CLOSING BELL
Sell The Kevin News
Rest in peace Catherine O’Hara
Happy Friday, unless you are a silver holder, because oohhh boy did metals tank today. The President nominated Kevin Warsh for the FOMC Chair seat, replacing Powell in May when his term runs out.
Speculators were pricing in a catastrophic dollar collapse based on Trump’s pick, expecting a rapid rate-cutting regime to appease home-buying mid term voters: record-high metals kept climbing all week, gold hitting nearly $5,600 Thursday.
The major drops in safe commodities and the biggest gain in the dollar for nearly a year showed this is a Fed chair the market can accept. It’s a former Fed Gov, who has criticized high rates and low rates, and frankly, he’s just one of twelve voting on rates.
The overall market fell big time, record high metals and speculative tech names selling the news regardless of what Warsh might do in four months. The Senate was voting on a Government funding bill, on the eve of a shutdown Friday night. It agreed to a two-week extension just past 6 pm.
Oil earnings from Chevron and Exxon showed cost cutting and high margins, and a wait an see regime change in Venezuela. Both stocks climbed.
Sandisk was the hero of the tape, ripping over 20% higher to start the day with blown-away estimates and proving the memory super cycle is alive and well. The stock pulled back to a 7% climb.
Deckers was the consumer descrationary stand out, popping 14% on record earnings driven by HOKA and UGG.
INDUSTRY NEWS
Video Game Stocks Google AI Tool Sparks Creative Disruption Fears
The new tech, on early access, lets users generate ‘sketches’ of virtual worlds.
The rollout of Google’s Project Genie prototype triggered a massive selloff across the gaming sector as investors weighed the threat of AI-generated interactive worlds. Shares of video game engine giant $U ( ▼ 24.22% ) led the decline, suffering their steepest one-day plunge since 2022.
The Numbers: $U plummeted 24%to close near $29, while children’s game giant $RBLX ( ▼ 13.17% ) and mobile app market maker $APP ( ▼ 16.89% ) fell; $TTWO ( ▼ 7.93% ) the GTA builder also dropped on fears of long-term disintermediation.
The Catalyst: Google’s new $250/month AI Ultra tool allows users to generate and explore navigable 3D environments via text prompts, threatening the traditional "moat" held by established game engines and platforms.
The Outlook: While analysts call the reaction "overblown" due to Google's high subscription cost vs. $210 for Unity Pro, the market remains wary of a "vibe coding" future that could automate complex asset creation.
MACRO NEWS
Trump Taps Crisis Veteran Kevin Warsh for FOMC
SUN VALLEY, IDAHO - JULY 10: Julia Hartz, CEO of Eventbrite, Kevin Warsh, and Kevin Hartz, former CEO of Xoom, leave after the morning-session at the Allen & Company Sun Valley Conference — Getty
President Trump has officially nominated Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve in May 2026. The 55-year-old Hoover Institution fellow and former Fed Governor is expected to drive a "regime change" focused on deregulation and balance sheet reduction. Despite a major history of hawkish comments, Warsh has made statements that align with Trump’s goals of major rate cuts.
Following the news, rumored last night, the U.S. Dollar Index rose the most it has since May as markets weighed Warsh’s history and recent pivot toward Trump’s low-rate preferences. Gold prices saw a sharp correction, falling 10% to $4,800 as investors priced in a potential shift in the Fed's operating framework. Silver fell nearly a whopping 30%.
Some tried to warn the market this week, pointing to technical indicators like RSI, showing the most ‘overbought’ conditions for gold for decades
The Resume: A Stanford and Harvard Law graduate, Warsh became the youngest Fed Governor in history at 35 and served as the primary Wall Street liaison for Ben Bernanke during the 2008 financial crisis. He wanted rates high even while the market was tanking.
The Why: After Trump took office, and chose Powell, Warsh emerged as a vocal critic of the "Powell Fed," advocating for a significantly smaller balance sheet and a tighter "accord" with the Treasury to spur productivity via supply-side growth.
The Outlook: Markets view him as a stabilizing institutionalist despite his hawkish past. He faces a confirmation hurdle from reps like Senator Thom Tillis, who have threatened to block proceedings pending a separate probe into the current Fed leadership.
The market seemed to think, based on the soaring prices of gold, that the next Fed head would be a cut-or-die pick, but that might not be the case. Peter Conti-Brown, Wharton School Legal and Business Ethics studies Prof. told Bloomberg that Warsh was up for a seat back in 2019, but Trump and team passed him over for his hawkish nature.
His tune is different seven years later: While Powell has prioritized a cautious, data-dependent approach to preserve the Fed's inflation-fighting credibility, Warsh is campaigning on a platform of "regime change" and aggressive institutional reform.
Warsh wants to cut the Fed’s $7 trillionbalance sheet in coordination with the Treasury, contrasting with Powell’s slower, more insulated runoff process.
While Powell focuses on cooling labor markets to curb prices, Warsh is a supply-side optimist who believes AI-driven productivity and deregulation will naturally lower inflation, allowing for a much more aggressive rate-cutting cycle. He is not specific on how.
On Wednesday, 10 of 12 FOMC members said rates should stay high, and maybe Warsh will help weigh the other side of hte scael when he gets there, but that still leaves 3/4ths of the votes for “wait.”
Deep Dive: Recommended Reading on Kevin Warsh
The Crisis Architect (2006–2011): The Federal Reserve History Profiledetails his role as the primary liaison to the G20 and his controversial pivot from supporting early stimulus to opposing the second round of Quantitative Easing.
The AI Evangelist: On his Hoover Institution Scholar Page, read his 2025 white papers arguing that AI could create a 1% increase in annual productivity.
WSJ Critic: In his recent Wall Street Journal op-eds, Warsh has blasted "institutional drift" and called for the Fed to exit the "political business" of climate change and social mandates to focus solely on currency integrity.
The Macro Partner: His private-sector background as a partner at Stanley Druckenmiller’s Duquesne Family Office aligns him with the "macro-mentor" of Treasury Secretary Scott Bessent, signaling a unified front between the Fed and Treasury.
HOT STOCKS
Market Movers
$SNDK (+6.60%): Shares rocketed after delivering a massive second-quarter beat that underscored its status as the premier pure-play for AI infrastructure. The company, which spun off from Western Digital in 2025, is benefiting from a "seller's market" where demand for its BiCS8 high-density SSDs is drastically outstripping global supply.
$PHOE (+997.36%): The massive percentage spike follows the company's first-quarter fiscal 2026 results, reporting $15.5 million in net income and a cash dividend of $0.21 per share. Low float dynamics following its late 2025 IPO contributed to the extreme price action.
$SOFI (-6.28%): The digital lender faced selling pressure as part of a broader cool-off in fintech and crypto-linked assets. Despite strong operational performance, and record numbers.
$SOUN (-7.27%): Investor sentiment cooled as revenue growth decelerated and losses mounted to $109.2 million in the most recent quarter. Concerns over a high price-to-sales ratio of 32.8and a lean balance sheet are driving uncertainty regarding its 2026 outlook.
High and Low
$DECK (+19.20%): Deckers surged after posting record Q3 revenue of $1.96 billion, fueled by 18.5%growth in the Hoka brand. The company raised its full-year EPS guidance to a range of $6.80–$6.85, significantly beating analyst expectations.
$VZ (+11.81%): Leading the Dow 30 gainers as defensive rotation picks up steam after bullish 2026 expectations.
$AGQ (-60.90%): The leveraged silver ETF bore the brunt of the silver market's "liquidity vacuum," compounding the nearly 30% drop in spot silver prices with double leverage.
$KOLD (-23.58%): The inverse natural gas fund tumbled as energy prices spiked, tracking volatile shifts in the commodity's futures market.
