Helping you understand why names like $Micron Tech

Helping you understand why names like $Micron Tech(MU.US), $SIVE, and $Applied Optoelectronics(AAOI.US) are down sharply today:

Paradis Macro Report [June 9]:

-> Iran war, yields/rates, and upcoming macro catalysts.

Iran shot down U.S. Apache helicopter today while patrolling over the Strait of Hormuz.

A confirmed US strike on Iran would:

Spike oil = Hit risk appetite = Worsen equity weakness.

Today, we already saw some violent factor rotation:

Momentum/growth -> Value/defensive

Highlighted by:

- $QQQ: -4.2% intraday

- $SPY: -2.7% intraday

- $DJI: flat

So, a very fearful / risk-off market right now, as seen by high growth names like $IREN(IREN.US), $AXT(AXTI.US) and $Lumentum(LITE.US) being down >10% today.

Yields have also jumped after the June 5 payrolls beat (US 10Y: 4.54%). Meaning that Fed futures are now pricing in a rate hike by end of yr.

Basically:

Higher real yields = valuation compression for long-duration growth/AI names.

(Long-duration because the value in AI equities sit in cash-flows years out)

Ultimately, all this favours value/financials over AI growth names, which are all unwinding simultaneously right now.

But directionally, AI supercycle names will all continue higher in the long-run, driven by huge hyperscaler capex.

In terms of upcoming macro catalysts:

1. US May CPI [Jun 10]:

A hot print (>4.2% headline) hardens the "Fed can't cut / may hike" narrative.

= yields up, $ up, more pressure on AI/growth multiples.

A soft core surprise would be the relief valve for chips.

= relief rally in AI names.

2. $Oracle(ORCL.US) Earnings [Jun 10]:

Strong RPO/capex execution = bullish for the entire AI supply chain (HBM, optical, packaging, networking).

3. FOMC [Jun 16-17]:

The statement language (does it drop the easing bias / call labour "solid" vs "moderating") and the dots will reset the Y/E hike vs cut debate.

A hawkish hold / hike-signaling dots = pressure on AI supercycle names.

Any dovish surprise = relief for AI supercycle names.

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For inexperienced investors, I have advised countless times to avoid risky instruments such as options/leverage. Right now, with the current macro backdrop, stick to normal shares.

Personally, I have slowed down most dip-buying to let this macro uncertainty wash through.