The Insider Report: Near-Term Risks Rise, but Get Ready to Buy the Dip Soon

Market Overview

Geopolitical tensions are rising, and so are U.S. government tensions too. The head of the BLS was fired after a far-from-strong jobs report, but it did send the rate cut odds for September soaring. This looks to be close to a lock now. The Nasdaq held up the best last week, which is an encouraging sign, as it closed 2.17% lower. The S&P 500 was routed 2.36% and the Dow Jones Industrial Average suffered the most, closing down 2.92%. If anything, this decline is setting up the next big buying opportunity.

Stocks I Like

Interactive Brokers IBKR – 26% Return Potential

What's Happening

• Interactive Brokers Group (IBKR) is a technology-driven financial services company providing automated trading and brokerage services, leveraging advanced software and algorithms to offer low-cost, global market access for retail and institutional investors.
• Business has been pretty stable for IBKR. Earnings have been trending higher and the most recent quarter showed results of $207 million off $1.4 billion in revenue.
• This valuation on IBKR is decent. P/E is at 34.33, Price-to-Sales is at 2.9, and EV to EBITDA is at 2.86.
• From a technical standpoint, IBKR already broke out from a cup and handle pattern that is pointing to significantly higher prices.

Why It's Happening

• Net new account additions in Q2 were phenomenal, with 250,000 accounts opened in the quarter, totaling over 528,000 for the year so far—already exceeding all of 2023. Rapid client onboarding at scale points to IBKR’s superior technology and operational automation, positioning it to ride the global secular trend of self-directed and international investing.
• The global expansion continues at pace: IBKR's reach into international markets is drawing investors keen to access U.S. markets, and the pipeline of introducing brokers remains robust with steady growth abroad.
• Technological innovation is at the heart of IBKR's differentiation, with thousands of new software releases and configuration changes rolled out in Q2 alone, including the launch of "Investment Themes" and the IBKR InvestMentor app. These initiatives make investing more intuitive and actionable for a global base, supporting sticky client engagement and continued rapid account growth.
• IBKR's net interest income hit a quarterly record of $860 million, up 9% year over year, driven by higher client balances and robust securities lending activity. This strong growth should continue as higher global interest rates and market volatility make IBKR's low-cost, multi-asset platform even more attractive for capital deployment.
• The company achieved an industry-leading pretax profit margin of 75%, the highest in its history and rare even among fintech leaders. Maintaining such high profitability reflects both operating efficiency and IBKR's powerful moat, reinforcing the confidence that new investors can have in the sustainability and scalability of its business model as it continues to expand globally.
• Interactive Brokers (IBKR) posted record-breaking Q2 2025 results, with revenue surging 20.3% year over year to $1.48 billion.
• Analyst Ratings:
• Barclays: Overweight
• Piper Sandler: Overweight
• Citigroup: Buy

My Action Plan (26% Return Potential)

• I am bullish on IBKRabove $56.00-$57.00. My upside target is $80.00-$82.00.

BridgeBio Pharma BBIO – 26% Return Potential

What's Happening

• BridgeBio Pharma, Inc. (BBIO) is a biotechnology company dedicated to discovering, developing, and delivering transformative medicines for patients with genetic diseases and cancers, leveraging a diverse pipeline of over 30 programs ranging from early-stage research to advanced clinical trials.
• The company's most recent quarterly report showed revenue of $116.63 million and a loss of $188.01 million.
• Valuation is elevated in this stock. Price-to-Sales is at 68.55 and Book Value is actually in negative territory.
• From a technical standpoint, it's coiling tightly within a symmetrical triangle formation that looks to be leading to a continuation of the trend.

Why It's Happening

• ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​BridgeBio Pharma’s newly approved ATTR-CM treatment, Attruby (acoramidis), has vaulted out of the gate with an impressive $36.7 million in net product revenue in its first full quarter on the market, substantiated by 2,072 unique prescriptions from 756 unique prescribers by late April 2025. 
• Attruby's pivotal studies revealed a 42% reduction in all-cause mortality and recurrent hospitalizations, as well as a 50% reduction in cardiovascular hospitalizations over 30 months versus placebo. These outcomes not only garner significant attention among cardiologists but establish Attruby as a likely first-line therapy, driving long-term product loyalty and prescription growth.
• Recently, BridgeBio secured approvals for acoramidis (marketed as BEYONTTRA™) in Europe, Japan, and the UK, massively expanding its commercial footprint. Acoramidis is now positioned as a global standard for ATTR-CM, with strategic partners such as Bayer spearheading its European launch, ensuring rapid uptake across multiple geographies.
• In June 2025, BridgeBio raised $300 million through a partial, capped monetization of BEYONTTRA European royalties, providing less-dilutive and non-recourse capital. This financial maneuver enables sustained and aggressive launch activity for Attruby and continued investment across the pipeline while preserving long-term royalty upside for shareholders.
• With $540 million in cash and near-term receivables, alongside the recent $300 million royalty transaction, BridgeBio possesses ample liquidity to support the rapid commercialization of Attruby and aggressive pipeline advancement. This strong balance sheet reduces near-term financing risk and enhances operational flexibility.
• While SG&A costs have risen to fund commercial expansion, operating spend has been offset by sharply lower R&D expenses post-Attruby approval and following divestiture of non-core affiliates. The company is now entering a phase where revenue ramp and strategic spending generate increasing leverage, setting up an imminent move toward profitability as sales scale.
• Analyst Ratings:
  • Keybanc: Overweight
  • CIBC: Outperformer
  • Stifel: Hold

My Action Plan (26% Return Potential)

• I am bullish on BBIO above $38.00-$39.00. My upside target is $60.00-$62.00.

Baidu BIDU – 85% Return Potential

What's Happening

• Baidu, Inc. (BIDU) is a leading technology company specializing in Internet-related services and AI, offering search engine capabilities, cloud computing, autonomous driving solutions, and other innovative products to enhance user experience and digital transformation globally.
• This "Terrific Ten" name over in China reported revenue of $32.45 billion in the latest quarter along with $6.47 billion earnings.
• Valuation in BIDU is very solid. P/E is at 8.81, Price-to-Sales is at 1.67, and EV to EBITDA is 5.43. The Book Value on this stock is 109.68, more than the value of the stock.
• From a charting viewpoint, it's most key for BIDU to hold above technical support at 76.00-80.00. Above there, it looks like a huge discount.

Why It's Happening

• ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​The latest upgrade to Baidu's Qianfan platform and the launch of PaddlePaddle 3.0 are game-changers for China's AI developer ecosystem. By streamlining model training and deployment, Baidu is lowering barriers for companies to build their own AI applications. 
• Baidu's bold open-sourcing of its advanced ERNIE language models under the Apache 2.0 license is a strategic masterstroke, encouraging developers worldwide to innovate on its platform. This move, modeled after successful open-source initiatives in the US and China, will accelerate ecosystem growth, attract global partners, and boost the monetization of Baidu's AI tech stack long term.
• Baidu's mobile app now reaches more than 724 million monthly active users, up 7% year over year. More than 35% of its mobile search pages now feature AI-generated content, up sharply from just 22% in January. This rapid shift signals rising user engagement and opens new advertising and monetization possibilities powered by generative AI.
• Resilient fundamentals are complemented by favorable analyst sentiment, with Bank of America and Wall Street peers rating Baidu a "Buy" and setting price targets up to $105—representing an over 20% upside from current levels. With consensus calling for continued strength in AI-driven sales, investors are positioned to benefit as sentiment turns strongly bullish.
• Financially, Baidu shines as a deep value play: it trades with a forward P/E of just 18.5x, well below both its five-year average and global AI peers. With $19.5 billion in cash and short-term investments, low net leverage, and a healthy pretax profit margin of 12.8%, BIDU offers rare value and growth in the AI sector.
• Baidu's AI Cloud business surged by an exceptional 42% year-over-year last quarter, becoming a powerful engine for the company's future growth. 
• Analyst Ratings:
  • Barclays: Equal-weight
  • Citigroup: Buy
  • Jeffries: Buy

My Action Plan (85% Return Potential)

• I am bullish on BIDU above $76.00-$78.00. My upside target is $160.00-$165.00.

Market-Moving Catalysts for the Week Ahead

More Trade Deals and Blow Out Earnings

I'm still a little skeptical in terms of whether the trade deals being struck will last. We had the good news to start last week in terms of the trade deal with the European Union, and we even got a trade deal complete with South Korea.

It seems that many of these deals are seeing tariffs settle in the 15% range. So far, the companies have been eating these costs, but for how long? I've been talking about the looming inflation battle once the Fed lowers rates, because that will entail money printing.

There will be people that blame tariffs and there will be people that blame the Fed. They'll try to point to specific moments in time that led to the shift, but that's not how inflation works. It's more of a psychological and monetary phenomena. It's coming back at some point. The time to prepare is now.

Can We Grow Our Way Out of This Mess?

For years, we've been aware of the fiscal mess in Washington. The math isn't on their side either, especially with interest expenses as high as they currently are. They're crowding out other spending and even entitlements. Something has to change, and the sooner it does, the better.

The current administration's plan is to grow our way out of it. It's being marketed as the "Golden Age of America," which is fine. They are doing pro-growth policies that I think will help – for now.

I can't help but notice the parallels between now and the 1920s… all this new technology, Republicans controlling the House and Senate, and even a business-man as President. I'm not looking for the rug pull tomorrow per se – I think this rally has years left. All I'm saying is you need to be prepared for it to defy logic, and then we know how it always ends.

Sector & Industry Strength

Stocks are on the retreat now, but when it comes to the sector stack from the April 7 low, nothing has really changed. Ten of the eleven sectors are in positive territory from that important market bottom, with only healthcare (XLV) being in negative territory.

Despite the market decline, technology (XLV) is still up a whopping ~40% over the past four months. So, let's not miss the forest for the trees here – this has been an epic rally – and we can't get too greedy.

The only real bearish development is seeing utilities (XLU) overtake financials (XLF) in the performance rankings. Remember, we want to see growth sectors do better than defensive sectors, so this is the first real warning shot from the bears.

Editor's Note: Near-term risks are elevated, but likely just a blip in the bullish tape.

Get Ready for Tech's Epic Break (Sector ETF: XLK/SPY) 

Never forget that this market lives and dies by the tech sector. We had some pretty constructive earnings last week from big names like Microsoft, which soared to new all-time highs, and thereby reinforcing its bull trend.

This makes it a great time to review the ratio between the tech sector (XLK) and the S&P 500 (SPY). The ratio has been in a secular uptrend for years, but believe it or not, the last year or so has been pretty choppy.

The ratio has been on a tear to the upside ever since the April low, favoring tech (XLK), and so it's no surprise the market has been so strong. I'm tracking a potentially epic breakout from a wedge pattern in this ratio, which would actually suggest we're still very early in this tech rally. Buckle up bulls!

A Niche Healthcare Renaissance (Sector ETF: IBB/XLV) 

There are a lot of reforms taking place in the public health space at the moment, and it hasn't really been good for the healthcare sector (XLV). In fact, the sector's been all but eviscerated since covid, but I am tracking a very interesting setup here.

I'm looking at the ratio between biotech (IBB) and healthcare (XLV). This is significant because biotech has the potential for tremendous innovation, and it adds a growth element to the greater healthcare space.

Interestingly, biotech (IBB) has nothing for four years as well. But if we see this ratio break out from the rounding bottom formation I'm tracking here, then I would look for biotech to join the greater tech party. Don't sleep on this setup.

Credit Stays Stable (Sector ETF: LQD/IEI) 

One of my favorite ratios to track in order to track the market's liquidity level is the spread between investment-grade corporate debt (LQD) and 3-7 Year Treasuries (IEI). It's important because when credit is stable, we don't have to panic about a market crash. We'll let the other pundits out there waste their energy on it.

The ratio between LQD and IEI has been largely stable over the past few years. Spreads are still nowhere as tight as they were back in the old QE days, and I'm starting to think that we won't really see them narrow much more.

But more important is the fact that they're stable and not blowing out. If we start seeing IEI surging relative to LQD (this ratio dropping), then we need to protect ourselves when it comes to the equity market. It's a great leading indicator for volatility.

My Take:

It appears as though a war is brewing over in the Federal Reserve as you have other governors openly dissenting Fed Chair Powell. Is this going to turn into another institution like Congress that is completely dysfunctional?

Maybe it won't be a bad thing if that turns out to be the case. People love to blame the Fed for causing distortions in the market, and they have a point, but bigger picture, I think Powell has done a decent job overall in recent years. I think he's fumbled the past six months, however. There was a great window to cut rates between January and June, but now, I'm not so sure.

Cryptocurrency 

The price of Ethereum continues to display very bullish technical posturing. The consolidation over the past few trading sessions is a gift, if anything. Remember, patience is one of the holy grails of trading. Don't get addicted to the feeling of big gains in short periods, for they can disappear just as fast.

Ethereum is the asset to own going into year-end. I'm fully expecting this to be back above 4000 sooner than later, and my longer-term target is above 7000 at least. Remember, the all-time high is in the 4800-5000 zone, and I do expect it to be exceeded at some point this year.

When it comes to technical support, there's no reason to be bearish as long as it holds above 3000-3200. With the strength of this market currently, I don't know that we will even retest this zone, but ever since we broke out from the saucer we were tracking, it's been straight upside momentum.

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