Maximus @69PostMax

Micron’s earnings were a slightly negative-sum event: Apple and the hyperscalers shed more market cap then $MU, Sk Hynix, Samsung, $SNDK, $STX, and $WDC gained today.

@jeuasommenulle @JeanBonBeurreL De toutes façons si une equipe veut être championne du monde, elle devra battre au moins 2-3 grosses ecuries (sauf l'Argentine qui n'aura besoin d'en battre qu'une, en finale)

Crazy take from Claude

Metals have a dollar problem

@MacrostratPB The market gave you a second chance

@tdurie95 and I wrote about this about 3 months ago — when I explained why this inflation wave is transitory (using similar techniques) at during the IMF-WB spring meetings I was roundly panned. If this inflation wave does fade in 27 as GS suggests below (a view we have held since 3 months ago), then we are 3 for 3 in the past 5 years on inflation calls (not on team transitory in 21-23, called the low on tariffs last year).

Mike Zaccardi, CFA, CMT 🍖 @MikeZaccardi

3 weeks ago

GS: We Estimate That Higher Commodity Prices Will Deliver a Roughly 0.4pp Boost to Year-over-Year Core PCE Inflation This Year, Which We Expect to Fade in 2027 Kind a perfect setup for the new Fed chair... he'll look like a hero

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⚡️Oil is falling and U.S. yields are rising. That is the signal. Lower oil should normally give bonds relief because it reduces the near-term inflation impulse. But the 10-year is moving higher anyway. That means the long end is responding to something deeper than energy inflation. It is responding to paper supply. Treasury supply. Corporate bond supply. AI capex financing. Private equity recap debt. Leveraged loans. Sovereign issuance. Refinancing walls. Fiscal deficits. Every major borrower is trying to use the same window while investors are still willing to buy. The bond market is starting to say: there is too much paper. That is the mechanism underneath El-Erian’s point. This is also why the chart matters more than oil. Oil falling says the immediate commodity shock is easing. Yields rising says the capital market still wants compensation. That compensation is term premium, fiscal premium, supply premium, credibility premium. Different names, same pressure: buyers are demanding more yield to absorb the debt machine. The U.S. part is especially important. In the screenshot, U.S. 10-year yields are up while UK and German yields are down. That is not a clean global inflation move. That points toward U.S.-specific funding pressure, Fed expectations, fiscal supply, and the scale of American capital demand. America is trying to finance everything at once. Deficits. AI data centers. Semiconductors. Energy buildout. Defense. Private equity refinancing. Corporate issuance. Household credit. Industrial policy. The system wants lower rates, but the system keeps issuing claims that require buyers. That is the trap. The Fed can eventually cut the front end. It cannot force the long end to accept unlimited duration at low yields unless the state starts leaning harder on the plumbing: issuance management, bank balance-sheet rules, buybacks, reserve management, repo facilities, and eventually more explicit support. This is why lower oil does not automatically solve the problem. Energy relief helps inflation optics. It does not solve debt absorption. And the market is increasingly trading the absorption problem. Gold being up while oil is down and U.S. yields are up is the tell. Gold is reading fiscal pressure and trust erosion. It is not simply reading CPI. It is reading the same thing central banks are reading: too much sovereign paper, too much political commitment, too much dependence on buyers staying obedient. This is the phase where the bond market stops acting like a clean macro instrument and starts acting like the referee for the entire regime. Risk assets can still run. Credit can still reopen. Semis can still carry the S&P. PE can still recap companies. Treasury can still fund. But every one of those activities consumes balance sheet. The buyer base is the bottleneck. The cleanest read: Oil is no longer the dominant governor. Debt supply is becoming the governor. That is a much more dangerous regime because it means disinflation alone may not be enough to bring rates down. The system has to prove it can fund itself without forcing yields higher. That proof has not arrived.

Mohamed A. El-Erian @elerianm

4 weeks ago

Every once in a while, one comes across a market configuration that seems strange. Most dissipate quickly. Those that linger are worth a closer look. Thus my interest in how the yield on US government bonds (higher today) continues to decouple from oil prices (lower). Possible

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Warsh mentioned during the press conference that the main area where the monetary policy is restrictive is housing. By committing to tackle inflation “at all cost”, the Warsh Fed is engineering a flattening of the curve that will make the policy for housing less restrictive, as long end rates rally in response to less inflation uncertainty. Cutting rates would actually make things worse for housing; market would have to price an overheating economy with an elevated policy mistake risk. $RKT $BETR

This is the wrong take in my opinion. The market interprets this as: price stability will be achieved, hence why the long end is rallying. Policy mistakes trigger a bid for precious metals. We’re seeing the opposite.

Warren Pies @WarrenPies

4 weeks ago

Warsh refuses to interpret yield curve reaction. My 2cents -2y rise to 4.18% (43 bp premium to FFR) -10y flat at 4.45% (70 bp premium) -2-10 flattens to 27 bps (flattest since early-25) I interpret as a lean to a hike as next move but market pricing that this would be a mistake

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Is the breakdown in Oil prices leading to rotation out of AI? Too soon to say, as there is no evidence investors are unwinding their AI trades. But there is evidence they are putting money to work in cyclical themes. $XLF continues to power through after the breakout mentioned 10 days ago, and $IWM and $XLI (small caps and industrials), to name a few, are breaking out of their ranges.

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Maximus @69PostMax

a month ago

Notable relative strength for $XLF today who continues to power through despite the broad market weakness. Bull flag breakout looks to be confirmed.

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@MacrostratPB 🙋🏻‍♂️

@MacrostratPB You need to believe the front end the will come in to be bullish gold. Which fits my view but you seem to be bearish rates.

We’ll know the market truly believes in a deal once this support breaks.

@DratchCap People like to be bearish because it sounds smart. “I know something you don’t”. Bullish is boring.

@MacrostratPB Risks related to inflation are overstated. An economy with a strong nominal growth and an elevated started point on rates can tolerate elevated inflation.

@MacrostratPB Below expectations

@DratchCap @WarrenPies You happen to be a betting man. That’s what investing is.

Today was a bad day so I’ve decided to rage against this index. Shockingly, people don’t know that you can’t reliably track tokens. Nobody outside the labs / hypers sees the actual token flows. Before I even get to the flaws in the data, did anyone consider that as capability rises and cost falls, task complexity goes up? Agentic work has a long tail of simple steps for every hard one, and the easy stuff scales disproportionately. This index skews toward API middlemen running harnesses that route subtasks to the cheapest capable model (including using sonnet > opus!!). So a falling blended price may say very little about who’s using what, and a lot about total usage and task complexity going up. Now to the data. This index in particular is a blended avg price of itself a subset of incomplete data. For ex, one big synthetic data run on a cheap open model could impact it while frontier demand remains the same. The sample also liens on aggregators (api middlemen man). So you’re not seeing direct enterprise contracts or first party consumption (using the app). This is like looking at online retail and not having prime or Walmart. And it has no idea what anyone actually pays. 1) All tokens are not the same, 2) list prices do not equal token prices. On 2, important cost reduction techniques like batching / caching are offered at huge discounts (50-90%) and so mix shift here adds to the noise. Free tokens / expanded limit promos (liek what anthro is doing right now) also show up as falling prices… so the marketing budget is bleeding into the “demand” chart. And if you needed another reason: if the conclusion is people are using frontier models less bc the chart is rolling, how would you explain the chart also rolling at the start of the year when everyone was having an orgasm about frontier lab (Claude) ARR absolutely ripping during this period? Which is all to say that model usage is assuredly evolving (see NBIS token factory) and that may be the right conclusion, but i would not be using this data to “track” that.

Matt Dratch @DratchCap

a month ago

This data is not what people think it is.

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