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Do NOT Chase SpaceX. Do This Instead.
SpaceX is getting all the attention right now.
NVIDIA, Apple, Tesla, and the other mega-cap names are still dominating the conversation.
But Wall Street’s top-rated analysts are pointing to a different group of stocks.
MarketBeat tracks the highest-rated analyst recommendations every day, and 5 names have just risen to the top.
The Top 5 Stocks to Buy Now report reveals the 5 stocks getting some of Wall Street’s strongest analyst support before the broader market catches on.
If you’re looking for your next move, don’t just follow the names everyone is already talking about.
NFP SAYS OTHERWISE
The services economy was supposed to change completely.
Jobs were said to be replaced by AI and never come back, which was sort of the path it was beginning to go toward in recent quarters.
However,
Job losses weren’t due do AI (no matter what management teams say about it) but rather because of the natural economic cycle we’re in right now.
The NFP also gave me a very important piece of information last week:
Consumer cyclical and discretionary names are diverging
Net firings concentrated in that industry, but the PMI had something else to say last week. This information pointed me to specific consumer names, which are now set up as very bullish swing plays in my opinion.
My selection and long/short equity pairs pitch will be sent to Offside Premium members later in the week.
Now let’s check up on what changed in markets this week:
I’m here to remind you that the S&P 500 has fundamentally changed since 2023.
If you strip out the concentration in tech and AI-related plays, momentum, and speculative growth…
The market has been in a bear market reflecting the recessionary economic conditions in the United States.
In fact, the only two factors that have turned a profit since then have been:
Momentum
Buying the Dollar
This also means that as soon as momentum slows, we could see an unwind and rotation threatening to bring the indexes lower by roughly 30-40% unless money rotates more aggressively rather than present a net de-risking scenario.
Here’s how momentum is doing (yellow.)
Still in the lead on a year-to-date basis, but definitely losing steam against other factors like:
Breadth
Size
Value
All of which have been gaining traction since May 2026, starting what could become the summer rotation.
That’s also why we’ve been building the Offside Portfolio very carefully around this thematic shift, and it’s done us very well (outperformed the S&P by 3% in a month.)
CHART OF THE DAY
According to FactSet, the market is going to look a lot different than where it is today.
The information industry is now set up to deliver the most earnings growth out of the whole market.
Officially overtaking communications (which is where semis and memory lie.)
Now this is extremely helpful in connecting the dots between software outperforming when memory comes off the highs.
ARE YOU COVERED? —>
This is exactly what I’m looking to confirm tomorrow when the services PMI comes out.
The information industry now needs to showcase renewed growth, in which case further stock picks will come your way.
IMPORTANT GAUGES
After a 15% drop in the NAAIM exposure index…
It seems managers have begun to feel the pressure coming from the memory/semis trade last week.
As most of these managers have exposed their clients to technology and AI-related bets, unwinding is going to look a whole lot like the theater exit analogy.
However,
Even after this 15% unwind last week, the overall level of the NAAIM still suggests bullish sentiment toward the S&P 500, though keep in mind shocks can come out of nowhere (Liberation Day 2025, Iran War 2026.)
Now let’s cover some items for this coming week:
Services PMI Tomorrow:
When we got last month’s Services PMI data, one segment stood out to me.
Inventories
This isn’t the strongest signal by itself, but combined with new orders and business activity? It becomes the tie-breaker between a bullish and bearish bias.
This spike was mostly led by two industries:
Real Estate, Rental & Leasing
Accommodation & Food Services
However,
New orders fell for real estate and expanded for accommodation.
Meaning, the real estate cycle may continue to decline (to be seen in building permits), while the leisure & hospitality cycle may see renewed expansion.
Tomorrow, I will look for confirmation in this trend and begin to select some equity swing plays for you.
Fed Day on Wednesday:
Markets are more nervous than usual about the FOMC moving forward.
Kevin Warsh has now expressed the Fed will no longer be in the business of forward guidance, a section of the meeting that everyone leaned on for modeling and decision purposes.
So whatever language and decision shifts will come abruptly and unexpectedly.
This matters more than ever because of the tight spot the Fed is in right now:
Rising inflation (4.1% PCE)
Shaky labor markets (NFP volatility at cyclical highs)
Warsh is of the belief that he can keep interest rates low while shrinking the Fed’s balance sheet as a counterbalance to the mandate.
However,
As you saw last week in the M2 Money Supply figures, it doesn’t seem like he’s going in that direction at all.
So perhaps we should think of the opposite scenario:
Raise rates and expand the balance sheet instead?
We’ll do a proper coverage of the FOMC transcript and what I think it means for markets inside Offside Premium.
Make sure you’re part of it before prices go up on July 17th.
A Final Note
COMING UP NEXT (Reminder for This Week)
This week is all about honing in on the Manufacturing PMI signals we got last week, and then spotting the alpha that’s coming from the Services PMI tomorrow.
Premium members will access my latest portfolio pick deep dive, pitch deck, and modeling rationale for valuation targets.
As I dig through other developments in the AI trade, the economy, and South Korea, there will be further commentary on these topics if new evidence is found.
So stay tuned for tomorrow’s PMI, I will do my best to push out an email about it in a timely manner, otherwise it will be pushed to Tuesday morning.
If you read my take on the hyperscaler divergence to the semiconductor trade, then here’s a video from Steve Eisman, part of The Big Short crowd that called the 2008 subprime crisis.
I think he makes a point rather close to the one I broke down for you already:
Until next time,
OFFSIDE RESEARCH
Against the Tape, Ahead of the Curve.