저자: Kevin · 외국인
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연준이 9월 금리인하 가능성을 시사하며 시장은 9월 인하를 약 93%로 반영. 보스틱은 올해 1회 인하만 예상, 윌리엄스는 6~7월 이후 명확한 전망 필요라 언급. 노동시장은 기업 해고는 적고 채용만 둔화된 'Great Hesitation' 국면. 모건스탠리는 S&P500 이익 수정치 개선(-25%→5%)을 강조하며 금리인하·10년물 4% 하회 기대에는 의존하지 말라고 조언, 경기 후행 국면에서 임의소비재·소형주 약세 전망. 마이크로소프트는 딥시크 도입으로 비용 절감, 순이익률 약 37%로 강조. 테슬라는 로보택시 발표 전후 '사실상 뉴스 매도' 위험 언급.
다듬은 글
Federal Reserve just set expectations as to when we should start to see those rate cuts. Remember what J House said about going to zero? They get a little bit of a time frame in terms of when the Fed wants to start. They also talk a bit about the labor market. Morgan Stanley's take on some of the worst sectors to invest in right now.
I'll add my own take to that as well. And Microsoft's deepseek reaction. Is it still evolving? The answer to that is yes. I'll touch on that a little bit on politics and some additional commentary on yes, the Biden situation. But first, it's worth noting a couple things. We actually just made progress on the reconciliation bill.
It was blocked on Friday in committee and it just passed through as some uh folks ended up voting present to help the bill make progress. So, we're slowly but surely making progress on that tax plan. TBD what the final version will look like. But so far it looks like that tax bill is going to end up passing through budget reconciliation which remember only requires a simple majority for revenue related bills.
You could usually use budget reconciliation about three times uh you know per year and this is expected to be one of those. Uh that way Democrats can't block the Republicans passage of the bill as long as they can get it through a Republicans and B the Senate parliamentarian. Another small note to keep in mind is that Buffett plans to skip the stage at the 2026 annual shareholder meeting for Berkshire Hathaway.
This to me just breaks my heart. It's it's just sad because I think once you go into retirement, you're on the downhill slope. That's just my take. Anyway, let's go ahead hit the Fed news this morning. So, Fed warnings this morning. We saw Bostic and Williams talk to us about time frames. And Bostic is the first to actually say something that Jerome Powell has not been saying.
Jerome Powell has been telling us that long and medium- and unconcerning. However, Bostic doesn't care about that medium to longer term end. He says that we're seeing inflation expectations move in a quote troublesome way and that before we move, we need to let things sort themselves out. And so therefore, he only expects one rate cut this year.
Now, I've kind of been teeing up for a September rate cut. I've been saying since earlier this year that even June or July, you're just going to be too early to know. Is the economy going to tank? Is it not going to tank? We we don't really know. So far, the economy is holding up just fine. But Williams came out this morning and also said that we probably need beyond June and July to get a clearer outlook.
Now, this aligns with the potential for a September firsttime rate cut, but it does mean that before we get any kind of panic or break as Jerome Powell says, where we break into the direction of recession and we end up going to zero rapidly or we break into the direction of a sort of a liftoff economy where we've stuck the soft landing and now we're on liftoff and maybe we actually keep rates higher for even longer before we break into that direction.
It'll take some time, says JPAL. If obviously we break towards recession, hey, they can cut to zero very rapidly. But Bonik and Williams were providing that clarity that don't get your hopes up on anything over the next few months as it's just going to take unfortunately patience and time to get that data.
And so markets immediately responded to this and we are now pricing in a 93% chance for a rate cut September 17th. We are only pricing in an 8.4% 4% chance of a rate cut June 18th in about a 37.4% chance combined chance for July 30th. So, in other words, it looks like we're leaning more towards that September period.
Now, something else that I've been talking about with uh course members, that's also something to pay attention to, not just in markets, but a quick note on Tesla. Those of you in the Alpha Report, you know about this. I think one of the reasons Tesla isn't seeing as much BTD buy the dip on some of this Moody's downgrade is because we're getting really close to buy the rumor, sell the news time frame.
If June 1st is robo taxi, sell the news, some people think if we have anything other than a really grandstand Whimoesque showing, there could be some near-term downside in store for Tesla. Just something to keep in mind. That said, the Wall Street Journal has a fantastic piece on what they call the Great Hesitation.
And this is really a reference to, you know, the Great Depression, Great Recession, Great Moderation of inflation. They call it the Great Hesitation. And the Great Hesitation basically just has to do with the labor market. In other words, corporations aren't laying people off, but when it comes to hiring, companies are kind of, we're going to slow down a little bit.
you know, maybe we'll use contractors versus hiring. And the Wall Street Journal says this is really common during periods of uncertainty. And this is especially true in the IT market, especially with companies that are more midsized, like 20 to 100 people. Uh they actually observed, hm, this is interesting.
If the labor market really is softening, why did it unemployment go down to 4.6% from 5% last, you know, last month? That seems good, right? But then when they looked, they realized the IT workforce shrunk 5 to 6%. The entire workforce shrunk because it's so much harder to find a job, especially as any kind of intern or entry-level IT programmer gone thanks to AI.
Even advanced degrees aren't working anymore. And now because applications are being reviewed by AI, a lot of programmers are finding it frustrating to try to actually get in front of an interviewer because everything's just getting fed through AI first. And if you don't hit those particular buzzwords the algos are being asked to look for, you're just not getting the phone call.
And so when you kind of combine this with the Fed and sort of positioning where we are, we're kind of in this like stasis almost. Like when I think of Stasis, I think of like the Jello- clone just kind of like hanging in the vat and we're kind of like it's like kind of a really boring summer is what we're, you know, like stocking up for here.
But frankly, businesses aren't firing people in mass. So, you don't really have a recessionary loss of jobs. If anything, we saw a really good surge of hiring when Trump was elected. Uh, and even leading into the tariff debacle because people were trying to a frontr run tariffs, but well, I guess b front run tariffs and a they were excited about the the the Trump win and potentially a pro business administration.
The the question now though is do those hiring enthusiasms last or do we break to the downside? Do we break to the upside or do we just sort of stay in stasis? It's kind of crazy because it feels like that's where we are. Fortunately, Morgan Stanley gives us a little bit of a guide in terms of what to expect in terms of tailwinds.
So, they say that earnings breath revisions for the S&P 500 are now5% versus negative 25%. In other words, fewer companies revising their earnings forecasts down, which is good. And they actually go as far as saying, do not rely on the two things that could really moonshot our stock market right now.
Number one, a dovish Fed. Don't rely on that right now. It ain't coming anytime soon. And number two, a 10-year Treasury yield under 4%. Don't rely on that without a recession anytime soon. Obviously, if we get a recession, the 10-year yield, all all yields are just going to tank. I mean, that's that's an obvious play.
But Morgan Stanley says the only thing we could really rely on right now for the stock market continuing to go up, earnings. That's it. You've got to pay attention to earnings. And this is actually interesting because one of the reasons we started talking about set trailing stops and enjoy sort of this upward momentum we're getting is because Q1 earnings are of course good and not only good because everybody sort of pulled forward their spending to Q1 but we don't have to worry about Q2 until July.
Uh so in other words we got quite a while to go before we really get end mass those Q2 earnings. And frankly July is just the start of the earning season. most of the Q2 earnings might not actually be out until August. So, in other words, kind of clear path right now just hanging out in the stasis chamber.
Uh that said, uh Morgan Stanley does not see a rate cut this a year and they are bearish on two particular sectors which I thought was very interesting. So they suggest that discretionary goods sectors and small caps both of those sectors are late cycle poor performers. And I think that's an interesting POV.
They say that early cycle small caps can outperform and early cycle consumer discretionary goods can outperform relative to other sectors. That's because people have extra money and they're basically spending at every business across the board. So everybody's a winner. But late cycle, these tend to be underperformers.
They do not perform as well as we're in a later cycle. And that's what a lot of people would argue we're in right now. We're in this sort of late cycle period of okay, things are slowing down. Growth is slowing down. Does that mean we're going into a recession? Nobody knows. But so far, all we know is we're in the trajectory of slowing.
And those are the sectors to stay away from. Now, I would add to that. absent a recession, uh, you know, mortgage companies, Nphase, bonds, rocket mortgage, really tough investments to make right now. They're potentially good hedges for a recession, but who knows when this talked about recessions ever going to show up.
I thought it would show up by the third and fourth quarter of 2026 or sorry, of this year, 2025. Uh, by the third and fourth quarter of this year, it could still happen. But maybe not. Maybe it'll end up getting too late and it'll be the third and fourth quarter or 26 or it just won't come at all. Nobody knows.
And so that's one of the tough things. You really have to have balls of steel to be investing in uh in in these right now just based on where we sit. Although when we start talking like that, it kind of makes you scratch your head. Does it become time to start actually buying those because they're so horribly unpopular right now?
TVD on your own allocations. That said, there's an interesting story out on Microsoft and uh Microsoft's reaction to sort of the deepseek moment and it was really awesome and I really admire sort of the CEO leadership of what happened here. So much so that it it makes me want to be like this when it comes to running House Hack.
Y'all know I see that as my little Birkshire Hathaway. We want to build that into not just a real estate uh company that buys and renovates homes, but also build it into a developer, which we're already doing with accessory dwelling units or even spec build homes or developments in the future, which is really exciting.
Uh and then expand from there. So, I really see that as sort of my the legacy company we're building. And if you want to get in to that investment preipo, remember we have a nonacredited round preo you can invest in. you get paid a 5% yield and the upside in the stock. Should there be upside, knock on wood, I obviously hope that there is a lot of upside because I'm deeply invested in it myself as well.
So, I'm a little biased. But anyway, . For now though, let's talk about Microsoft. So, there's a story out on Nadella's reaction to the deepseek moment. They talk about how in the days after the Deepseek moment in January, there were emergency meetings, uh, contacts with the the company that created DeepSeek, sleepless nights, and ultimately they ended up legitimizing and validating DeepSeek.
They incorporated into Azure as an option for people to choose as an AI model. Uh, and they decided, you know, this is the pure example of the commoditization of AI. It's cheaper to operate. We can save money on this. And frankly, I love it. Now, initially I'm like, "Yeah, but you know, Microsoft has their own AIs.
Like, aren't they competing directly with OpenAI?" And the story answered it. The story was actually about how Microsoft said, "You know what? We have licenses for OpenAI in their bleeding edge model. So, let's let OpenAI keep running the bleeding edge models on the most sophisticated, most expensive, hardest to compute AI possible." But at Microsoft, since we have that license, we've got that site covered.
Why are we going to compete with them? Let's just try to make money off the commodity, give people access to Deep Seek, add our own Azure fees on top of it, and basically just sell the pickaxes. Like, who cares what the pickaxes are selling for? We'll just sell the pickaxes. Or if you ask Copilot a dumb question, no such thing as a dumb question.
Okay, Kevin. If you ask Copilot a dumbass question, they'll just give you a deepseek answer. If you ask a really really complicated answer that's more than encyclopedic and requires some levels of reasoning and self-prompting or otherwise or or time or you know data querying. Well then they might use some of the uh more bleeding edge models like OpenAI.
Now, this Microsoft is pulling back on their own data center projects around the world. And they actually say that data centers are basically a real estate asset. Now, I don't actually think that's a dish on, you know, or a diss on real estate. I think what it is to say is Microsoft is a software business with insane software margins.
Leave the real estate to real estate companies. In this case, that would be a coreweave and we'll just focus on providing the software integration into you know word or outlook or bing or you know whatever. And so as a result, you're seeing Nadella basically say, "Hey, where can we use Deep Seek to basically provide value to people but also save on costs and that sort of reiterates the slowing economy that we're in because Microsoft added another DeepSeek model in March and they were able to rent it for a half the price of an equivalent OpenAI model." Uh, and so it's fascinating also because you're seeing this costsaving which you usually see in a slower economy.
Look at this. The last five years we spent building, you know, it doesn't matter. Spend, spend, spend, spend. It's basically just build everything. Right now, Nadella is telling folks, burn the ships. Basically, shut down things like Skype or whatever. Uh, and minimize the expenses. Let's lay off 3% of the workforce.
Even though that's being branded as just middle management, we know from what we're hearing on the ground, could be wrong, that a lot of people are being affected by this, who aren't even managers in any regard. Uh, and so it to me it screams that Microsoft is actually turning into this insane costconscious machine and I love it.
I think that is so important for business. And again, it's why I'm inspired as the CEO of House Hack, you know, tiny little company, uh, preIPO company that that wants to emulate that sort of efficiency in business. That's, you know, in 2024, we we cut a lot of our expenses. We're still cutting expenses today because we think that's that's very important in a slower growth environment.
Now, let's go take a look at Microsoft because I want you just to see for a moment just how much money this company really makes and the margins that they have, which are really mind-blowing. So, when you look at Microsoft's financial statements, I think there's something you should always remember is look at Microsoft's net income.
$25 billion for three months. Okay? Three months. $25 billion. But I what what I want you to do is I want you to remember that that is the net income number. We're not talking about gross profit here. We're talking about net, okay? Software business. All right? This is why this is the most valuable company in the world.
$25.8 billion net in 3 months. That's insane. That's, you know what, $300 million a day, something like that. Okay. Now, divide that by their total revenue of 70 and their net margin. In other words, when Microsoft gets paid $100 for your, you know, Microsoft Word subscription or whatever, they are putting about $37 into their pocket.
It is such a high margin business. And I have to say, dang it, dang it, dang it. This Nadella guy is just smart. He's brilliant. And it's just going to keep pushing this stock higher and higher and higher because they just make so much freaking money. And while they're making this much money, a 37% net margin, you've literally got the CEO going, "Where else can we save money?
Let's save money by using Deepseek. Let's save money by firing people. Let's save money by quote unquote burning the ships of things we don't need anymore." And I'm just like, "Oh my gosh, this guy's so smart." I mean, look at this. their s their their general and administrative expenses literally fell.
This company is the most valuable company in the world with a 37% net margin. Nobody would tell them that they need to go cut expenses and they literally cut their general and administrative costs by 9.1%. Their sales, so like their marketing department stayed flat. Meanwhile, they grew their top line by over 13%, which is what?
You didn't advertise a dime more and you grew your top line 13%. What? Well, it's because they're going around and they're like, "Oh, we got all these people who are basically pot committed to Microsoft Word." And then they go raise the prices on you. And all of us are like, "Damn you for raising the prices.
How could you, you greedy bastards?" And and then of course, you know, we're like, "All right, we'll just cancel it." But we never do. It's because they got this really sticky service, right? So, I mean, this is just I'm killing myself over here. It's just so impressive. I mean, don't even look at the fact that they've got $80 billion of cash and short-term investments right here available.
And they have current liabilities. If you take out the unearned revenue over here, take their 114 in current liabilities, take out their unearned revenue. I never take that off of current liabilities. $69 billion of current payables, income taxes, other liabilities, acred compensation, current portions of long-term debt, blah blah blah.
So, in other words, we've got an extra $10 billion of cash that we're sitting on, not including the fact that we also have another $51 billion of accounts receivable. Could you imagine waking up and your QuickBooks saying you have pending payments of $51 billion coming your way and you're just like what?
Like yeah, this company is you realize their profit margins are substantially higher than Apple's, right? And this is what I think blows people's mind is they take 37% of the bottom line. I think Apple's somewhere around like 22 24%. We'll look it up for sure in just a moment. But the the reason for that is Apple has to create hardware.
Microsoft is a service business. They're really not creating a lot of hardware. In fact, them wanting to stay out of the the data center play and start reducing some of their data center, in my opinion, it's smart because whoever builds all those facilities, you know, coreweave, if for whatever reason those chipsets become less valuable in future because there's either a new version or we just don't need the newest versions or we don't need as much growth anymore in in all these chipsets, then anybody who's holding the bag of those assets has to write down their inventory and their balance sheet.
Coreweave is probably going to be one of those bag holders. That's why I kind of call them the industry bag holder, which the stock, don't get me wrong, right now financially things are great, okay? Like they can forex their business. They've got excellent cash flow. When people glance at them, they're like they're losing money.
That's not actually true. They've got a crapload of depreciation. Uh it's it's actually in the short term like great. It's just a long-term bag holder. But anyway, look at this. This is Apple 2478 net. Divide that into total sales of 95.3. Their net margin is 26%. Now on their services side, their margins obviously a lot better, but that's like the Microsoft style business.
Their gross profit on services is let's see here 70 75% gross margin which is awesome. And then of course they got the SGNA and all the other stuff and probably brings them down closer to about 40%. Which is roughly in line with Microsoft. But the point is Microsoft's whole business is basically services.
Whereas the majority of Apple's revenue is still products, iPads, iPhones. That services side is growing beautifully, especially with sort of like the Apple cloud features and family features and all the other crap. Apple TV, you know. I actually just watched an Apple at least I think it was. Gosh, what was it?
Is the gorge. I'm pretty sure the gorge recommendation by the way. Uh is an Apple TV exclusive. I think it was really good. They got the same chick from um oh, what's it called? Uh the Queen's Gambit, which was fantastic as well. Uh highly recommend. Really enjoyed it. Super cool. Uh so that said, uh yeah, let's get into the next topic.
So that's uh that's MSFT for you. And I think the takeaway from that is you know bullish Microsoft bullish house uh and then also just sort of bullish this uh this this recognition that the companies that are slowing down their expenses those are companies that are probably setting themselves up to be winners which is a good thing.
You know you want to be careful no matter what you see like Microsoft if we go into a recession they'll be fine. If we don't go into recession they'll also be fine. They'll just be even more profitable. So, that's the beauty about cutting some expenses and just being a little bit more cautious, so to speak.
All right. Uh, as far as the reactions to Biden's cancer diagnostic, uh, I have to say I I personally just think like leave the poor guy alone. You know, you shouldn't wish cancer upon anyone. And it's it's always sad when things become so politicized. Uh, but they did immediately. I mean, it took like 20 minutes for things to get politicized over the Biden thing.
And so now a lot of people like, "Oh my gosh, Democrats knew." Look, Democrats knew that Biden had probably dementia, massive forgetfulness, and that he really wasn't fit for office. That was a disgusting cover up. We know that. Uh and and I think the Wall Street Journal's editorial board actually puts it very well.
They actually go as far as saying that Democrats in the media covering up Biden's health denied Americans another presidential choice. You know, they end up saying that Democrats who actually appropriately called out how bad Biden's health was, like the special counsel who said Biden wasn't fit to stand trial because he was too old and incapable.
Uh this was um special counsel Robert or Mr. Phillips, the Minnesota congressman, saying Biden couldn't win due to his health. They were right. And the Wall Street Journal editorial board is like they are owed an apology. But while while that whole cover up is bad, and I totally agree it's bad, I don't know that it makes sense to assume that Biden purposefully didn't disclose that he had cancer because I personally think he would have probably gotten treatment.
You know, if they actually ran PSA screenings, they would have seen this cancer and they would have started treating him. And I don't think we would see Biden the way he looks in public even today the way he looks if he was undergoing treatment. Now maybe I'm wrong about that. Okay, I could be wrong.
Maybe you could undergo treatment and just look totally normal or fine. But I don't certainly don't look like you've been undergoing any kind of chemo. I don't know that anybody would want to just hide that they have cancer and basically kill themselves uh just to not reveal it. I think what's more likely is the monkey see no evil attitude, which is that because people knew Biden's health was deteriorating.
I think it was more likely that they chose not to run tests on them for fear of finding potential problems. So, I think it's much more likely they did the na na na. We'll just do the bare minimum here. Yep. Yep. Bare minimum looks good, which is also BS, right? But as as far as like they got PSA screens and they're like, "Oh, dude, you probably have cancer.
Let's hide that." I don't think that's very likely. Uh, you know, and Biden's had sort of scares with cancer in the past. He's had skin lesions removed and things like that. You know, this is when people are now quoting him, uh, saying, "Why have cancer, had cancer," or whatever. It's like, "Yeah, he did skin forms." So, people say that, "Oh, he knew he had prostate cancer years ago." An aggressive form of prostate cancer does probably take at least a year to metastasize at least.
Probably more like two to four. So, it's quite likely he had this while he was president. I mean, it's almost certain he had this while he was president given that, you know, he was president as of 6 months ago. It's actually guaranteed he had this while he was president. But again, the I think the bigger question is if they didn't run any PSAs, why would they not?
And do we have PSAs on Trump? Right. the screening panels, the pro prostate uh screening panels uh was probably probably would be a good idea. Maybe that should be a mandatory disclosure, right? But I my guess is this is just a big case of no no, we're not going to look and if we don't look, we don't have to disclose anything.
You know, it's kind of like it's kind of like a seller for real estate who's kind of like, hey, um um yeah, man. I I haven't been to the property, so I can't really disclose anything. And then the buyers are like, okay, well, what if it's a crap hole? like why don't you go there and look? It's like nah, I don't want to look cuz then I might have to say, you know, it's like now the Wall Street Journal editorial board goes a little further and they get pretty aggressive here.
They actually say Jake Tapper from CNN is totally complicit in this cover up. Uh they say that uh Mr. Tapper quoted a White House dismissal of the stories regarding concerns around Biden's health, including sneers that the Wall Street Journal, who is reporting on Biden's health, is simply an organization owned by News Corp, which is run by the Murdoch, as if that rebutted the story.
Uh, basically saying Biden is fine, totally dismissing any concerns around Biden's health, and then interviewing a Democrat who dismissed Biden's health issues. The Wall Street Journal editorial board basically says Jake Tapper is complicit in convincing people to vote for Biden or support Biden, which if Biden dropped out in 2023, they say maybe Democrats could have had a different choice and maybe Democrats wouldn't have been stuck now with Trump because there could have been a reasonable candidate who was platformed, somebody who actually won a primary unlike Kla Harris who didn't.
So, the Wall Street Journal editorial board suggests that as a journalist, like you should be exploring the truth. The fact that you hit it up, you know, hit it makes you complicit for now having Trump so Democrats can't complain. In other words, uh, now they also suggest that Jill Biden is heavily to blame.
Now, this one goes deep because they go as far as saying that Jill Biden should know better than anyone else the health condition of Joe Biden and that it's actually in part Jill who deserves heavy blame. The Biden family, especially Jill Biden, she's she more than anyone could see his decline. Yet, Democrats say the first lady was more determined than anyone that Joe could run again.
Wow, this is intense. Anyway, there you have it for today. Make sure to check out house hack over at househack.com. Open to nonacredited investors. PreIPO investment. You get 5% yield plus all of the upside in the stock. Imagine investing in venture capital investment that pays you 5% paid out to you on a monthly basis and you get the upside in the stock.
Now, obviously there's risk with every investment. It's an investment, right? So, it's not like guaranteed it can't go bad. But let's just put it this way. I'm all in on this baby. Well, heavily exposed to the company. I'm physically, mentally, everything about me is all in on it. Uh, and and I'm I'm very very excited about the company. So, folks, go check it out. Houseack.com. .
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