The Compound and Friends
00:47:32 · Michael Batnick, Daniel Clifton, Josh Brown
[00:47:32] S0: So think about Whether they like [00:47:34] S1: Think it or about sitting in a client meeting with me, and I'm like, Meta is a great Democratic stock. And people look at me like I'm crazy. Mark Zuckerberg, Democrats, right? But the market's always been more worried about Meta's cash flow rather than the other ones because there's no cloud revenue to back it up. And Congress is going come in or state government is going come in and say, oh, we're going limit data centers. I'm now putting handcuffs on the ability of Mark Zuckerberg to spend. And as the Democrats' odds of sweeping go up, Meta's stock started going up. [00:48:03] S2: Yeah. Cancel your... Well, they have commitments. So a limit to how much can really be canceled. Yeah. I agree with that. And Meta is both a user of other people's data centers and also building their [00:48:13] S1: own. Yep. [00:48:14] S2: There's sort of a weirder story. I think the right stocks to pay attention to are Microsoft Yep. Amazon and Google [00:48:22] S0: Yeah. [00:48:22] S2: Which are the the numbers one, two, and three. Yeah. Clouds. And those stocks are barely down today relative to [00:48:28] S0: Google's barely down. It's down 1.7%. [00:48:29] S2: So so the message there, the best I can come up with, tell me what you think. Okay. If we're gonna build less compute than those who have compute are sitting on something that's more valuable today than it was two days ago. Absolutely. Okay. Absolutely.
00:48:29 · Josh Brown, Michael Batnick, Daniel Clifton
[00:48:29] S2: So so the message there, the best I can come up with, tell me what you think. Okay. If we're gonna build less compute than those who have compute are sitting on something that's more valuable today than it was two days ago. Absolutely. Okay. Absolutely. [00:48:42] S0: And one other. One else. Doesn't it also tell you that AI was a legitimate threat to search? Because Google's barely down today. And a week ago, we're like, oh, shit. Like, search missed estimates for the second quarter in a row. Sell the shit out of Google. [00:48:55] S2: Before we move off this topic, put that one up too. [00:48:58] S0: 25. [00:48:58] S2: Yeah. So this is sort of our own version of what you were saying. Yeah. This is Oh, yeah. S and P returns six months after each midterm by party control of congress. What's the what's the takeaway here? [00:49:09] S0: This is Charter. I'm not the poll... Political analyst. Dan, what's the takeaway here? [00:49:12] S1: Yeah. So it's it's the same thing. I don't like six months because I think we'll be in the middle of a budget fight in in... When we get there. But, like, literally, the market prices in the bad news before the election. The election has always been a clearing So... [00:49:25] S2: But just on the right side of the chart, this looks at nineteen fifty, fifty four, fifty eight, and it's... The... It takes the stock market six months further. And the message here, don't get mad at me, the average for a Democrat midterm a party control change. [00:49:43] S0: It's cute. It's...
00:49:43 · Michael Batnick, Josh Brown, Daniel Clifton
[00:49:43] S0: It's cute. It's... [00:49:44] S2: Doesn't... Understand it's Clinton. It's the nineties. Fine. [00:49:47] S0: It's '50 to 70 to '78. [00:49:49] S2: No. No. No. 16.5% Democrat, 10.2% for Republican. Am I misreading this? [00:49:56] S0: No. I'm saying, but all those blue bars happened prior to 1990. So it's sort of not super relevant. [00:50:01] S1: So we we we communicate a little bit differently. We do it with the president, and we do it bipartisan control. And what we found is that under every single partisan breakdown that we've had over the last hundred years, stocks are higher. Okay? Stocks are higher. It really doesn't matter. Okay? I love [00:50:18] S2: I love that. [00:50:19] S1: Alright? It really doesn't matter. [00:50:20] S0: What if the president's under five foot eleven? [00:50:23] S1: But if you think if you think about, like, you know, these combinations, they're all political animals. It is really cool to be a member of congress. I'm not gonna destroy the world and ruin my relationship. [00:50:36] S2: They do... Especially in the senate, they think they're in the think they're in the they house of lords. They wanna they wanna sit there for the rest of their lives. Can I? Can we do oil? Yeah. Alright. Chart four, John. By the way, round of applause for John. Crushing it. So this is Brent Crude Oil Futures. Is This is Wading. Yeah. Pretty notable. What's the message to your firm's clients on what we're seeing [00:51:01] S1: with oil prices? So the straight [00:51:03] S2: of
00:51:03 · Josh Brown, Daniel Clifton
[00:51:03] S2: of [00:51:03] S1: removes dictates every other financial asset in the world right now. I've never seen anything like [00:51:08] S2: it. Like interest rates. [00:51:09] S1: Interest rates. Dollars. All that. [00:51:11] S2: Yes. Okay. [00:51:14] S1: And by the way, it's not oil. It's the Strait Of Hormuz. And so if the Strait Of Hormuz is going to start to normalize, oil is going to come down. We're getting 18,000,000 barrels out every day, and oil still hasn't come down. The market started to say, well, wait a minute here. The Democrats have leverage because they control the budget. They can limit Trump's spending on the Iran war. JD Vance is blaming the Iran war for Trump's [00:51:36] S2: Explicitly. Jews and the Iran war. Yes. [00:51:40] S1: Right? Yes. And so, you know, you could trade, you know, the Israel stock market, but oil is a much more important one. Yeah. And so the market is saying directionally this can improve. I just urge a little bit of caution with that view. It takes two to agree to end a war. [00:51:53] S2: Yeah. I was gonna ask you, what what is the interpretation of the IRGC? Yeah. So they they all they all meet for coffee the next morning. Yeah. And what what is the what is the view from Tehran of what just happened [00:52:06] S1: to you? Ready for this? Their view is that there's [00:52:08] S2: Now they could wait this guy out.
00:52:08 · Josh Brown, Daniel Clifton
[00:52:08] S2: Now they could wait this guy out. [00:52:09] S1: There was regime change in Texas before there was regime change in Tehran. Alright. Well Okay. Right? Like, think about that. Right? And so their point is... The IRGC's point is It's true. I mean, sad but true. We can't be attacked. If we are attacked and don't respond, it's existential for them. So they're willing to get totally suffocated economically and not do a deal. The civilian leadership of Iran need to do a deal because the blockade is working, all but since sanctions on them are working, they're caught... And to me, that's where we're we're gonna be in the status quo. We could play the games of doing these deals back and forth, but literally, they just need to straight open for five days. We need it open every day. Yeah. And that's a that's a very asymmetrical [00:52:50] S2: We also don't know what the what the DNC presidential candidates are gonna be saying about how to resolve whatever we started. Like, we... It's way it's way too soon. Yeah. But does that keep oil somewhat elevated then, that uncertainty? [00:53:06] S1: I've been higher... I've been in the higher for longer camp. Okay. And and by the way, if I get lower oil, I'm all for it. I just need to see a plan to get us there. Is Trump going to completely capitulate and give them tolls on the Strait Of Hormuz? The market will love that, but I'm not sure that Trump's ready to do that position
00:53:06 · Daniel Clifton, Michael Batnick, Josh Brown
[00:53:06] S1: I've been higher... I've been in the higher for longer camp. Okay. And and by the way, if I get lower oil, I'm all for it. I just need to see a plan to get us there. Is Trump going to completely capitulate and give them tolls on the Strait Of Hormuz? The market will love that, but I'm not sure that Trump's ready to do that position [00:53:21] S0: right So, Dan, are the questions that clients are asking you more longer term in nature, like what does this mean for data center earnings, or are they like when will this sort of when will the market come down? [00:53:31] S1: So all the above. So my email box today is, what do you think the governor of Texas is really going to do? [00:53:37] S2: Should I buy Micron? Right? But that's That's what they're asking. [00:53:40] S1: That's what [00:53:40] S0: they're asking. Yeah. [00:53:41] S1: Yeah, exactly right. And so it's very short term, but it's, Hey, can you bring your economist in? We have a great economist, Don Ritholtz. We need to know how this is going to impact his capex forecast and his GDP forecast. [00:53:53] S2: Is she that powerful? So here's Is that seat, whoever sits in it, that powerful?