Trump backs bitcoin, small caps rise: Asking for a Trend

On today’s edition of Asking for a Trend, host Josh Lipton breaks down some of the biggest stories and trends from the trading day.

Former President Donald Trump is scheduled to speak at the Bitcoin Conference on Saturday, July 27, despite previously calling the cryptocurrency a “scam.” BTC Inc. CEO and organizer of the Bitcoin Conference David Bailey explains: “Donald Trump is a businessman first and foremost, and he sees a good opportunity. And bitcoin is the greatest opportunity for this country.”

He calls the Biden administration’s sentiment toward bitcoin (BTC-USD) “horrendous,” and as the industry aligns with Trump, they are going to “send a message to the Democratic Party that that they’re on the wrong side of this issue. And that it would be much more productive for them to work with our industry rather than to banish our industry.”

Yahoo Finance senior markets reporter Jared Blikre breaks down some of the trends driving the market action on Tuesday. He focuses in on small caps stocks, which are tracked on the Russell 2000 (^RUT), as they have outperformed large-cap stocks on the Nasdaq 100 (^NDX) for five straight days. Meanwhile, Cyclical sectors, like industrials (XLI) and the homebuilder category (XHB), have also been surging within the last few days.

Market Domination host Julie Hyman breaks down Amazon’s (AMZN) falling multiple in Tuesday’s Chart of the Day. The stock is currently trading at 32 times its estimated earnings, well above the Nasdaq 100’s (^NDX) multiple but well below the 10-year estimated earnings average.

Finally, Josh Lipton checks in on some of the stocks moving the most in after-hours trading as shares of Five Below (FIVE), Spirit Airlines (SAVE), and JB Hunt Transportation Services (JBHT) all slide lower

This post was written by Melanie Riehl

Video Transcript

Hello and welcome to asking for a trend.

I’m Josh Lipton for the next half hour.

We’re going to be breaking down the trends of today that I move stocks tomorrow.

There is a lot to keep track of.

So we’re focusing on what you need to know to get ahead of the curve.

Here’s some of the trends.

We’re going to be diving into another record day.

The Dow rallying 700 points for its best day in more than a year in the Small Cap Russell 2000 closes up 3%.

Bitcoin’s gains were far more muted from its Monday surge as investors up the odds of a crypto friendly Trump presidency.

But the broad market rally aside A I still one of the hottest trades on Wall Street server storage company, Super micro computer, which is rallied more than 200% in the past year is set to replace Wall and the NASDAQ 100 index later this month, we’re going to hear from the CEO later this hour and get those carts ready.

Story continues

It’s prime day, Amazon’s two day shopping.

Bonanza kicking off in a show of dominance for the E commerce giant shoppers are focused on deals.

But investors will look to Amazon growth and margins during the event and take a closer look in our chart of the day, Donald Trump affirming he will speak as scheduled at a Bitcoin conference coming up later this month, that’s after an assassination attempt over the weekend.

But the former president’s support of Cryptocurrency is relatively new.

Trump has previously deemed it a scam when he was in the White House.

But now the 2024 hopefully is singing a very different tune.

Thanks to the efforts of crypto industry insiders and join me now is David Bailey BT C INC CEO and organizer of the Bitcoin Conference.

David.

It is good to have you back on the show.

So Trump’s gonna be participating in the Bitcoin Conference.

Uh David, that’s July 27th.

How did that come about, David?

Well, first off Josh, thank you for having me back on the show.

And yeah, we’re thrilled to have the president speaking in what is going to be a historic speech on, on Bitcoin policy um and his, his agenda uh as of the new administration, uh We’ve been working with the Trump campaign for several months uh advising them on uh different policy uh platform items that our industry cares about our community cares about and really helping lay the case for the amount of votes and the amount of dollars that our industry can deliver for the campaign.

So, um we’ve been very thankful for their support.

Um Donald Trump is a, is a businessman first and foremost and he sees a good opportunity and Bitcoin is the greatest opportunity for this country.

So uh uh we’re, we’re very thankful to be partnered with him and Dave, you know, we know there.

Um Trump wasn’t always a fan of crypto what changed there, David?

Is it, is it what you suggested there or is it just, you know, has it come down to dollars and votes?

Yeah, I mean, I think uh for most people, they don’t start as a fan of Bitcoin, most people when they hear about Bitcoin, they think it’s a scam.

Uh That’s how I got started in Bitcoin.

That’s how Michael Saylor got started in Bitcoin.

In fact, Michael Saylor’s first tweet uh uh on the topic is, you know, once the government figures this out, they’re going to shut this down.

So, uh I think, you know, the biggest advo bits of Bitcoin start as the biggest skeptics.

And then, you know, they go through uh a journey where they come to understand the technology better, they come to interact with it more and eventually what seems like a scam at first uh uh eventually kind of uh hits home as, as fundamentally uh uh uh innovation that’s transformative.

And David, I, I know you’re a fan of Trump and from what I’ve read, um you’re gonna be hosting a fundraiser forum in Nashville.

Any concern though, David that, you know, we’re sitting here in July and Trump and Vance don’t win in November that Biden does any worries.

You would have that.

You know, maybe you put all your eggs here in one political basket.

Well, we are running a fundraiser for the president in Nashville.

We want it to be a record breaking fundraiser.

So we are working around the clock.

I’ve, I’ve been on phone calls all day for about two weeks straight, raising money for the president.

Um So we are, we are eager to show him what our industry is able to deliver and show him how much we care about this topic.

Um You know, our industry considers ourselves single issue voters, meaning that, you know, your policy on Bitcoin is what’s going to determine how we show up at the ballot box.

Uh Your question about, you know, are we worried about putting all of our eggs in one basket?

You know, the way the Biden administration has treated the Bitcoin and crypto community has been horrendous.

Um And what do you, what do you mean by that, David?

When you say horrendous, uh they have uh had the sec give um awful guidance uh uh jail or prosecute uh legitimate businessmen and entrepreneurs that are trying to build great technology businesses in the United States.

They’ve suggested um a tax regime for our industry that if implemented would, would devastate the American Bitcoin industry.

Um They’ve targeted Bitcoin miners claiming that, you know, they are fundamentally uh dangerous to the environment when in fact, Bitcoin miners are investing billions of dollars into America’s infrastructure and energy infrastructure.

Um The, the list goes on and the president actually just vetoed a bill that would have given us financial institutions the ability to custody digital assets on their balance sheet.

And so, you know, uh uh he, he’s, he’s holding back the, the, the our industry in the United States and he’s giving other nations a massive competitive advantage over um the state.

So, uh just to, just to, just to this is to play devil’s advocate.

Um could someone counter and give me, give me your take on this.

But at the end of the day, you know, spot Bitcoin ETF S got the green light.

Reportedly, you probably saw this David, you know, spot Ether ETF S are on the way.

What do you say to that?

We had to sue the SEC and, and do a multiyear fight against the SEC to get there, the, the spot ETF S should have been approved five years ago.

So, you know, if there, if there is one thing I would, I would say, I wish Trump had done differently in his last administration, he should have approved the spot ETF S. And so, um it’s been a nonstop fist fight with the Biden administration.

And so frankly, at this point, we feel like we don’t have much to lose um and what we hope is that by showing up for um the Trump administration and, and let me be clear, Bitcoin is, is bipartisan.

Bitcoin is a technology, it’s a tool.

Um You know, it, it does not have a political leaning or a prescribed political faction.

Um But uh uh I if, if you’re going to come after our industry, then, you know, our industry is going to defend itself.

And so what we hope is that by showing up big for the uh President Trump, by helping him win the White House, we’re going to send a message to the Democratic Party that, that they’re on the wrong side of this issue and that it would be much productive for them to work with our industry rather than to banish our industry.

You know, there are over 50 million Americans that own Bitcoin and other crypto cryptocurrencies that is a massive voter block.

And there used to be an old political adage that people vote their, their pocketbook.

Bitcoin is people’s pocketbooks today.

So the Democratic Party is, is aligned with the public and we’re hoping that by, you know, making ourselves heard um in this election, uh we’ll make ourselves heard in, in all the future elections as well.

It is impressive.

David, uh the way crypto has become an issue in this campaign in this, in this election, we always appreciate you coming on the show.

David.

Thanks so much.

Thank you for having me the S and P 500 Dow closed at a fresh record high with small caps shining bright Yahoo Finance’s Jared Blick joins us now with the takeaways of the trading day, Jared Josh, small caps are on fire.

We have never had a five day period where small caps outperform large caps.

And I’m talking about the Russell 2000 versus the SP 505 100.

We have never had that ever.

And I’m gonna show you a comparison.

This is uh the Russell 2000 is the NASDAQ 100 over the last five days.

You’ll notice that the NASDAQ 100 is negative.

Whereas the Russ Russell 2000 up 11.5%.

This just does not happen that often.

I really want to underscore that and it’s not just the small caps, it’s also the smaller large cap.

So you talk about the S and P 500 versus the 4 495.

This is the S and P 500 which is up 1.5 points.

But you, you compare it to its equal cap.

That’s where everything gets an equal vote.

That is up almost 5%.

So just a huge, huge uh break up by small caps here.

So small caps.

So we’re waiting for them to work, we’re waiting for them to work.

Now they are working.

Now, I have to ask you technical.

Let’s look at the chart.

I mean, do they now look, actually the small caps look over extended.

Now, you know, that’s, that’s a decent point.

That’s a fair point to raise.

Uh I was talking about the last five days, you know, you look at this up 11.5%.

That’s a big amount.

So, yes, I think temporarily you might see a little bit of a slowdown, but this is a five year chart.

So that’s a pandemic mess in there.

What’s happened is small caps just recently broke out of this multi year base.

And so this tends to get momentum.

Now, what usually happens?

What I would expect to happen is maybe we do come back a little bit but that prior resistance should now act as support and that’s how you gauge the health of the new trend.

All right.

Next Jared point number two.

All right.

Uh I’m on pins and needle here too.

Let’s see, see what we got.

Oh, by the way, I just want small caps.

I forgot to show this chart.

This is coming off the worst six months performance ever.

Uh And that’s relative to the S and P 500.

So just kind of underscores that cyclicals are surging.

So what has been working?

We talked about small caps, but you look at even the large cap sectors, industrials, materials only broke out within the last 5 to 10 trading days.

And in fact, you look at the catalyst and you think about the catalyst in this market.

A lot of that was last Thursday, but a lot of these trends started a day or two before.

So over the last five days we have industrials up 6% real estate.

That’s more of an interest rate, story, material, cyclical finances, finance more of a value sector there.

Energy value.

But my point is all of these, all of these fringe sectors which had been beaten down or which hadn’t done much for a while.

I shouldn’t say beaten down, but hadn’t done much for a while finally perking up.

Let’s take a look at XHB.

That’s home builders up 16% over the last few days.

Here’s a five year chart and you can see it was consolidating for much of 2024.

You can see that in the year to day chart and it just broke to the upside.

Look at that.

So, you know, kind of back to your last push back.

This is a little bit too far, too fast.

But when we take a look at where we expect it to go next, we might come down a little bit.

But you want that prior resistance uh to become support.

We talk about small caps size guys.

What about, what about me mag seven big tech, you know, mag seven has not done that well over the last five days.

And you can see this in the NAS 100 chart where we have meta down about 7.6%.

Amazon down 3% you know, Apple kind of bucking the trend.

And by the way, going back to 1980 Apple does really well in August.

So, you know, another few weeks maybe.

Set your, I wonder you think that’s just, uh people getting ready for Tim Cook to take the stage in September on the other shiny new.

This goes back to Steve Jobs.

This predates the iphone.

It predates everything.

August Apple.

I don’t know.

Investors love it.

Uh But to your point mag seven here not doing so well.

Um The mega caps, you know, they had their day in the sun but they’ve fallen off a little bit.

All right.

Rotation.

Yeah.

You know what it, that’s exactly what it is.

Um Don’t give that short trip.

Sector rotation is the lifeblood of the bull market.

All right, we wanna take a look at seasonality, seasonal.

You know, we’ve, we’ve had so much, so much bullets bullish seasonality here.

It’s like a bullet.

Um I’ve been showing this, this chart.

This is the 1st 10 days of the, in the last 10 days of the month.

This is what we just came out of.

This was the 1st 10 days, business days, trading days of July and it’s over and you can see the, the last 10 days, which is where we’re heading into right now.

Just a little bit of a blip that’s not negative, it’s just not positive.

So we might have seen a lot of stuff kind of get pulled into this, uh, seasonality here and guess what?

We don’t see much happening until middle of August that’s looking at the S and P 500.

We can also look at the VICS.

Um, here’s where we are with the VICS purple is what usually happens in an average year.

This goes back to 1990 the beginning of the VICS.

So, what I’m looking for is that first spike up there?

This happens at the beginning of August and that’s where I might expect to see a little bit of vol, more volatility, maybe a little bit of a sell off there.

So second half of June, I’m not expecting too much in terms of seasonality plays, but at the beginning of August, I’m starting to see a little caution there.

All right, Jared, thank you, my friend.

Thank you.

Still to come.

We’re going to hear from the CEO of Super Micro Computer as the company gears up to join the NASDAQ 100 index.

Stay tuned more.

Ask me for a trend on the other side, NASDAQ announcing the addition of Super Micro computer to the NASDAQ 100 starting next week.

Stock having a meteoric rise this year.

It’s something more than 200% year to date, even outperforming NVIDIA and joining us now to talk about all this is super micro computer, Ceo Charles Leong Charles.

It is good to see you.

So let’s let’s start with that news, Charles.

You are joining the NASDAQ 100 starting uh July 22nd, walk us through Charles.

Just what this means is a milestone for you.

The company, your employees.

Yeah, thank you, Josh.

It has been a great honor and we are very happy to be listed in uh neat one N A company.

Uh That also mean that industry recognize our green computing, our time to monkey with new technology and especially our cooling recently that really help customer reduce their energy cost, reduce carbon who print and make their data center available online earlier because of that power consumption.

So it’s a great owner and we are very happy to continue uh grow our company in green computing in optimized data center uh for A I and Charles.

Um Typically, when a company is added to one of the indexes, we do see a little more upside as various ETF S and index funds, add the stock with your stock already up so much.

What is the revenue and earnings growth that you are predicting?

And has the stock gotten a little ahead of itself with the huge gains that it’s seen?

Yeah, thank you for the question.

Last two years, we have been growing a lot.

Indeed the last year, more than double and I believe the strong growth will continue because the A I boom is just beginning.

And people like our energy saving, like our building block solution for specific application optimized solution.

So we are very happy for that and uh company continue to uh uh accelerate our production capacity.

Even in Silicon Valley, we just add four more new building recently.

Uh The defense is strong and we are we are preparing to service the market uh quicker and better.

Charles, you know, um your stock has enjoyed just a remarkable run but you do have competition, right?

Um Dell H pe other server makers.

These are big names.

What is your competitive advantage?

Charles?

Oh Our advantage including technology is time to market.

When our partner vendor partner have a new chip, new architecture available, usually we are able to bring the optimized system to our customer earlier and not just earlier, but with uh energy saving with uh based uh optimization for performance, for easy maintenance.

And we have a customer on site employment, make the job easier for our customer so that they can bring new technology to online uh quicker as quick as they want.

So uh also our production in Silicon Valley, there had been another advantage uh customer work with us in our factory and very did uh optimize everything.

Uh We make a rack scale uh product play.

So when we ship the rack to customer site, customer can go for online in a few days.

So they are ready to be online in a few days.

So that’s uh some of our uh advantage compared with others.

I’m curious not just about competition for customers but competition for the building blocks for uh your servers and your products.

I’m talking about the chips.

Of course.

Now I know that you all have partnered with NVIDIA as the sort of the building blocks for your servers.

But are you getting the supply that you need to meet the demand that is out there right now?

Because there’s a lot of competition, not just for customers but for the chips to build what you guys build.

Yeah, we are very lucky indeed.

Since day one, I founded a company in 1993 we design our product build our product based on building B solution.

And after 31 years refining redesign improving.

Uh indeed, I surprise myself.

Our building B solution have been a very powerful tool that help us design, manufacture a new product, come to market it quicker and also with better quality, better cost structure uh able to leverage inventory more efficiently, easy to support a customer on site.

So um uh it’s imagine architecture.

And since day 1, 31 years ago, again, I did not know the F post solution can be that powerful.

So we are very lucky.

Uh We have a good architectural and a good partner to work together, you know, uh a broader question for you, Charles.

Some argue that they, they think about A I right now and they, they argue we really at this kind of historic moment, you know, you’ve heard NVIDIA Jensen, Juan talk about this, that, you know, Jensen will say, you know, the next industrial revolution has begun.

That’s how he describes it.

Do you see it that way?

Charles.

Uh Yes, Jensen is uh like a genius, right?

He has been uh have a very good vision and we work with them very closely.

Uh So we believe uh we both believe the A I boom is just beginning and A I will continue to bring lots of advantage to uh human being.

The society makes things more precise, more, perfect, more efficient, uh even more power saving, right?

So improve people’s uh life quality and improve people’s uh education system culture.

I mean, uh in that area.

So we are very happy to uh uh work with the industry leader.

Continue to deliver the uh fully uh optimized solution to, to the market.

Charles.

Thank you so much for joining the show today.

We appreciate your time.

Thank you, Josh and Julie.

Thank you, Amazon stock trades at 32 times estimated earnings which is above the NASDAQ one hundreds multiple, but below Amazon’s 10 year average.

Now finances Julie Hyman, Georgia now with a closer look.

Yeah.

And this chart of the day prompted because it is Amazon prime day or prime days really because it lasts two days here.

And even though a lot of the reasons that people look at Amazon and not necessarily because of its retail business, it’s because of things like Aws, for example, still it is a spur for some investors to take a look at the stock.

JP Morgan, for example, estimates that gross merchandise volume, that is the total value of stuff sold on Amazon during its prime days rose by 12%.

Uh this time around to about $12.4 billion.

And he says a lot of that wouldn’t have happened if it weren’t for prime day and the deals that it spurred.

So that brings me to the multiple here, the price to forward earnings.

Now Bloomberg puts it at around 3233 here, which is indeed higher than the NASDAQ one hundreds and higher than some of its competitors.

But it is cheap on a historical level as we have seen those uh shares rally this year by more than 25% earlier.

Today, we heard from Gil Luria, an analyst who covers the stock and he talked about sort of the proposition of why people would be looking at Amazon right now.

We actually think Amazon at the end of the day may have more A I business than any of these other companies.

Aws is the biggest hyper scalar and it’s done a lot to catch up to Azure in terms of A I capabilities.

And yet, Amazon is getting very little credit in terms of multiple, it’s trading at, at average multiple compared to its historical rates.

And so we think that’s where when they get more credit, that stock will outperform.

And this at a time where the operating margin for Amazon is projected this year to be around 10%.

That would be about double what it’s been on average over the past five years, Josh.

All right.

Thank you, Julie.

Now, let’s take a look at what’s trending here after our shares of five below sliding after the retailer announces a CEO transition and second quarter guidance, Joel Anderson stepping down as CEO and will be replaced by the company’s CEO O Kenneth Bull retailer also slashing his earnings guidance for the second quarter five below.

Now seeing earnings per share of 53 to 56 cents.

That’s down from the 57 to 69 cents previously forecasted company also expecting a sharper decline in same store sales than earlier thought.

Also watching shares of Spirit Airlines, the airline cutting its second quarter revenue guidance and the company saying that’s mostly result of disappointing non ticket revenue.

It’s got revenue to come in at roughly $1.28 billion.

That news also weighing on shares of other airlines after hours including jetblue and Southwest and turning to JB Hunt shares of the transportation giant sliding after reporting second quarter earnings below Wall Street estimates revenue for the quarter also falling below expectations total operating revenue decreasing 7% compared to the prior year.

That’s a wrap on today’s asking for a trend.

Be sure to come back tomorrow at 4:30 p.m. Eastern for all the latest market moving stories affecting your wallet.

Have a great night.