TMTB EOD Wrap

Good afternoon. QQQs -16bps as factor whiplash moved back to the forefront, with Semis +1.6% sharply outperforming Internet/Software -3% (META -3.5% and MSFT -3% the names we got most questions about). We didn’t find a single great catalyst for the rotation back into semis, but last week’s SNDK analyst day, some big Anthropic ARR/revenue & positive margin commentary around the Anthropic IPO have the HOT AI Summer vibes starting to make an appearance again. Add in some reversal of last week’s WDAY-driven software squeeze, plus upcoming catalysts like NVDA earnings and the Jefferies Semi Conference next week, and the near-term semi outperformance makes sense. That said, the move still felt relatively orderly compared with the violent factor whiplash we got used to in 1H. On a slow August day, machines, ETFs and quant flows can take a fairly modest rotation and make it look like everyone suddenly changed their entire worldview before lunch, so we won’t over extrapolate the narratives here. Just seems like a continuation of semi sentiment improving and some investor re-grossing after the “Leopold Low.”

Fairly slow on the macro front. Fed expectations didn’t change much, as market continues to price in 24bp worth of hikes over the course of the year’s final three meetings.

Let’s get to it…

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AI/SEMIS

Anthropic:

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Poll from over the weekend in TMTB Slack:

TMTB Slack