Timber Point Capital Management

TPCM is a boutique New York based investment firm providing outsourced investment services, alternative funds and multi-asset solutions for our clients.

[Timber Point Capital Management @TPCM17]

The U.S. sports betting landscape is being redrawn.

For a decade, betting meant state-licensed sportsbooks — DraftKings (DKNG) and FanDuel (Flutter, FLUT) built the category one regulator at a time. Kalshi and Polymarket took a different route: as CFTC-regulated exchanges, they list sports contracts under one federal framework, no state license. So they operate in Texas, California, and Florida, where the books can't — and it's working. Combined monthly volume on Kalshi and Polymarket hit ~$24 billion in April, up from under $5 billion last September, blowing past the ~$14 billion a month wagered through legal U.S. sportsbooks in 2025.

Last week brought the clearest federal signal yet. The CFTC's proposed rule (June 10) would permit most contracts — moneylines, spreads, player props — while carving out injuries, officiating, microbetting, and casino-style games. Still a proposal, likely headed to the Supreme Court. But the direction's clear: the regulator isn't trying to shut this down.

That cuts both ways. It validates Kalshi and Polymarket's core product, and de-risks the books' own entries — DraftKings Predictions volume jumped 24% month-over-month to $1.3 billion in April, and DKNG popped 11%, even with the stock down 27% on the year. The carve-outs matter too: microbetting and exotic props, the books' richest-margin products, stay off-limits for the prediction markets.

The books own the customers. The exchanges own the framework. We're watching.

#PredictionMarkets #SportsBetting #CFTC

[Timber Point Capital Management @TPCM17]

The Timber Log is a bit delayed from its usual Friday posting...apologies.

Our take is that SpaceX relit a fire under tech stocks but new highs in the equal weight SPX suggest that the market can broaden out. Certainly, resumption of oil flow from the SoH should help that occur. IPO activity is set to accelerate, financials from Anthropic and OpenAI will be enlightening, especially with OpenAI's reduction in token pricing - interesting timing to say the least.

Animal spirits are rising as evidenced by the rise in unprofitable stocks while credit risk looks reasonably well contained with spreads down from recent highs. Lower energy prices will be much welcomed by a strained consumer...all positive elements for further equity appreciation.

https://t.co/BJF9mysoFg

[Timber Point Capital Management @TPCM17]

Let's get this Strait…good news on the US/Iran peace deal overnight is moving equity markets higher by ~ 1% as yields move slightly lower and front month WTI crude declines 5%, now near $80. The framework of a deal leaves unanswered questions beyond open transit through the SoH, which is seen as a big step forward for the global economy. Pending details on issues such as further nuclear enrichment and how Iranian proxies fall in line, not to mention the Israeli response, we remain cautiously optimistic although understanding of the difficulty past "deals" have had with verification of compliance - some things never change.

Earnings reports are decidedly down market cap this week although JBL (Wed), one of the largest manufacturers for AI related hardware, will provide an update on future build out plans for major capex players. ACN (Thur) will hope to convince investors that AI is not disintermediating its business with the agentic AI buildout and cybersecurity concerns likely the strongest card it has to play. KR (Thur) is dealing with higher input prices making it more difficult to compete with low cost suppliers such as WMT and COST, at the same time it attempts to accelerate new store openings and expand existing store fronts.

The Fed meets (Wed) with new Chair Warsh taking the reins and no change to the fed funds rate expected. Economic conditions have changed quite a bit over the past few months as employment and energy driven inflation have both rebounded and investors now see more of a possibility of medium term rate hikes rather than rate cuts. Expect Warsh to focus on a smaller Fed balance sheet and driving new data sets for economic intelligence.

Have a great week!

https://t.co/MdGYACAdFH

[Timber Point Capital Management @TPCM17]

Fermi America is a mess right now — which is exactly why we're watching it closely.

A ~$4B company chasing a genuinely big idea: build America's largest private power grid and sell gigawatts of behind-the-meter electricity to AI data centers.

The asset base is one-of-one. Project Matador sits on ~5,236 acres locked up under a 99-year ground lease with the Texas Tech University System — long-term control few rivals can replicate. The company has secured a ~6 GW Clean Air Permit (the second-largest of its kind in the U.S.) , built over $1.4B of infrastructure, and lined up nearly $1B in financing. And tenant interest from hyperscalers is finally accelerating.

Then the boardroom caught fire. Co-founder and former CEO Toby Neugebauer was terminated for cause and is now running a consent solicitation to seize the board back. The stock is down 80%+ from IPO.

On the surface, it’s a cautionary tale – the anti-SpaceX, a moonshot that lost its hype while the market moved on from its difficulties. But cautionary tales and mispriced assets often look identical from the outside.

Here's the setup: Rick Perry is backing the current team, the assets are real and permitted, and the price reflects the chaos — not the campus. Resolve the governance fight, sign a lease, and the story changes fast.

Founders get you to the IPO. Governance gets you to scale. We're watching.

#AIinfrastructure #Energy #DataCenters

[Timber Point Capital Management @TPCM17]

To Infinity, and Beyond…as SpaceX blasts off into public markets this week hoping to raise $75B at an ~ $1.75T valuation. Fears of a big capital suck from SpaceX and others orbiting closely behind it (Anthropic, OpenAI, Databricks), in addition to GOOGL's $80B equity raise and META's rumored raise, gave tech investors indigestion last week - as did higher 2-year rates warning of a possible rate hike.

This week's earnings results will largely focus on consumer related names (CPB, MTN, SJM, CASY, CHWY) with the backdrop of the XLY (Cons Disc sector SPDR) and RSPD (Equal Weight Cons Disc) both having broken their 50/150 dma's on Friday. Granted, AMZN remains firmly above its 150dma but MCD, HD, BKNG all signal some level of distress across various consumer sectors despite robust employment data last week, along with positive prior month revisions. ORCL and ADBE will be the focus for tech investors with ORCL having showed a strong revenue acceleration last quarter that put to rest, somewhat, fears of dependence on OpenAI and a stretched balance sheet. ADBE will hope to dispel the belief that they are a melting ice cube in the face of greater AI capabilities.

Price indices including the CPI and PPI (Wed/Thur) will show accelerating inflation prints as energy and logistics prices spike input costs that are slowly bleeding into finished good prices. April energy costs jumped 18%, the steepest annual increase since Sept. '02, but WTI crude has largely been flat over the past month, suggesting the m/m print will be subdued. PPI prices rose 6% y/y in April and are expected to rise further in May, approaching 7%. We will also be watching the size of the Fed Balance Sheet on Thursday as new Fed Chair Warsh begins his term with meetings next week.

Have a great week!

https://t.co/spdLTrPbay

[Timber Point Capital Management @TPCM17]

CIO David Cleary with a 5-minute market update video...Bottom line: May was a wonderful month, and the rally has real fundamental backing, but after an extraordinary eight-week run, rising narrowness and speculative behavior argue for a bit more caution.

https://t.co/wyDLUM5zgH

[Timber Point Capital Management @TPCM17]

Ford vs. Ferrari:

Two automakers, two announcements, two opposite verdicts from the market.

Ferrari unveiled its first electric car — the Luce, a ~$640K four-door EV. The stock fell ~8% as critics argued it abandoned what makes a Ferrari a Ferrari. The brand is built on emotion, exclusivity and the scream of a combustion engine — a silent EV cuts against the very thing customers pay for.

Ford launched Ford Energy, a $2B business selling battery storage to AI data centers. The stock jumped ~30% to a multi-year high, with analysts valuing the new segment alone at up to $10B — Ford turning decades of battery muscle into the hottest demand signal in the economy.

Same industry, same energy-transition tailwind.

The difference: Ferrari built the product it wanted to build. Ford built the product the market was desperate to buy.

[Timber Point Capital Management @TPCM17]

June is in full bloom, just like earnings have been for the past 6 weeks or so. The IGV's recovery above its 150dma last week could foretell a return of capital into the broader enterprise software space beyond the security names which have already recovered. We see names such as ORCL, MSFT, NOW, APP, WDAY, and maybe even CRM, as worthy of consideration as the AI hardware related names all look quite extended at this point.

HPE, AVGO, CRWD and CIEN are the high profile earnings reports this week in technology followed closely by takes on the consumer from DG, ULTA, FIVE and LULU. There is much not to like about the consumer sector currently (war, gas price, inflation, etc) but we have to admit that breakouts in the airlines (DAL, UAL), autos (F, GM) and the steadfastness of the hotels (MAR, H, HLT) give us pause to consider that the worst case scenario has long been discounted and we need to be on the lookout for emerging narratives.

The US labor market will be the focus of data this week as JOLTS (Tues), ADP (Wed), Challenger Job Cuts (Thur) and Non-Farm Payrolls (Fri) will provide a mosaic for the Fed to consider at its next meeting June 16/17. From our viewpoint, the no hire/no fire status quo looks like the most plausible scenario though a small uptick last week in new/continuing jobless claims - as we have sporadically over the past year, only to have it recede - gives us pause. Investors interest in regional economic activity reports from the Fed's Beige Book (Wed) will be high as it will provide anecdotal color/context to bewilderingly strong economic data that underlies the recent Atlanta Fed GDPNow estimate of 4+%.

Have a great week!

https://t.co/Zpxa4svCKK

[Timber Point Capital Management @TPCM17]

AI capex continues to drive earnings, not just for technology, but across many different sectors/industries. Equal weight SPX is breaking to new highs telling us the average SPX stock is participating - a good sign! May was a wonderful month for equity portfolios, can it get much better? The Timbe Log takes a bit deeper look...have a great weekend!

https://t.co/lkNWpdkGfZ

[Timber Point Capital Management @TPCM17]

Good morning and welcome back to a holiday shortened week, hope your Memorial Day was a great one! A short week but lots going on with a myriad of interesting earnings reports in both the technology and retail sectors which appear to be going in diverging directions at the moment as NVDA calls out parabolic demand last week while WMT spoke to margin concerns from higher fuel and food (fertilizer) prices along with tighter consumer wallets.

The PCE price index on Thursday is the key economic highlight as it will likely continue to frame inflation as accelerating given the ongoing Iran conflict. At the same time, there are rumblings of a deal in the Middle East, yes again, that would be a welcome reprieve for global GDP that is increasingly subject to higher crude/products pricing with inventories to date acting as a governor on price increases. WTI Crude is near 5-week lows this morning and 10-year yields are back to 4.5%, both supporting what looks to be a strong opening.

Have a great day and week!

https://t.co/WD6BcT2plZ

[Timber Point Capital Management @TPCM17]

The Timber Log returns with a look at the bounce back in Large Cap Growth equities driven by technology shares that have been fueled by AI capex trickle down into earnings. We like the setup but believe the tech sector needs to take a breather, not necessarily based on valuation, but on price action and sentiment as trailing returns are excessive relative to history and SPX/Levered ETF skew is at record highs. We would consider Healthcare, which is a relative laggard, as a place for rotation.

https://t.co/VodUdfrRbq

[Timber Point Capital Management @TPCM17]

A quick 5-minute market update from our CIO, David Cleary...
Markets climbed a wall of worry in April, posting an impressive 10.5% gain in the SPX, despite ominous headlines out of the Middle East. The driver of the upside was strong corporate earnings, especially in the tech/AI sector, which had seen equity price declines over multiple months resulting in attractive valuations for many names that will benefit from the strong capex led AI buildout.
We remain constructive on the market as we believe that the Strait of Hormuz situation will be resolved in the short-ish term and US energy independence will allow earnings and the consumer to side step the worst of the energy price increases.

https://t.co/K4uIPk0yh4

[Timber Point Capital Management @TPCM17]

NVDA (Wed) will put a cherry on top of technology earnings as they are expected to post F1Q27 (April) revenue and eps growth of 80% ($79.1B) and 120% ($1.78) and will likely solidify recent commentary that compute capacity is tight and will remain tight for the near future. We will be listening for insight on future hyperscaler capex as well as any supply constraints that may act as a governor on growth. At less than 30x F27 eps and PEG ratio of sub .5x, we find the shares attractive even after the recent run to new highs.

Retail EPS are in focus as HD, LOW, TGT, TJX and WSM all report with different dynamics in play and investors concerned that paychecks are increasingly being stretched by higher gasoline prices as well as incipient inflation that was laid bare in last week's CPI and PPI reports. Wednesday's FOMC minutes will tell a tale of two Fed's, with more Governors pushing for neutral to hawkish language - which will be at odds with new Chairman Warsh's beliefs that AI will be disinflationary and that government reporting mechanisms need a makeover.

A slew of housing data - NAHB, pending home sales, building permits and housing starts - are unlikely to jump start investor sentiment though upticks in permits (Feb) and starts (Mar) offer some hope that the bottom has been set. S&P Global Composite Flash estimates (Thur) will show the US economy remains in expansion territory (< 50.0).

Have a great week!

https://t.co/KZMK3hHgcY

[Timber Point Capital Management @TPCM17]

Investors begin the week asking whether ongoing momentum in the AI trade can continue to overshadow higher oil prices and a fragile ceasefire in the Middle East. Earnings reports shift from large cap, only 11 SPX firms are scheduled to report, to the R2K where ~ 15% of companies will report. Given the strong advance in technology last week, CSCO (Wed) and AMAT (Thur) will be focus names for the latest on enterprise spending trends while consumer names UA, DDS and YETI will hope to highlight consumer resilience.

Economic data including the CPI (Tues) and PPI (Wed) will be watched for signs of inflation picking up led by higher energy prices in headline reports. CPI core reports last month (March) were a tough light of estimates at 2.6%, as higher apparel prices offset lower used car/truck prices. Likewise, the PPI fell short of mid 4% expectations, coming in at 4%, while the core rose 3.6%, matching the highest level over the past three years. Retail sales (Thur) is expected to remain robust in the 4% range where it has been for the better part of '24 and '25.

President Trump meets with China's XI later in the week with Middle East events and trade matters, including agriculture and rare earths, likely the major focus points.

Have a great week!

https://t.co/jsGkzw6Eoo

[Timber Point Capital Management @TPCM17]

Renewed tension in the Middle East as Iranian media reports two US warships were hit after President Trump announced Operation "Escort" to move vessels through the SoH. The US denies the report and Iran's latest attempt at negotiation is deemed "not satisfactory" by the US, as WTI crude jumps 2%.

Earnings season continues but the cake is baked in terms of strong EPS reports with almost 2/3 of SPX companies having now reported. GAAP EPS growth, now estimated at 27.1% (!) by Factset, has been boosted by investment portfolio gains by GOOGL and AMZN as well as a sizable tax benefit by META. Suffice to say, non-GAAP or operating earnings growth remains in the mid-teens, a still very healthy level. Speaking of technology earnings, PLTR is a focus this week as investors assess its growth in the commercial sector while AMD will hope to impress with continued traction in the GPU space while also highlighting renewed adoption of CPU's for inference capabilities.

On the economic front, employment readings from JOLTS, ADP and Non-farm payrolls (Tues/Wed/Fri) will give investors further color on the strength of the labor market as companies continue to announce layoffs but initial unemployment claims remain remarkably subdued, reaching a 5-year low last week at 189K. ISM PMI for services (Tues) looks to remain comfortably above neutral at 53.7, while sub-indices for employment and new orders will be closely watched. US productivity (Thur) should uptick to the 2%+ range q/q after 4Q's subued report of a 1.8% gain which was hindered by manufacturing (-3.3%) but offset by non-financial corporate gains of 4.5%.

Have a great week!

https://t.co/Mpo48tnp7b

[Timber Point Capital Management @TPCM17]

Earnings season has been more than enough to flip the script on the Iran war, as long as no kinetic activity is in the offing. Technology shares have been a key driver of earnings season but we also see contribution from materials, financials and industrials. We think oil stays higher for longer given shrinking inventories and SPR's, but Trump will want to find a way to get volumes flowing again...soon! The Timber Log takes a look at that and more...have a great weekend!

https://t.co/BcF6uGEf4M

[Timber Point Capital Management @TPCM17]

A big week for earnings as the heart of the Mag 7 (AAPL, AMZN, GOOGL, META, MSFT) report with investors set to dissect capex guidance given the 30% run of the SOX over the past 3 weeks. TXN, QCOM, ARM and AMD, all formerly moribund chip stocks, posted gains of 10-40% over the prior week which requires that commentary best be positive. Investors are unfazed by events in the Strait of Hormuz – interesting given that prospects for negotiations to end the blockade(s) appear limited, crude oil prices are rising near $100 and US gasoline prices are approaching 4 year highs.

We expect the FOMC meeting (Wed.) to hold interest rates steady at 3.625% (mid-pt.) with warnings of accelerating inflation from the Middle East conflict in addition to employment downside risks from AI displacement and a strained consumer that is paying more at the gas pump. Building permits and housing starts (both Wed.) are expected to decline while Case Shiller housing prices will increase, with little relief in sight for mid 6% mortgage rates.

Thursday's PCE price index is expected to show an increase, as did the recent CPI, as higher energy prices funnel through the economy and impact the headline print. Core PCE prices should remain near the prior 3% level, a modest ticker higher relative to average 2025 price levels. ISM Manufacturing PMI (Fri) likely remains in expansionary territory (>50.0), although April's reading may see some impact to the new orders sub-index which could be a “tell” for future activity.

https://t.co/8O8rfGG7wv

[Timber Point Capital Management @TPCM17]

The IRGC reclaims control of Iranian messaging and it is not what the US and the world hopes to hear as they refuse to meet with US officials tomorrow and continue to claim control over the Strait, which is now closed - again. Over the weekend, the US fired on and seized an Iranian container vessel in the Strait, likely not the path to de-escalation.

The SPY is down 50 bps or so this morning and WTI crude is rebounding a few percent after hitting recent new lows on Friday near $85. Economic reports are light this week, retail sales (Tues) for March is the key one for a read into consumer activity as the Iran conflict began and escalated. S&P Global Flash PMI reports (Thur) will provide a first look at April business conditions with March showing a downtick in Services PMI to sub 50.0 level, its first foray to contractionary territory in quite a few years.

Earnings will be key to maintaining or reaching new highs as we did last week on many major indices. NOW (Wed) is a focus for a read into the AI impact on software names that stock prices have been aggressively discounting while INTC (Thur) will provide information on its technology advancement and Terafab involvement. Other earnings of note include GE, HAL, RTX and BSX. Have a great week!

https://t.co/5xCq0Mt3kT