Here's a comprehensive summary of the video, including all the news and facts discussed:
The broadcast starts with **Julie Hyman** (host) introducing **Adam Johnson** (portfolio manager for the Bullseye American Ingenuity Fund) and **Jake Conley** (Yahoo Finance).
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**Part 1: Morning Brief - Markets, Earnings, Tech, and the Fed**
* **Market Overview:** Julie Hyman notes the market's end-of-month rally, with futures pointing to gains and the NASDAQ leading.
* **Earnings Outlook:** Adam Johnson anticipates a "blockbuster" earnings season, projecting 25% earnings growth, a level not seen since 2021 post-COVID, which he believes is the dominant force pushing markets.
* **Chip Stocks & Hyperscalers:**
* Samsung's preliminary earnings are due this week, attracting attention due to strong chip stock performance.
* **Mike Wilson (Morgan Stanley):** Called for a rotation *out* of chip stocks and *back into* MAG-7/hyperscalers, expecting hyperscaler spending to slow, negatively impacting chip makers.
* **Adam Johnson's Counter:** He respects Wilson but believes "you want to own the whole complex." His fund (39 companies, 2-4% weighted) holds both hyperscalers (MAG-7) and chips, with computing power making up about a third of the portfolio.
* **Hyperscaler Spending:** The top four hyperscalers are spending nearly $700 billion this year, exceeding the inflation-adjusted cost of building the entire U.S. highway system over four decades.
* **Debt & Sustainability:** Julie questions the sustainability of hyperscalers' high debt issuance. Adam argues it's sustainable if they continue 30-35% earnings growth, which they've historically done.
* **IPOs & Valuations:**
* SK Hynix is planning a $29 billion U.S. listing; Google and SpaceX have also issued shares.
* Adam Johnson is *not* buying IPOs due to "astronomical multiples." He compares current IPO valuations (some 100x-230x sales) to the 1999 dot-com bubble (NASDAQ traded at 70x sales, currently 6x).
* **Example: Firvo:** A geothermal power company using fracking tech, has a great story but no revenue or earnings, making it a "tricky" investment despite fitting the "American ingenuity" theme.
* **OpenAI/Anthropic:** Adam notes OpenAI's CFO stated profitability is possible any quarter by cutting CapEx, suggesting they *choose* to spend for investment. Julie argues it's not truly a choice without alarming signals.
* **NVIDIA:**
* Semi Analysis reported a delay for NVIDIA's Kyber rack system to 2028, but NVIDIA shares remained largely unchanged.
* Adam Johnson reiterates that NVIDIA is a "buy on any weakness," trading at 20x earnings (cheaper than S&P 500) with high growth potential.
* **Jobs Report (Julie Hyman's return):**
* June: 57,000 jobs added (big miss, less than half expected).
* May: Revised down from 172,000 to 129,000.
* **Commentary:** Most economists dismissed it as a one-month blip; the 3-5 month moving average remains 125,000-150,000 jobs.
* **Labor Force Participation:** Dropped 0.3%, a significant amount for that metric, raising questions about fewer people seeking jobs. Anecdotal evidence suggests a weaker "white-collar" job market.
* **Rate Market & The Fed:**
* Huge dispersion in analyst forecasts: Bank of America sees three hikes, Citi sees two cuts. Julie Hyman predicts the Fed will hold rates steady.
* **Adam Johnson on the Fed:** Believes the Fed is "late again." Notes that a hawkish Fed meeting coincided with a 15-20% drop in oil prices (due to Iran situation resolving, impacting oil, sulfuric acid, and thus inflation).
* **Kevin Warsh's Strategy:** Adam speculates Warsh might pay for rate cuts by shrinking the balance sheet (stopping bond reinvestment), effectively withdrawing liquidity to offset inflationary pressure from rate cuts.
* **Inflation:** Julie isn't convinced inflation is tamed, citing other persistent underlying costs (financial services) and projected global electricity demand growth (short-term inflationary).
* **AI's Impact on Profitability:** Adam links record S&P 500 profit margins (13.5%, third consecutive quarter over 13%) to early AI payoffs and increased productivity. Julie counters that much of this may be due to pricing power from tech companies (Micron, NVIDIA).
* **NATO & Defense Spending:**
* NATO's annual summit is in Turkey.
* U.S. Aerospace and Defense stocks (ITA ETF) are up 16% YTD, near record highs.
* **Adam Johnson's Pick:** AeroVironment (AVAV), a major drone supplier, with a $2.1 billion backlog (over two years of sales). He highlights its volatility but strong fundamentals.
* **Anderil:** Another drone company, which Adam would consider based on valuation, noting its smaller, "pernicious" drones differ from AeroVironment's larger reconnaissance models.
* **World Cup Controversy:**
* A U.S. star player (Pilar Balogun) received a red card, but President Trump reportedly called FIFA's president, leading to the decision being overturned.
* This is reportedly unprecedented since 1962, sparking debate about fairness and precedent. Adam is not watching the World Cup, preferring college football.
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**Part 2: Opening Bid - Trump Accounts and Micron**
* **Trump Accounts Launch:**
* Live coverage of President Trump at the Oval Office with Lynn Martin (NYSE President), Adina Friedman (NASDAQ CEO), Michael Dell, and Susan Dell.
* Official launch of "Children's Investment Accounts," dubbed "Trump Accounts," which went live on July 4th.
* **President Trump's Remarks:** Thanks Michael and Susan Dell for contributing $6.25 billion, mentions Micron's $250 million. Calls it "one of the most important things we've done during the administration." Claims the market will "go through the roof" and highlights factory building (avoiding tariffs) as an economic driver.
* **Eric Jackson (EMJ Capital):**
* Views Trump Accounts as positive for markets, creating a "permanent bid of buyers" for the S&P (a tech index in a trench coat, 35% tech).
* Good for retail investors and financial literacy, making everyone a "stockholder."
* Notes that the flat $1,000 seed benefits lower-income families more, similar to COVID-era government checks.
* **Brooke De Palma (Yahoo Finance):**
* Highlights the importance for lower-income Americans. A $1,000 deposit could grow to $6,500 by age 18. With an additional $5,000 annual contribution, it could reach $250,000.
* Philanthropic contributions (like the Dells' $10,000) could result in $61,000 by age 18 for low-income households.
* Reports over 85% of Trump Account openers are from families making under $200,000.
* Emphasizes asset ownership to beat inflation.
* **Micron (MU) - Stock of the Day:**
* Brian Sazze notes Micron's 22% decline from recent highs after its strong earnings report, though still up 250% YTD.
* Citi analysts placed Micron on their 90-day upside watch list.
* **Eric Jackson:** Acknowledges Micron's "remarkable run." Explains memory (HBM) is a bottleneck in AI, causing shortages. Notes skepticism due to Micron's historical "boom to bust" cyclicality, requiring it to prove itself as a secular AI winner. Pullback is linked to Fed rate hike hints.
* **Brooke De Palma:** Consensus price target is over $1,500 (currently ~$1,000). SK Hynix is filing for $28 billion in ADRs. UBS expects the DRAM industry to be undersupplied until Q2 2028, suggesting continued momentum. Micron's long-term deals aim to counter cyclicality.
* **Collectible Cup Madness:**
* **Brian Sazze:** Discusses the trend of fast-food chains selling collectible cups, pioneered by Starbucks with its "Barista" glass bear ($30). Others include Jack in the Box ("Jack Sipper") and Dunkin' (coffee bucket, pineapple cup, eagle cup). Brian expresses preference for glass over plastic.
* **Reasons for the craze:** High-margin drinks and a booming U.S. collectible market ($32 billion last year, projected $48 billion by 2033).
* **Brooke De Palma:** Believes it's more about brand loyalty (e.g., Starbucks Rewards members for early access) and boosting sales rather than a direct stock price driver.
* **Eric Jackson:** Agrees it won't boost stock prices long-term. Sees it as a distraction from higher menu prices and a way to compete beyond price, offering a "one-time hit for traffic."
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**Part 3: Market Catalyst - Private Tech Access, Airlines, and Frozen Yogurt**
* **Market Snapshot:** Julie Hyman updates: Dow off 150 points, S&P up 0.4%, NASDAQ up 0.9%. Tech (XLK) up 2.3%. Broadcom (Apple ASIC chips) up 5.5%, Tesla still up post-deliveries.
* **Accessing Private Companies (PowerLaw Capital Group):**
* **Mike Dinsdale (CEO, PowerLaw):** His NASDAQ-traded fund (PWRL) offers exposure to large private companies like OpenAI, Stripe, Databricks, Telshi, Grok, and SpaceX (his largest position at 20%).
* **Motivation:** $25 trillion in U.S. retirement accounts are locked out of private companies, including "trillion-dollar private companies" like SpaceX. PowerLaw aims to unlock this access.
* **Mechanism:** PowerLaw is the first venture firm to do a direct listing, trading its portfolio within a closed-end fund structure. NAV is reported monthly, using independent valuation firms (KPMG audits).
* **Valuation:** Uses secondary transactions, company performance, and public comparable companies.
* **Tradeoffs:** Acknowledges lack of transparency in private companies. Notes regulatory efforts (executive order from August last year) to build access to privates.
* **Strategy:** Concentrated portfolio of "most influential technology companies over the next decade." Will rebalance as companies go public (SpaceX eventually).
* **"Private for Longer" Trend:** Dinsdale (former CFO of DocuSign, DoorDash, Gusto) sees it as a strong trend (half as many public companies now as 30 years ago). He views it as "not good" for retirement access. Argues for incentives to go public and increased access for investors through vehicles like PowerLaw.
* **Airline Earnings Outlook:**
* **Steve Trent (President, SDT Capital Advisors):**
* **Airfares:** Are over 20% higher year-over-year despite falling fuel prices. He doesn't expect moderation soon, as airlines cut capacity to raise fares, and premium demand remains "sticky."
* **Capacity Discipline:** Airlines might add mid-single-digit capacity later in the year, but it takes time to get equipment, flight, and ground crews in place. Focus remains on holding yields.
* **Q2 Earnings:** Fuel stayed high in April/May. Yields climbed but may not fully cover fuel costs in Q2. Q3 and H2 look much better due to further fuel price drops, likely leading to guidance increases.
* **Top Picks (Overweight):**
* **United Airlines:** "Monster" in airfare action, strong unit revenue growth.
* **American Airlines:** Often overlooked, but strong premium cabin and co-branded card revenue. Cash flow from operations up 591% (last 12 months vs. 2021), strongest among the big three. Expects "torque" in H2.
* **Delta Airlines:** A "great airline" with solid management and an industry-leading Amex co-branded card, but its strengths are more "baked in," offering less surprise potential than United or American.
* **Discount Airlines:** Less certain long-term. With Spirit disappearing and others seeking government help, the market structure has changed. He believes the U.S. market won't return to pre-COVID discount models due to equipment shortages and air traffic control limitations. Discount airfares are higher, and unit revenue vs. seat mile cost convergence makes economics tough (e.g., Southwest's cash flow from ops up only 3% vs. American's 591%).
* **Frozen Yogurt Industry:**
* **Neil Hirschman (CEO, 16 Handles):**
* **Resurgence:** "Good time to be in frozen yogurt." While some brands faded, 16 Handles (an "affordable luxury" brand) has seen continually increasing same-store sales (20-30% lift this year, similar prior years). Attributes this to being a healthier treat and a fun family experience.
* **Nostalgia:** A factor, as former kids who enjoyed froyo now bring their own families.
* **Consumer Trends:** Focuses on health benefits and innovative ingredients. Launched the world's first kefir soft serve and has two oat milk flavors in every store. Aims to be early to trends (e.g., kefir).
* **Marketing:** Creates "virality" with monthly new flavors (e.g., French fry frozen yogurt) to generate buzz, even if customers ultimately buy classic flavors.
* **Background:** Left Wall Street (asset management) to buy 16 Handles, seeing its untapped potential. Has since doubled store count, with 50th location opening soon and 80 more in pipeline. Recently hit $1 million in sales in a single week.
* **Future Goals:** Focus on quality over quantity: "half as many million dollar frozen yogurt stores" over "twice as many half a million dollar shops" for better profitability and franchisee success.
* **"Third Place" Concept:** Aims to create a community destination, like a modern mall. Stores are designed with ample seating (minimum 25 seats) for people to "hang out," offering an affordable experience.
* **Microsoft Xbox Layoffs:**
* Microsoft's Xbox division plans to cut about 20% of its staff (3,200 total by fiscal 2027, with 1,600 today).
* This is part of a reorganization to spur growth, as the division has been underperforming.
* Asha Sharma (Head of Xbox) stated the business is "not healthy" with margins 3-10 times lower than comparable platform and publishing businesses.
* Microsoft shares are down 1.7% due to the news.
* **Waystar (WAY) Stock Outlook:**
* **Scott Berg (KeyBank Analyst):** Initiated overweight coverage.
* **Underperformance Cause:** Rapid sell-off in tandem with broader software sell-off.
* **Market Misunderstanding:** Believes the market underestimates Waystar's "moats and barriers to entry" in healthcare. The market assumes AI/LLMs could easily disrupt revenue cycle management (based on CPT codes), but Scott argues this misunderstands the complexity of healthcare.
* **Waystar's Strengths:** Relationships with 5,000 payers, 1 million clients, robust data streams, deeply embedded workflows.
* **Change Healthcare Impact:** A competitor, Change Healthcare, had cybersecurity issues, leading some customers to switch to Waystar. Concerns that customers might return to Change are overblown.
* **Survey Findings (50 large hospital executives):**
* 33% of Change customers switched providers; 25% of those went to Waystar.
* 75% of Waystar's new customers are "very satisfied."
* 64% of hospitals are planning new RFP processes for revenue cycle management.
* 24% are considering Waystar as a new provider.
* Conclusion: Strong pipeline for Waystar, not seeing customers return to Change.
* **Catalysts:** Upcoming investor day in August (expecting financial objectives) and continued acceleration of billings and revenue growth in the second half of the year.