–-Oracle (ORCL) reported after the close yesterday. The stock, which had a market value of $600 billion+ before the earnings release, is up by over 30% in the pre-market. This says three things to me:

—I shouldn’t have dismissed ORCL as a company of a bygone era, like IBM or Cisco

—today’s Wall Street is a trading venue that reacts to news rather than what it was a generation ago, a source of leading-edge anticipatory research. Great for you and me, assuming we’re willing to read company financials and find out industry information

—AI as an economic force isn’t completely discounted in today’s stock prices.

–if I understand correctly, Commerce Secretary Lutnick wants the US to establish a sovereign wealth fund to finance domestic firms that have the potential to become national champions, with the idea, I think, that the country will not only gain from these champions prospering but the fund will also benefit from stock price appreciation.

Intel (INTC) is arguably a good place to start the fund, if one does eventually emerge. But, as I see it, the recent announcement that Washington owns an equity stake in INTC is part of an ongoing rescue operation, with a touch of remembrance of past glory. At present, and again as I see it, INTC isn’t a vibrant, soundly-managed, industry-leading company. There doesn’t seem to me to be a new injection of cash in this deal, either, but rather a restructuring of loans/grants previously awarded to INTC. In addition, the shares issued to Washington look to me to function as what would normally be called preferred or preference shares, not common. If so, I see the “preference” to be a liquidation preference, which positions Washington below creditors but ahead of common shareholders in the event INTC is forced into bankruptcy–an unlikely event, I think, both generally speaking and because of the strong indications of government support. If this is correct, the shares should trade like bonds.

The Washington move also makes sense, I think, since INTC may be our last, best chance to create a domestic rival to TSMC.

–I’ve been thinking about ETFs recently, in two respects. The seasonal selloff that lasts about two weeks and occurs each year, usually between mid-September and mid-October, is driven by the activity of mutual funds preparing to close their books on their year-end on Halloween. According to Chat GPT, just over 40% of the US investor money held in stock market mutual funds + ETFs is in the latter. This compares with a third this time in 2024.

So, maybe the seasonal selloff in September-October is starting to fade away as a phenomenon. I don’t think we can argue there will be no book-closing effect this year. But it shouldn’t be a total surprise if it isn’t as bad as it used to be.

The second is that the immense popularity of etfs can’t be a good thing for the traditional brokerage industry.