Good Morning Investors,
The week is closing with markets leaning higher, and my outlook hasn’t changed: if August produces a pullback, my base case is that it will occur around next week’s CPI release. Consensus expects the print to reflect tariff impact, but the real opportunity is in the upside surprise, a cooler read that undermines those expectations. That would open the door for indices to push higher into Jackson Hole, where I continue to expect a Fed pivot. In that scenario, any CPI-driven weakness should be short-lived.
Positioning remains deliberate. Alphabet ($GOOG ( ▲ 3.04% )) is still the most undervalued AI play in the Magnificent Seven, and my $230 target stands firm as the market continues to underestimate the monetization potential of its search, YouTube, and cloud franchises once AI integration hits scale. Amazon ($AMZN ( ▲ 3.1% )) is another high-conviction hold, with a $250 target supported by Prime ecosystem strength and AWS’s accelerating relevance in AI workloads. Apple ($AAPL ( ▲ 1.27% )) is back in the frame for the “catch-up” trade I highlighted when it was at $200. A decisive break through resistance could put fresh all-time highs within reach. In crypto, Ethereum’s role as the preferred settlement layer for stablecoins continues to deepen. The network’s fundamentals support a $10,000 long-term target, though I do not expect that milestone this year.
Opening Bell: Quiet Before the Data
US futures are modestly higher, Dow ($DIA ( ▲ 1.94% ))+0.2% , S&P 500 ($SPY ( ▲ 1.54% )) +0.3%, Nasdaq 100 ($QQQ ( ▲ 1.54% )) +0.3%, with the major averages set for weekly gains. The Nasdaq leads at nearly +3%, reflecting tech’s resilience even amid policy uncertainty. Gold futures hit an all-time high after the US imposed tariffs on imported 1-kg gold bars, while oil prices firmed on supply risks.
The tariff story remains the dominant policy driver. President Trump’s 100% semiconductor import duty is being digested as a binary framework: build in America and receive exemption, or face full tariff exposure. This simplicity has created a fresh lens for equity selection, favoring those already positioned with domestic capacity. That’s why Apple’s capital investment plan, TSMC’s US buildout, and Nvidia’s infrastructure spend continue to matter far beyond their own supply chains.
Technology & Infrastructure: From Build-Out to Monetization
Thursday’s launch of OpenAI’s GPT-5 marks a shift in the AI cycle. For two years, the focus has been on building the infrastructure, chips, data centers, cloud capacity, to train ever-larger models. GPT-5’s arrival signals the next phase: turning that investment into revenue. The model’s promised “Ph.D.-level” reasoning and software-writing capabilities raise the bar for competitors, and the fight now is as much about distribution and enterprise integration as it is about raw capability.
Meta’s ($META ( ▲ 2.12% )) $29 billion data center financing, backed by PIMCO and Blue Owl, underlines that the capital cycle is far from over. AI leaders are building long-lived assets to secure compute dominance, not just reacting to near-term demand. These are multi-year investments that create high barriers to entry and long-term pricing power, precisely the kind of positioning that withstands policy and macro swings.
Corporate Highlights: Execution Still Wins
Block raised its 2025 gross profit forecast on the back of resilient consumer spending, a sign that the core payments story remains intact even with discretionary spending under pressure. Expedia lifted its bookings outlook, reinforcing that travel demand is still sticky despite economic noise. MP Materials reported a 45% jump in rare earths concentrate output and a near-120% surge in NdPr production, aligning neatly with the administration’s push for domestic critical mineral supply.
Apple is also in the headlines for less welcome reasons, facing a new lawsuit over Apple Pay’s technology. While this case is unlikely to materially alter the company’s near-term trajectory, it adds to the backdrop as the stock approaches technical breakout territory.
Crypto Framework: Ethereum’s Quiet Accumulation
Ethereum extended gains to hit a seven-month high just shy of $4,000, underscoring steady institutional and retail demand. The network’s centrality to the stablecoin ecosystem is creating a base layer of transactional demand that is largely unaffected by speculative swings. This mirrors what we’re seeing in traditional markets, infrastructure providers capturing recurring revenue streams while others remain hostage to cyclicality. For Ethereum, the breakout setup aligns with my broader thesis: in both digital and physical markets, those who own the rails own the future cash flows.
I like Ethereum treasury stocks here for a move. Sharplink Gaming ($SBET ( ▲ 15.69% )) and Bitmine ($BMNR ( ▲ 12.07% )).
Macro Outlook: CPI as the August Inflection Point
All eyes now turn to next week’s CPI report. A hot print would likely prompt a short-term pullback as the market recalibrates tariff pass-through expectations. A softer number, however, could trigger an acceleration toward new highs as traders position for Jackson Hole. The labor market backdrop, with jobless claims rising but no sign of collapse, gives the Fed room to pivot without appearing reactive. That balance is what underpins my 6,500 S&P 500 year-end target.
From a strategic standpoint, the next two weeks could set the tone for the rest of the year. Tariff policy is no longer a mystery, and monetary policy is on the verge of a dovish turn. Companies with operational excellence and strategic alignment to domestic infrastructure priorities are best positioned to compound returns as those policy winds converge.
Final Thought
The market is at the intersection of policy clarity and capital deployment. Whether in AI, manufacturing, or blockchain, the winners will be those already building capacity for the next cycle. The lesson is simple: preparation beats reaction. In this environment, location, execution, and foresight are the new alpha drivers.
Stay with the names turning structural change into sustained advantage, they will define leadership in the years ahead.
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.