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Microsoft Moves Like a Microcap

07-18-2023

This morning's macro data, in particular retail sales, was on the weaker side. That boosted fixed income, which helped the equity market to some degree, although the performance through midday was pretty lumpy, with the Nasdaq lower and the S&P only slightly positive. Then around noon, a Microsoft 365 Copilot price increase caused its stock price to spike about 5%, which boosted the entire tape to some degree. With an hour to go, when I had to leave, the market was up almost 1% on the day.

Away from stocks, as noted, fixed income was a little higher while green paper was about flat. The metals picked up their heads, with silver gaining 0.75% and gold over 1% while the miners joined the party as well.

Moving and Shaking In company-specific news, a friend of mine met with the new CEO of Wesdome and was very impressed. I also have a Zoom call with her in a couple of days and will relay any impressions that I think are meaningful.

Regarding Enovix, today it made a small announcement that I don't think was that important, but it would appear some sort of a short squeeze is taking place. I point that out because the company is slated to report news next Wednesday and between now and then things could potentially get a bit wild on the upside. Thus, I reduced my position slightly due to its size and the strength of the stock price relative to any material changes in the business.

Expect Some Volatility Speculative stocks such as this can be difficult to manage because often there are wild price swings that don't necessarily correlate with the underlying business. We saw this on the downside and now we're seeing it on the upside. I'm not suggesting anyone take any specific action. I'm just noting what I have done (mostly due to the size of my position).

Positions in stocks mentioned: long WDOFF and ENVX.