Wesley Nolte @Wesl3y: "𝗢𝗻 𝗔𝗴𝗮𝗶𝗻, 𝗢𝗳𝗳 𝗔𝗴𝗮𝗶𝗻 You can..."

United Kingdom

𝗢𝗻 𝗔𝗴𝗮𝗶𝗻, 𝗢𝗳𝗳 𝗔𝗴𝗮𝗶𝗻 You can see the flip-flop rotation happening again today. Oil is down on an Iran ceasefire pause, lifting the Dow, while chips sell off again and drag the Nasdaq into the red. Money isn't leaving, it's moving. $GOOGL (Alphabet Inc Class A), $MSFT (Microsoft) and $AMZN (Amazon.com Inc) are green. Semiconductor darlings are not. It's been a back-and-forth for weeks: when semis bounce, SaaS gives a little back, and when semis roll over, the money comes right back to software (see Semis in blue vs SaaS in green in the attached chart). Last time I said the semi selloff was rotation and not panic. The SOX (semiconductor index) is in a bear market after a monster run, and even Micron's blowout couldn't hold its gains. When a stock sells off on record numbers, you know the price already assumed perfection. I also previously said the Google selloff was nerves. However, the 82% growth in Cloud doesn’t entirely offset my concern that the company ran a negative free cashflow since IPO. The hyperscaler question now isn't demand, it's returns (which I think it should be!). Microsoft and Amazon will face the same test this week. 𝗢𝗶𝗹 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗙𝗲𝗱 Strikes resumed a fortnight ago and Brent pushed above USD100, then the US paused today and it fell back toward USD90. This is the fourth ceasefire headline this cycle, and oil has swung big time on each. This is important because oil drives inflation. June’s inflation cooled across the US, UK and Europe, but based on a lower oil price. Now we've got fresh tariffs on 60 countries too. And the Fed's Wednesday debate isn't 'cut' or 'hold', it's 'hold' or 'hike'. The ECB has already bumped rates. We shouldn’t expect cheap money soon. 𝗧𝗵𝗲 𝗦𝗮𝗮𝗦 𝗦𝘁𝗼𝗿𝘆 My portfolio is SaaS heavy, and SaaS has been the market's punching bag this year on the theory AI agents will eat software. The earnings disagree. $NOW (ServiceNow Inc) went into last week's print down over a third, then posted revenue up 24% with AI contract value past USD1 billion, and has rallied since. $DDOG (Datadog Inc) grew 32% in May. Expensive semis punished, cheap software rewarded. 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗠𝗼𝘃𝗲𝘀 * Sold my $IWM (Ishares Russell 2000 ETF) positions for decent gains, taking risk off the table. The US small cap index had its best run in a long while * Added to $UNH (UnitedHealth) twice in June * ServiceNow has also bounced nicely since the April lows 𝗕𝗼𝘁𝘁𝗼𝗺 𝗹𝗶𝗻𝗲 Oil is the thing to watch. I have cash ready, and will be adding to quality names on dips. It's good to keep an eye on the headlines, but we also need to distinguish signal from noise. Stay invested. Stay diversified. Stay patient.

Not investment advice. The author may have financial interests in the mentioned instruments.