group believes a rate cut in September is highly likely, potentially exceeding market expectations of 85-87% due to labor market weakness [3][4] - Encouraging PCE data, particularly stable services inflation around 25% year-over-year, supports the likelihood of a September rate cut [6] - A rate cut could cushion the labor market and support consumer spending [14] AI Investment and Growth - While growth rates of AI beneficiaries like Nvidia may be slowing from over 200% year-over-year, hyperscaler capex is projected to be $400 billion next year, driving stock performance [8][9] - The total addressable market growth in AI will materialize through investments in data centers, connectivity, cooling, and related services [10] - Business application software is expected to outpace semiconductor growth within the AI sector, indicating a broadening of the AI trade [12] Broadening Market Opportunities - The broadening of the AI trade extends beyond semiconductors, with opportunities in business application software, including those in private markets [12][13] - Private equity middle market growth companies are seen as having significant potential, with earnings growth and margins exceeding those in public markets [15]

Core Insights - Oliver Rodzianko is an investment analyst with a focus on the technology sector, particularly in AI, semiconductors, software, and renewable energy, emphasizing companies with resilient management and competitive advantages [1] - The investment strategy involves value trading at inflection points without leverage, typically holding investments for one to two years [1] - Rodzianko anticipates significant annual returns based on his rating system, with expectations of 30% or above for strong buy, 22.5% or above for buy, 15% or above for hold, and 0% or negative for sell and strong sell ratings [1] Investment Strategy - The analyst employs advanced risk-mitigation strategies to protect against market downturns and capitalize on recessions [1] - A medium-term goal includes establishing a family office based on wealth-preservation portfolio models [1] Rating System - Strong Buy: Expected annual return of 30% or above for value trading and 20% or above for long-term investments [1] - Buy: Expected annual return of 22.5% or above for value trading and 15% or above for long-term investments [1] - Hold: Expected annual return of 15% or above for value trading and 10% or above for long-term investments [1] - Sell: Expected annual return of at least 0%, typically below 10% for value trading and similarly for long-term investments [1] - Strong Sell: Anticipates zero or negative annual returns for both value trading and long-term investments [1]