Markets are selling off pre-market after Yemen declared a naval blockade targeting Saudi shipping and struck two tankers in the Red Sea, with oil spiking and Trump saying Iran will be held responsible.
This is industrials week for me. Chubb and Northrop Grumman both reported strong earnings earlier and I wrote them up on Substack, with Lockheed Martin, RTX and Blackstone landing today. GM's defense subsidiary is a leading contender to build a large infantry squad vehicle to replace the Humvee, with the Army planning to buy 10,000 trucks and 1,200 already ordered in a deal worth more than $1 billion. That ties back to what Shyam Sankar at Palantir keeps saying about needing to build weapons faster and moving toward a wartime economy, which is bullish for industrials.
Using 80% tech as an example, if that is how your portfolio looks, you should have some allocation to financials and industrials alongside it. My own build is roughly 70% tech with the rest in financials and industrials, because those are the sectors that can actually lead a bull market. Consumer staples cannot, and I doubt energy can over a long duration. That is the whole point of my July 21st post, "Stop Being All Tech: Why Your Watchlist Needs Financials and Industrials."
Initial jobless claims collapsed to 187,000, the lowest since 1969, which says the economy is running hot and gives the Fed another reason to consider raising rates. The 10 year sits at 4.7 and the two year at 4.35.
A Jensen Huang clip covers why Wall Street misunderstood DeepSeek and is misunderstanding Kimi K3 the same way, since great open models drive more usage, more Nvidia computers, more data centers and more diffusion into industries. That is exactly what my Substack argued last week about open weights helping the hyperscalers and AI infrastructure.
ServiceNow's GAAP margin drop came almost entirely from $7.4 billion in acquisitions including Armis, with non-GAAP gross margin at 78%, and this earnings season is full of asterisks like that. Alphabet trades around 24 times forward earnings and is sitting on its 200 day near $322. I missed the big run up in Google, and don't own it directly. Rather than trying to pick the next hyperscaler, my suggestion is to buy the Nasdaq 100 on pullbacks, which is where I got lucky buying around $687. Nobody knew Micron would carry that index, and nobody knew Alphabet would go from hottest frontier lab to losing engineers to Anthropic and OpenAI.
Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore.
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Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions.
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