This Week in Barrons: 1.26.2025

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• Over $80B in $TRUMP coin/money was created, distributed and traded … without a bank, brokerage house, or an exchange being involved.  If you did not know what the ‘Internet-of-Money’ was … now you know. … Howard Lindzon

• Challenging the status quo is always a requirement … because being selfish, focusing on short-term results, and accepting complacency – are all too easy.  ‘Looking-the-other-way’, and ‘Going-along to get-along’ – are both expected, accepted, and again – too easy.  The goal is to improve and make things better.  Challenging the status will always be worth it – but never easy.

• What does it say about us when … the first action by a new leader is to launch the world’s largest meme coin Ponzi scheme.  What message does it send to hardworking families when the our new First Family is Hawk Tuah’ing meme coins with the sole intent to pocket tens of billions of dollars?  Be careful what you wish for, because eventually everyone becomes – The Greater Fool.

• Just checking all of your audience’s boxes …  is the simplest way to capture your target market.   Unfortunately, per Seth Godin: (a) Most of your audience’s boxes are hidden.  (b) They don’t all have the same boxes.  And (c) if it were that easy – everybody else would be doing it.  Good work finds emotions, stories, and possibilities.  Great work invents new boxes.

• Nvidia the semiconductor firm … will soon become a robotics company.

• China accounts for ~27% of global industrial production … but in another 5 years China's share of industrial production will be 45%.

• Until I see signs of negative earnings growth…  I will remain invested.  Animal Spirits are taking hold and being shown via greater small business ‘n consumer confidence, and continued economic expansion.  The canary in the coalmine continues to be inflation.

• The SKEW (OTM PUTS / OTM CALLS) is hitting an all-time-high.  If everyone believes that markets are off-to-the-races, then someone should tell our institutions because they are as hedged as they have ever been.

• OpenAI just launched ‘Operator’ …  an AI agent that can independently navigate web browsers to complete everyday tasks.  This is a major step towards broadly changing our mindset of how we interact with AI.  ‘Operator’ feels like the official beginning of a brand-new Agent-based era.

• The real risk to our economy is from the deficit and the bond market.  Our federal debt has doubled in 30 years.  Our debt-servicing costs exceed our defense budget.  Mind the wisdom: “Any great power that spends more on debt than on defense – will not remain a great power for very long.” 

• Trump signed an executive order to delay the TikTok ban … and threatened 25% tariffs on Mexico and China starting Feb. 1^st.

• Studies show that weight-loss drugs … reduce the risk of Alzheimer’s by 12%.

• Meta expands its AI smart glasses through a partnership with Oakley … in order to give them an athlete-focused touch.

• The FDA approved the use of J&J’s nasal spray Spravato … as a first-of-its-kind standalone treatment for depression. 

• Disney’s “Moana 2” surpassed $1B at the box office … and was their third to do so in 2024.  [FYI: no other studio had one.]

• OpenAI, SoftBank, Oracle, and Nvidia … are teaming up for $500B Stargate data center project.

• Global fund managers are so bullish on U.S. stocks … that their clients have the lowest amount of ‘free cash’ since June 2021.  [Historically, low amounts of ‘free cash’ have been a SELL signal.]

• Home prices soared in all 50 metros in Dec. … with Cleveland seeing the biggest jump – as budget-friendly markets heat up.

• “Produce in the U.S., or face Tariffs.” … DJT to WEF in Davos.

• Saudi Arabia pledges to invest $600B in the U.S. … over 4 yrs.

• Fashion at the Inauguration … PA. senator John Fetterman wore gym shorts, the soon-to-be Mrs. Bezos wore lingerie, and Melania’s wide-brimmed hat kept everyone else at bay.

• The S&P 500 closed at its first record high of the year.

• Buckle-Up … Next week = FOMC + Mag-6 earnings + inflation.

• Total Crypto and Alt-Coin markets hit all-time-highs this week.

• Cynthia Lummis, a pro-crypto senator … will lead the new subcommittee on digital assets.

• Crypto Course Correction:

  o Our new SEC repealed SAB 121 that requited institutions holding crypto assets to record them as liabilities.  This will allow banks to more easily custody bitcoin and other digital assets.

  o We’re clarifying rules as to when a cryptocurrency is considered a security.

  o We’re learning to embrace and protect our crypto assets.  We’re back to encouraging innovation and buying it for our own balance sheets.

• Crypto Quotes from Bankers: 

  o Bridgewater’s Ray Dalio: “Non-government money, including bitcoin, reduces portfolio risk.  I own bitcoin.”

  o Bank of America’s CEO Brian Moynihan: “Banks will come in hard to crypto once they get the regulatory approvals necessary to reduce their risk. We see benefits to using: stablecoins and crypto rails for payments.”

  o Blackrock’s CEO Larry Fink: “If you’re frightened of debasement of your currency, you now have an internationally based instrument called Bitcoin.  I’m a big believer.”

• Crypto Thoughts from Davos:

  o The US will drive the growth of blockchain/digital assets via: (a) a strategic Bitcoin reserve project with 11 US states & 20+ other countries closely following, (b) the removal of SAB 121, and (c) the filing of dozens of new crypto ETFs.

  o Leaders of Sovereign Wealth Funds, Pensions Funds, and Mutual Funds will begin turning from 1% to 5% of their assets-under-mgmt. into Bitcoin.

  o 2025 will see major integrations between CeFi and DeFi.

  o The remaining pain points of crypto are: (a) account abstraction, (b) improving the user experience, and (c) cross chain adoption.

• Tuesday:  President Trump’s inaugural address proclaimed the beginning of a “New Golden Age.”  Trump kept a very serious tone and pledged to move quickly on the border, global issues, and the natural disasters that have plagued the country.  Last week, the indices posted their biggest weekly gains since the 1st week in November.  @Jason Goepfert tweeted: "This is the first time in history that the S&Ps have had 5 straight days with more than 68% of their stocks advancing.” Trump wants lower rates, and our FED will probably give them to him.  With lower rates small caps should perk up, and I’d take IWM over $228.65.  Financials should do well, and I’d try Visa (V) over $322.88.  AMZN is looking good, and I'd take some over $231 and more over $233.

• Thursday:  The movers and shakers are still in Davos, exchanging their plans on how to run the world.  I find it amazing how they can lecture us about our carbon footprint, and still feel good about taking their own private jets (all 400+ of ‘em) to attend their little get together.  I put OKLO on my radar.  They broke out a bit yesterday, and will take some if they can get over $56.75.

• Friday:  Markets have reacted favorably to President Trump’s comments on trade, currencies, and to this week’s executive orders.  In his comments to the WEF in Davos, he warned of steep U.S. tariffs for products made outside of the U.S.

• Anthony Pompliano’s & MCC’s practical TRUMP coin thoughts:

  1. $TRUMP was launched on the Solana blockchain.  This may signal a changing of the guard between Ethereum vs Salona being the smart contract platform of choice.  Solana did $30B in volume last Saturday – which is 10% of the total daily Nasdaq volume.

  2. Since $TRUMP launched, many are now excited about meme coins, but there is also a strong argument that this could mark the top of the meme coin hype-cycle.

  3. The $TRUMP launch seemed to signify a different era of regulatory treatment for crypto.  There are no specifics, but the shift feels real.

  4. We know that Pres. Trump measures the success of the US economy by the stock market and by the price of bitcoin; therefore, anticipate both assets continuing to appreciate.  Don’t take the $TRUMP launch so seriously – as it’s just a reminder of the fun, excitement, and chaos that we’ll continue to see over the next 4 years.

• This Bid-Back Rally doesn’t feel right … Professional traders and portfolio managers are seeing the up-coming week through Risk-Colored glasses.  They are hedging like there’s no tomorrow – via shorting, buying specific PUT options, and CALL options on the VIX.  Meanwhile, the VIX is calming down and drifting lower. 

• Weirdly, the S&Ps obeyed the upper-end of their Expected Move (EM) …. We just went thru 4 weeks of major breaches of the SPX’s EM, but this past week – markets decided to obey (almost to the $) the EM’s upper edge. 

• Bonds remain in a holding pattern … and didn’t flinch even when Pres. Trump said publicly that he will bring interest rates down. Interestingly, all of this week’s price action took place during after-hours trading. 

• Volatility is definitely back … and traders believe that it will only increase this coming week.  They’re buying more VIX Call options – driving the VVIX (the volatility of the volatility index) higher.  Meanwhile, the SKEW (the ratio of OTM Puts to Calls) is also at an all-time-high.  Traders are buying PUTs, and to finance that purchase – they’re selling CALLs. 

• This market is seeking a catalyst …

• Next Week’s Catalysts … Durable Goods (Tues.), FOMC (Wed.), Mag-6 Earnings (all week), and Inflation (Fri.). 

  Tip #1: Trade weekly SPX or Mag-7 Butterflies around their Expected Move.  

• These are inexpensive options trades that will pay off handsomely, and due to market uneasiness – are paying off at a much higher rate than normal.

• SPX Expected Move (EM):

  o Last Week’s EM = $87 = 4-Day trading week, and we moved $94.

  o Next Week’s EM = $84 … 5-Day trading week with all of the economic news we could possibly ask for, and we’re expecting a move smaller than last week? 

  Tip #2: Do NOT SELL Options next week because you’re not getting correctly REWARDED for your RISK.  

   

• This year will be the moment-of-truth for the AI market.  On one hand you have the “AI Manhattan Project” that will cost $500B just to maintain superiority.  And on the other hand, you have the just-released DeepSeek (Chinese) model which demonstrates the success of nerds + open-source models = superior efficiency at a fraction of the cost and speed == Cheaper, Better, Faster.  Per Callum Thomas: “The big questions remain around commercialization and profitability.  We will begin a period of re-thinking on capex, earnings prospects, and a probable shakeout of our excesses.”

• Calamos’ first Downside Protected Bitcoin ETF Suite:

  - CBTJ == 80% protected – w/ a cap range of 51 to 55%,

  - CBXJ == 90% protection – w/ a cap range of 28 to 31%, and

  - CBOJ == 100% protected – w/ a cap range of 10 to 11.5%.

• HODL’s: (Hold-On for Dear Life)

  - ICSH == iShares Ultra Short-Term Bond Active ETF (6% yield)

  -  IBIT – Blackrock’s Spot Bitcoin ETF ($59.7 / in at $24)

  - Physical Commodities = Gold @ $2,777/oz. & Silver @ $31/oz.

  - Bitcoin (BTC = $105,480 / in at $4,310)

  - Ethereum (ETH = 3,334 / in at $310)

  - ETHA – Blackrock’s Spot Ethereum ETF ($25.2 / in at $20)

  - GLD – Gold ETF ($255 / in at $212)

   

  Options for Income: **IBIT

  - Bi-Weekly:  BUY the IBIT ETF

  - BUY Puts 1 Std. Dev. OTM (out-of-the-money) for protection

  - SELL Covered Calls ½ Std. Dev. OTM for income

   

  Crypto Alts:

  - Aave (AAVE = $328 / in at $155)

  - ChainLink (LINK = $25.3 / in at $11.15)

  - Doge (DOGE = $0.356 / in at $0.22)

   

  ‘De-Gen’ Economy:

  - Apple (AAPL = $222 / in at $220)

  - Google (GOOGL = $201.9 / in at $197)

  - Coinbase (COIN = $298 / in at $291)

  - Singapore (SE = $117.7 / in at $107)

  - Roblox (RBLX = $67 / in at $61)

  - Robinhood (HOOD = $51.1 / in at $42)

   

  ‘Defensives’:

  - Nextera Energy (NEE = moving to $85 w/ Divi. / $71 in)

   

  Please be safe out there!

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