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Momentum Monday - The Degenerate Economy Does Not Care About Moody's or US Debt Downgrades

Momentum Monday - The Degenerate Economy Does Not Care About Moody's or US Debt Downgrades

Notes from The Alpaca Fintech Summit in Kyoto, Japan

Howard Lindzon
May 19, 2025

As a reminder, MarketSurge (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from MarketSurge. They are offering my readers 2 months for $59.95 - save $239. That's 80% off the most powerful stock research platform for individual investors.

Good evening…

I am in Kyoto, Japan working for a couple days.

I am here for the Alpaca Summit with over 100 Alpaca partners/customers. ..the next generation of investing, trading and crypto platforms and what I call ‘The Degenerate Economy’:

We were seed investors in Alpaca back in 2017/2018 (fund 3) and the company is a fast growing global business today. One customer example is Midas in Istanbul, Turkey which over the last three years has over 3 million customers across Turkey (the Robinhood of Turkey).

Here are a few shots of the team and the event…

Alpaca founders Yoshi (left) and Hotoshi (right) and head of sales Tarun on far left

Joke about the state of speculating, trading, degeneracy all you want, but the more players, the more liquidity the better for US stocks and markets.

It could be a main reason that US stocks continue to shake off what so many Americans perceive as terrible policy and leadership (which just led Moody’s to downgrade US debt).

Ivanhoff did the show himself because of my travel and time zone differences and shares a lot of ideas and setups in this weeks episode:

Welcome back to Momentum Monday!

In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:

Market Sentiment and Deflation Concerns
AI Stocks: Recovery and Trends
Key Stock Movements: VRT and COS Performance
Potential Cryptocurrency Breakout Insights
Stock Market Recovery and Potential Breakouts
US Debt Downgrade & Market Reaction

In This Episode, We Cover:

Market Sentiment and Deflation Concerns (0:00)
AI Stocks: Recovery and Trends (2:22)
Key Stock Movements: VRT and COS Performance (3:38)
Potential Cryptocurrency Breakout Insights (5:43)
Stock Market Recovery and Potential Breakouts (7:19)
US Debt Downgrade & Market Reaction (9:00)
Here are Ivanhoff’s thoughts:

We continue to see higher lows in the indexes are they consolidate near their 200-day moving average. Consolidating is certainly more bullish than immediately selling off. It is a testament of strength and eager dip buyers.

The first trade deal is a fact. It was with the UK, one of the few countries with which the US has a trade surplus. Nothing major has changed compared to last year, other than the 10% base tariff. The market has started to accept that while it is likely that current high tariffs will be reduced for many countries, they are not going away. This is why inflation expectations are rising. This is why gold and cryptocurrencies are getting a bid.

The Fed kept interest rates at 4.5%, citing increasing uncertainty and potential for rising unemployment and inflation later this year. What is important is that the market didn’t sell off this week. It went higher. Rallying on bad news is a reflection of bullish sentiment.

The biggest loser last week was the biotech sector. The new FDA Center for Biologic Evaluation and Research director’s appointment caused a major selloff in gene therapy stocks, which spilled over to the rest of biotech. I don’t know if this is a short-term hiccup, but the entire healthcare sector is looking vulnerable.

We remain in a market-of-stocks environment that offers something for everyone. There are plenty of stocks that broke out and are setting up. There are plenty of stocks that broke out and are looking weaker.