Every Sunday morning I sit down to write a few thoughts. Sometimes these thoughts end up being about life, other times they are on gold, geopolitical issues affecting the markets, or the economy.

Here are three thoughts for this morning:

1. Why is Japan so important to the US stock market anyway?

This week you started to see major drawdowns on the S&P 500, Nasdaq, and America’s darling, Nvidia.

So far, they have yet to recover… This is why Japan is so important.

Many American investors, money managers too, use what’s called the Japanese carry trade.

The Japanese carry trade works by borrowing ultra-cheap yen, converting it into dollars, and buying higher-yielding U.S. assets. The profit comes from the rate spread—as long as the yen stays weak. But when Japan’s 10-year yield suddenly spiked, the yen surged.

That instantly made dollar-based investors’ yen debts more expensive to repay. U.S. investors were forced to unwind positions, selling stocks to raise cash and buy back yen.

The result was a rapid drawdown across the S&P 500, Nasdaq, and especially high-beta names like Nvidia, as carry traders dumped shares to cover their foreign exchange losses.

2. Target has been plummeting since lockdown and it probably won’t recover. Aside from the whole “Go Woke, Go Broke” thing, there are some important line items to pay attention to on the balance sheet, and financial reports too.

We used to say something went “the way of the Buffalo.”

Now we think, “the way of Sears." Or, if you’re in Canada, “Zellers” and now, “The Hudson’s Bay Company.”

Target is going that way too. They’re becoming a part of the disappearing storefront landscape of retail.

A few marketing mistakes is one thing, but Target seems to have taken the 2020-2021 consumer turn to e-commerce the wrong way…even into a delusional horizon.

In 2020-21, e-commerce revenue spiked up everywhere. No one could go out!

So, with numbers looking up Target planned to re-purpose their revenue into capital expenditure. Cap Ex projects rose over $2 Billion from ~$3.54 billion in 2022 to ~$5.53 billion in 2023.

The Cap Ex projects were earmarked for new stores and remodels, enhancements to the store experience, and advancements in digital fulfilment/ technology/ supply-chain.

Except all that investment in the storefront only worked what smart investors look for. Free Cash Flow, which is…

Free Cash Flow (FCF) = Operating Cash Flow – CapEx

When you’re looking for a company to invest in, FCF is a good indicator as to whether or not the company is using big expenses efficiently.

Well, in retail operating cash flow is touchy. Margins are tight. And you’re always looking to maximize profit from inventory.

So far, Target hasn’t decided to turn their spending around. They announced a roughly $5 billion capital expenditure plan for 2026, up by about $1 billion from the prior year. And it’s mostly focused on the storefront even as revenue declines.

It doesn’t look like Target will turn it around.

3. Bitcoin looks like it’s wrestling with sub-$80k now. What will become of Michael Saylor and his company MicroStrategy?

After briefly plummeting below $80k, the price of Bitcoin continues sideways at about $84k.

Meanwhile, according to PolyMarket, McDonalds is seeing a surge of job applicants.

All those who were investing their future in “crypto bro” alt-coin schemes on X are suffering disillusionment.

Meanwhile, even savvy investors who were hoping to gain some exposure to Bitcoin without buying Bitcoin may also be regretting flushing their money into Michael Saylor’s Microstrategy (MSTR).

MSTR has plunged from $455 per share in July 2025 down to $170, today.

The thing is, MicroStrategy holds around 641,692 BTC, which, at $100,000 per Bitcoin is worth around $64.17 Billion.

At $84,000 BTC, that’s $53.90 Billion.

So, if you divide that by the number of shares available to the public… The value of their Bitcoin is still worth more than the value of their $170 share.

That doesn’t include the value of his business operations. Someone’s AI funny work (see Saylor working at McDonalds below) may not come true after all.

What will become of Michael Saylor and his Bitcoin wager?

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