Last wk, S&P/Nas/Mag7 were +1.2%/+1.7%/+4.0% despite oil +4% & bond ylds +7bps on Iran flare-up. 2 days remain during this seasonally favorable time from the last 3 trading days of June through first 9 days of July. Earning season starts w/ big banks on Tuesday. As I first posted about on June 28th and reiterated on July 5th, the seasonality is historically very favorable from the last three trading days of June through the first nine trading days of July during which the S&P/Nasdaq have advanced 1.6%/2.5% and been up 78% of the time since 1985. The S&P/Nasdaq is up 3.0%/3.6% during the first 10 trading days of this time period in 2026 already. But for the heart of the AI trade, the Semiconductor (SOX) Index is down 7.0% during these last 10 trading days on fears of a “speed bump” that I have been posting about since 6/28. For the AI trade going forward, two separate thoughts with two different implications are beginning to coalesce in my mind. The first thought is that AI revenue growth for the leading LLM models is likely to hit a “speed bump” and slow in the September quarter. Last week, $SPCX and $META released new LLM models that both closed much of the gap with the leading edge models from OpenAI and Anthropic. But Meta plans to price their model at roughly 1/4th the cost of the two leaders with SpaceX aggressive as well. This is particularly relevant as companies switched from token maxing in March to token minimization in June. As an example, the CEO of Coinbase posted on June 26th, “How to keep AI spend flat while token usage grows exponentially... Putting this into practice has cut our AI spend nearly in half, while our token usage continues to grow.” Sam Altman on Thursday: “we have heard enterprises on their concerns about AI costs, and 5.6 sol is a huge step forward for dollars-per-task, as are terra and luna”. But on a positive note, two more public cloud providers have been recently added to the four that already existed of $AMZN, $GOOGL, $MSFT and $ORCL. SpaceX in the past month raised over $100B in equity plus debt and plans to spend hundreds of billions to attack the $28.5 trillion TAM they talked about in their IPO prospectus. News surrounding Meta last week seems to imply that they are launching a cloud offering not because they have excess compute but so 1) they can double their compute spend from 7 MegaWatts in 2026 to 14 MegaWatts in 2027 and 2) have capacity to sell their Muse Spark LLM. So in summary, with this seasonally favorable period of time for the overall market coming soon to a close, I believe cutting back excess exposure is prudent. Reaction by investors on Tuesday to bank earnings which should be strong, may give us a good tell as to the risk vs reward at current levels over the shorter-term. As for the AI trade, I believe selectivity is key as we work our way through the “speed bump” and the positive implications of 4 aggressive public cloud vendors now becoming six versus the negatives of token maxing in March turning to token minimization in June. All the best in the week ahead.