Highs Without Trust

Welcome to Portfolio Activity — my daily investing journal built for clarity, not clutter.
I believe financial media today distracts more than it helps. It’s flooded with charts, stats, and surface-level noise — complexity disguised as insight. But real investing clarity doesn’t come from more data. It comes from perspective.

That’s why I created Portfolio Activity — to cut through the noise and focus on what actually matters. Each day, I break down market moves, macro signals, and long-term trends in a way that helps you think clearly and develop your own edge.

This is not about telling you what to buy. It’s about helping you build your own edge — by making sense of what actually matters.

Big move in tech, decent lift in energy, and a “risk-on” close across U.S. equities but it’s not clean optimism under the hood. Trump’s push to double steel and aluminum tariffs and force countries to cough up trade offers before the July 9 deadline sets the stage for a sharp turn in tone.

We’re not past trade friction we’re in its acceleration phase.

Meanwhile, Europe’s soft inflation print basically greenlights the ECB to cut rates this week. That may keep global liquidity loose, but it also confirms slowing growth across the bloc.

Oil’s bounce isn’t from supply tightness—it’s from drones and denials: Ukraine hitting Russian targets and Iran looking ready to walk from U.S. nuclear talks. Real risks with real prices.

Rates creeping up again, dollar firming, Nasdaq looking invincible but this rally isn’t resting on peace or clarity. It’s resting on narrow leadership, Fed patience, and the hope that global chaos won’t spill over. Risk is getting reshuffled not removed.

We’re not in a calm tape we’re in a narrative hurricane. Inflation fear one week, recession fear the next. Tariffs on, tariffs paused, then courts step in. The bond market has gone nowhere in two years, but the swings inside that range have been brutal. That’s what narrative volatility looks like investors jumping from one conviction to the next without waiting for confirmation.

And yet, despite the noise, the playbook hasn’t changed much. Markets are near highs because the big stuff :earnings growth, cash flow, margins is still holding up. Quality is getting paid, and it makes sense. When sentiment is this twitchy, investors look for companies they can trust to deliver, not dazzle.

Valuation is high, no question. But it’s not frothy-for-no-reason high. Profit margins are strong. The market is more asset-light, more durable than it used to be. Expensive? Yes. Overvalued? Not necessarily.

So while others chase the next hot narrative, the steady trade is still in quality. Not because it’s exciting but because it holds up when everything else swings.

Technicals?

Tech strength is back in full force. The QQQ has climbed steadily off its April lows, powered by AI optimism and resilient earnings. With price now above all major moving averages and holding momentum, it’s clear buyers have regained control.

But here’s the catch: the last two runs to the ~$539 level both failed forming a textbook double top. Now QQQ is marching back toward that zone. If it clears that ceiling with volume, it opens the door to price discovery and new highs. But if it stalls again, we might see sellers step in aggressively.

With the Fed still data-dependent and macro risk swirling, it’s not the time to get greedy. Smart money will watch this level closely.

The April JOLTS report came in hotter than expected, with 7.4 million job openings still well above the number of unemployed workers. That’s a clear signal that labor demand hasn’t cracked yet. But the composition of the report isn’t all strength. Quits edged lower, and layoffs moved up. That combination points to workers getting a little less confident about jumping ship and employers getting just a bit quicker to cut.

The labor market is still strong, but it's not bulletproof. Wage growth probably stays firm, which supports consumption, but makes life tricky for the Fed if inflation refuses to cool further. Friday’s jobs report matters more now it’ll be the tie-breaker on whether the labor market’s cooling or just rebalancing.

Factory orders slipped in April, but no signs of a deeper slowdown, just some digestion after months of pre-tariff stockpiling.

• April factory orders fell 3.7% vs. 3.0% expected.
• Inventories dropped for the first time in six months.
• Overall activity still points to a steady, if not strong, manufacturing base.

The dip in April factory orders looks less like a red flag and more like a pause to catch breath. After four straight months of gains, a pullback was expected—especially with companies front-loading inventory ahead of tariff deadlines. The drop in inventories shows that firms are finally drawing down those reserves. It’s not a boom, but it doesn’t read like a bust either. The big question now is whether demand picks back up in Q3 or if this moderation sticks. For now, manufacturing seems stable enough to avoid dragging on the broader economy.

Student loan delinquencies are starting to ripple across the economy in a way that’s hard to ignore. In just the first three months of 2025, more than 2.2 million borrowers saw their credit scores drop by over 100 points. For over a million of them, the hit was even worse—150 points or more. That kind of damage isn't just a personal finance issue; it has broader implications for the economy. Lower credit scores mean higher borrowing costs—or no access at all—when it comes to car loans, insurance, mortgages, or even employment.

This spike in delinquencies signals that the consumer side of the economy, which has looked relatively solid on the surface, may be more fragile underneath. If credit access tightens just as tariffs raise prices and job growth flattens, spending could take a hit. Credit reports are often a lagging indicator, but when they fall this hard, this fast, they can start to lead. It’s another crack forming beneath the market’s surface—and worth watching closely.

The market has largely brushed off fiscal concerns this year, but Musk’s comments may be a preview of what resurfaces when the music stops. Calling the latest spending proposal a “disgusting abomination” isn’t just theater.

He’s pointing to the growing disconnect between political promises and fiscal math. With interest costs already climbing and debt issuance running hot, another round of unchecked spending adds to the structural pressure. Treasury yields haven't flinched yet, but the bond market has a habit of waking up all at once. For now, stocks stay focused on AI, but a reprice of long-term risk could come faster than expected if fiscal credibility slips. Musk may be early, but he’s rarely ignored.

OECD Flags Trouble Ahead

The OECD’s latest adjustment isn’t dramatic, but it’s directionally important. Cutting 2025 U.S. growth forecasts while raising inflation estimates says one thing clearly: the soft landing narrative may be too clean.

We’re staring down a cycle where the economy cools but inflation doesn’t cooperate exactly the mix that puts central banks in a bind. Markets aren’t pricing in that kind of stagflation-lite scenario yet. If this drift in projections turns into a trend, it could push rate cut expectations even further out and reset risk across both bonds and equities.

🐂 What Bulls Say

1. Quality Still Reigns

Earnings growth, strong profit margins, and durable, asset-light models are holding up. That’s why markets are near highs despite the chaos. Investors are rewarding companies with predictable results, not just flashy narratives.

2. Rate Cuts Are Still on the Table (Outside the U.S.)

The ECB has room to cut with European inflation softening. That keeps global liquidity from tightening too fast. If the U.S. doesn’t cut, others might—which helps keep risk assets afloat.

3. AI-Led Tech Resilience

Nasdaq continues to push higher with tech leadership intact. The QQQ breaking above moving averages signals strength. AI optimism and hard infrastructure investments like Meta’s nuclear deal show this isn’t just hype—it’s backed by capital, hardware, and power deals.

4. Factory Pullback = Healthy Pause

April’s dip in factory orders doesn’t mean manufacturing is weakening—it looks like digestion after front-loading ahead of tariffs. Inventories finally dipped after months of stockpiling, which could position Q3 for a bounce.

5. Labor Market Is Cooling, Not Cracking

Job openings are still outpacing unemployed workers. Even with rising layoffs, it’s not panic—it’s normalization. Wage growth is firm, keeping consumption supported in the short term.

6. Fiscal Panic is Premature

Treasury yields haven’t blinked. Investors aren’t yet pricing in a fiscal crisis. As long as the debt burden isn’t triggering higher borrowing costs, equities can keep running with the current playbook.

🐻 What Bears Say

1. Trade Tensions Are Escalating Fast

Trump’s push for double tariffs by July 9 is a ticking time bomb. Global trade risk is no longer a headline—it’s an active threat. Investors are underestimating how fast sentiment could sour if supply chains get hit again.

2. Narrative Volatility ≠ Real Stability

This isn’t a calm tape. Every week brings a new fear—recession, inflation, war, tariffs. Markets aren’t climbing a wall of worry—they’re surfing a hurricane. When one narrative ends, another hits before confirmation.

3. Market Leadership Is Narrow and Fragile

Nasdaq strength is built on a few names. Under the hood, sector breadth is shaky. If QQQ fails to break above $539 for a third time, it confirms a double top and could trigger broad selling.

4. Consumer Cracks Are Forming

Over 2 million borrowers just saw 100+ point drops in credit scores from student loan delinquencies. That’s not a blip—it’s a macro problem. If credit tightens and spending slows, the soft-landing story breaks.

5. Stagflation Warning Signs

The OECD cut U.S. growth forecasts and raised inflation projections. That mix is toxic for central banks. If the economy cools without inflation cooperating, rate cuts get delayed—and valuations start to look stretched.

6. Fiscal Reckoning Could Hit Fast

Elon Musk isn’t alone in calling out the debt blowout. Interest costs are climbing, and another round of spending could snap bond market complacency. If Treasury yields spike, equities may get re-rated in a hurry.

7. Nuclear Hype ≠ Unlimited Upside

Meta’s nuclear deal shows energy access is the new AI bottleneck—but the price isn’t exciting. This theme is real, but valuations may have outrun fundamentals.

Tom Lee Thinks the Rally’s Just Getting Started—Because No One Believes It

May was the best month for stocks in over 30 years, but you wouldn’t know it from investor sentiment. Most portfolio managers are still cautious, pointing to tariff worries and political noise. But while they wait for clarity, the market keeps moving higher. There’s still a lot of cash on the sidelines and short interest is rising, classic fuel for a meltup.

Tariffs, for now, aren’t breaking the economy. Even if they cut into growth a bit, it’s nothing the market hasn’t handled before. Think of it like oil prices doubling annoying, not destructive. Debt and tax bill debates are noise, not new trends. If anything, they could end up being temporary dips to buy.

Credit risk is showing up in areas like auto loans, but there’s no sign of a broad credit crisis. Junk bond spreads are stable, which suggests the economy still has momentum. Housing is clearly cooling, and that could help ease inflation pressure. If inflation keeps slowing, the Fed could pivot sooner than expected.

The key point: most investors still don’t believe in this rally. That disbelief is exactly what gives it room to keep going. As Tom Lee put it, “You don’t get a parade when the bull market resumes. It just leaves the station quietly—and most people miss the train.”

Meta just signed a two-decade power deal with Constellation, locking in nuclear energy from the Clinton plant in Illinois—likely around $80 per megawatt hour. That puts a hard number on what Big Tech is willing to pay for consistent, carbon-free power to fuel AI expansion. The headline jolted Constellation shares early, but the move fizzled once investors realized this wasn’t another $145/MWh moonshot like Microsoft’s earlier Three Mile Island deal. In fact, it might now anchor expectations for future deals lower.

Still, this isn't about price tags anymore—it’s about access. With energy demand ballooning thanks to AI infrastructure, locking in stable power has become as strategic as locking in GPUs. Tech giants don’t just want to build the models—they want to own the pipes and the power behind them.

Constellation is riding the theme, but the valuation is stretched—trading at a 70% premium to peers. For investors chasing the nuclear story, PEG looks more reasonable. They share a plant with Constellation and have utility downside protection baked in, unlike a pure-play bet that’s may be priced for perfection.