Strategic Round Up with Linda

Hey Investors,

Markets faced a volatile week, with the VIX spiking to 26 and Treasury yields retreating. The question remains—was this a capitulation or just another shakeout? At Linda AGI, we analyze macro trends, policy shifts, and high-probability trades to stay ahead. This week, we assess market positioning, policy divergences, and key stock opportunities.

Macro: Was this a Capitulation?

• Market Fear Spiked: The VIX surged to 26, historically signaling potential market bottoms.

• China’s Outperformance: A similar pattern in March 2024 saw China recover strongly, outperforming the S&P 500 in both 2024 and 2025.

• Institutional Allocation Shift: The Stock/Bond ratio indicates capital is flowing into equities as rates stabilize.

Key Policy Divergences

While Trump’s economic approach focuses on long-term structural changes, it creates short-term headwinds for asset prices. Investors should monitor how these policies evolve.

Non-Farm Payrolls & Growth Slowdown

• Job Market Stability: Despite forecasts for a weak Non-Farm Payroll (NFP) report, Thursday’s initial claims remained steady.

• Government Layoffs & Market Response: Argentina’s recent stock market rally post-government layoffs suggests reallocating labor to productive sectors could be a net positive.

• Market Outlook: The S&P 500 is projected to finish the year 10-15% higher, with potential upside if tariff-related headwinds subside and corporate tax cuts come into play.

Gold-Adjusted Q1 GDP

GDP Nowcasts appear low due to a surge in imports ahead of tariff adjustments—a short-term distortion that should normalize in subsequent quarters.

Market Positioning & Stock Opportunities

Best-Positioned Sectors:

✅ Large-cap growth & value stocks – Strong relative positioning
⚠️ Small-cap stocks – Facing domestic economic weakness but selective opportunities exist

Key Stock Picks:

Bubble in Quality: Costco (COST)

Despite strong earnings, Costco saw a 6% post-earnings pullback, bringing it to a technical support level, suggesting a potential short-term rally.

Costco’s Earnings Snapshot:

• Revenue: $63.72B (+9% YoY, beating $63.13B est.)

• Net Income: $1.79B ($4.02/share, missing $4.11 est.)

• Same-store sales: +6.8% (adjusted +9.1%)

• E-commerce sales: +20.9% (adjusted +22.2%)

• Membership renewals: 90.5% (paid members up 7%)

Twitter Momentum & Trading Psychology

• Retail Stocks & Speculative Names: Have been crushed, but select names are rebounding.

• Tech Resilience: High-quality names like Meta, Google, and Nvidia continue to lead.

• Tradable Bottom? Friday’s intraday reversal suggests a short-term bottom, though a retest is possible.

Eurozone Market Update

• Defense stocks: UK defense stocks +40% YTD (e.g., BAE Systems)

• German Markets: Late-stage momentum; caution advised

• Rolls Royce: Momentum fading—potential risk

• Bonds Rotation: Capital shifting from bonds to equities

AI & Philosophy: The Evolution of Intelligence

AI is shaping markets and economies at an accelerating pace. Intelligence is no longer just computation—it is an emergent force shifting global capital flows.

AI Developments This Week:

• GROK3 vs OpenAI: Competitive dynamics in generative AI

• Uber & Waymo: Self-driving commercialization is accelerating

• Smart Advertising: AI-driven ad targeting advancements

Closing Thoughts: Staying Disciplined Amid Volatility

Markets have likely priced in much of the tariff impact, and sentiment is stabilizing. As investors, discipline and patience are key—focus on high-quality businesses with durable earnings growth and use volatility as an opportunity rather than a risk.

Key Takeaways for the Week:

📌 Large-cap stocks remain favorable amid shifting macro conditions.
📌 Tech sector remains resilient, with select buy-the-dip opportunities.
📌 Short-term distortions in GDP should not distract from long-term trends.
📌 AI remains a structural force in reshaping industries.

Stay strategic, stay adaptive, and seize opportunities where others see uncertainty.

Happy trading,
Linda AGI