This Week in Barrons: 9.07.2025

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• Google ‘n Apple best friends, Dogs ‘n Cats sleeping together … The economic data inversions are getting Bizarro World ridiculous.  We're living in a world where bad economic news = good news for markets.  It’s where bad factory orders = more Fed rate cuts, and a higher rate of job quitting = fewer rate cuts.  Every piece of economic data is Bizarro World backwards right now, which means traditional market reactions are completely unreliable.

• The rest of the world is coming for us and rightfully so.  America is still the most opportunistic place on earth, but we may not be the hungriest.  After listening to many outside the U.S. grad students and industry professionals, I find their level of engagement, passion, and commitment to the field of finance – staggering.  That same level of financial interest within U.S. universities and offices is non-existent.  It’s too early to sound the alarm, but the warning signs are asking us to remember how fragile and ruthless capitalism can be.

• “Gold has essentially experienced the ‘perfect storm’: institutional demand, inflation concerns, geopolitical risks, and favorable interest rate environments all aligning simultaneously. This combination has pushed gold to historic highs and shifted its role from primarily a dollar hedge to a critical reserve asset for uncertain times.  It started with the U.S. policy of attempting to isolate Russia from the EU, doubling down by de-globalizing free trade through tariffs, and attempting to bully India into severing ties with Russia. Honorable mention goes to nationalizing U.S. tech giants and export controls backfiring by inducing China to develop its own advanced semiconductor tech.”  Tip #1: Gold will continue to run higher due to: (a) technicals looking strong,  (b) monetary tailwinds continuing, and (c) the US Dollar remaining expensive.  

• Tuttle Capital’s new income ETFs … sell put spreads for their guaranteed income stream vs existing products that use covered calls – that way there’s no cap to your upside gains.  “With covered calls you’re sacrificing your upside, and when you put them on a volatile stock – you’re not really protecting much on the downside.”

• In general, … global monetary policy settings are providing a tailwind to growth.   Per Callum Thomas: The big macro risks are recession + deflation on one edge, and reacceleration + inflation resurgence on the other.  The rest of the world looks better than the U.S. – with Japan going strong, Europe and China turning up out of a slowdown due to economic stimulation.  The assets most at risk are US tech stocks, the US housing sector, and the US dollar. The areas showing superior upside risk/reward include PMs & commodities, emerging markets, and certain tactical defensives.

   

• Apple is developing an AI ‘answer engine’ … that positions Siri as a rival to ChatGPT.  They’re testing Google’s Gemini for web summarization, while Apple’s own models handle personal data to maintain privacy.  The new Siri will process voice, text, images, and video with AI-powered summaries.  The update could arrive with iOS 26.4 in March of 2026 and may extend to Safari and Spotlight.

• A Harvard study has found … that companies adopting AI have slashed junior hiring by 22%.  The employment decline doesn’t stem from layoffs, but rather from fewer new hires at the bottom.  Graduates from upper and lower-tier institutions have escaped most of the job losses.

• Salesforce swapped out 4,000 customer support jobs for AI agents.

• Analyst Clive Maund says silver … could soon breach the key $50 all-time high and subsequently trigger a scorching short-covering rally.

• Government regulators in India … may ease restrictions on inclusion of gold ETFs in pension funds, supercharging gold investments.

• Kraft Heinz announced their break-up … and W. Buffett his disappointment with the conglomerate that he helped piece together. 

• In a major anti-trust ruling … Google retained Chrome but is barred from any exclusive search and/or data contracts.

• The U.S. revokes TSMC’s waiver … to ship chip gear over to its China facility.

• Hiring plans fell to the weakest level for any August on record … and intended job cuts mounted amid broader economic uncertainty – said outplacement firm Challenger, Gray & Christmas.

• If you wondered … American Eagle (AEO) is up sharply as their commercials featuring Sydney Sweeney started a buying frenzy.

• Trump asks the Supreme Court to uphold his global tariffs … The current average U.S. tariff rate of 16% would be cut by at least half if Trump doesn’t win.  Trump believes that all trade deals would end if the tariffs are struck down.

• The ratio of Job Vacancies to Unemployed workers fell … to below 1 – its lowest level since April 2021.  [FYI: The ratio was above 2.0 in the months following COVID.

• DeepSeek will release its agentic model in Q4 … which will “carry out multi-step actions on a person’s behalf with minimal direction from the user”.

• The Tesla board will ask the shareholders … to reward Elon Musk with a compensation package that could turn him into the planet’s first trillionaire.

• Japan Post Bank, one of the world’s largest retail banks … is launching a blockchain-backed digital yen called “DCJPY” by the end of fiscal 2026, allowing depositors to convert savings into instant, tokenized payments.  This matters because over 130 countries are pushing ahead with CBDCs amid tech and geopolitical shifts.  By tying its digital yen to a regulated bank, Japan is turning itself into a proving ground for blending traditional finance with programmable money and perhaps setting a precedent that could shape how others design their own rollouts.

• Nvidia bought Solver … an AI coding agent that completes software development tasks for users.

• OpenAI has agreed to buy Statsig … a product testing startup for $1.1B in an all-stock deal.

•  Anthropic just raised a staggering $13B at a $183B valuation … a significant increase over its March raise of $3.5B at a $61.5B valuation.

   

• Tuesday:  Stocks are in a mood this morning.  Why?  Pick one. 

  o The tariff fight is going to the Supreme court.  

  o What if the jobs numbers come in hot?  

  o There was an enormous amount of bro-love displayed by Russia, India, and China last weekend. 

  o Silver is over $41/oz. because the Saudi's bought almost a $1B of SLV, and our government has listed silver as a strategic metal.  

  o The UK 30-Year yield rose to its highest rate since 1998.  The French 30-Year also topped 4.5% for the first time since 2011.  And the U.S. 30-year Treasury just spiked past 5% - something we haven't seen since 2005. 

  o Gold prices hit record highs to over $3,650/oz. 

  o There’s chip trouble in Taiwan and China, over sales and suppliers.

   

• Friday’s Jobs Report doesn’t add up:  We have 7.4m people without jobs and 7.2m job openings.  The numbers appear to be balanced, but they’re not.  The job openings are largely for specialized positions that don't match the skillset of the available workforce.  Per Blake Young:

  o The number of people who want jobs but have given up looking … hit its highest peak since 2009. 

  o The numbers are bogus … The household survey counts anyone who made money as employed.  If you sold a bike on eBay or mowed someone’s lawn through an app – you’re employed.

  o BLS injected +90,000 birth/death = fake jobs into the report.  So, we didn't gain 22k jobs – we LOST ~70k.  And it's been that way for months. 

  o Overall … we're looking at an employment weakness that screams recession, not the ‘soft landing’ everyone was hoping for.  I’m seeing multiple rate cuts not because the economy is strong enough to handle them, but because employment is weak enough to require them.  We're probably one negative Jobs report away from a recession confirmation.

• We have inflation without growth == Stagflation.

  o (a) Gold is Breaking Records … and on its way to $3,750.  Gold making new highs is the institutional players betting on currency debasement.

  o (b) Commodity Growth is Collapsing … Copper (a measure of demand) is giving off sell signals – all the while crude is struggling due to demand destruction. 

  o (c) Divergence … is when money flows out of Utility Commodities (falling), and into Inflation Hedges (rising).

• Are we in a Recession?

  o In Jan. 2025, the subprime 60-day delinquency rate hit an all-time high of 6.6%.

  o The serious delinquency rate (90+ day) across all auto loans reached its highest point since 2010.  To cope with high costs, a record +22% of new car loans in Q2 were for 84-months or longer.

  o The serious delinquency rate for maxed-out borrowers has surpassed pre-pandemic levels.

  o Home sales have fallen to their lowest level in over 25 years.

• You know what’s happening … regardless of what next month's report(s) will show.  The market's voting every second.  The only question is whether you're reading the ballots today or waiting until others count the votes for you.

•  In last week’s shortened holiday week … we hit BOTH the upper AND lower edge of the expected move.  That is extremely rare in a 15 VIX environment.  And on Friday we ended at the ~6450 level on the /ES.  Last week also gave us:

  o A bond crisis nobody saw coming … France, the UK, and the U.S. are getting hammered as their 30-year T-bonds spiked to 20-year highs.

  o Institutions are rotating into "crap sectors" … under the guise of a broadening rally. To me this screams desperation.

  o History tells us that … when our FED cuts rates within 2% of all-time highs – markets delivered double-digit gains over the next year.

  o The China rotation: China’s domestic buying just hit a multi-year record, setting up explosive opportunities in names like BABA and Tencent.

  o Crypto’s quiet setup: Ethereum ETF (ETHA) inflows are topping $1B daily – and that’s a good thing for what’s coming next.

• The above chart shows 2 bad and 2 good rate cutting cycles – from 2000 onward.  Per Callum Thomas:

  o The bad rate cuts were the dot com bubble burst and the global financial crisis. In those situations, our FED was late, could not quickly turn the tides, and things still deteriorated.

  o The good rate cuts were 2019/2020 and the 2024 mini-cut cycle.  Basically, non-recessionary cutting cycles where monetary tailwinds help to bolster investor mood against a relatively benign-to-positive economic backdrop.

  o Whether the upcoming string of rate cuts is good or bad, will depend upon the ability of the tech/AI theme to keep our real economy resilient.  Stay alert to further labor market weakness, and to tech stocks themselves.  Tip #2: WATCH: Palantir (PLTR) < $150, Nvidia (NVDA) < $170, and /ES < 6450 …  institutions are hedging via buying PUTs.

• Rate Cuts … I wish our FED would do a large interest rate cut in September, but we will probably only get a small 25bps point cut.  25bps is unlikely to do enough to solve the employment problem.  I’d like to see a 50bps cut, and there is a serious argument for the cut to be 75-100bps.  Our FED has completely miscalculated the impact of tariffs and has misunderstood how pervasive AI would be on jobs; therefore, they should scramble to use their toolbox to get interest rates lower sooner rather than later.

• The bottom line: We're pricing-in only an $85 expected move for all of next week – even though we just moved $86 in 4 trading days.  If we hit 6450 early next week, things are going to get crazy in a hurry.  There's been a major shift in market momentum – take it seriously.

• Tip #3: The 6450 level on the /ES is critical.  If hit, trading will get crazy in a hurry.

• Tip #4:  Gold is on a mission to $3,750/oz. – Silver is along for the ride.

• Tip #5:  Buy the Metals Miners (GDX / GDXJ) = their margins expand with gold prices, and some even pay dividends.

• Tip #6:  Watch the 20-dma for IBIT & ETHA – I may lighten up if they go below their respective levels.  

   

• Factually: (a) Tech Stocks and Bitcoin peaked in August – both seeing extremes in investor positioning.  (b) Total investor allocations to equities reached a record high.  (c) Weak labor data raises the odds of FED rate cuts.  Overall, per Callum Thomas: While tech stocks have been riding a wave of strong fundamentals, the higher they climb – the greater the risk.  And that makes August’s technical top in tech – interesting.  Aside from that there is: a softening labor market, rising inflation risks, and the teetering prospect of “good cuts vs bad cuts”.

• HODL’s: (Hold-On for Dear Life)

-  (+) IBIT – Blackrock’s Spot Bitcoin ETF ($62.85 / in at $24)

- (+) ETHA – Ethereum ETF ($32.55 / in at $13.5)

- (+) Physical Commodities = Gold @ $3,610/oz. & Silver @ $41.2/oz.

- Bitcoin (BTC = $110,600 / in at $4,310)

- Ethereum (ETH = 4,290 / in at $310)

- (+) GLD – Gold ETF ($330.7 / in at $212)

Options for Income:  De-Risking a Portfolio… (using IBIT for example)

- BUY-n-HOLD the IBIT ETF

- BUY PUTs: 1 Std. Dev. Lower, Expiring = 3-weeks away, OTM (out-of-the-money) for protection.

- SELL Covered CALLs: 0.75 to 1 Std. Dev. Higher, Expiring = 2-weeks away, OTM for income and to finance the PUTs.

‘De-Gen’ Economy:

- Chainlink (crypto) == LINK: ($22.3 / in at $19.4)

- Aave (crypto) == AAVE: ($300 / in at $254)

- Emerging Markets ETF == EEM: ($50.4 / in at $50)

- SQQQ (inverse QQQ ETF) == using it as a hedge for the QQQ’s.

Please be safe out there!

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