Steve Miller

$MSFT rallies over 3% after hours following a massive fiscal Q1 earnings beat, proving it is the "anti-Google" of the AI trade. Here is why Microsoft is dodging the software cannibalization trap: •Massive Beat: Microsoft generated $92.3B in revenue (up 19%) and a huge $4.89 EPS. •Positive Cash Flow: Unlike Alphabet's negative free cash flow, MSFT printed a staggering $18.6B in FCF this quarter, easily covering its heavy infrastructure spending. •The Azure Engine: Cloud revenue grew 48% to $33.2B. Microsoft acts as the landlord of AI, regardless of who builds the software, they rent the infrastructure from Azure. •OpenAI Revenue: OpenAI paid Microsoft a massive $10B this quarter in compute and revenue-sharing, making it a larger business for MSFT than Xbox or Windows. •Enterprise Upsell: AI is additive here, not destructive. M365 Copilot users spiked 50% QoQ, driving corporate clients into premium, higher-priced software bundles. The tech trade has split. Google faces lower ad margins on long AI queries, but Microsoft is successfully monetizing AI as a premium corporate upgrade. #Microsoft #MSFT #StockMarket #Earnings #AI #CloudComputing #TechNews #Investing

$GOOGL crashes 10% this morning after a shocking double-miss for Q3 earnings. The market’s biggest fear is officially playing out: AI is starting to cannibalize Google’s search dominance. Here is the breakdown of the post-earnings wreckage: The Headline Miss: Alphabet reported an EPS of $2.12 (badly missing the $3.02 estimate) and revenues of $127.6 billion. The Cannibalization Problem: While total search queries hit a 5-year high, Search revenue missed expectations, slowing sharply to 12% growth (down from 17% last quarter). Users are flocking to Google's "AI Mode" conversational search, but executives admitted that these longer AI queries monetize at a significantly lower rate than traditional, link-based search ads. The Cash Burn: Alphabet poured an eye-popping $51.4 billion into AI infrastructure this quarter. This massive spending sent free cash flow into negative territory at -$9.1 billion—worsening its cash burn for the second straight quarter. The Silver Lining: Google Cloud was a monster, surging 103% to $30.7 billion as enterprise customers snapped up Google's in-house TPU AI chips. The Bottom Line: Google doesn't have a traffic problem; it has a monetization crisis. It is spending tens of billions to fund an AI shift that is actively eroding the profit margins of its core cash cow. Until Google proves its AI Mode can generate the premium ad revenue of old search, investors are viewing its massive capex less like an investment and more like an expensive bill. #Alphabet #Google #GOOGL #StockMarket #TechNews #AI #Earnings #SearchEngine

$CAT beats Q3 earnings with $7.20 EPS, but the stock plummets ~10%. Why? It’s an AI story, not a mining one. The AI Hook: Caterpillar is now an AI infrastructure play. Its Power Systems segment supplies massive backup generators to tech data centers. Combined with construction, this now drives 80%+ of revenue. Mining Reality: Despite falling metal prices, CAT’s Mining unit actually grew sales 15% to $4.6B. The core business is stable. 📉 The Drop: It's a valuation correction. Investors priced CAT like a high-flying tech stock. When forward data center guidance came in "flat/moderate" instead of an exponential blowout, the AI tech premium evaporated. #Caterpillar #StockMarket #Earnings #AI #DataCenters #Investing #Stocks

Ah! Good! Obviously before these newly planned meetings the #Fed had no “strategy.”

All corporate bailouts should be banned!

The math says the Fed is not fighting inflation hard enough. The open question is whether it has the stomach to go where the math points, or whether it stops early again. Read this 👇 The Fed funds rate has averaged about five and a half percent since 1954. Even excluding the Volcker peak, the average is near five. If the current rate sits in the four to four and a half range, it is below the historical norm, not above it. The real rate is the number that matters. Subtract inflation and you are looking at roughly zero to one percent positive. That is not restrictive. That is neutral at best. Volcker did not break inflation with a nominal rate near five. He took it to twenty percent while inflation ran ten to fourteen. Real rates of six to ten percent positive. That is what forced deleveraging. A restrictive stance today points to a funds rate in the six to seven percent range. Some argue higher, given how much debt the system carries. The same rate bites harder on leveraged borrowers than it did in past cycles. The catch: the Fed has never sustained that level without breaking something. Every time real rates went that positive, you got a recession or a financial crisis. 1980. 1981. 2001. 2008. The pattern is the Fed gets there, panics, and cuts before inflation is fully dead. #Fed #Inflation #Rates #Markets ~ Slim

Today is “Fed day” Hawkish pause base case for today’s FOMC Fed widely expected to hold the funds rate at 3.75–4.00% after September’s 25 bp hike (first in three years). CME FedWatch ~90%+ on a hold; only a small chance of another hike today. Markets instead price a high probability (~75–85%) of a hike in December. Why “hawkish pause” • Rate stays put, but messaging keeps the door open for more tightening. • Persistent inflation (Sept CPI ~3.7% y/y), energy pressures from the Middle East/Iran situation, and a still-resilient economy support further firming. • Officials have signaled patience post-September and a desire for more data; proximity of the Nov 3 midterms reinforces waiting. Possible hawkish dissents (e.g., Logan or Hammack) would reinforce the tone. • Chair Warsh generally avoids strong forward guidance, so the 2:30 p.m. ET press conference is the key: does he frame the pause as policy still not restrictive enough, inflation too high, or further adjustment still appropriate? No new dots today, statement wording and Warsh’s tone will drive the December path. #Fed #FOMC #Warsh

What happens to a stock market when that socialist government spends more than it can afford on programs and that brings a public revolt? Just ask #France - $EWQ What happens when hard left communists take over a country? Just ask #Brazil - $EWZ

The worst years of trading of my life taught me more than the best ones. I'd rather you learn it sooner and cheaper. "A Trader's Ride"
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