What Happens After AI?

Welcome to the show.

Today on the show, this is the 13th edition of the JD Durkin Show, the only live independent show that broadcasts every week here from the iconic trading floor of the New York Stock Exchange.

One of the big questions, thank you, DJ, facing investors in this particular market, is the AI trade starting to shift?

We certainly know the narrative with regards to artificial intelligence, how at many points it has been rocket fuel on equities.

But it looks a lot different today than it has in years past.

So today on the show, we will be breaking down the recent semiconductor sell-off.

We'll be talking historic earnings growth, plus what the far cooler than expected inflation data we got earlier this week means for the Fed and why Netflix, can't wait for this one.

We got Netflix earnings, NFLX after the bell today.

We'll talk with Lindsey Bell in just a bit about why Netflix could be chasing its next big growth engine.

And I also wonder if Netflix is still kind of top dog in the streaming wars.

Is there more parody?

Are they sort of in a league of their own?

Lindsay's way smarter about this stuff than I am, and we'll talk with her about it in just a few minutes.

Uh, it's not just the great Lindsey Bell on the show, it's also my longtime friend, Bob Lang, author of the book.

Know your options.

Get it?

He's a big options guy, founder of explosive Options, uh, and then one of our favorite all-time guests on Taking Stock from Fun Strat, the great Hartika Singh, rounding out the broadcast in the next hour.

As always, drop your questions, your comments in the chat.

I make no promises as to whether or not those comments and questions will be featured on the show because they got to be appropriate, but if they are, and if they are.

Insightful, we'll put them up.

I'll mention them.

I'll kick those questions to our amazing guests over the next hour.

Uh, we'll start as we always do with a quick look at the market to give you a sense of what investors have in store on this Thursday morning.

I like to call Thursday, Friday eve here on Wall Street.

The S&P is down about 0.25%.

That's why I love doing the show because I have it here, but I also have it in like 8 places above my head.

Uh, the Dow is up fractionally 3107%.

The small caps the best of the bunch.

On this Thursday morning in positive territory, about 0.5%.

Some gains for the New York Stock Exchange Composite Index as well.

Uh, what else are we're looking at?

The dollar still holding on to the 100 level, up fractionally on the day.

The dollar very quietly regaining 100, uh, maybe about a month or two ago, and it has not let up at that level.

It's an important psychological barrier.

I'll ask Bob Lang.

I just decided this on the spot.

I'm gonna ask Bob Lang for his take on the dollar.

Uh, the VIX, our volatility gauge is up about 4% on the day, but still relatively muted for its year to date average.

Take a quick look at the metals, gold and silver, both slightly selling off today.

Gold currently down about 1.6%, silver down about 3.4%.

The oil benchmarks in this particular market ecosystem simply cannot be ignored.

We've usually had this kind of inverse relationship where oil goes one direction, top line stocks and equities go the other direction, sort of an inverse relationship.

Right now, West Texas and Brent, both relatively muted reactions but muted to the downside.

Uh, Bitcoin, let's talk to crypto majors real quick here, guys.

Uh, Bitcoin, ET, Solana, all down.

Bitcoin still south of 65,000 producers.

We can pull up the BTC chart real quick.

We have kind of consolidated in this range going back to.

To really Monday, June 1st, that was kind of that last big bout of selling, as Jay Woods likes to say, sideways is a direction and it has been range bound for quite some time and has established a little bit of resistance, I'd say around 67,000.

Uh, newly formed support around, let's call it 5800 to 59,000 right now holding on just south of 65,000.

Also, we're probably going to get some more updates ironically on the Clarity Act on Capitol Hill later on today.

What does that mean for price action for Bitcoin?

If anything, are these two completely untethered conversations, right?

The way that Bitcoin trades versus what's going on in terms of further institutional adoption over to the sectors in the S&P 500.

We go, we've got 11 of them.

Most of them are in the green on this Thursday morning.

Healthcare leading the way, kind of a defensive risk off day, but not entirely.

Healthcare up 2.3%.

That's XLV.

We'll take a look here at consumer staples, also a very defensive sector, up almost 2%, and real estate, a third defensive sector up on the day, up more than 1%.

Energy also an outperformer.

Laggards in the S&P 500.

XLK, that's technology.

XLC, that's telecom or communication services and financials.

XLF is down fractionally on this Thursday morning.

Over to the Dow producers.

We will head.

Quick glance tells me most of the Dow 30 components in positive territory today.

Neil, how are you doing, bud?

Good morning, brother.

All right, we'll talk.

UNH is the big dog of the Dow this morning.

Currently up about 6.5%.

Coca-Cola, another big defensive name.

In the green 2.5% and Nike is a Dow leader.

I've been doing this a long time.

It has been quite some time since I've said Nike is one of the strongest performers in the Dow, but this morning, NKE is up more than 2.5% as well.

Uh, we'll head down to the Dow laggers, the Dow names that are under most pressure this morning.

Goldman Sachs, which of course is the most weighted Dow stock.

It is a price-weighted index, given the fact that Goldman Sachs. trades now at well over $1000 a share, $1,117.

That means it's the big dog in the Dow, but today it's also the hardest hit, down about 3%.

IBM continues its woes.

What a wild few days here on the street it's been for IBM.

Shares currently down 2.6%.

Cisco, Nvidia, and Caterpillar, other hard-hit names in the Dow today as well.

Eric, you don't, you could always just jump on right now if you see me here at camera too, dude.

Great.

Eric Chriscolo, actually, come, come, come chat with me real quick.

Give me, just give me one take.

I'm going to do this is how I roll right here with the microphone.

Eric Criscolo, market strategist here at the big board.

I was just kind of running through what's up, what's down in the Dow, kind of a defensive brisk off day.

Any potential catalyst on your radar for today?

You're expecting things to be a bit muted?

Yeah, no, a bit, bit muted.

Earnings season obviously is in full bore.

Financials reporting, but we are seeing some big tech names report.

You had TSMC last night.

Uh, ASML reported previously.

Samsung came out with numbers a couple of days ago as well.

Uh, so, you know, those tech names, um, stellar numbers selling off after they, after they report though.

So the bar is very high.

You're seeing it bleed into the memory names and the chip names which, which were lower.

The hyperscale is that we're seeing some upside now.

So there's a, that rotation continues, right, where, where the money is just constantly flowing back and forth in the tech space.

Now it's kind of bleeding into the.

Other areas as well.

Yeah, we'll have to see what Netflix gives us after the bell, and then obviously we're through the big banks, and then the rest of Earningspalooza gets to continue.

It's I love Earningspalooza.

That's great.

It's fine because you and I talked last week.

We're like very muted, not a lot to trade on, and this week we came in, we got inflation, we got wars on Capitol Hill.

It's like we go from quiet to not quiet very quickly, gradually, then suddenly, yep, that's it.

Thank you for being here live on the JD Durkin show.

We'll get you on next week.

Thank you for stopping by today.

I, OK, my man.

Oh wait, are you on taking stock with us today?

There we go, a preview of the 4 o'clock hour.

My man, looking forward to it.

Thank you for stopping by, Eric Criscolo.

All right.

That's how the JD Durkin show rolls, folks.

We just make it up as we go along.

We'll take a look at the MG 7 quickly before we toss to break.

Apple, the only of the MG 7 stocks in positive territory at this hour, up about 0.25%.

I was about to say Tesla is the hardest hit.

It's not.

Nvidia is the hardest hit.

Currently down more than 2, Meta down 1.3.

Tesla, Microsoft, Amazon, Alphabet's about flat, but the rest of those names are down on the day.

All right, producers, oh, wait a minute, Taylor can join?

Taylor, Craig, I can.

Join if needed, uh, Taylor Craig live from the launch Live now studio in beautiful Brooklyn, New York.

Taylor, thank you for popping on, brother.

Um, what's on, what's on your radar, dude?

We feel like you guys and I got a lot to talk about.

Uh, I'm always just bullish on chips, extremely boring in that regard, um, and I'm sure a lot of people down there on the floor with you are too.

Well, you know, it's a crowded trade, but that doesn't mean it's a bad trade, right?

I mean, on the one hand, you've got the theory that says, by the time it's consensus, it's probably wrong.

That's what JC Perez always talks about and some of the CMT guys.

But on the other, on the other side, If a lot of people are in a trade, like they're in the trade, in that particular trade for a reason.

Um, you also produce a lot of other amazing shows here with Launch Live now, including with the great Lou Bassinis.

We love Lou.

What have been some of the top themes that, uh, people like Lou and others have been talking about recently?

You know what, it's, it's funny you ask, and, uh, and that's one of the benefits, you know, I used to be a producer at CNBC.

We weren't allowed to trade.

Trade any stocks.

I'm like, if we're going to run our own company, we're allowed to trade stocks.

If, if, if I hear something awesome mentioned on the JD Durkin show, I might freaking buy it.

Um, and, uh, and what I'm hearing a lot, especially from Lou, and he's coming up later on at 2 p.m., uh, uh, the big skinny changed times over there, but, uh, he's talking a lot about biotech, um, small-cap biotech.

Um, if, uh, if we're able to, Lilia, if you want to.

Pull up the XBI.

XBI is, is basically an ETF that's consolidates a lot of the biotech names, especially the smaller ones.

So if you are not sure which ones to play, uh, Lou says that that's a really good place to be, and, and you can, oh look, it's, it's up there right now, trading around 155 bucks a share.

You can own a little bit of everything.

That's the court.

And of course, as we always like to say, do your own research.

None of this is investment advice.

I like to talk with people who are far smarter than I am to give our viewers a sense on the things.

Then why am I here on their rate?

Well, this, I would not have brought you on the show, Taylor, if you didn't fit that bill.

Um, all right, man.

Well, I'm really grateful for you popping on.

I'll try to bring you back again towards the end of the hour.

Uh, anything else big in terms of potential market?

Catalyst, other things on your radar or new developments from you and the amazing team that launch Live now you would want our viewers to know.

Hey man, no, just looking forward to the rest of this hour and smarter people than myself talking.

I know you got Lindsey Bell and a lot of great names coming up, so, uh, extremely excited to, uh, to see everything we're going to see in this hour.

The great Taylor Craig, founder of the one and only launched Live now.

Love you.

Man, best, uh, best of court and everyone there in the studio, we'll talk with you again soon.

Speaking of guests who are far smarter than I am, how about this interview?

This is someone I've wanted to talk to and meet for years.

She was on Taking Stock yesterday.

Take a look at my one on one conversation with the truly great Katie Stockton of Fair Lead Strategies.

We got Lindsey Bell on the other side of that.

But first, here's my interview with Katie.

Take a look.

I believe for the first time she's on taking stock, someone I've wanted to interview for a very long time, Katie Stockton, founder and managing partner at Fair Lead Strategies.

Welcome to the broadcast.

Great to see you here today.

Good to be here on the floor.

What do you make of a cooler than expected CPI print yesterday, Cooler than expected wholesale PPI numbers today.

And the market's reaction to getting those prints before the opening bell.

Well, the reaction is what I care most about as a technical analyst.

It's how does the market absorb the news, not as much the news itself, and we have a little bit of a crack in the armor of the market from a momentum perspective.

You're seeing it much more in the NASDAQ 100 than the S&P 500, but we don't have a breakdown.

The NASDAQ 100 has been testing its 50 day moving average, and the S&P 500.

Holding up decently above, but it's getting what I would call coiled up, and that means we've seen sort of volatility lessen and lessen further, and that usually precedes a big pickup in volatility, and we'll see which way that comes.

As a technical analyst, are there any parts of the technical analysis of the S&P 500, these big picture indexes, you think is worth it for the average investor at home to maybe pay a bit more attention to or maybe even learn in the world?

Of technicals if they don't follow technicals that of course it's really very easy to get started with it.

We like to use moving averages as one.

The 20 day moving average can be a great indication of short term momentum.

So when you see a 20 day moving average roll over, that can be indicative of a loss of momentum that's significant enough to rotate your position, and we have indeed seen that from the broader market, from the major indices, and even from the semi.

Conductor sector, which of course has been a source of leadership.

So I do think that's the thing to focus on right now for those at home.

I wonder your take on what you've seen out of the big bank earnings.

Maybe you don't pay as much attention to the fundamental side, but anything interesting on the technicals for a lot of these big names who of course once again are kicking off earnings season overall.

And so far a lot of interesting movement from investors in reaction to the Goldman's and JPMs of the world the last few days.

I would say it's been somewhat.

A muted reaction and not really overwhelmingly positive.

I feel that the banks are holding up nicely, but they're not exactly breaking out.

We have consolidation phases underway, and that's healthy.

Healthy digestion is what I would call it within the context of their longer term uptrends.

Their relative performance has improved for financials in general, and that's helped keep a bid to the market when we have tech pulling back.

I wonder if you're surprised with the year to date.

Performance.

You know the book better than I do.

The Stock Trader's Almanac tells us historically this is the weak spot of the 4 year cycle.

We're inching closer to the midterm elections, despite what history tells us, maybe stronger performance year to date so far, Katie, than many analysts had been expecting.

Yes, that's fair to say that 4 year cycle does appear in many asset classes, and I feel that we're overdue perhaps for an off cycle.

That can mean a trading range for the major indices.

It could mean a bear market cycle, but we truly don't have indications of a bear cycle at this time.

So we want to respect the momentum while it's there and simply position for to manage risk through these corrective phases that we think may soon ensue.

All right, shout out to Jeff Hirsch and his father Neil Hirsch as well for the Stock Trader's Almanac.

Very grateful for your time, Katie Stockton.

Really nice to finally meet you and get to interview you today.

Please come back on the show anytime.

I sure will.

Nice to see you.

Special thanks there to Katie Stockton joining the show now, making her debut on the JD Durkin show.

Please welcome the great Lindsay Bell, chief investment strategist at 248 Ventures.

Lindsay, grateful for your time.

How are you doing today?

I'm doing great.

Thanks for having me.

Excited to be here.

Of course, let's dig right in.

We are very pro chart here on the JD Durkin show.

That has been a through line from our very first episode a few months ago.

So producers, let's jump right into it.

Lindsay, I love what you sent us here.

Uh, we're gonna start with a look at this.

I guess it, it's sort of a, a percentage or maybe a bit of a crowded trade with regards to long global semiconductors.

We are seeing chip demand still booming.

Are we hitting peak chip, and how do you read this data?

Yeah, I mean, I think it says something that fund managers now see the semiconductor space as the most crowded, and when this came out, it came out yesterday, by the way, the market, the semiconductor market took turned down on the back of this news, and for me, I've been saying for a couple of weeks, ever since Apple announced their price increases to their products because of the input costs, AKA semiconductors, the stock price reacted negatively to that, and I started.

Questioning, are we reaching semi-chip price peak?

And I think there are other signs.

We saw it this week with IBM.

Their, their customers that are the same as semiconductor stock customers are pulling back spending on AI to spend it on chips to lock in prices now.

So you're starting to see their customers becoming much more price sensitive, and that is going to become a problem for the semiconductor industry.

I mean, these companies who Some of them, their end consumer, their end customer is the consumer, are very price sensitive.

So if pricing starts to come under pressure, which by the way, semi-chip prices have quadrupled in three quarters, if that starts to come under pressure, what we usually see is that investors react negatively to that, especially if it's a crowded position like this chart shows.

Now my hope is that we have more of a rational rotation out of semis into the mag.

7 and I think that did start and I think the mag 7 saw weakness earlier this year because semi pricing was getting too extended.

That doesn't mean the demand isn't weakening and supply isn't still constrained.

I think there's still a lot of demand, and I, which is why I think there could potentially be a rational rotation and not keeping my fingers crossed, hoping for that for the semis and for the market overall.

So that's the semis part.

If we can keep that chart up producers.

Uh, uh, is it, is the story more of the crowded trade in the semis, or is it also, maybe, maybe I'm just personally surprised.

We talked Long mag 7.

You got a 7% indicator along the US dollar, even shorter.

Long Europe equities, maybe I understand some hesitancy.

Oil.

I mean, a long position on oil.

I mean, we know how high beta, how volatile it has been.

The, the mag 7 part to me is interesting.

Is it because the MG 7 is trading much more like the LG 7 now, or what do you see happening there that brings that number to such a low percent?

Yeah, I think it's because investors, as we're approaching 2nd quarter earnings season, they are really rising, raising the question of what is ROI on all this CX that we're spending on AI.

Sure, the semiconductors are benefiting, and you saw that chart.

I thought about sending it to you.

The cash flow of the MG 7 versus the semis, it's going in completely opposite directions with the semis soaring and the mag 7 cash flows falling off a cliff, which is another reason why I think these companies are becoming much.

More price sensitive and so in this chart you're just seeing a lot of froth and semis, and I think you're starting to see opportunity potentially in mag 7, you know, I'm all about the contrarian play, and that's this chart shows you two contrarian plays.

But what I'd love to see is if you chart, I was just gonna say another chart I was gonna send you was the price performance of the mag 7 versus the semis.

They have departed in different directions, and that's unnatural, especially given how tied to the hip these two are with regards to spending.

And, um, and using the spend for semiconductors and in the AI space.

So you, you wanna see those trading together.

Both should benefit from the AI trend.

Also, I just feel like the Mag 7 story is so different from one stock to another, right?

I mean, last year it was Amazon that was so badly beaten down.

This year, it's Microsoft that for the most part has struggling to get, struggled to get its foot, and now I feel like I've asked this, so I, I wasn't planning to ask you this.

Do we need a new acronym?

Do we need a new batch of stocks?

I mean, I guess we could have a new acronym to include some of the AI names, but I don't know.

I think the MG 7 keeps it clean, um, you know, so I'm gonna stick with MG 7, semis in their own world.

Onto the second chart we go, Lindsay, S&P 500 earnings on pace to grow almost 25% this year after 13% growth last year.

Historic earnings boom, what's driving it?

Yeah, I mean this is crazy.

What we're seeing this earnings season actually over the last six quarters is a magnitude of beat of almost 8.5% points.

And the crazy part is that we're seeing those beats as numbers move up through the quarter.

I've been studying earnings for most of my career, and what I can tell you is it is normal for analysts to cut estimates as the quarter progresses.

What We've been seeing this quarter, last quarter, is that numbers have moved higher going into the reporting period.

Usually we like to lower them, let the companies beat the lowered bar, and the stocks can move higher.

So what does that mean?

The bar, it has been higher and it's going to be higher for this quarter.

This morning alone you're seeing Taiwan Semi, you're seeing GE GE Aerospace.

Both of these stocks beat and raised, but they're down this morning.

And that's because the bar has been hired, especially in sectors like technology, energy, materials.

So that's where it's going to be tough, and you're also seeing the stock responses in the tech sector to be negative this quarter.

So usually the market does best when expectations have been lowered, but they have been higherd, so it could be a rocky reporting period even though we're probably going to get pretty good numbers is my opinion.

I mean, I wanna call it quite a falling knife because that's needlessly dramatic, but Taiwan Semi's chart now down for what looks like 6th or 7th days in a row.

Obviously, it's coming off very elevated levels, looks like it reached its recent high around Tuesday, June 30th, but since then, it's been a fundamentally different story and that involves earnings.

What could derail the earnings story, Lindsey Bell?

I think it's simply put, it's the high expectations.

I mean, look at Samsung and just last week.

It fell 19 to 20% even though it had a great earnings report.

Expectations are that the type of growth, especially its semiconductors, which by the way is over 100%.

For the for the quarter and for the year is going to continue if there is any sign that that even moderates slightly, which is why I'm worried the first chart when we saw the semiconductor stuff and we talked about peak pricing because if there's any wiggle in that to to moderate a bit.

Investors aren't going to be pleased with that.

And so I think that we need to just be aware of where the high expectations are, but also where the low expectations are.

We've seen estimates reduced quite substantially for the healthcare space and also within the consumer space.

So whether it's discretionary or Staples, there might be some better opportunity there this earnings season because again, I do think the numbers are going to be good.

I like pulling in non-intuitive parts.

Of the general market conversation, which leads me to chart three.

I love this.

Let's talk inflation rate and what it means for equity return.

This is so cool.

Historically, markets have posted some of their strongest forward returns when inflation has maybe been a Goldilocks zone, let's say 23, maybe 2 to 4% overall.

You think investors are worrying a bit too much about modestly elevated inflation right now?

Right, exactly.

If you look at this chart, what it tells you is that the stock market can perform very well when inflation is in the 2 to 4% range.

It really just gets rocky when we get to the 6% range, which is what we saw in 2022 and the market retreated.

So we're kind of in the sweet spot so long as economic growth, what the chart doesn't show you is so long as economic growth keeps up and outpaces, outpaces that inflation.

Now that being said, I do think inflation is going to be.

It's going to add volatility to the market because I don't see inflation returning to the 2% Fed target rate anytime soon, so the Fed's going to have to make a decision.

Do we raise rates that the two years are already at 4.5%, which is way above their target range of 3.5 and 3 to 3.75%.

But I think that, you know, we're seeing, we are seeing deflation in some categories which the bulls will point to, but they're indiscretionary.

Categories we don't want to see deflation in discretionary categories.

There was an article on CNBC this morning about grocery people buying less groceries because of inflation.

We, we want to be in the sweet spot where inflation is rising steadily in that 2% range.

The other thing that I'm worried about is the intermediary inflationary costs which we saw in the PPI report, especially with regards to services and even goods, goods intermediary.

Inflation rising in the double digits still for the last three months, that's going to eventually make its way through the market and hit CPI.

I don't think that means CPI is shooting up significantly from here.

We'll probably remain in this 3, 3.5% range for a while, but and the good news is that the market can withstand that.

But I think there's just some things to watch here because we're not out of the woods yet with inflation, but the market can be OK with it.

And Lindsay, I don't know if you caught this.

Um, this week when Kevin Warsh was on the Hill, I mean, this is what, these are what, I mean, chairman of the Fed do this, they have to do this from time to time.

They go in front of the House of Representatives, and they go in front of the Senate.

I do believe Kevin Warsh was making the argument, at least in front of the House on Tuesday.

That, you know, basically communicating, hey, we will keep rates restrictive if we need to because 2% is still the goal.

We know that was always Jay Powell's big thing.

You know, the historical record strongly argues against prematurely loosening monetary policy.

We'll stay the course until the job is done.

Did, did you pick that up from Worsh in his comments that it's still he's at least communicating 2% more or less is still the goal?

Yeah, I did pick that up, and I also thought what was interesting is that he says, you know, one data point does not make a trend, which I also believe, and the market felt relief this week with the CPI and PPI reports, and I can understand they came in lighter than expected and they even fell a bit, so that was positive news, but we're still quite far from the Fed's target.

Of 2%.

So I think it's going to be really interesting at the end of the month when we get the FOMC meeting.

There's going to be a lot of debate in there.

I mean, you've heard from Williams, you've you've heard from Morris, you've heard from a few others this week, and people have differing opinions about where, where rates should go, where, where inflation is going from here.

So it's going to be interesting.

Yo, perfect timing for Worsch, by the way, right?

He's got to go in front of lawmakers who are skeptical about Fed independence, but he comes at a time when the CPI reading is like so much softer than headline expectations.

So it gave a nice boost to equities on the time, but I'm like, wow, what a perfect day to go.

In front of Congress, when you've got a cooler than expected CPI and PPI figure, um, with all these complicated acronyms, do you have a favorite inflation gauge?

Do you have one you look at, Lindsay, that you put higher stock, no pun intended, into more than others?

You know, I, I don't, I really like to look at all of them in combination, but I also, I don't like to look at core as much, and I know that's where the Fed goes, core PCE.

PCE is probably the most important because that's what the Fed's watching, but I like to look at the whole number because in reality, the consumer who matters the most is they are the greatest part of GDP, you know, gas and housing and food, those are all important expenses for the consumer, so.

So to me, I like to look at the headline numbers and then I like to, for me it's always about drilling down and seeing what's moving underneath the surface because rarely can you tell from the headline numbers what is actually happening and where we're where we're going from here.

So that's my thing.

Do you have any sense on what a W-led Fed will more look like?

We know the task forces, we've heard some of his public commentaries.

Is there anything you're looking for or trying to get further clarification on in a post Jerome Powell era?

Yeah, I mean, he's very clearly focused on inflation and he has his own mindset about what inflation should look like, and I think these task forces are going to help him understand what is, what is actually moving the economy because it has been so disjointed from, from what what sentiment is to what we're seeing in fundamentals to what the actual economic data is showing.

So I really am excited about his task force and Seeing what that uncovers, um, I do think he, he genuinely believes that AI is deflationary, so he's looking for a reason to lower interest rates, um, from here, but I think he's also gonna be pragmatic about it, you know, I think he sees probably 3.5% is, is too high, but if you can find a reason that the other reasons that inflation is underlying is, is lower, then, then he'll use that.

All right.

We gotta talk Netflix.

It's a big one after the belt today.

We got our last chart.

I love this.

What do you see going on with Netflix?

Is it steadily becoming more than a streaming company?

And I guess one of the big questions, to what degree can it compete with YouTube and, and other places in terms of maybe some of Netflix's new-look priorities here, Lindsay.

Yeah, I mean, I think investors are, are missing the story on Netflix and the opportunity is here because the stock has fallen the most in the last year.

It's in the top 20 losers over the last year, and it's trading at a deep discount to its historical average.

And everybody, I think investors are looking at this as a company that is, you know, saturated its market growth is slowing.

We're used to seeing.

And talking about growth and tech and semiconductors, so a 10% earnings per share growth seems low even though it's higher than the historical standard of the S&P 500.

Um, but I think there's such an opportunity for these guys.

They are the top player in the paid streaming service.

They have the largest customer base and they also have the lowest cancellation rate.

And they're doing things to evolve into new media.

And so I think investors look at Netflix and they see a stagnated business and they think M&A is the answer, which would be the answer in the old world of media.

But this is, we're not moving into the old world of media.

We're moving away from it, and Netflix sees that.

And I think to Ted Sarandos, he is doing interesting things where he is bringing Jay Shetty's.

Podcast onto Netflix.

They're, they're working with creators, and this creator economy is a $1.3 trillion opportunity by 2033.

They see that they're going after it and they have the best moat to, to, to disrupt it.

You know, I don't see Netflix as going away of blockbuster.

You know, who's going to disrupt them?

Yes, there's competition.

Yes, you have YouTube, you have.

Other, other platforms, but I think Netflix has this unique opportunity, and maybe this is just me thinking out of the box, that they could be the filter or the gold standard for what shows, creators or media are the ones that are worth watching because there's so much out there and it's the space is getting more and more crowded.

So I think Netflix just has this great opportunity and the chart I showed you is the digital economy versus the traditional economy.

Which shows that the digital economy growing 60 to 70% higher than the traditional economy over the last decade plus, and that shows that they are in the right space, you know, they don't have to evolve into the space they are in this space, um, so I think that that's just a chart that you don't see a lot and people don't think about a lot because we have been an industrialized goods producing goods consuming economy, but we've turned into services because we're a digital economy now.

Uh, are you watching anything good on Netflix right now?

You know what I just watched was Nemesis.

Oh, check it out.

OK, I've seen it promoted.

Any good?

You like it?

You recommend it?

I loved it.

I couldn't stop watching.

OK, I will check out Nemesis.

I would encourage for you and anyone else watching it.

It's on Netflix.

It's from Tom Hanks' production company called The American Experiments.

It's very nerdy history stuff, Lindsay.

I don't know if that's up your alley, but it's a five-part special shows all the battles of the Revolutionary War, um.

You know, it's, it's maybe not for everyone, but if you like that stuff the way that I do, I highly recommend.

Um, Lindsay, you've been very generous with your time, and I'm really grateful to have you on the show.

Please come back and see us anytime.

Where can people go, Lindsey Bell, if they wanna see more of your stuff?

Check me out on LinkedIn.

Check me out on Instagram.

Those are, those are my places.

Great, Lindsay Bell.

Please come back and see us again.

All the best for the rest of your week and the rest of your training day, Lindsay.

We'll talk soon.

All right, talk soon.

Thanks for having me.

Let's go from one terrific guest to another.

Our next guest joins us live.

He is the founder of Explosive Options.

He is also, also author of the book Know Your Options.

Please welcome to the show, the truly great Bob Lang, my man, what is going on?

Good morning to you.

Good morning, JD.

Great to be with you.

It's a, uh, it's a beautiful day out here in Massachusetts where finally the smoke has cleared from those wildfires.

I think they were hitting, um, New York City as well too, but, um, It's a beautiful day out here today and, um, I'm looking forward to, um, actually, uh, in, in New Jersey, isn't there some, a, a big, um, soccer game coming up this weekend?

I've heard on Sunday at 3 o'clock, there is something going on in MetLife Stadium.

I am familiar.

To the point about the fires, by the way, Bob, you know, I grew up in North Jersey.

I just, I don't, I don't know if I blocked this out of my, I never grew up with a reality where every summer we had this wild fire smoke, and now it's just been summer after summer after summer, at least for the last 4 years or so.

Yeah, last night was not quite as apocalyptic as we had a few years ago, but um I'm hoping it clears out.

It's good to hear your Into clear skies there in Massachusetts, up in the great Commonwealth.

Absolutely.

It's beautiful up here and we're looking forward to a great weekend.

And so I, I, I'm, I'm also, I know you're a big football fan.

It's coming up pretty quickly, JD.

We got training camps coming up here and um I know you're always optimistic about those New York Giants.

We got John.

Well, yeah, well, some years more than others.

Now we got John Harbaugh.

Like we've got, we've got a coach, we got a team, we got a franchise.

I don't know if that's gonna translate to any wins, Bob Lang, but it does translate to higher ticket prices I have to pay, but also a lot more hype and enthusiasm.

Um, let's, let's, uh, let's get after it here, Bob.

So I know.

You sent along a chart.

I actually pulled one for you as well.

So we're gonna start with that chart because I know you talked about this yesterday.

Uh, producers chart one, this is the United States Oil Fund, USO.

Bob, I know you, you talked about this.

Um, it had a really interesting run-up.

It pulled back a bit.

We kind of traded up a little bit the last few sessions.

Let's start with USO.

What do you see or what do you like in this chart?

Yeah, so USO is the ETF for oil, and it had a really nice breakout a couple of days ago, obviously, with the potential of the Strait of Hormuz being closed, and maybe it still is closed.

I don't know.

I think there's a lot of uncertainty there that created a lot of doubt, the fact that, you know, oil supplies were going to be increasing, I think.

One of the, one of the problems that we've had here, JD, is that the SPR has been, um, almost uh clearly depleted.

And, uh, which is the Strategic Petroleum Reserve, which is a, uh, uh, a, a, a, a group of, um, of wells that the, uh, and tanks that the United States uses to keep reserve, uh, crude oil, and, and they've been dumping it on the markets here to try and keep oil prices and gas prices lower.

But once it depletes, you know, you got to get back in there and start buying, buying oil again.

So that demand starts increasing again, JD, then I think we're going to see oil prices just naturally float up and it doesn't really need the Strait of Hor Hormuz to be closed in order for for oil prices to rise.

It just, it'll just naturally rise because of the demand and supply issues.

Off to SMH we go.

The VA semiconductor ETF you sent along this way and you got some.

You gave us some trend lines on top of the price action, which I love.

Uh, it's been one of the market leaders.

Do you see the technicals here starting to shift a little bit?

What do you see overall in this chart here, Bob?

Well, in this chart here, JD, the, um, 50-day moving average seems to be a pivotal point here, and, and we, we broke it last week.

Um, and, and surged above there after, uh, testing that 50-day moving average, but it was pretty much a weak bounce, and it came back down and tested it again yesterday and this morning we're, uh, we're, we're, we're below it a little bit as well too.

So, um, I, I'm, I'm really kind of waiting cause I, I, I do think that, um, there's gonna be an opportunity to buy semiconductor stocks, uh, the SMH, um, you know, the names in the SMH, obviously, the ones that everybody knows about.

This is uh Nvidia, this is Intel Broadcom, uh, Q Qualcomm, and even the memory names are, are big, uh, big players in the SMH2, JD, which is Micron.

Sandisk and uh Seagate and Western Digital.

So there were others as well too, Marvel.

So that this is a uh very heavily weighted towards um the chip companies, um, but also the other outliers as well too.

There's other, uh, other manufacturers like uh Applied Materials ASM Lithography came outings earlier this week, um, also in this, uh, in this ETF.

So I'm waiting to see if This thing can, uh, just go sideways for a little bit at the very least, JD, just stop going down.

So this, you know, lower highs, lower lows, and, um, you know, I suppose at some point it's going to stop going down.

Um, I did a Fibonacci retracing on, uh, the recent lows to the recent highs, and that, um, 50% retracing comes in at about 5:34 on the SMH.

We're about 5.

6570 right now.

So there's, if, if the SMH continues to go down a little bit more, I think it finds a little support down there.

550 is also another level where I think we can find some support.

But still, I think right now, this is a chart that says the SMH is in no man's land.

It's a no touch right now.

You don't really want to get in there and buy unless it's for about a 5-minute trade, and you know, I'm not a 5 minute trader, but I know some people are.

Fibonacci retracement reference.

Now it's a party.

I appreciate that, um, that chart up 55%, that ETF, uh, year, year to date.

Uh, let me get your take on, excuse me, market breadth.

The market keeps hitting new highs, but you say breadth.

Is it maybe a little bit less impressive than it would otherwise appear on the surface right now, Bob Lang, what do you see more broadly in the ongoing rally?

Well, I, I see mostly rotation going on here at JD, and we've seen, we saw a lot of rotation going on the prior week.

Money was flowing out of the tech tech stocks and moving into other names like banks and financials.

So, you know, it, it actually kept the breath afloat for now and And, and what's what's been troubling to me is that on the big days where the market's been up strong, we had a couple of them last week, we had yesterday and of course on Tuesday, the markets are up.

The breath just has not been impressive.

So we're seeing just as many down issues as up issues.

But you know what, you know, to be fair, on Mondays, uh, shellacking was not on a horrible breath either.

So, you know, it's, you know, it's it's, it's both, it's both situations where when the market is going down a lot, you're not seeing horrible breath.

When the, when the market is going up, you, you aren't seeing horrible breath or great breath either.

So, um, the breath numbers are really important to pay attention to because it tells you where the money is flowing.

It doesn't tell you exactly what the price action is, but it tells you when big money is coming in or coming out.

How about thin market liquidity?

Is that a contributing factor to some of the bigger swings that we've seen?

And if so, why would that matter to investors, Bob?

Well, what it tends to do is create some erratic price moves, and I see it a lot in the S&P futures, ES futures, and Nasdaq futures as well too.

We see prices jumping around a lot in large increments, and that's not normal.

But what happens is that when liquidity is dry, when liquidity is very poor, we see those.

Market jumping around in a big way up and down, and it creates a lot of uncertainty.

And you know, look, when there's not really good price discovery out there, JD, and people are not comfortable putting money in or taking money out, they just stay out for a long period of time and again, less liquidity creates.

That problem.

A lot of the lower liquidity, JD has been coming in because of the banks participating a little bit less in the in the markets.

We're also seeing less liquidity coming in from the Federal Reserve and perhaps that quantitative tightening that a lot of people are talking about that Kevin Warsh is going to do is just in our near future.

So, I, I wanna ask you a little bit about Treasury yields.

You and I have talked various times over the years about the reaction to the bond market.

I, I found it really interesting last year around the liberation Day lows.

Even the president himself saying the, I'm paraphrasing, basically saying, the bond market is tricky.

You're not gonna fool the bond market, right?

Bond market investors tell you things that maybe equities won't.

Um.

What do you, what do you make of, of the movement we've seen in Treasury yields?

I know we saw them pretty much all come down across the board yesterday, but talk to me about the relationship between yield performance this week and cooler than expected CPI and PPI prints, Bob.

Well, years ago, JD, um, I used to work with bond traders at Countrywide Securities, and, and the one thing that I found out is that, the, the extent of the paranoia of bond traders is to, uh, to the limit, to the sky.

In fact, um, there's an old saying out there that the bond market has predicted 6 of the last 2 recessions.

So, um, yeah, so I, you know, I, I always have one eye on yields.

I always have one eye on what the bond market is telling me right now.

And You know, I pay attention to the yield curve right now.

I'm also paying attention to high yield bonds, high yield spreads, and also the 210 spread, which generally speaking is what you look at in terms of determining where the Federal Reserve is going to go with monetary policy.

At the market rates are telling you that.

So Fed fund futures are telling us that maybe you have one rate hike in 2026 and possibly two.

And I'll tell you what, I think the Fed funds' futures have flipped around as being a little bit more hawkish than what the Federal Reserve is right now.

And I think it's very possible the Fed could pass on a rate hike in 2026.

The market is not pricing that in right now, and generally speaking, when the market comes around to that way of thinking.

Thinking JD, it's going to be very bullish for markets.

I don't know when that's going to be.

Is it going to be later on this year?

Is it going to be in the summer?

Is it going to be towards the end of the year when we have a midterm election?

I don't know, but certainly, um, the market is pricing in a rate hike right now and the bond market sees it as well too.

Let's talk about this big, beautiful book I hold in my hands.

Know your options, how to build wealth using proven options, trading strategies, and technical analysis.

Uh, what do you most want people to know about the book and in general, your thesis, your approach to trading options, why it might actually be something for people to consider who've only heard of it from the outside.

Well, you know, JD, there's just not a lot of sources out there that tell you how to start, uh, trading options and, and give you a, a, a really good glimpse of what strategies are out there to use to effectively make money.

My, my whole, uh, uh The thing about, about options trading is managing risk.

You've got to start from that standpoint.

You've got to be able to manage your risk.

What does that mean?

That just generally means, you know, you don't look at the options market or the, or the stock market for that matter as a casino.

It's not, it's not something where you just, you know, throw your money out there and hope that you're going to win.

And, uh, you end up losing because the, the market is a, is an enormous environment and you can get swallowed up very easily and lose all your money.

And then, and then where are you gonna be at?

You're gonna be, you know, on the outside looking in.

So, um, I, I start with, um, with the basics about options, the, uh, the terminology.

We talked about.

Some strategies, some basic strategies about how to manage your risk.

Um, you know, this is, you know, trading options is a risk game, right?

And, um, you know, my baseball analogy is you got to take some risk, right, JD?

If you can't, uh, you can't steal second base with your foot on first.

So you, you've got to be able to.

To, to, to take some risks and get out there on the risk curve and uh and get a return because, um, you know, we're not in there buying treasuries here.

We're buying options and we're looking for an opportunity to move higher.

I, I talked a little bit about technical analysis and charts and so forth and that help aid you in finding the, uh, the trade ideas as well.

And by the way, for viewers watching this interview, go ahead and scan the QR code up on the screen.

That will take viewers directly to the Amazon landing page so you could buy Bob's book.

Bob, that's how we roll here on the show.

Producers.

I appreciate you going above and beyond.

Uh, Bob, before I let you go, I have a couple of very quick ones.

Lightning round, if you will.

What's your favorite technical indicator?

I love the MacD, but I also, um, I'm, I'm gonna say the MacD is one of the, uh, one really tells you the trajectory of where the stock price is going before it happens, not during or after, but I, I, I'm also getting really charged up by the Chain money flow.

My good friend Mark Chaikin created this indicator several years ago.

Um, and it really tells you where the big money is flowing.

Uh, when, when it's positive, it generally means that you can stay on the trend of the, of the market, um, individual stock for a long period of time.

That's what I'd like to see.

That's what I need.

Um, and so those, those two indicators are probably my favorite.

One investment lesson you wish you had learned sooner.

Oh, well, you know what I mean, taking, taking money off the table, or I, I, I, I, I'll tell you what, you know what, when you have a winner in, in the options market, you've got to learn to take profits, and take money off the table because you can, you can have a winner turn into a loser literally overnight, probably within.

Minutes.

So it's taking money off the table, taking risk off, risk down, and moving it around.

We're we're in the, we're in the business here to move money around on a regular basis, not just let it sit there.

So that's probably the most most important lesson I learned years ago.

Bob, I love you, man.

Thank you for popping on the show today.

Where can people go if they want to see more of your stuff?

Explosive Options.net is where I'm hanging out.

We have a chat room there.

We, uh, we have a lot of active traders there regularly.

I have a swing trading service which has been up since 2011, Spread trader, and we just started a leaps trading service as well too, which is, uh, was up 100% in 2020, 2025.

So very proud of that, uh, and, uh, I appreciate all the, uh, the, the, the great words from you and, and talking about the book today as well too, JD.

So thank you.

Let, let me know next time you're up here in the city, man.

We'll get you on taking stock.

The book is Know Your Options.

I don't want to brag.

I've got a signed copy by Bob Lang.

My man, take good care, and uh you and I will talk again soon.

Bob, thank you.

Thanks, JD.

Great to see you.

And to round out today's broadcast, I said it at the top of the hour, she is one of our absolute all-time favorite go to guests on Taking Stock.

I am so grateful that she joins us here today.

Please welcome economic strategist at Fun Strats, the one and only Hartika Sang.

Hartika, good morning.

What's happening?

Good morning.

Thanks so much for having me.

Of course, it's great to have you here this morning.

And, uh, first and foremost, I would love your take because I haven't really talked to you here in the last few days.

Cooler than expected CPI, cooler than expected PPI.

What does the Fed do with this as we get a little bit closer to the July twenty-eighth and twenty-ninth two-day policy meetings?

Yeah, these inflation prints just handed a victory to Kevin Borsch, right?

Uh, the way I'm looking at it, this was in line with my expectations.

Oil prices have really come down in recent weeks because there's been, sure, there's been a renewal infighting, but at the same time, it's not as big of a hit to markets as it was back in March and April.

So we have seen oil prices come down, and that has had a negative impact on inflation.

Uh, I think if you looked at core CPI, uh, only 7 out of 10809 components, they were the only positive contributors to the core CPI month over month.

That's a really good sign, and I think for, you know, the Fed chair.

The biggest issue is knowing how to weigh this.

He has said in recent days that inflation is a choice.

He's not taking this inflation print as a decisive victory.

That is a really good sign because, as we all know, his reputation, it's still being formed.

We're not really sure if he's going to be independent, if he's going to make the decisions.

That are good for the economy that, you know, data indicates he should take, but I think him saying that I'm not really sure if this is, this is the inflation print that says, OK, inflation is over, it's not coming, it's not going up anymore.

I think that was a really good sign, uh, especially given his hearings in recent days.

Yes, he certainly communicated a lot of the right things to members of the House and the Senate.

Um, you flagged SK Heinix.

I'm getting a lot of comments from people on social media.

They want to better understand this story.

They want to understand maybe some of the, and you know, there's no shortage of like 2X leveraged ETF products surrounding it.

It's only been trained a few days.

Uh, it looks like it is down so far today, but in general, what have you tracked out of the last few days out of Hein?

It's been, it's been a very jagged launch in the US.

It came on Friday, and I think the most striking thing to me about it it's ADR launching in the US is that there's, it's trading at a huge premium compared to the one in Korea.

You can take that, you know, in two ways.

Number one is that there's a huge demand still for memory stocks in the US and SK Hex is of course much bigger than Micron.

It is somewhat bigger than Samsung Electronics.

It is much bigger than what we have going on in the US.

So I think it's natural for investors to want a piece of the pie, especially because they weren't able to get access to it until the ADR launched, and that's why we have seen a profiltration in the number of uh SK.

TX 2X leverage ETFs being launched.

I think proshares, uh, leverage shares, they've all had these products, uh, launching or, you know, upcoming launches.

Uh, you can, of course, you know, take the premium as a sign that investors are still believing that there's a memory bottleneck and they still want to pay up for it.

It, it's a huge premium.

So I think, I think you perceive it that way.

Another way you could sort of try to understand it is that SK Hein is getting very concentrated right now, where investors are giving up on Micron and Sandys.

You could take it that way as well.

And what does that say about the US memory boom?

There's questions about that, especially in recent days because we have seen a sell-off in Micron and Sandys and all these semiconductor companies that just got really Really, um, really hyped up in recent months.

Uh, so it, it could go either way, but I think at the end of the day, it is a good sign that the ADR is doing well overall.

Sure, it's been volatile, and I think it'll continue to be that way at least until the ADRs can be converted back to the Korean stock.

We don't have that option yet.

So I think this premium that we're seeing, it's going to continue to be that way for the coming months.

Mara, as you and I are talking, 7559.

That is the current level of the S&P 500.

What's your year-end target over at Fun Strat for how you see the rest of the second half of the year playing out?

Yeah, our head of research, Tom Lee, he has updated his target to 8000.

It was a little bit lower earlier.

It's the thing that concerns me is whether we see some of these high flying stocks, whether we see these um memory, hot memory stocks sort of come back into the market.

We've seen this great rotation that everybody was begging for.

In the past few years, and we're finally getting it, and it's still not good enough.

I think that investors would just rather prefer to have, you know, tech and the broader market rally at the same time, but that hasn't been the case.

And at the same time, it is a little concerning that the renewal of fighting between US and Iran has led to oil prices inching higher again.

Um, of course, at the end of the day, we know that a long-term peace path is still going to be there.

Uh, this is not, you know, oil prices are likely not going back up to their 2026 highs, but it's still concerning that oil prices are moving up and at the same time, our reserves are depleting very rapidly.

Uh, so I think in the summer it's going to get a little tough as consumer spending gets pulled back.

What I did find interesting was bank earnings, and in bank earnings we saw that the K-shaped economy continues to remain strong.

I know so many people are going to say that, you know, it's not good to see a K-shaped economy and yes, it's not great.

But it's not the worst thing either because the consumer at the top, the top income consumer, their spending is very strong.

They own a huge chunk of stocks, 50%, the top 10% own 50% of the stocks, whereas the bottom 50% own 1%. to 2% of the stocks, but is significantly smaller.

So I think there are signs that their spending at the top can continue to be really strong, and I'm not really taking that as a bad sign that banks' earnings were strong, partially because of the K shift economy.

I think it's still a good sign.

That's interesting.

Um, S&P 8000 upside potential off these current levels, about 5.8 to 6% or so.

Um, I am running out of time, but I do want to squeeze in one more if I can.

Mag 7, since you and I last spoke, which I think was about a week and a half ago, has looked a fair bit stronger, some strong outperformance.

How are you currently thinking about these names, Hartika, before we wrap up?

Yeah, this month they've had really good performance, and, you know, I did forecast this would happen, but at the end of the day, you're always surprised when what you predict, uh, sort of come true in the short term at the very least.

I think with the Max 7, it again goes back to the memory trade.

Investors just got really nervous seeing the sell-off in memory.

You're having 10%, 20% drops and gains every day, whereas the Max 7, they don't, they don't really move like that anymore because they are so big.

And I think that investors, when this type of nervousness just hits them, it's easier for them to go hide into some of these bigger, safer names like Magnificent Seven, where AI is, it's a part of their thesis, but it is not the sole driver of their earnings.

It contributes to it.

And I think that them having uh sort of like a diversified business model helps them.

For example, in Meta's case, AI is being used to improve advertising.

In Google's case, they are using it in TPU, but that's not their only business, right?

They have a huge, they, they have a huge number of business elsewhere as well.

So I think at the end of the day, if investors get nervous about AI, as counterintuitive as it sounds, they are going to go into Max 7 because it's not as AI heavy.

Yeah, and some old reliable names maybe investors are familiar with after these last few years.

Um, I'm so grateful, pal, that you came on the show today.

Uh, we, we always love having you on Taking Stock, and I hope I get to see you there or here again soon.

Hartika, before I let you go, where can people go if they want to see more of your stuff?

It'd be great if they could follow me on LinkedIn and TikTok, uh, just my name, Hartika Singh.

Yeah, crush it on TikTok.

I know you and I have these conversations a lot, reaching would-be investors where they are with smart, uh, accessible, uh, vertical content.

You do it as well as anyone in the game.

Hartika, thanks for being here today.

I'll talk to you again soon.

Thank you.

11 o'clock on the dot.

That is it.

We will be back with the 14th edition.

I think I've sort of lost count of the JD Durkin show next Thursday, July 23rd at our brand new time, 10:00 a.m. live from the trading floor of the New York Stock Exchange.

Tune in later on today.

To the big skinny with the one and only, the man himself, Lou Bassinis at 2 o'clock, all from Launch Live Now.

My special thanks to the entire team at Launch Live Now out in Brooklyn and of course the broadcast control room here at the Big Board up on the 12th floor.

We got a whole new edition of Taking Stock later on today, live at 4 o'clock from the trading floor.

Thanks for watching.

I'll see you again, see you again soon.

There we go.

Close enough.