☕ If I were to buy one steel company

Good morning! 👋

I expect this to be a comparatively quiet week in terms of earnings but perhaps not market action as I explained in yesterday’s short. (Watch) 

So far so good! 

Here’s my playbook. 

1 – What I’m watching this week and why 

I sat down with my friend and colleague the super smart Dave Asman ahead of today’s opening bell who asked me what I’m watching this week in the markets and why. (Watch) 

And, in case you missed it, I also had a wonderful conversation last Friday with the always sharp Liz Claman and another friend and colleague, Jason Katz of UBS. He makes some great points, and not surprisingly, we have quite a bit of thinking in common. (Watch) 

2 – Unka Ronnie’s not lovin’ it 

McDonald’s didn’t serve up a win. (Read) 

Not a surprise. Customers are spending less at its restaurants. 

So why’s the stock higher today? 

Short-term traders are taking it for a ride while the media draws in everyone hoping to cash in on rising international sales. Franchisees, meanwhile, are worried about “promotion overload.” 

MCD has returned just 4.91% over the past year while the S&P 500 has tacked on 19.88% over the same time frame. 

Glad I cancelled my “order” a while back. 

Keith’s Investing Tip: Companies making “must have” products and services are a very different proposition from those making “nice to haves.” Invest accordingly – your portfolio will thank you! 😊  

And at the risk of sounding like a broken record, I’ll be here if you'd like some help.  

3 – Mon Dieu!  Macron Unveils an AI Investment 

French President Emmanuel Macron just announced a whopping €109 billion ($112.6 billion) AI investment ahead of the AI Action Summit in Paris. (Read: A carefully choreographed PR stunt to keep France in the AI race—on paper, at least.) 

He called this France’s version of America’s AI push—specifically referencing Project Stargate, the U.S. initiative that, even at conservative estimates, is a half-a-trillion-dollar bet on artificial intelligence, quantum computing, national security and more. 

Bien essayé! 

The problem? That’s pocket change compared to what America’s biggest tech firms will privately invest this year alone. Alphabet, Microsoft, Amazon, and Meta are each spending tens of billions—Amazon alone reportedly $100 billion—on AI infrastructure. Nvidia? Just booked $22 billion in sales last quarter to feed the AI beast. 

Europe, on the other hand and in its infinite wisdom, would rather hamstring progress with regulatory red tape and anti-trust lawsuits than foster the kind of brutal, high-stakes competition that actually breeds world-class innovation. 

Examples? Take your pick: 

• The Digital Markets Act and Digital Services Act—which force U.S. tech giants into compliance but do little to help homegrown European AI firms actually compete. 
• The EU fining American tech companies (Google, Apple, Amazon, Meta) a combined ~$30 billion in recent years instead of building homegrown alternatives. 
• The utter failure of the European cloud initiative (Gaia-X)—meant to counter AWS, Azure, and Google Cloud, but bogged down by bureaucracy and infighting. 
• DeepMind? British. Acquired by Google. Anthropic, OpenAI? American. Meanwhile, France’s AI champion, Mistral, relies on U.S. venture capital for funding. 

Rather than creating an environment of unfettered tech investment, where companies can thrive without begging Silicon Valley for cash, European regulators seem intent on punishing success rather than enabling it. 

But that would mean doing something really radical—like cutting the ranks of bloated bureaucrats who thrive on blocking progress. 

And that, mes amis, is the real challenge. 

MyPOV: It’s a real shame EU regulators can’t get out of their own way. Europe is packed with brilliant, ambitious minds ready to lead—but instead of fueling innovation, the brain drain continues. Tech, in particular. 🤦‍️ 

4 –Steel/Aluminum tariffs: Winners and whiners 

US President Donald Trump told reporters on Air Force One that all imported steel and aluminum will face a 25% tariff. (Read) 

Following Trump’s announcement, U.S. steel and aluminum stocks saw significant premarket gains: 

• Cleveland-Cliffs: +8% 
• Nucor: +7% 
• Alcoa Corp.: +4% 
• U.S. Steel: +3% 

But there’s a name missing on many of the lists I am seeing flying around this morning. 

My choice – if I owned US steel companies – would be Steel Dynamics because it’s the most profitable and has the most efficient production process imho. 

What really attracts me, though, is that the TSY (True Shareholder Yield) is ~6.5% versus the listed dividend yield of 1.39% most folks know about. 

Hmmm. 🤔 

Keith’s Investing Tip: Tariffs are a short-term game changer so what you want to do is look for companies that have great operations and which are capable of emerging on the other side stronger for the experience.  

5 - China’s BYD Embeds DeepSeek AI into EV Software—What Could Go Wrong? 

Yang Dongsheng, head of BYD’s intelligent driving division, just confirmed the integration of the DeepSeek-R1 AI model into BYD’s vehicles. Geely, Zeekr and Dongfeng have all already followed suit. More will undoubtedly follow at Beijing’s behest. (Read) 

Are we surprised? 

Not in the least. 

China has just built the largest real-time intelligence-gathering system in human history… in plain sight and everybody who blithely jumped on board to try it voluntarily helped ‘em out. 

It’s only logical that they’d extend that reach into everything they produce. 

If it’s got a Chinese chip, it’s suspect. 

Toys, medical devices, industrial equipment, power grids, EVs... and more. 

The dragon is coming to lunch which means the only decision you need to make as an investor is to be at the table or on the menu. 

Hopefully you have thought about this as part of your investment strategy; if not, I urge you to do so immediately. How you “handle” China today will potentially impact your money for decades to come. 

Bottom Line 

Success in the markets isn’t about being right all the time, it’s about being ready all the time.  

Discipline beats prediction. 

Profits follow. 

You got this – I promise! 

As always, let’s MAKE it a great day and a greater week. 

Keith 😀