Michael Santoli
@michaelsantoli
CNBC talking head. Markets, mostly. Maybe some baseball and movies.
As mentioned, the newsletter will make room for some lighter observations on the interplay of culture and markets. Here's a chunk from today's edition about a blessed joint anniversary we'll celebrate on Thursday...
Robinhood breaks down growth in client assets between new deposits and market gain/loss. Client assets were +$90.1B from Q2 2025. Of that, $75.7B was net deposits. Net market impact was $14.4B - which equals a 5.1% gain from Q2 '25 asset levels. Over that span, S&P 500 was up 20%. Churn and burn.
Robinhood continues to do pretty well. Its clients, less so. The firm grew revenue and operating earnings 32% vs. a year earlier. Transaction-based revenue alone was up 44%. Yet excluding the contribution from "event contracts" - largely sports bets - annual transaction-revenue growth was 15%...
Semis try to bounce off their first contact with the 100-day moving average in nearly four months. Pretty symmetrical stampede higher and lower since early May. Enough for now?
Tech's contribution to GDP growth under the AI binge rivals the '90s Internet buildout. Yet fiscal trends (remember the '90s "peace dividend" and DC gridlock thwarting spending?), the aging population and rising tariffs/trade barriers today leave less room for a disinflationary productivity surge.
Market continues to try to stay on the rails, refusing to overrread Iran headlines, allowing pressure on crowded/volatile semi stocks to dissipate through reallocation to non-tech, holding the broader uptrend - even as erratic flows threaten to knock something loose and the pattern grows indecisive.
Sure, but not the core issue. Media's tortured attempts to explain short-term market moves have been a motif for decades.
So everyone must try to understand what lopsided indexes are/aren't saying about the economy. It's an acceleration of a long-running trend in mature markets. Far easier to create novel ways to trade than to new enterprises to own. Also, doesn't take much to feed people's conspiratorial suspicions.
The price undershot each step of the way vs. what those closest to the physical markets anticipated. I'll be interested in the full evaluation of what might've been missed. Did the market simply intuit that demand could flex - both short-term and structurally - more than believed? From my column...
Warsh's professed desire to return the Fed to a less intervenstionist, more opaque institution reflects a forced nostalgia for the Greenspan era. Rests on some shaky assumptions and would get the Fed back to a time when the plugged-in macro-trader sharpies made their bones betting on policy moves...
My first day back in front of the screens in a week. That's right, fun's over.
And for those who get fixated on how joining the big indexes is an automatic formula for mechanical buying juicing a stock, note that Tesla has lagged the market since it was added to the S&P 500. (Yes, it's possible index membership has kept the tock from underperforming by more...)
While Tesla has trounced the market over the past decade, every ounce of its outperformance over that period to date was achieved in clendar 2020. That's the sort of wild market that was needed to unlock the "Musk premium..."
Total expected net equity issuance as a proportion of total market cap. This assumes $225B in total IPO proceeds alone for this year.
Apollo today noting the number of ETFs exceeds that of stocks, as if this is something to fret over. The ETF industry has surely become a gimmicky runaway marketing juggernaut. But from a market-structure perspective it's no great worry. My response below from when indexes first eclipsed equities.
Headline-writing fail here, a "tight job market" is the opposite of a weak one...
The now-ubiquitous idea that "markets always test a new Fed chair" is overstated. Bernanke started early in 2006, a year before the GFC cracks really opened up. Yellen's debut in early 2014 was in a phase of relative macro calm. But somewhat fun that Powell's first day was Volmageddon Monday...
Cisco is the latest old dog of tech learning new tricks, thanks to AI-driven demand for its hardware. The stock has finally overtaken its 2000 peak, set when it was the Nvidia of its day. But its market cap is well below peak becauSe Cisco spent the past 25 years buying back almost half its shares.
The all-cap software index alone. Moderately encouraging, burden of proof is high.
Again? S&P 1500 Software vs. S&P 1500 Semis, two-year. The approch here is probably to follow Bob Uecker's advice for how to catch a knuckleball: "Wait for it to stop rolling and pick it up."
This should placate everyone, we know how good Americans are at weighing counterfactuals when it comes to allocating blame for inflationary episodes…
This market continues to shift within the AI-buildout theme toward the area of maximum conviction. Which has also meant moving down the value chain from the more sophisticated processors and toward scarce memory chips. Micron is now outperforming Nvidia since the launch of ChatGPT...
Mentioned on air a few minutes ago one odd element of the current tech cycle: The "WORK HARDER, NOT SMARTER" dynamic at its core. Brute-force sprending on physical computing capacity is now seen as as the main near-term edge, with "smarter" promised prodictivity gains...eventually. (Via JP Morgan)
Berkshire Hathaway CEO Greg Abel refers to the company's key concentrated stock positions (Apple, American Express, Coca-Cola, Moody's) as the Core Four, clearly trying to borrow some scrap of legitimacy and greatness from the Yankees 1990s dynasty...
In Omaha to cover the Berkshire annual meeting, the first with Greg Abel, Warren Buffett’s successor, as CEO. A long line quickly formed to get selfies with the new boss when he hit the exhibit hall. We’ll see how long a leash the market gives him after a soft patch in the stock’s performance…
It's somewhat odd given the proliferation of optins-selling strategies was portrayed as a ZIRP phenomenon when money-market yields were under 1%.