AJB Capital

Momentum has turned negative. The S&P and Nasdaq downtrends are clear, lower highs and lower lows, and the Russell is fading right along with them. Time to start playing defense.

Last night's earnings didn't help. Alphabet beat on revenue with cloud growing 82%, then told everyone capex could reach $205 billion this year, and the stock got sold 4% anyway. Tesla put up record revenue and still missed, with costs up 47% and margins collapsing to 1.4% from 4%. Both reactions say the same thing. The market has stopped rewarding the spending. It wants proof it pays off.

Under the surface, the selling is concentrated in the biggest names while the average stock actually improved overnight. Energy is up almost 5% on the week, and utilities, materials, and real estate are pulling in money. Every group with more stocks breaking out than breaking down right now is defensive or rate-sensitive. That's where capital is hiding.

Oil is driving this. Brent is pushing toward $100 after the Houthis hit two

The AI hardware trade is cracking hard this morning, and it's worth understanding what actually set it off, because it isn't just profit-taking.

The trigger came out of China. A company called Moonshot released a new model, Kimi K3, and it's the largest open-source model ever built. It rivals the top US systems, and it's open, meaning anyone can use it. This is the same fear that hit the market with DeepSeek earlier, and it keeps coming back for a reason.

The whole US AI and chip trade is priced on the assumption that we stay far ahead. Every time China closes the gap and drives the cost of these models down, that assumption takes a hit. And it's not just the model side. A Chinese memory maker called CXMT is about to list in Shanghai after an IPO that was more than 200 times oversubscribed, which stands up a fourth major competitor in the memory chips that go into every phone and server. More capacity and more competition in memory is a direct threat to the pricing power that has driven