Straight-forward news - virtually in real-time, may be the winner thus far as a confounded Nation's media continues sifting through information. By doing so, they have largely missed the transparency, if not always accuracy, of 'live streaming' such as we saw from Trump's Butler PA rally, in some cases both a more accurate, and timely picture than mainstream media later provided.

I'm not a fan of fake news or shoot-from-the-hip opinions, but even I rendered a couple on the weekend, based on fairly obvious takes from viewing videos, and that includes the lag before a Secret Service sniper reacted to 'assassin on the roof' screams of bystanders and even local police. More will emerge in time I'm sure, but what the heck, the stock market is actually buoyed by this.

The prospect of a Trump Administration is perceived as favorable for business, especially small business, and restraining excessive globalism. Not to be dismissed, there are genuine socioeconomic differences between party candidates, but not as wide as one might think. For example, when JD Vance was asked who among liberal democrats share his views, Bernie Sanders got mentioned. To wit: populism on the right and the left have a good deal more in common than not, which is something I've noted in the past about extremes.

I think that's an interesting note for all of this, with only the 'temporary' pull for unity seeming to bolster center-right or center-left politics. That's what Biden proclaimed his leaning, but the center hasn't been holding well other than with calls for social unity. Some summer we're in, as there's more of this especially with both sides slipping back into hurling platitudes at the other already today.

And by the way, Defense Spending could see big changes with Trump/Vance influencing not so much the spending, but the orientation of that spending. In a sense Vance (knowing the vulnerability of carriers as capital ships) prefers a focus on Naval autonomous vessels, many of which were recently tested. Oh, is it coincidental that he is close to Peter Thiel, or that Palantir along with its partner BigBear.ai, are proponents and suppliers of autonomous software.

From the Navy's viewpoint, most want to see more large ships vs. unmanned systems, and we envision a blend of both. As impressive as carriers are, we already have seen their 'float plans' modified to limit exposure to targeting by adversaries. The combination of 'drones', short-to-ship missiles, and swarms of either that would be hard to assure total knockdown of, was evidenced lots of times, including the Red Sea skirmishes and the major Iranian attack totally repulsed by Israel and allies including Jordan (and the U.S. and U.K.) months ago. Stubborn Admirals are being compelled to accept today's reality, versus huge expensive ship-building programs. But we need both capabilities 'if' you envision conflict with China. Vance is a China (and Israel) hawk, Trump tends to be swayed by the biases of his advisors on most global affairs.

The takeaway from this is continued defense spending but with a focus on the 'mass' capacity we lack of flooding a combat area with relatively inexpensive drones etc. That is, as a boost for 'battlespace Ai', as it is termed.

There is a takeaway related to the late-breaking New York Times news that of course we'll take with slight skepticism. Authorities previously have obtained intelligence on an Iranian plot to assassinate Trump, prompting the Secret Service to increase security around the former president.

The intelligence threat from Iran raises new questions about security lapses at the Butler, PA rally, where Thomas Matthew Crooks, unconnected to the plot, attempted to kill Trump. Where was the expanded protection? Iran previously has vowed revenge for the US killing of (terror mastermind) Qasem Soleimani in 2020. Former Trump officials including John Bolton and Mike Pompeo, had also been targets of Iranian plots. Now let's temper this by two factors, one a) a crowd of cynics might say they wanted to see Iran do something like this to give an excuse to start a war with Iran, or b) it's not relevant now that you got a new President 'in' Iran, who has indicated overtures towards new stability in relations with Europe, and by extrapolation, the United States. We shall see, but this will be a story this evening to ponder and not overreact to. (I knew it would not be a comfortable time of Election year to comment on many things.)

Meanwhile.. AEHR entered into a stock purchase agreement to acquire all of outstanding capital stock of Incal Technology, Inc., a small Fremont, Calif.-based, privately held manufacturer of packaged part reliability/burn-in test solutions used by a significant number of leading Artificial Intelligence (AI) semiconductor manufacturers.

Hah! Good way to get involved with AI. The acquisition expands Aehr's (AEHR) product portfolio to include Incal's solutions, particularly ultra-high-power capabilities for AI accelerators, GPUs, and high-performance computing processors. AI semiconductors are among the highest power consuming devices in the semiconductor industry, with power levels of recent devices reaching 1,000 watts or more, well beyond existing devices. So while we'll not chase price higher, this is a plus given AEHR can provide test solutions for previously unseen power levels testing requirements. This company is basically a neighbor of AEHR, and probably is an easy small acquisition.

Market X-ray: 

Solid rally Tuesday widened as desired after a mixed start. We anticipate further upside and do not expect the last NYT Iranian news to derail this market. I do believe the broadening-out relieves the 'concentration' aspect we have warned of, as you do see mega-caps fade as small-caps catch bids.

Instant re-balancing and broadening is what this is. It is constructive. By the way I'm unimpressed by the IMF today talking of tighter monetary policies, no.

For now, all the sectors can hold or advance, given 'aggregate' sidelined cash including 'safe' money (more so than bonds) and some mega-cap trimming. If that money has been hiding to avoid another phase of recession, now maybe it is rethinking that and finding it's way back into equities. Combine a rate cut by the Fed, and you have a formula for an economic shot in the arm and next a political backdrop which might be favorable for M&A and deregulation too. (I am not approaching any subjective social issues, just what the market sees.)

I don't believe we're at a top so long as we get continued broadening-out. It's a shift in dynamics we called for in July and so far it unfolds satisfactorily with a lot of angina and side issues that have potential to be disruptive, or this time to actually assist the markets in becoming more optimistic.

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