The Compound and Friends Why Valuations Don't Matter
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Aug 1, 2025 This chat features Adam Parker, founder of Trivariate Research and former chief U.S. equity strategist at Morgan Stanley. Adam sheds light on what makes earnings season so intriguing for investors and decodes the Federal Reserve's recent strategies. The conversation also touches on the surprising implications of skyrocketing R&D spending in big tech firms and dives into the financial lessons learned from Hulk Hogan's legal battles. Don't miss the insights on navigating today's unpredictable market dynamics and the evolving landscape of investment strategies!
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Fed Focuses On Employment
- The Fed focuses mainly on unemployment, currently historically low, as key to policy decisions.
- Rate cuts are unlikely without rising unemployment, so investors must temper rate cut expectations.
Earnings Reactions Are Nuanced
- Earnings beat doesn't always lead to stock price gains due to prior run-ups and forward guidance.
- Market digests earnings news contextually, affecting immediate price impact.
AI Investment Drives CapEx Surge
- Microsoft and Meta's massive AI-focused CapEx signals a major shift despite gross margin pressure.
- High R&D productivity shows efficient scaling of AI infrastructure investment.
