08 Sep 8th September 2025
Index Movement Last Week
| S&P500 | +0.3% |
| Nasdaq | +1.0% |
| Aussie ASX200 | -1.1% |
Friday’s jobs report all but seals an interest rate cut next week by the Fed. The US added just 22,000 jobs last month and the unemployment rate ticked up to +4.3%. The firing of 100,000 government workers has not been offset by private enterprise hiring.
The Fed has two jobs. To maintain maximum employment and keep a cap on inflation. With inflation under control and now signs of weakness in the jobs market, the Fed can cut rates. In fact, the market is pricing in 3 cuts before the end of the year. That is bringing down long-term rates which is a tailwind for higher stock prices.
The last GDP result we got was +3.3% and the Atlanta Now GDP forecast is predicting this quarter will come in at +3.0%.
A growing economy and declining long-term rates is as good as it gets for stocks.
Alphabet also got an “as good as it gets” result this week. The owner of Google got a ruling on a Department of Justice case that has been running since 2022. Strangely it was competitor ChatGPT that helped them. But this story is one that gets me hot under the collar.
Google has the most profitable business model ever created. It has a gross margin of 59%, meaning that 59% of every sale ends up as a profit for Google.
Google invented search based marketing. And boy did it work. It worked so well they decided all they need to do is get more users on the web and Google would profit just by the number of people looking at computer screens growing.
But they had a Microsoft sized problem. At the time 70% of users were using Internet Explorer as their web browser. Google feared Microsoft would enter the search game and it would be a serious threat to Google. They were right. In 2009 Microsoft did just that.
But Google had already made a pre-emptive strike. In September 2008 Google released the Chrome browser and it was signficantly better than Internet Explorer. It actually ran web apps without crashing and put a sandbox around tabs. Popularity was instantaneous.
Google gave this away for free. In the same way most of their products are free, like Gmail, office suite and Android.
Within 4 years Chrome was by far the most popular browser because the product was better. By taking market share of the browser from Microsoft, Google maintained an edge in search.
Google spent a lot of money on keeping Chrome as the best browser over the years.
The Department of Justice decided that because Chrome is so successful Google should be forced to sell it.
How would you feel if you started a business, put a lot of time and money into it, did such a good job that it knocked out competitors, even when those competitors had very deep Microsoft pockets, and then you were told that because you are too successful you have to sell off one of your products to make it fairer on your competition?
Luckily, sense has prevailed (or maybe Big Tech lobbying government) and Google has been allowed to keep Chrome. With some minor concessions to help competition.
The reason quoted was that AI could seriously compete with Google’s search business and therefore there is competition.
Google stock jumped 8% on the news and Apple also increased 5% as Google pays Apple $20billion a year to be the search engine of choice in the Apple Safari browser.
Google stock finished the week at a new all-time high and remains a Buy in my books.
CrowdStrike Holdings (CRWD)
Looking for a growth company? Then crowdstrike fits the bill
Just look at the consistency of growth in revenue
Gross margin is 77% and customers are adding more and more products over time
In Q1, CrowdStrike customers who adopted 6 or more modules grew to 48% from 45% a year ago, 7 or more modules grew to 33% from 29% a year ago, and 8 or more modules grew to 23%. Notably, among customers with over $100,000 in ending ARR, 60% have adopted eight or more modules, highlighting the effectiveness of the CrowdStrike platform consolidation strategy.
CEO George Kurtz had this to say
“Quarters like this one highlight our momentum and progress on the path to $10 billion in ending ARR, setting new records, achieving net new ARR reacceleration sooner than anticipated, and rising competitive win rates highlight CrowdStrike leading the way in cybersecurity.”
Warning
Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.