Shutdown City

As the Feds careen towards another vacation for furloughed workers, the markets don't care. The risks are there, but Wall Street doesn't see them.

Polymarket event pricing is showing a high-odds shot of another government shutdown coming soon.

I don’t think anyone cares.

The Trump administration passed the OBBB, so the spending surrounding immigration enforcement is already covered. That means there’s no leverage for other players on the board to use to get what they want.

It doesn’t look like markets care much either. That’s what happens when the overall market is overhedged, and has been for months.

There absolutely are risks in this market, but it has more to do with the options market and Mag7 earnings than any headline you’ll see in the media.

I laid out the entire thesis behind it in today’s live session:

I don’t expect this dynamic to come into play for about two weeks, but if intraday ranges start expanding, that’s the clue that the persistent bid from the options market has started to unwind.

Deep Saudi Pockets

Sports are getting weird.

A few weeks ago, Tom Brady had an announcement with Turki Alalshikh, the chairman of the Saudi General Entertainment Authority.

They were promoting the launch of the “Fanatics Flag Football Classic” in Riyadh. NFL stars will be part of the event, and honestly it looks like a ton of fun.

Saudi Arabia also dropped a couple billion into LIV Golf and scalped a ton of players from the PGA Tour.

We are witnessing the de-Americanization of sports. It’s been going on for a while, but it’s accelerating as Saudi Arabia’s sovereign wealth fund (with $1.1T AUM) has been throwing cash into the system.

I’m not a protectionist when it comes to sports. Demographic and capital shifts over the past 20 years made this inevitable, and this trend isn’t over.

EA Sports just got bought out by the Saudis for $55B. The company has multiple sports franchise games like Madden and EA Sports FC, and the deal could be accretive with some of the brands that the Saudis own, like Newcastle United and Formula 1.

And while eSports aren’t huge in the EA franchises, I could see them expanding this out.

There’s one more play from the House of Saud that could be worth a look in a few months…

Lucid Motors (LCID):

Over the past 3 years, the Public Investment Fund (Saudi’s SWF) has put in $3.7B into the company’s equity. Lucid’s market cap sits at 7.4B.

Lucid opened the first-ever auto plant inside of Saudi Arabia, so they’re probably getting some benefits as well. And this stock, which has been an absolute stinker since its SPAC listing, may be ready to finally squeeze.

Riggers Have Their Lines Cut

This news dropped at lunch today:

We last looked at QMMM when the stock was trading up at $275 from single digits. The stock had been dead money for a while, and it looked ready for another squeeze higher:

The halt is in effect for about 2 more weeks. This may be enough of a metasignal to change how some of the low-float runners have been trading recently. More market players will play “hot potato” with shares of some sketchy overseas holdings company so they don’t have their position locked up.

Up Next For CS Clients

Multiple momentum themes are looking a little extended, so our focus today is going to be some straight forward pullback trades in LC tech, and then a couple rotational trades for names that have had great years so far and look like they’re ready for continuation into the fall.

If you aren’t a Client yet, you can join today.