Top Names, 6/8/2023

Continuing our core strategy.

This Week’s Top Names

Before we get to this week’s top names, a few quick updates.

The Trump Indictment.

Bad news for American politics and governance, but I doubt it will have any market impact in the near term. I plan on writing a post about it for ZeroHedge, which you should be able to find here by Friday afternoon, if you’re interested.

The Banking Situation

You may recall that one of the factors our banking analyst looked at in compiling our list of regional banks most likely to go bust was which banks had exhausted the Federal Reserve’s emergency bank bailout facility, the Bank Term Funding Program (BTFP).

ZeroHedge notes here that usage of the BTFP has climbed to a record level (“Fed Emergency Bank Bailout Facility Usage Tops $100 Billion For First Time As Money-Market Inflows Soared Again”). That this has happened at the same time bank stocks have recovered from their March lows raises an obvious question, as ZeroHedge points out:

If everything is so awesome - with regional banks at 3-month highs - why are they needing to borrow $100 billion from The Fed?

Thanks to the recent rally in bank stocks, if you haven’t opened our bearish trades against them yet, you can probably get better prices on all of them now than I did.

Top Names Performance

Our top names this year have benefited from exposure to the AI boom, as you can see below. We’ve mentioned Super Micro Computer (SMCI 0.00%↑) before; Rambus (RMBS 0.00%↑) has been another beneficiary.

Our top ten names from December 30th of last year are up 29.78% so far, compared to 12.64% for the SPDR S&P 500 Trust ETF (SPY 0.00%↑).

With that in mind, here are our top ten names as of Thursday’s close.