LIVE STOCK MARKET TALK

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Stocks On Spaces
@StocksOnSpacesFeb 4, 2026

The Spaces dissected market volatility, critical minerals geopolitics, and thematic investing. Evan (host) steered discussion on EU–US cooperation to curb China’s influence in rare earths and critical minerals. Stock Talk emphasized that supply chains will likely span Europe, the Middle East, and Africa due to environmental constraints in Europe and Australia, and warned these themes (rare earths, nuclear, quantum, space) are high-beta with extreme ATR swings. He urged focusing on weekly charts over headlines, respecting opportunity cost, and riding the middle of moves rather than calling tops/bottoms. A live update flagged SMCI’s strong beat and the data-center theme’s resilience while AMD traded lower. Stock Talk outlined portfolio positioning (VIAV, KTOS, HII, PANL, GLDD, SYNA) and upcoming option exercises potentially causing near-term stagnation. Paul (Themes/Leverage Shares) presented the case for copper miners (COPA) as a durable play on electrification and data centers, detailed global exposure, and contrasted lithium’s lag with uranium’s strength (URAN) amid nuclear’s resurgence (including micro-reactors). He highlighted transatlantic defense primes, humanoid robotics’ differentiated return stream, and GSIB financials’ strategic positioning. On cybersecurity (SPAM), Paul noted investor concerns about AI displacing software but argued for dedicated vendors given liability and operational needs. The session closed with resources and upcoming earnings catalysts.

Market Themes, Critical Minerals, Volatility Strategy, and Thematic ETF Insights

Participants and Roles

  • Evan (host): Moderates, frames questions, transitions across topics and speakers.
  • Stock Talk (co-host): Provides macro, sector, and trading strategy views; shares portfolio positioning and process.
  • Paul (Themes ETFs / Leverage Shares): Offers thematic ETF perspectives (copper, uranium, robotics, defense, financials, cybersecurity), market context, and allocation rationale.
  • Co-host providing market updates (Speaker 3): Interjects with real-time earnings and market headlines (e.g., SMCI results).

Critical Minerals, Rare Earths, and Geopolitics

  • Headline context: The European Union reportedly plans to pitch the United States on a critical minerals partnership aimed at curbing China’s influence.
  • Stock Talk’s view:
    • A U.S.–EU critical minerals partnership is logical given aligned interests in countering China’s dominance.
    • Execution challenges: Regulatory approvals, immediate investment, and “getting mass moving” (rapid scale-up) are required. Clear delegation is needed for mine locations and processing facilities.
    • Environmental constraints: Many European countries are reluctant to host processing/refining due to stricter environmental standards.
    • Offtake/refining partners: South Africa and Saudi Arabia are attractive because they’re more willing to undertake processing and accept environmental risks; Middle East and Africa are likely essential for scaling to China’s level.
    • Australia is becoming less viable as environmental standards tighten around processing.
    • Market dynamics: Rare earth-related stocks are highly speculative and often overpriced; performance is catalyst-driven with high volatility (frequent ±15% moves and high ATR). Investors must be comfortable with sharp extensions from moving averages and subsequent mean-reversion.
    • Nuclear stocks rallied alongside rare earths despite limited fundamental linkage; Stock Talk sees that correlation as questionable.

Trading Strategy, Index Read, and Volatility Management

  • Timeframe and signal extraction:
    • In headline-driven markets, daily charts provide limited signal; focus on weekly charts and structural integrity.
    • Avoid trying to predict double-tops; react to breakdowns when they happen rather than forecasting them.
  • Philosophy of returns in bull markets:
    • Aim for the “meat in the middle” of moves rather than picking tops/bottoms.
    • Opportunity cost is paramount for both traders and investors; avoid stubbornly holding underperforming sectors when leading themes offer asymmetric upside.
    • Bubbles are where outsized returns often occur during bull markets; when the music stops, it affects the whole market, so while it’s playing, be positioned in leading areas.
    • Performance accountability: If you’re not up meaningfully in a strong YTD tape, you’re likely in the wrong names. Don’t cling to a philosophy at the expense of results.
  • Risk management and adaptability:
    • Accept losses, concede to market signals, and rotate when thesis confirmation fails.
    • Earnings over the next three weeks (context of the conversation) will provide clarity; exposures will be adjusted accordingly.

Sector Exploration: Software, Cybersecurity, Fintech, and Cloud

  • Cloud computing: Not an area Stock Talk focuses on.
  • Cybersecurity:
    • Rich valuations and poor technicals across many names; heavy software-sector selling (IGV high-volume drawdown).
    • AI coding advances create uncertainty around medium/long-term runway for traditional software firms; sentiment complicated.
    • Approach: Prefer waiting for structurally improved charts; may consider small, catalyst-driven options positions around earnings where asymmetry exists.
    • Historical examples of this tactic: Lyft (LYFT), UiPath (PATH), Photronics (PLAB) produced 500% option gains on well-placed earnings plays with small position sizes (1%).
  • Fintech: Similar challenge—can build fundamental conviction but lack technical conviction; charts currently unattractive, so patience required.
  • Software bottoming: Avoid “no man’s land” bottoming where price hasn’t reclaimed key moving averages; often a setup for another leg lower.

Data Center and Semis: Real-Time Update

  • SMCI (Supermicro) reported a double beat and strong guidance:
    • Revenue ~$12.7B vs. ~$10.2B consensus; EPS $0.69 vs. $0.49 expected; adjusted gross margin ~6.4% (noted as low vs. expectations); FY net sales outlook ~$40B.
    • Stock initially up ~6–7%, then gave back some gains intraday.
  • AMD: Despite a strong quarter and guidance, stock was down on the day.
  • Host and Paul’s broader take: Data center theme remains strong; short-term moves don’t invalidate the multi-year growth runway.

Stock Talk’s Portfolio Positioning and Process

  • Position count and workflow:
    • Target: 10–15 core positions; currently at ~17; aims for 21–22 by end of Q1, but may be constrained by option exercises.
    • Research cadence: Heavy reading and independent work in Q1–Q2 (new information, policy developments, emergent themes); let portfolio work more in Q3–Q4 unless conditions change.
  • Existing holdings and standouts:
    • Carryovers doing well: Viavi (VIAV), Kratos (KTOS), Huntington Ingalls (HII).
    • New positions acting well: Pangaea Logistics (PANL), Great Lakes Dredge & Dock (GLDD).
    • Synaptics (SYNA): Down modestly vs. cost basis; upcoming earnings will confirm/deny thesis.
    • Nuclear: Centrus Energy (LEU) is a core position; monthly chart is a key anchor for conviction.
  • Options expiring around March 20 (exercise plans and buying power considerations):
    • ENS 115 calls acquired at $8, now ~$75 (+800%); intends to exercise some.
    • “M core” $25 calls acquired at ~$3, now ~$21; intends to exercise to add “amp core” shares near ~$28 (names as stated; exact tickers not confirmed in the audio).
    • VIAV $14 calls acquired at ~$1, now ~$12–13; intends to exercise some.
    • HII $300 calls acquired at ~$17, now ~$130; intends to exercise some.
    • Net effect: Likely portfolio stagnation until March 20 while upsizing high-conviction holdings at favorable cost; may still pursue shorter 1–1.5 month trades opportunistically.

Paul’s Thematic ETF Insights (Themes ETFs / Leverage Shares)

  • Conviction and market context:
    • Don’t let daily tape dictate conviction; focus on why sectors move and multi-year growth runways.
    • If strong names sell off on good results (e.g., AMD), it can be an opportunity to add.

Copper Miners (COPA)

  • Thesis:
    • Copper’s industrial utility is accelerating with electrification, data centers, robotics, and high-conductivity applications.
    • Data center racks: Significant copper content; copper plates serve as cooling agents.
    • Compared to gold/silver’s recent hyperbolic moves (which can be fragile), copper appears earlier in its cycle with constructive charts.
    • Year-to-date performance cited: ~+15.1% (at the time of discussion); chart “coming off bottom,” forming a positive pattern without parabolic excess.
  • Miners vs. spot:
    • Themes ETFs focuses on miners rather than spot commodities; miners have operating businesses that extract/refine and can benefit from improved efficiency over time.
  • Representative holdings: Freeport-McMoRan, Glencore, Southern Copper, among others.
  • Geography (approximate allocations mentioned):
    • Canada ~40%; U.S. ~16%; U.K. ~12.5–13%; exposure also in Australia and Hong Kong (and in aggregate, China), plus smaller weights in Japan, Germany, Sweden.
  • Supply/demand debate:
    • Mixed reports on long-term supply adequacy; either way, increased use cases mean miners will be busy ensuring supply meets demand.

Lithium & Battery Metals Miners (LIMI)

  • Thesis:
    • Vital for batteries and AI-adjacent tech, EVs, robotics, etc., but “hasn’t caught a bid” yet.
    • Early-stage investor interest observed; flows remain limited relative to other hot commodities.

Uranium & Nuclear (URAN)

  • Thesis:
    • Strong YTD, stronger last year than copper; linked to clean, high-density energy needed for AI/data centers/crypto.
    • Technology shift from large legacy plants to micro-reactors: smaller, portable, powerful, with evolving regulation reducing taboos post-Fukushima/Chernobyl.
    • Fund includes uranium miners/energy plays and nuclear infrastructure names.
    • View: Wind/solar won’t suffice alone; nuclear is critical and investable momentum is building.

Humanoid Robotics (BOT)

  • Thesis:
    • Distinct tech vertical producing differentiated return streams vs. broad U.S. tech.
    • YTD cited: ~+28%+; geographic concentration drives performance diversity:
      • ~51% South Korea, ~17% China, ~4% Japan, ~20% U.S.
    • Global interest spanning advisors, retail, and institutions (including Asia-based asset managers).

Transatlantic Defense (NATO/NATOO)

  • Thesis:
    • Pure-play focus on firms with prime government contracts; defense spending is rising, and prime contractors are capturing outsized flows.
    • Example: Lockheed Martin reportedly tripled an air/missile defense contract recently.
    • Note: A competitor highlighted Kratos, then trimmed exposure shortly after—Paul emphasizes going where prime contract money is flowing.
    • Defense can act defensively in choppy markets; tends to hold its own amid volatility.

Global Systemically Important Banks (GSIB)

  • Thesis:
    • Largest financials are positioned for varied macro regimes.
    • Ongoing tech investment, tokenization, and operational transformation can justify higher multiples over time.
    • Policy shifts (lending, credit, interest rates, deregulation) could provide tailwinds.

Cybersecurity (SPAM)

  • Necessity vs. sentiment:
    • Operational necessity is undeniable for governments and corporations (client data, critical systems, monetary networks).
    • Sector sentiment impaired due to broader software weakness and AI’s coding capabilities, triggering questions about in-house cyber vs. third-party vendors.
  • Paul’s view:
    • Organizations still want a dedicated “watchtower”; liability considerations matter (e.g., airlines blaming CrowdStrike during a widespread outage—firms prefer third-party accountability over self-blame).
    • Expect cybersecurity vendors to leverage AI to become more capable rather than displaced.
    • Allocation likely persists even in down markets; still, flows depend on resolving investor concerns about the future role of external providers.

Additional Headlines and Logistics

  • Trump signed a funding bill; comments viewed as non–market-moving in the moment.
  • Upcoming earnings: Google, Amazon, and others were flagged for the following days.
  • Defense.gov daily contract releases are useful to track where government dollars are flowing.
  • Themes ETFs resources: Prospectus, fact sheets, and holdings are available at themes.etfs.com; host emphasized using ETF holdings as research starting points even if not investing directly in the ETFs.

Key Takeaways

  • Critical minerals and rare earths remain geopolitically strategic; expect multi-region solutions (U.S., EU, Middle East, Africa) to address processing and scale.
  • High-beta thematic trades (rare earths, nuclear, quantum, space/satellite) offer asymmetric upside with commensurate volatility; risk tolerance and technical discipline are essential.
  • In headline-heavy markets, weekly structures matter more than daily noise; manage exposure and react to breakdowns rather than predict them.
  • Opportunity cost is a central principle: rotate into leading themes and accept being wrong quickly to protect capital and capture bull-market gains.
  • Copper miners (COPA) present a non-parabolic setup with strong industrial tailwinds tied to data centers and electrification; uranium (URAN) continues to benefit from the nuclear renaissance.
  • Cybersecurity remains essential but sentiment-challenged; both Stock Talk and Paul prefer technical/fundamental alignment and clearer structures before sizable allocations.
  • Stock Talk’s portfolio is positioned in names with confirmed themes and improving structures, with planned option exercises potentially upsizing high-conviction holdings.