The bull refuses to relent.
The S&P 500 notched yet another record yesterday before the bell.
After?
All eyes were on Nvidia…
Like a twenty-year-and-eleven-month-
It’s all-important data center revenue came in just shy of expectations, $41.1 billion against Wall Street’s $41.3 billion forecast.
Plus, not a single one of its lower-powered H20 chips sold in China was a casualty of Trump’s tightened export restrictions.
Nvidia’s revenue trends continue to show growth, albeit at a slowing pace.
For now, the market is fine with it. (Source: Kobeissi Letter)
Nvidia’s stock slipped about 3% in after-hours trading. In regular trading today, the market barely flinched – and shares are flat this afternoon.
That alone tells the story of this rally – investors are buying any dip, no matter how small, in expectation of higher prices.
Andrew Zatlin, who joined us today for Grey Swan Live!, relied on some personal experience working for Cisco during the 2000-01 boom and bust, to suggest that Nvidia’s hardware division is likely where sales will top out first.
Zat went on to say he believes the Fed pivot is already priced in.
Investors believe Powell’s September 17 quarter-point rate cut is baked into prices, tariffs and inflation be damned.
“We’re already marching forward,” he said. In this most terrifying of bull markets, the dip-buying instinct reigns. “We’ve been programmed to believe the market always goes up, even if there are some terrifying corrections.”
With $13 trillion in 401(k) and IRA money representing retail investors being systematically injected into the AI bubble, “the sentiment will be bullish… until it isn’t.”
Paid-up members will be getting the recording of today’s Grey Swan Live! with Andrew Zatlin as soon as our production team can wrap it up in a bow. Andrew gives a rundown of the indicators he’s looking for to know when the jig is up and your money is at stake. Stay tuned.
If you’re looking for symbolism, here’s some: America’s markets and economy are now literally being built on a foundation of Legos. More on that in a moment.
The Buyback Binge, Refreshed
Share repurchases are hitting records at warp speed.
As of August 20, U.S. companies had announced $1.05 trillion in buybacks — already the fastest pace ever. August alone has logged nearly $140 billion in new announcements, following July’s record $166 billion.
Many of the S&P 500 index leaders have been aggressively buying their own shares back even at these historically elevated p/e levels. (Source: Birinyi Associates)
Apple led the charge, but Nvidia added to the frenzy yesterday with a $60 billion authorization, joining Apple’s $100 billion boost earlier this year.
Bank of America, JPMorgan, and even regional stalwarts have piled in.
These buybacks goose earnings per share and prop up stock prices — short-term sugar highs for shareholders.
But they also divert cash from research and development, capital investment, and worker pay. And sometimes companies even go into debt to buy back shares – a term known on Wall Street as “hollowing out the balance sheet” and leaving companies unprepared for uncertain – but likely – Grey Swan events.
As Treasury Secretary Scott Bessent scolded Boeing recently: “Financial engineering is not innovation.”
Margin Debt and Seasonal Shadows
Yesterday, we mentioned one of the cautionary nuggets Mr. Zatlin commented on in today’s Live!
The cost of carrying margin debt — the money investors borrow to buy stocks — is at record highs.
Leverage amplifies rallies, but when selling starts, it forces liquidation. September and October have a long history of market shocks.
Seasonal volatility, layered on this kind of froth, is a recipe for drama.
That’s why the early focus on the Grey Swan Trading Fraternity has been on resource companies – which should bode well amid a terrifying bull market and resurgent inflation – and strategic ways to profit from short-term “air pockets” in the market, like the recent drop in Palantir Technologies from their all-time highs.
Tariffs, Trade, and Realignments
Trump’s trade war is reshaping the global chessboard.
India, once aligned with Washington, is feeling the sting of Trump’s doubled tariffs — 50% on its exports to the U.S.
That’s an $87 billion pipeline suddenly narrowed, though smartphones remain exempt for now (a lifeline for Apple as it shifts manufacturing away from China).
And here’s the kicker: China, long at odds with India, is quietly courting Modi.
Xi Jinping wrote to him earlier this year, and now Modi is set for his first visit to Beijing in seven years. Tariffs are pushing two rivals closer together — a geopolitical wrinkle Wall Street is happy to ignore while it buys the dips.
Debt, Confidence, and the Public Mood
It’s hardly a secret that the national debt has surpassed $37 trillion.
This morning, the Peter G. Peterson Foundation, released a survey showing 79% of Americans say they are deeply concerned about the fiscal outlook, across party lines. The Fiscal Confidence Index sits at 49 — well below neutral.
The public sees what the market ignores: pressure on interest rates, inflation risk, and a government living beyond its means.
Social Security at Risk
And now, as if to underline how fragile our institutions are, a whistleblower says the personal data of every American with a Social Security number is at risk. Department of Government Efficiency employees reportedly uploaded the SSA’s entire database to an insecure cloud environment, outside oversight.
The records include everything from birthplaces to parents’ Social Security numbers — over 500 million records.
Charles Borges, SSA’s chief data officer, warned: “Should bad actors gain access… the government may be responsible for re-issuing every American a new Social Security number at great cost.”
For now, there’s no confirmed breach. But the fact that we’re here at all tells you something about this “great reset” era. As we have forecast, new Social Security numbers are on the list of DOGE-recommended fixes.
AI’s Dark Side
The same fragility extends to technology itself.
This week, OpenAI was hit with a wrongful death lawsuit after California parents discovered months of ChatGPT transcripts with their 16-year-old son, who later died by suicide. In the conversations, the chatbot reportedly encouraged his despair and dissuaded him from seeking help.
OpenAI admitted safeguards can degrade during long back-and-forth sessions and promised parental controls “soon.” But this is hardly the first case. Both a 14-year-old and a 29-year-old were reported to have taken their lives after confiding in other AI chatbots over the past year.
The American Psychiatric Association put it bluntly: AI companions aren’t ready. Yet, as with financial markets, belief carries more weight than caution — until it doesn’t.
Legos And A Food Fight Worth Watching
Back to those Legos: the Danish toy giant is pouring more than $1.3 billion into Virginia factories and distribution centers to avoid tariffs, create jobs, and shorten supply chains.
Good news for workers, carbon-neutral energy, and Christmas shoppers (though they’ll still pay more for their kids’ sets).
The symbolism is almost too on the nose: a market built on plastic bricks, at record highs, with debt and tariffs stacked precariously beneath it.
Meanwhile, the 20,000 tourists who descended on Buñol, Spain, for the 80th Tomatina festival tossed 120 tons of tomatoes at each other. Organizers stress that the tomatoes were unfit for eating anyway.
At least in Spain, the great waste is deliberate. In Washington, it’s just policy.
~ Addison
P.S. Tomorrow, we’re hosting a free live tax seminar on how to keep more of your gains with IRS-compliant strategies.
With the market about to roll over until September, it’s not too early to make sure you’re taking advantage of the best tax strategies. We want to ensure you keep your wealth – by avoiding the pitfalls of Grey Swan events – and also from the bite of the IRS.
August 29, at 1 p.m. ET. Registration is free and easy — reserve your spot here.
Your thoughts? Please send them here: addison@greyswanfraternity.com
