China is Approved but...

Good Morning!

A lot happened in the markets this week, so let’s break it down and see who’s smiling and who might be feeling the pinch.

1️⃣ Nvidia and AMD – Big China Sales… but a New Tax Bite
Nvidia and AMD have been riding high on strong China demand for AI chips, but they will have to pay the US government 15% of the chip revenue!

💡 Good or bad? Short term, still good because China wants their chips and is willing to pay. Longer term, that 15% tax eats into margins unless prices can be pushed higher. While 15% tax is not the best thing for Nvidia and AMD, but it is way better than “no sale” to China. Bullish for them!

2️⃣ Bitcoin Back at $120K – Treasury Buying Spree

Bitcoin’s rally is back in full swing, touching $120,000 as more companies add BTC to their balance sheets. Treasury stocks linked to Bitcoin are also spiking.

💡 Good or bad? Very bullish for crypto-related companies like Coinbase, MicroStrategy, and miners such as Marathon and Riot. But remember – Bitcoin rallies can be wild rides. If you’re in, enjoy the gains but you must have the stomach for the swings. I’m long term bullish on BTC so I will DCA my way through this.

3️⃣ Fannie Mae & Freddie Mac – Trump Wants a Stock Offering
Shares of the US mortgage giants jumped after Trump pushed for a stock offering that could speed up their exit from government control.

💡 Do you know?!
Fannie Mae’s real name is Federal National Mortgage Association (FNMA) and Freddie Mac’s real name is Federal Home Loan Mortgage Corporation (FHLMC).

They sound like your friendly neighbours, but they’re actually massive government-sponsored enterprises that underpin the US housing market 🏠💵.

💡 Good or bad? Good for shareholders in the near term – an offering and privatization talk boosts speculation and potential valuation. But these are highly political stocks, so policy risk is always lurking.

4️⃣ Apple Pops 4.8% – $100B US Bet
Apple surged after news of a massive $100B US investment plan. This is on top of their ongoing buybacks and product pipeline momentum.

💡 Good or bad? Very good for sentiment. It signals confidence in the US market and could stimulate domestic production. I suspect this might eat into Apple’s long term margins but it is still good to be back in the good books of Trump

📌 My takeaway:

• Nvidia and AMD are in a “win now, watch later” situation. They are willing to pay to sell to China.

• Bitcoin strength is spreading to related equities – momentum is strong but so is volatility.

• Fannie and Freddie’s political play could create sharp moves both ways.

• Apple remains the market’s safe giant with growth plans to match.

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Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.