Fundstrat
Fundstrat: What’s the Best Risk/Reward Now? Tech Pullback, Precious Metals & Crypto Bottoming
8/20/2025, 7:09:01 PM
Economic Summary
- The Nasdaq's gains are narrow and largely driven by a few names while software is underperforming; hardware and semiconductors like AAPL and TSLA are holding up, implying sector rotation beneath the surface.
- Broad-market breadth has actually improved recently (Dow made new highs), and until major August lows are broken the pullback is likely short-lived, supporting a constructive near-term market view.
- Real interest rates are rolling over and the Fed is expected to cut about four times between now and next summer, a dynamic that should be supportive for risk assets and cyclical sectors.
- The equal-weight S&P is showing short-term breakout behavior, signaling that financials, industrials, and consumer discretionary are participating and reducing concentration risk from mega-cap tech.
- Precious metals (gold and silver) look to be bottoming with a seasonal tailwind; the speaker expects a run toward recent highs into October and recommends them for diversification away from software concentration.
Bullish
- Hardware and semiconductors (e.g., AAPL, TSLA) holding up versus software.
- Equal-weight S&P breakout suggests broader sector participation beyond mega-cap tech.
- Real rates rolling over and expected Fed cuts provide a supportive backdrop.
- Gold and silver appear to be bottoming and likely to rally into October.
Bearish
- High-beta software names vulnerable to sharp, rapid sell-offs (example: PLTR).
- Palantir plunged ~19% in six days, indicating momentum breakdown and short-term weakness.
- Narrow market leadership increases fragility if the top names roll over.
Bullish tickers
AAPLTSLAPLTRGOLDSILVER
Bearish tickers
PLTR
AAPL
Bullish
Hardware/semis are holding up well and may outperform if rotation continues.
Bearish
Could be affected if the narrow tech leadership reverses, but not showing current weakness.
TSLA
Bullish
Staying resilient relative to software names; benefits from any rotation into hardware/semis.
Bearish
Exposed to broader tech volatility, though not currently part of the software sell-off.
PLTR
3 price targets
142150190
Bullish
Analyst likes it as a buy at 142 and expects stabilization and a gradual move higher into September.
Bearish
Very high beta; plunged ~19% in six days and was hit by negative reports (Citron), making it risky short term.
GOLD
Bullish
Expected to be bottoming and likely to rally toward highs into October; good diversification play.
SILVER
Bullish
Also viewed as bottoming with upside into October; useful for diversification away from software concentration.
People mentioned
Mark NewtonCitron