Capital Wealth DailyThe America-At-250 Issue
Our read of the July 2 Wall Street Journal (Wednesday, July 1 close). Every story, with its tickers and the exact model move.
The Fed switched verbs. The banks we own threw a party about it.
A year ago the debate was when to cut. Two days before America turns 250, it’s whether to hike. Kevin Warsh won’t take a July increase off the table. He wants a “good family fight” first. The committee is split nine-to-eight toward higher by December. The hawks have ammo. ISM came in at 53.3, a sixth straight month of factory growth. ADP added +98K. The Dow slipped 14 points from a record. Financials rose 2.13% and led the whole market. Higher-for-longer, it turns out, is a business model.
Our ReadWe reinforce the banks: Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan (JPM). They earn better spreads the longer the Fed stays parked. They also collect fees on every deal in the record IPO pipeline three stories down. SGOV stays the full cash sleeve at 4%+. IAU stays the ballast. We make zero duration bets. The committee can’t agree with itself, and we don’t referee family fights. For the CalSTRS and CalPERS crowd, the 2-year pays 4.164% to wait. Take the money.
The Stories
6 stories · 3 pictured · 3 listed
The AI build-out now runs on small engines. We bought the guys holding the extension cord.
Quanta Services (PWR) joins the book as a new 1% tactical add in the Aggressive tiers. Every announced gigawatt needs transmission crews, and Quanta is the biggest crew in America. GEV, Constellation (CEG), NextEra (NEE) and Vertiv (VRT) are all reinforced on the 20-year power contracts and everything between the engine and the rack. CAT goes to the watch bench, not the book. The backlog is great, but Burry just shorted it and the multiple already ate the story.
A record $130 billion IPO half. Our allocation is the toll booth, not the ticket.
New issues pop 24% on average. That pop goes to the institutional allocation, not to you at 9:47 a.m. Our IPO exposure is the underwriters, GS, MS and JPM, all reinforced. They collect fees on every deal whether it pops or flops. BSP and the day-one casino stay AVOID. SK Hynix goes on the watch list as a memory-cycle read for the Micron (MU) position.
The USMCA got a decade of annual reviews. Ask Alcoa what uncertainty costs.
The income stays anchored in domestic toll-takers whose molecules never cross a border. Kinder Morgan (KMI), Williams (WMB) and Texas Pacific Land (TPL) are all reinforced. AA stays AVOID. Good assets, wrong passport. When trade policy becomes an annual argument, own the pipes that don’t file customs paperwork.
- Your Money · DividendsKroger bought Giant Eagle for $1.65 billion. The boring aisle beat the AI aisle.
- TechnologyMusk sketched an AI phone. “The idea of making a phone makes me want to die,” says man making phone.
- Markets · The Bear FileMichael Burry shorted half the AI market. Meta started selling the other half.
Off Duty & The Life File
3 stories
A Bangkok broth has simmered since 1974.
The owner can’t take vacations, and neither can compound interest. Never turning off the heat for 52 years is the whole retirement playbook in a soup pot.
Europe is fighting over air conditioning in a record heat wave.
A two-year court fight for a window unit. Build the buffer before the heat wave, because permission always takes longer than weather.
American capitalism at 250: three questions from the birthday section.
One retirement lesson is hiding in the fireworks. The system compounds for whoever stays in it longest, grumbling permitted.
From the desk Bias, the book, what’s priced, the planopen
Everything hinges on the July 28–29 Fed meeting, and Wednesday showed you the build. Chips were off (S&P IT −1.84%), banks were on (+2.13%), and gold rose +$45. The market is rehearsing a world where AI capex is an inflation source. So we lean into the layers that get paid either way: power, banks, bills, gold. We refuse long duration, day-one IPOs, and anything that needs the Fed friendly by Labor Day.
- DJIA52,305.24 −0.03%
- S&P500 7,483.23 −0.22%
- NASDAQ26,040.03 −0.7%
- 10Y4.474%
- 2Y4.164%
- WTI$68.58
- Gold$4,068.30
- Euro$1.1379
- Yen162.60
If your bond ladder still assumes rate cuts, it’s fighting last year’s war. Get paid 4%+ to wait while the committee has its family fight.