The Squeeze into.....the Wheeze?

Hey Income Traders,

As the market squeezes higher on short covering we've been plodding along with some nice wins in the community: 110% in META. We're up nicely in the Bitcoin Hedged Income book (video link in the newsletter). The Goldman fly is up around 50% - I need GS to get a little higher into the 575 area to make it sweeter. Taking a little heat on the NFLX fly but willing to wait it out (serves me right for getting even a tiny bit bearish on one of my 3 favorite stocks!).

Added another SPY income trade yesterday and hoping for a non-event over the next couple of days. I suspect the pain point is still up in markets - I don't think Powell says anything to rattle them much. He has made it clear that rate cuts are not on the table until data compels him to act. With inflation sticky and GDP soft... the Fed is backed into a corner. That's not great for stocks technically but at the moment they are looking for tariff deals.

The Gamma profile is not great - a 2% selloff could gather steam but without a trigger I do think we drift in this YELLOW market, which remains conducing to small and measured income trades. There is no all-clear so dry powder isn't a bad idea.

Some more details into what I'm seeing:

🔌 Semiconductors: A Tale of Two Earnings

AMD and Supermicro told very different stories in the latest round of AI-related earnings. AMD shares jumped after a strong beat in data center revenue and impressive confidence in forward guidance, despite a potential $800M hit from export restrictions to China. Their $7.4B sales forecast surprised many given the geopolitical headwinds but the market is just generally off the semi train right now - I've been saying for months to not force it in that sector. It's out of favor despite big tech saying they're continuing to spend. Political/trade/national security clouds are just keeping a lid on AI semi excitement. Too many questions, not enough clarity. I do think we need billions of GPUs over the next decade..... but for now respect the charts as a trader. As an investor? A taste.

Also, Supermicro cut its full-year forecast, citing delays and looming tariffs. While the CEO expressed optimism for demand to rebound later this year, the market wasn’t buying it—shares dropped more than 3%. Again, tough space.

💼 The Fed: Paralysis by Uncertainty

With the Fed decision coming Wednesday, the tone was one of hesitation rather than conviction. Former Dallas Fed President Richard Fisher noted the lack of clarity makes action nearly impossible, saying the central bank is in “wait and see” mode until more concrete tariff and economic data emerges.

Michael Schumacher of Wells Fargo sees a growing likelihood of back-end loaded rate cuts—potentially as much as 100 basis points in the second half of the year. However, many on the desk warned that could be too little, too late if macro data turns sharply worse. I don't believe it will. I think the second half could be gangbusters, but for now we trade what's in front of us.

🌍 Trade Tensions & Tariff Talk

President Trump’s “shopkeeper” analogy for trade deals has left investors scratching their heads. While administration officials hint at progress with several key partners, no negotiations with China have even started. Mixed messaging has only added to corporate uncertainty and investor caution.

🚗 Rivian, Palantir & the Market’s High Flyers

Rivian posted a smaller-than-expected loss and two quarters of positive gross profit, unlocking $1B in VW financing. However, a delivery guidance cut spooked the street. Palantir beat expectations but tumbled after weaker international sales and an overheated valuation narrative—66x sales is tough to justify. Fundamentals don't matter until they do. Be very careful with option sales on extremely expensive stocks.

📺 Disney, Uber & Lyft on Deck

Disney announced a new theme park and is up today. UBER, one of my fav stocks had mixed results - a little revenue miss and a little slow on ride demand. The good news: profits higher than expected and margins improving. These are KEY. They are in monetization mode and free cash flow is also 66% higher than last year. Trip numbers are up, gross bookings are up... but again perhaps slowing. Overall not bad. I'm holding.

📅 What’s Next:

• Fed Decision – Wednesday

• Disney, Novo Nordisk, Uber Earnings – Wednesday

• Lyft Earnings – Thursday

• Macro Watch: Jobs, GDP revisions, and ongoing tariff negotiations

Stay tuned—this week could be a turning point across markets.

Catch you guys later.

Hans