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Oil whipsaw action in the face of global conflict (0:30). Market highs, tech upside (2:35). Stablecoin bill driving momentum (5:00). Kroger earnings (8:15). Recorded on Thursday morning, June 26, 2025.
Transcript
Rena Sherbill: Brian Stewart, Seeking Alpha's director of news, welcome back to Wall Street Roundup.
Brian Stewart: Great to be here.
RS: Talk to us. How are you thinking about this? Market highs, world devastation. What are you seeing?
Oil up, oil down, oil should be up, oil should be down. Who knows? Talk to us. What are you seeing out of the market? What's most prominent in your thought process right now?
BS: I think oil (CO1:COM) is a great place to start just as taking in the temperature of the market.
Oil spiked in the immediate aftermath of the, however you wanna call it, the flare up of missile fire between Israel and Iran, culminating in the US bombing of Iran nuclear sites.
Then that quickly became a ceasefire, so it did not spiral out of control as a lot of people had feared, which sent oil lower.
You can see the the whipsaw in a lot of the oil stocks. For instance, the (IEO), which is the iShares oil, gas, exploration, and production ETF, down about 4% in the last five days, but it's basically flat year to date.
So kind of speaks to the volatility that oil stocks have been seeing. Just looking at some of the bigger names, ExxonMobil (XOM) down about 5% in the past week, Chevron (CVX) down about 4%, Halliburton (HAL) down about 6%.
So in the the most recent news cycle, it's been bearish for oil. Only time will tell. I think an interesting comparison to make here is with the tariff trade that occurred earlier this year.
This is a kind of a muted version of that where the market reacts in one direction as things look like you were pointing out, like the end of the world, and then react the other way very quickly when it's clear that the end of the world is not actually on the table at this point.
So I think investors have gotten used to the temperature of the current geopolitical situation and the process of the Trump administration.
I think they've gotten used to the theatricality of the Trump administration, how everything always seems to be a little on edge, a little aggressive. And I think the market is learning to take that in stride.
RS: And what would you say about the S&P (SP500), Nasdaq (NDAQ)? Anything to contextualize or make note of there as investors are wondering what's gonna happen after gaining such high highs?
BS: Well, I think we drill down a little bit and look at the underlying drivers of the market over the last couple years. Obviously, the AI trade, the Magnificent Seven, NVIDIA (NVDA) specifically, and those are stocks that have caught a bid in the recent upswing.
So NVIDIA is up about 8% in the last week, it's reaching new highs. Same with Broadcom (AVGO), it's up about 7% reaching new highs. So you can see investors moving back into the AI infrastructure play, which I think is just a sign of returning to normal after the brief Iranian concern.
So overall, I think investors have kind of decided to move geopolitical events to the periphery and look at fundamentals, and they still believe that there's a lot more upside to go in terms of the overall building out of the AI infrastructure.
A good example here is (AMD). It's up about 9% over the past week. Going into today's session, it was up six out of the previous seven days. Got a couple of high profile analyst upgrades recently, which was the main driver behind it.
But I think more than just those individual upgrades, I think it's just a sign that Wall Street as a community, investors and analysts alike are beginning to rediscover the upside that these tech firms have.
Like I said before, ignore the the geopolitical noise.
RS: We've seen some tech stocks hitting new highs also for more grounding in the tech moment.
Joe Albano and Sara Awad, we had them on Investing Experts. Really highly recommend both those episodes from this week along with the other ones. But those, if you're interested in the tech conversation. Anything else to add to to the tech conversation as we're still in it?
BS: Yeah. If we look to a different part of tech, the stablecoin stocks such as you can call that as a sector elicited a lot of investor interest recently.
So Coinbase (COIN) is up 24% in the last week. Circle's (CRCL) actually down last week, but that's been extremely volatile. It was up 97% from the close on June 12 through the close on June 23 and then has come back in the last couple days. So on Tuesday, it was down 15% and then down another 11% yesterday.
So you're seeing big swings there, but overall, this is being driven by the senate passing a stablecoin bill. This is a piece of legislation that would create a regulatory environment around stablecoins.
It still needs to pass the House, but all indications are that's going to move through the legislative process relatively smoothly.
I think that as another point to normalcy, this is a situation where you can see crypto. I think for crypto, it's a two pronged theme here. One is further expanding the broader consciousness beyond Bitcoin (BTC-USD).
So I think for a long time in people's minds, Bitcoin and crypto were pretty much synonymous. Stablecoins are entering the mainstream discussion, especially with investors, but I think legislators, the general public.
And so you have this other kind of pole that conversations can center around. And then you just see further institutionalization of crypto, having it settle into the general economic and payment structures of the economy.
And as that becomes more embedded, it makes all crypto, but especially stablecoins and Bitcoin, much more it plays into the bullish thesis that a lot of investors have been saying for a long time.
RS: And how much is the price movement in Bitcoin correlated to the stable coin movements, if at all?
BS: That's an interesting question. Traditionally, over the last several years, Bitcoin is basically trades as a risk asset. So if tech is going down, so is Bitcoin.
If tech is going up, so is Bitcoin. So I don't suspect that that uncoupling has happened. I haven't looked into it in a data, in an organized way, but my feeling is that that hasn't decoupled recently.
I think that's still probably the most likely profile for short term trading in Bitcoin. Stablecoins, obviously, you're investing in the companies that produce Stablecoin, not a Stablecoin itself.
But I think for investors that might be a more, predictable way to invest in the crypto space, companies that are providing this obvious service to the crypto markets and the general economy. And then the question just becomes whether the valuations make sense.
There's been some pushback, especially around Circle, that it's gone too far too fast, and there's probably a ways to go in terms of the fundamentals catching up to the current stock price.
RS: And then switching to earnings, what would you highlight about earnings releases this week?
BS: So, obviously, pretty pretty slow going. One interesting one was Kroger (KR). It was up sharply after its earnings report, beat expectations with sales and earnings, raised its same store sales guidance.
In its commentary, it provided interesting color on its earnings beat. It noted that there was more demand for the lower priced private label brands.
So that's a sign that people are kind of moving down the price scale a little bit in response to inflation and whatever tariff bump there might be in prices. The company also continued to cite macro uncertainty.
I think just as an example of the overall economy, this shows where companies are at and where investors need to put their head at is that there's still a lot of uncertainty to deal with, there's still tariffs to deal with, still inflation in the market.
The Fed has signaled that it's willing to hold off on cutting rates until basically it needs to, and that doesn't seem to be in the immediate near term.
So I think that the overall economic conditions as they stand are going to continue in this slightly murky situation for a while.
And we should point out that next week is extremely light on the earnings front. It's probably the nadir of earnings releases in terms of volume and interesting reports coming out.
We get the holiday at the end of next week. So in terms of market fundamentals, we're not gonna get a lot of information. There is the jobs data coming out next week, coming out on a Thursday because of the holiday on Friday.
So that's gonna be the main focus of trading next week, which is likely gonna be extremely light given people are on summer vacation, not much to trade on. So it opens the door for notable swings on geopolitical events or if that jobs report comes in either too high or too low, you might see the market swing.
RS: Let's hope for good news going into America's celebration. We will be off next week in honor of that fact.
Brian, I'll leave you with with the last word if you want it.
BS: Stay out of the heat. It's been hot where I am, I don't know what it's like where you are, but it's been been a rough one.
RS: Stay cool. Stay patient. Stay level headed.
BS: Exactly. 100%. Not just the physical heat, but you gotta stay out of the emotional heat as well.
