TMTB EOD Wrap

Good afternoon. QQQs finished up 10bps in somewhat of a slow day. A bit of opposite price action from yesterday as semis -1% led the way lower with HDD names -7-8% the biggest losers. Elsewhere in AI, software and adopter baskets modestly outperformed, but memory-exposed and AI power names pulled back. Leadership came from security sw (CRWD +4.5%, PANW +4%, OKTA +4%) while hardware saw declines as investors continue to worry about what higher memory prices mean for margins(hint: not good — DELL -3%; AAPL -70bps; HPE -6%; HPQ -5%). As nice as memory charts look, these look the opposite with most breaking down.

Here’s DELL:

Source: Bloomberg

HPQ breaking to new lows:

Source: Bloomberg

DRAM prices no signs of slowing yet:

Source: Bloomberg

Factor-wise, investors rotated toward GARP and megacap quality, while momentum, Bitcoin-related, and unprofitable tech saw the steepest underperformance (-1.8% to -2.1%).

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A couple Trump social media posts today:

1) Trump said corporations should be banned from owning single family homes. Z +2.5% on the news with the read-through being that Institutional investors (like Blackstone or SFR REITs) often buy in bulk, pay all cash, and sometimes bypass the traditional MLS agent ecosystem. Zillow makes its money from individual buyers and sellers connecting with Premier Agents. If institutions are sidelined, inventory theoretically frees up for regular people, increasing volume for Z. BX -6% on the news (major player in institutional housing space) and INVH -6% as largest owner of single family rental homes. No surprise Trump taking a more populist stance heading into the midterms — expect more of this.