🌟 Editor's Note
At Linda AGI, we see this week is about the return of the left-for-dead trades.
Housing, small caps, and healthcare—all written off earlier this year—are staging synchronized comebacks. The drivers? Rate relief, fiscal liquidity, and forced short covering. Add stablecoins and energy diplomacy, and the liquidity loops are alive and well.
The Situation
Housing: Melting Up Against the Odds
Mortgage rates drifting to 6.58% (lowest since Oct) → liquidity loop: refi/HELOCs → more consumer cash → stronger demand.
Case-Shiller & Redfin: housing prices continue “higher lows, higher highs.”
Actionable: Overweight homebuilders (XHB, DHI, LEN, TOL). Watch Sallie Mae (SLM) as refi spillover play.
Fiscal Mess Meets Private Equity
Policy chatter: sell $1.8T student loan portfolio + privatize GSEs.
Huge opening for specialty lenders & private equity credit platforms.
Actionable: Monitor Sallie Mae (SLM), private loan servicers.
AI & Digital Assets
Payments Gold Rush
Stablecoin entrants: PayPal, Paxos, Robinhood, JPM, Citi.
Stablecoins = new USD rails + capital formation.
Actionable: COIN, PYPL, HOOD beneficiaries.
Dollar Hegemony 2.0
Stablecoins funnel trillions into T-bills → stronger USD.
Argentina workers now paid in USD stablecoins.
Implication: Bearish BRICS de-dollarization.
Bitcoin & Ethereum
BTC: Hedge vs. U.S. fiscal collapse, not just inflation. Accumulate dips.
ETH: Still plumbing for stablecoins; institutions buying. Reload after consolidation.
Linda AGI Markets Interpretation
Funny Markets, Serious Alpha
Weak NFP → Fed cut odds repriced from 20% → 92% → rally.
Small caps leading since April lows, outpacing big tech.
Hedge funds short small caps → forced covering.
Actionable: Long Russell 2000 (IWM), select banks (LOB, OZK), consumer discretionary (AEO).
13F Season
Buffett & HFs adding UnitedHealth (UNH) + managed care.
Shift from “value trap” → durable earnings growth.
Actionable: Re-enter insurers (UNH, HUM, CI).
Energy: Tentative Recovery
Crude consolidating $62–67 → airlines ripping (DAL +14%, UAL +12%).
Nat gas exporters benefit from Trump’s EU deal.
Actionable: REPX (oil/gas leverage), LNG, EQT; tactical airline longs.
Multiples Aren’t Apples to Apples
Today’s S&P = 50% tech/health/comm → higher multiples justified.
Implication: Stay long innovation, avoid lazy “market expensive” narratives.
Trading Ideas
📅Top Actionable Ideas This Week
Long small caps (IWM) + selective regional banks & biotech.
Add UNH / HUM / CI on healthcare bottoming.
Ride housing momentum (XHB, DHI, LEN, RKT).
Energy barbell: REPX + airlines (DAL, UAL).
Digital assets: Reload ETH, accumulate BTC, COIN/PYPL/HOOD for stablecoin rails.
Speculative: Sallie Mae (SLM) upside if student loan privatization advances.
Non-Consensus Spotlight: Healthcare
AI quietly driving costs up; Obamacare collapse + regional monopolies.
Biotech in “lost decade” but regulatory spark could revive.
Actionable: 13F-aligned biotech ETFs (XBI, ARKG). Hedge cost inflation with insurers.
CIO Commentary
Liquidity loops and policy pivots are setting the tone:
Liquidity Beneficiaries: housing, small caps, stablecoins, ETH.
Policy-Driven Pivots: student loan privatization, healthcare premiums, energy diplomacy.
The shorts are being squeezed, and left-behind sectors are turning leaders.