The Week That Is

In a market that seems to be disconnecting headlines from reality, Vijay Marolia says investors should be looking to be shown different kinds of proof, rather than following the herd. So when high capital expenditures from artificial-intelligence plays have come under question and the market has reacted harshly, Marolia, chief investment officer at Regal Point Capital, says it's a clearance sale worth the attention of long-term shoppers. But single-stock futures — launched July 27th by CME Group — are just a different form of gambling that will leave most investors frustrated, and which he never would have used for ordinary consumers during his days as a financial planner. Plus, Vijay talks about how high electric bills — jacked up by a heat wave that has caused high usage but also by energy concerns — are the extra cost consumers are not talking about while they are busy complaining about gas prices. Because electricity costs are even less avoidable for most consumers than gas bills, Marolia notes that this is a pain all of us are bearing, but that we also should be preparing for it in our day-to-day money management.

With earnings on tap this week for Alphabet, Intel, Tesla and more — and after a week in which IBM shares were cut by a quarter in a single day — Vijay Marolia, chief investment officer at Regal Point Capital says that Mr. Market is showing his "manic depressive" tendencies, getting so excited by guidance and potential that the reaction to positive earnings has been horrible stock action. The good news for investors is that Marolia believes that action — which is part of why technology stocks have been on the decline for the last three weeks — is overblown, creating a buying opportunity for aggressive investors. Marolia also discusses June's inflation reading, and whether investors should be more focused on the positive — the number was down significantly from May — or the negative (still up sharply from before the conflict in Iran), noting that the continuing emotions may depend on whether the trend remains positive next month amid rising action in the Middle East.

With Korean chip maker SK Hynix having a record launching for its domestic IPO last week and ASML Holding slated to report earnings on Wednesday, chip stocks are again proving that they have the power to drive portfolios, and Vijay Marolia, chief investment officer at Regal Point Capital, says investors need to balance the big numbers with appropriate caution so that they can profit from the rise without getting burned by the volatility. He also looks at how financial and banking stocks could be in for a rough earnings cycle when they start reporting results this week, with their numbers perhaps showing how right or wrong they were in anticipating how the Federal Reserve and its new chairman Kevin Warsh would respond to economic conditions. Plus, housing affordability remains an issue, but with new legislation slated to help, Vijay looks at how the picture might be changing.

There were a lot of big celebrations over the weekend, and Vijay Marolia looked for fireworks beyond those celebrating America's big birthday. Marolia, the chief investment officer at Regal Point Capital, Amazon, celebrating its 32nd birthday and Tesla celebrating a big forthcoming manufacturing announcement about a key change to its business, so he digs in on each of those stocks using his "five-lens approach" to discuss whether the companies should be celebrated in investor portfolios. And while Vijay's invitation to the Taylor Swift-Travis Kelce wedding apparently was lost in the mail, he digs into the numbers of the extravaganza to discuss whether the couple spent "too much," and to show how their party might give ordinary investors and consumers the permission to spend more without feeling financial or emotional regrets.

Micron Technology had another stellar quarter and looks poised for more of the same and while Vijay Marolia continues to ride the stock — one he called out correctly as being a bargain when its stock price struggled despite great earnings numbers three months ago — he does see some potential troubles that could make the ride bumpy. Still, Marolia, the chief investment officer at Regal Point Capital, likes the looks of Micron, and he dislikes the looks of Nike, which is getting all sorts of World Cup attention but which he says could struggle when it reports earnings this week and beyond, facing smaller margins, particularly compared to rival adidas. Plus, Vijay looks at whether the A.I. revolution could have the unexpected consequence of triggering another wave of inflation.

Kevin Warsh, the new chairman of the Federal Reserve, made his debut last week, and took a hawkish stance, gave no dot plot or forecasting help, and held the central bank's statement to a terse 130 words; Vijay Marolia, chief investment officer at Regal Point Capital, says it's a good start, and a sign of better times ahead. He also discusses the news that Charles Schwab Corp. is planning to enter prediction markets, noting it will both speed up acceptance of this form of gambling while also making it more likely that prediction markets come under regulatory scrutiny soon. Plus, Marolia gives his take on why housing affordability issues go well beyond high interest rates and limited housing supply raising prices, noting that once consumers find a home they are still facing dramatically increased taxes and insurance costs, further exacerbating the problem.

SpaceX launched its stock with a record-breaking initial public offering last week, but the rush of money to the shares didn't change the mind of Vijay Marolia, chief investment officer at Regal Point Capital, who notes that the company's "total addressable market" may be the size of the entire GDP for the United States, but the issue is what the company is actually addressing and how much market it can capture. With the next big IPOs from Anthropic and OpenAI already in the pipeline, Vijay says it's easy to think 2026 is the "Year of the IPO," but it may be more the year when the venture capitalists opted to cash out, so he's urging caution. Another note of caution comes from recent statistics showing that hyperscalers have pledged nearly 100 percent of their incoming cash flow to capital expenditure projects; that level of spending from hot stocks is reminiscent of the telecom companies during the Internet boom, which lasted until the spending trend turned to more realistic, standard levels. While not calling it a bubble, he does worry about this particular similarity, in part because the market and economy have been driven higher due to the emphasis on future capital expenditure spending.

Broadcom shares dropped 15% despite on the day the company announced it had solidly beaten earnings expectations, but Vijay Marolia, chief investment officer at Regal Point Capital, says the problem was that management was punished for "sandbagging," the practice of understating expectations so that they are easy to beat; Broadcom held future AI-driven revenue projections steady, triggering Wall Street's reaction.

Markets also reacted negatively to a solid jobs report last Friday, because the good news on jobs might mean bad news for a rate hike, something the market is still hoping to avoid, even if Marolia thinks it can weather the hike storm without significant damage.

Plus, Vijay checks in on Bitcoin, which has lost about one-quarter of its value over the last five weeks, testing the faith of traders. While making the case that Bitcoin could drop further from here, he suggests this is a buying opportunity for long-term investors wanting to make a small, permanent allocation to the cryptocurrency.

Mounting credit-card bills are a sign that consumers may be reaching the end of their [credit] limits, more than low sentiment numbers. Vijay Marolia, chief investment officer at Regal Point Capital, discusses how faltering consumers could drag down the rest of the market, if they wind up reducing spending, cutting into corporate earnings and curtailing the profit growth that has driven the market back to record levels. Marolia also discusses the upcoming wave of big, brand name initial-public offerings, but says this IPO boom is more about venture capitalists wanting to lock in profits than it is about screaming buys for average investors. Plus, he discusses whether attempts to regulate prediction markets will have much impact on an industry that has been growing, unfettered, faster than even the artificial intelligence world.

Vijay Marolia, chief investment officer at Regal Point Capital, has been banging the drum on the troubles with higher inflation for longer, and reveals this week that his superhero alter-ego would be "Captain inflation." But because Marolia's primary tool is a reminder that investors need to adjust to inflation, he needs a sidekick with power, and he gets one this week in Kevin "The Hawk" Warsh — Robin to Marolia's Batman — the new Federal Reserve chairman who gets his first crack at inflation later this week. Marolia covers what he expects from Warsh and how he expects the market to respond, plus gives his take on the wild action in the bond market and on whether the consumer can keep spending — thereby propping up the economy — amid higher costs and lower confidence.