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Apple’s Starlink Update Sparks Huge Earning Opportunity
Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.
One of the biggest potential winners? Mode Mobile.
Mode’s EarnPhone already reaches 490M+ users that have earned over $1B, and that’s before global satellite coverage. With SpaceX eliminating "dead zones," Mode's earning technology can now reach billions more in unbanked and rural populations worldwide.
Their global expansion is perfectly timed, and investors like you still have a chance to invest in their pre-IPO offering at $0.52/share.
With their recent 32,481% revenue growth and newly reserved Nasdaq ticker, Mode is one step closer to a potential IPO.
Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering.
Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
BURRY’S NEW WINNING STREAK?
Most people love to jump and judge Michael Burry and his ideas.
I don’t agree with everything he picks, nor his timing, but there is one thing we cannot deny about the guy:
He’s amassed a net worth of half a billion dollars through trading and investing
So he must be doing something right.
I point this out because his latest picks have just been announced in:
Adobe
Microsoft
JD (in China)
We own the first two in the Offside Portfolio, and gave Premium Members an entire thesis deep dive on Adobe last week.
Now let’s check up on what changed in markets this week:
For the first time this year, something shifted in what markets are now willing to bid up…
While momentum (in yellow) continues to be the driving factor in terms of year-to-date performance, the rotations broken down through our morning digests last week revealed something very important.
The S&P 500 is struggling to keep its all-time high prices, in fact it closed lower in the week as capital rotated out of AI-related stocks.
A rotation that drew capital into:
Size (green)
Quality (dark blue)
Breadth (light blue)
In that order, the conclusion is that smaller cap names are starting to attract more investor capital now.
What happens to the AI trade now?
I suspect that a further rotation will continue, and as long as these other factors keep moving higher, there should be no more than a 15-20% drawdown in the S&P 500 from all-time highs.
That said,
Here’s my insight into the most important divergence of the AI trade:
Combined with this rotation, you’ll be better prepared to navigate whatever comes next.
CHART OF THE DAY
If you read our last take on the AI trade, then you know how these GPU price declines will affect everyone.
From hyperscalers, to semis & memory, the oversupply / slowing demand theme will affect future outlooks.
Challenging these outlooks will require valuations to come off accordingly, especially as current prices carry embedded expectations that are realistically hard to meet.
ARE YOU COVERED? —>
More importantly,
There are GPU-backed loans circling around the market today.
On top of that, credit default swaps are transforming these loans into a massively leveraged bet.
IMPORTANT GAUGES
The current NAAIM exposure index remains near tapped-out territory.
Because most of these managers are somewhat systematic, meaning they buy when the VIX is low and/or other technical gauges look right, the S&P has had a guaranteed buyer this month.
The VIX is being kept artificially low through a phenomenon called the “Dispersion” trade, which typically ends after earnings season.
We can get into that in another post.
For now, what matters is that you know these managers have very little room to keep buying as the index approaches 100 and above.
As you can see, the downside (liquidation) tends to happen abruptly, so I would keep an eye on these potential reactions especially now that the market rotation is gaining traction.
When you update the Commitment of Traders Report view, it’s more of the same.
A divergence between leveraged money (light blue) and managed money (dark blue) has been made like nothing we’ve seen in the past decade.
Fundamentally, this sort of plumbing is bullish for the S&P, and today’s record divergence can help explain the outperformance in the market driven by concentrated bets.
But,
This spread is highly mean reverting, and it seems both managers and levered money is tapped out to their S&P exposure.
Which means,
They must BOTH de-risk their books accordingly, and that’s not something I’ve spotted yet in the market, as only tech and AI-related bets are getting sold and rotated into other areas of the market.
When and if you see all sectors in the red, and money going into safe havens like the dollar or bonds…
That’s when you know these traders are simultaneously de-risking their books out of the equity market.
Now let’s cover some items for this coming week:
Wednesday is Fed & PMI Day:
Kevin Warsh is set to give a speech on Wednesday, just hours before the Manufacturing PMI report is released.
Keep in mind that the Manufacturing PMI is highly correlated and leading for areas like:
Real economy names and sectors (consumer, transportation, housing)
The breadth factor carrying most of the smaller cap names
Household economics for the most part
Given that markets are already rotating into these related areas and factors, selling tech and AI, I would think the PMI may have some good news for us this week.
More than that,
I will provide you with a deep dive view on which industries are growing the most, and where I think EPS beats and revisions will eventually show up.
Thursday’s NFP is Key:
July 4th weekend 🥳 also means markets will be closed on Friday.
So we are pushing one of the most important economic reports earlier by one day.
The non-farm payrolls number is expected to be 114K, a number I suspect will be beaten considering how strong the rotation has been into breadth and smaller cap names.
If the real economy is in fact beginning to recover, then this would be a welcome sign.
But, it’s not all good news…
A strong jobs number along with 4% inflation also means the odds of a rate cut also come down significantly.
Bank of America is already projecting three rate hikes before 2026 is over, so I guess the NFP will be key to figuring out whether they’re right or not.
Look out for a portfolio update in tomorrow’s morning digest, I expect to apply some DCAs and even open some new positions this week if the tape is good.
I am currently writing up another deep dive on a name we just bought as well.
A Final Note
COMING UP NEXT (Reminder for This Week)
I have just been shown some interesting data out of South Korea, it’s now obvious they are levered up to the hilt, and that never ends up well.
The government has already tried (and failed) to step in and put a stop to the recklessness.
I didn’t think I should care, until I found out just how exposed the US market is to what’s happening in Korea…
That big revelation is coming this week, along with a company deep dive a famous congress member just bought.
In the meantime, here’s a video from Goldman Sachs touching up on the IPO boom and what the new equity supply could mean for broader markets:
Until next time,
OFFSIDE RESEARCH
Against the Tape, Ahead of the Curve.