Executive Wealth Management of Raymond James

June Market Commentary: The Age of Altruism?

The largest IPO in human history landed today. My response? Yawn! That is for now. My sense is this may reflect elevated levels of market enthusiasm.

I see so many red flags that it is hard to know where to start. Let's start with the purveyors of this deal stating they will make a record number of shares available to retail investors (little guys and girls), as they are often left out. How sweet, out of the kindness of their hearts. Listen, I've been in this business for 33 years. The last time any institution did anything for me out of the kindness of their hearts, including the most recent, would be zero! Yes nil, but every investor has to make their own decision based on their individual goals and risk tolerance. Also, the indices have changed so many rules that have been in place for decades to accommodate this deal. Again, if it's going to be such a great deal, why the rule changes? And don't get me started on the astronomical valuation of this deal. Infinity and beyond, baby!

With the launch of this IPO, there has been a mad rush by other AI companies to announce their own public offerings. This comes as the intellectual giant Bernie Sanders has floated the idea that US taxpayers take a 50% equity stake in AI companies, and, of course, President Trump has signaled he likes the idea. Let me get this right: The US government should pour billions of dollars into companies valued at over a trillion dollars that are burning capital faster than Sherman burned Atlanta, with no clear path to profitability. And oh, by the way, the WSJ and FT verified the OpenAI CEO Sam Altman had been privately lobbying for a government stake in AI companies.

I am no tech genius, but I have something more critical, good old-fashioned common sense. Common sense tells me there has been too much circular financing to develop a product that is becoming a commodity. Add to this that large purchasers of tokens, which is how these AI companies generate revenue, have now told their employees to cut their use to save costs.

I have written in recent missives (Ghost of Christmas Future) that when this party comes to an end, it could come fast while delivering significant discomfort.

As for current market technicals, the continued market pullback this week has completed a weekly chart "swing-high" on the Dow Jones Industrials. However, with only two of my three technical indicators being triggered to the downside, a technical "sell signal" has not yet occurred. The good news, in my experience, is that when technicals are as stretched as they were last week, not seeing a sharp pullback could be anecdotal evidence that the end is closer than believed.

Minutiae minute!

CNBC today, in their news brief, stated that six years ago, there was a deadly attack at the US Capitol, and Democrats are marking the day by holding non-formal hearings. Interesting, if I recall correctly, there was only one death, which was the death of a "5'02" unarmed woman who a Capitol police officer shot.

I worked as a cop for 7 years, and back then, trespassing was a misdemeanor and not a capital offense!

Shame on CNBC and shame on the Dems!