Downsize Your Euphoria

While the 25 Stocks I’m Watching for 2025 list (part 1 here and part 2 here) continue to perform well relative to the S&P, I can’t say the same about the overall market.

The looming question yesterday was whether the market snapback early in the week was a path to the S&P taking back its trend and continuing to move higher, or just a “bear market rally”. It shouldn’t be a surprise that I believe it was the latter.

There’s an old expression that “nothing good ever happens below the 200-day moving average.” As you can see, that’s where the S&P 500 continues to be (under the red line).

Then there was the question of auto tariffs yesterday, and whether or not Trump was going to immediately flip-flop on them—or whether he was even serious about them to begin with. While he does have a history of changing his mind quickly with regard to tariffs, it appears that, at least for the time being, these auto tariffs are here to stay.

The tariffs are sizable enough, and in a consequential enough industry, that they will create significant trade uncertainty between the U.S. and many of its major trading partners—introducing the stock market to more of the one thing it doesn’t like: uncertainty.

Finally, the big headline this morning is the news that CoreWeave, a purported player in the same atmosphere as Nvidia, was being forced to downsize its plans for an initial public offering.

Semafor reported that CoreWeave is set to scale back its IPO, cutting both the share price and fundraising target. The cloud firm is now aiming for a valuation closer to its $23 billion private-market figure from last year, down from the $30 billion it originally sought. It may also raise less than the $3 billion it had planned.

Shares are expected to price Thursday night and begin trading Friday, though shifting sentiment during today’s session could influence final decisions.

My longer-term readers know that about a year and a half ago, I started asking questions about where the black swans in the market could be. Where are the bodies buried that the rest of the market doesn’t necessarily know about yet? One of the places I ventured a guess was potentially between Nvidia and CoreWeave. I wrote about the two following critical analysis that began circulating in lesser-trafficked analyst circles about the circuitous relationship between Nvidia and CoreWeave. As a reminder, here’s a video discussing...(READ THIS FULL ARTICLE HERE).