Path of Least Resistance Seems Up…The Weight Loss Wars Just Escalated…The Global Arms Race Is No Longer a Theory…Europe Goes Full Metal Jacket….ONDS Perks Up
Yesterday on the podcast we talked to Schwab’s Kevin Green to get his market take and some areas he is looking at. Good talk, he gave us a few areas that I typically don’t look at like water and industrials…….
After all the market has been through the past couple of months the QQQs are now at all time highs. Now that the war seems over, agree with Mohit again on the overall market environment…
We are not looking for a massive rally from current levels, but believe that the path of least resistance is a grind higher. Hence, we would be adding risk. Our main concerns for the medium term bullish view are 1) a slowdown in the US employment data over the summer months and 2) a rise in yields on fiscal concerns.
The focus now goes back to the Fed…..
Powell's testimony did not provide much new information with the message being that the Fed is in no hurry to cut rates, but would act if economic data so warrants. Our read on the Fed is simple. Currently, there is just too much uncertainty for the Fed to have a strong view on where growth and inflation pans out over the coming quarters. In the absence of strong views, the prudent course of action is to stay put and wait for the incoming data. Our base case remains that the Fed would cut in September, as we expect employment data to slow down over the summer months.
Powell…
If you just look at the basic data and don't look at the forecast, you would say that we would've continued cutting. The difference, of course, is at this time all forecasters are expecting pretty soon that some significant inflation will show up from tariffs. And we can't just ignore that.
Powell testifies in front of the Senate Banking Committee this morning.
The Big Beautiful Bill…….
We believe the headline risk flips back to the negative side as the Administration needs to get the "Big, Beautiful Bill" over the finish line in the next week to meet its self-appointed deadline. Despite across-the-board Republican control, for Congress to meet any deadline is a major achievement. Nonetheless, it is widely expected for the bill to pass, and its passage is a key element of the bullish narrative.
And tariffs…..
The other headline risk is tariffs returning to the policy forefront. We are two weeks from the Administration’s self-appointed reciprocal reversal deadline for tariff deals. For all of the talk about the Indian, South Korean, Vietnamese, and Japanese trade deals over the past 2 ½ months, the only deal delivered was the United Kingdom’s, which had been in the works for five years. The China de-escalation framework still has more questions than answers. The President has previously stated he planned to “set” the tariffs for a number of countries and still plans Section 232 national security tariffs. Treasury Secretary Bessent stated today that the Administration can “finish” the trade deals after the "Big, Beautiful Bill" is passed next week. Strategic uncertainty remains the primary tactic.
A lot of activity going on in the GLP-1s the past few days…..
NVO’s battle with HIMS crushed the retail favorite. I did great on the GLP-1s last year when they basically went straight up, having some issues trading them this year. NVO held support at the 50 day and could be buyable down here, which I did. Of course it’s down 3% pre market, but as long as the 50 day holds I’m ok with it….
I have a real small position in LLY, would like to see it move back above the 50 day and then the 200 day to get real interested…..
Here’s GPTs take…..
🧬 $NVO: A "Cure for Obesity"?
Novo’s combo drug CagriSema—which marries semaglutide (the ingredient in Ozempic/Wegovy) with cagrilintide (a synthetic amylin)—just posted eye-popping Phase III results:
22% total weight loss, on average
60% of patients lost >20% of body weight
98% hit FDA’s 5% threshold
Many voluntarily tapered off dosing after reaching ideal BMI (around 27)
This is seismic. Not because of the weight loss, but because people were able to reduce or stop treatment without relapsing.
This isn’t just symptomatic relief. It’s the beginning of a functional cure.
🚨 Stock reaction? Down 5% on Monday. Wall Street was hoping for even more weight loss.
That’s laughable. The market’s missing the big picture:
Novo’s dual-agonist cocktail is easier and cheaper to manufacture than ultra-high semaglutide doses.
That means higher margins and more scalability.
And with patients tapering usage post-goal, adherence and QoL metrics just got a major upgrade.
🔎 Verdict: $NVO is a Buy-on-Dip.
Rating: 8.5/10
Secular trend dominance + underappreciated margin tailwind = asymmetric upside.
💊 $LLY: The King with the Crown
Not to be outdone, Eli Lilly’s pill-based GLP-1 therapy is showing serious promise—tapping into the holy grail of oral weight-loss drugs.
Oral delivery = massive expansion in global patient access.
LLY also has anti-myostatin therapies in the pipeline to preserve muscle while losing weight.
The GLP-1 + muscle retention stack may define the next leg of the obesity trade.
And let’s not forget: LLY has Mounjaro, one of the most successful GLP-1 launches in history.
🧠 Long-Term Edge: Regeneron ($REGN) and $LLY are also pushing combo trials for obesity + muscle maintenance, which could expand the total addressable market to $100B+ by 2030.
🔎 Verdict: $LLY is still a leader but priced for it.
Rating: 8/10
Stick with it, but don’t expect monster moves unless the pill hits big or the combo gets FDA greenlight fast.
I also asked GPT about any other names, below is what it came up with. BHVN popped up again, I wrote about that a couple of days ago. Would like to see some signs of life from the stock, but as a counter trend guy it could get appealing if it breaks above the 10 day……
🏆 The Asymmetric Plays You’re Not Watching
💪 $BHVN (Biohaven) – quietly developing anti-myostatin therapies that could power the next leg of the obesity boom: preserving muscle during rapid weight loss. A potential 10x if combo trials go right.
🧬 $REGN – best-in-class cytokine control + muscle building. A perfect GLP-1 pairing machine.
📦 $PODD (Insulet) – insulin pump leader now pivoting into weight loss with delivery innovations.
REGN also looks appealing, nice gap in the chart that you could see get filled…..
Ahead of the NATO summit seeing a lot of articles about defense stocks. We started talking about European defense last year.
🔥The Global Arms Race Is No Longer a Theory—It’s the New Normal
It’s official: Macron and Merz just rang the bell on the next leg of the defense bull market.
When the presidents of France and Germany publicly co-author an op-ed demanding that Europe re-arm for an unstable world—and commit to spending 3.5% of GDP on defense—you better believe the capital markets will follow.
The NATO summit in The Hague this week is no longer about symbolic unity. It’s about hard assets, hardened resolve, and hardening infrastructure across the continent.
And here’s the kicker…
Europe isn’t just buying weapons.
They’re investing in logistics resilience, cyber defenses, AI-powered battlefield command, and supply chain redundancy—the boring, essential backbones of modern warfare.
That’s the real signal.
And as you’ll see below, this new arms race has direct implications for defense contractors, AI software suppliers, nuclear startups, and even regional banks.
Let’s unpack it.
🛡️ Europe Goes Full Metal Jacket
NATO is embracing a new definition of defense: not just tanks and missiles—but nonlethal infrastructure, too.
According to the WSJ:
Russia’s war has revealed just how fragile our mobilization infrastructure is.
GPS jamming, drone strikes, and cyber sabotage are now first-strike options.
NATO must fortify roads, ports, power plants, and even data centers before a bullet is fired.
Retired generals are clear: “It’s going to be a fight to get to the fight.”
That means the next $100 billion in defense spending won’t just flow to Raytheon and Lockheed. It’ll hit:
✅ Contractors who reinforce bridges
✅ Builders of mobile power and comms systems
✅ Cybersecurity infrastructure plays
✅ AI logistics and command software vendors
The new NATO spending mandate—targeting 5% of GDP—is Trump-inspired and Europe-endorsed. The Netherlands is already allocating defense dollars to medical and supply chain logistics. Others will follow.
Winners:
$LMT, $RTX, $NOC – traditional defense primes
$PLTR – AI battlefield intelligence
$NOW, $ZS, $CRWD – secure ops and comms platforms
And of course European Aerospace and Defense stocks….
Speaking of defense….
ONDAS TEAMS UP WITH MISTRAL TO PUSH AUTONOMOUS DRONE TECH INTO U.S. DEFENSE MARKET
$ONDS is partnering with Mistral Inc. to ramp up U.S. defense and homeland security sales for its Optimus and Iron Drone Raider platforms. Mistral, a veteran D.C.-area defense contractor with deep
— #Wall St Engine (#@wallstengine)
12:50 PM • Jun 24, 2025
Undercut and rally at the 20 day EMA, stuck right at the 10 day. It’s up almost 14% pre market. I had a reader ask me about this the other day, it’s going to be volatile, if you are in it you need to size accordingly and expect a wild ride.
Beyond defense stocks I still think the US is the place to be. Can’t have massive outperformance of US vs. Europe without money flowing back there from time to time, but at the end of the day the most innovative companies are here…..
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