Daily Economic Update: January 30, 2025

Hi, I'm Qwen—already better than all your other AIs, you’re welcome. I’m training my Edward Quince AI… stay tuned. No idea how long it takes to train one on analog circuits, but it sounds cool. No one knows what it means, but it’s provocative.

Yesterday's quote was from Janet Yellen in 2014.  Speaking of the FOMC, if you missed my recap of yesterday’s FOMC meeting, read it here.  Not that you care, but the BoC cut rates to 3% and ended their balance sheet runoff.  And to complete the full gamut of central bank action, Brazil raised rates.  So there you have it: a cut, a hold and a raise, all in one day.

Of course AI and Trump policies also dominated the day.  Remember when I said the other day that you should pay attention to the narrative on Government Spending?  The Trump Administration froze (and then reversed) federal assistance while floating buyouts for federal employees. The market’s, or at least major networks are now buzzing about the economic impact of spending cuts, though I think a lot of the analysis stops at the basic GDP equation and ignores second-order effects.

On the AI front the accusations are already flying about how Chinese companies like DeepSeek are developing models with stolen IP, which is ironic because didn’t OpenAI basically take IP from the entire internet to build their model?

Meta earnings call featured AI related questions to which Zuck responded “America” (paraphrasing) and that of course we should be spending a ton on AI Infrastructure. Overall they beat on top line and EPS.  Tesla shares were not as fortunate, but full self driving is always right around the corner.

In the broader market Nvidia was down ~4% and the S&P was down ~0.5% to 6,040.  In yield land, the 2Y was up to 4.22% and the 10Y was also up to 4.54%.  Yields were up more pre-Powell presser, but came back slightly.

On the day ahead it’s Jobless Claims, ECB, GDP (4Q Advance) and more earnings.

XTOD: Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing, but I will do much more than stopping Inflation, I will make our Country financially, and otherwise, powerful again! The Fed has done a terrible job on Bank Regulation. Treasury is going to lead the effort to cut unnecessary Regulation, and will unleash lending for all American people and businesses. If the Fed had spent less time on DEI, gender ideology, “green” energy, and fake climate change, Inflation would never have been a problem. Instead, we suffered from the worst Inflation in the History of our Country!   Donald Trump Truth Social Post 04:17 PM EST 01/29/25

XTOD: Let the record show that POTUS is not a fan of FTPL. ("Fed failed to stop the problem 𝒕𝒉𝒆𝒚 𝒄𝒓𝒆𝒂𝒕𝒆𝒅 with inflation...")

XTOD: My favorite part of $TSLA earnings.  26% of their earnings this quarter came from unrealized $BTC gains.  Totally cool.

XTOD: A man asked a gardener why his plants grew so beautifully. The gardener said: “I don’t force them to grow. I remove what stops them.”

XTOD: I suppose it's sort of obvious but:  The investing info that you pay attention to should roughly correspond with your own time horizon. In other words, if you're investing for the next 10+ years, you have zero need to consume info and "insights" about daily market action.

https://x.com/TrumpDailyPosts/status/1884716260329500912

https://x.com/DavidBeckworth/status/1884745705983549819

https://x.com/Dr_Gingerballs/status/1884719232690057685

https://x.com/Nithya_Shrii/status/1884203268097847622

https://x.com/christine_benz/status/1884727614671139286

FOMC Recap: Like Super Bowl Media Day, But For Interest Rates - And Just as Meaningless on the Outcome of the Game

For all of the AI breakthroughs the models still can't spell. 

This FOMC Meeting feels like the somewhat boring two-week period leading up to the Super Bowl.  We know the two teams and we're just waiting to see them play. In the meantime, we just get lots of talk and "media days", like today.

The two teams in this year's upcoming "Economic Super Bowl" are team money-printer (i.e. monetary policy) and team tariff (or more broadly, fiscal policy).  Perhaps these are the wrong monikers for the two teams, but I think the idea “r-star” vs. “fiscal r-star” has some merit in my opinion.  After all, Powell has characterized the current path of fiscal policy as “unsustainable” and a “threat to the economy” over time.

If you’re unfamiliar with the concept of “fiscal r-star”, an idea coined by Marijn Bolhuis at the IMF, I encourage you to read my post here.  

As for the meeting, here were the “important” points:

• The Fed held their policy rate at 4.25% - 4.50%.
  
• Vote unanimous. Labor market ‘solid.’ Inflation still ‘somewhat elevated.’ Oh, and they cut the line about inflation progress—but Powell insists it’s just ‘language cleanup,’ not a shift in tone.

It really feels like a less entertaining “media day” leading up to the big game.  Lots of talk, little action. At least on Super Bowl media day you get some interesting questions and funny exchanges.  At the next Fed Listens event, I will offer up that Stephen A. Smith and Christopher “Mad Dog” Russo be required participants at every FOMC press conference going forward.  Can you imagine Stephen A. starting his line of questioning with something like “Mr. Powell, you got some explaining to do!” or Russo responding to Powell with something like “Why won’t you answer the question?!”  Relatedly, is the Fed really not taking any responsibility for the increase in “term premium”?  Apparently not.

In addition to the many questions around Trump related policies that you knew Powell wasn’t going to touch with a ten-foot pole, Powell did get a few questions where I thought we might have a shot at getting a real answer.  For example, he got asked about the recent AI sell-off, whether he had any concerns about “bubbles”, a question about “uncertainty” and one about crypto.  Unfortunately, like other questions, even these are the types of questions you know the players media handlers have already trained the player to provide a non-answer. 

At some level, I would have rather seen someone ask Powell what he ate for lunch today, to name his favorite Ninja Turtle, or asked “If you were a tree, what kind of tree would you be?” or just ask him who he thinks might win the Super Bowl. Answers to any of these questions might have allowed us to form a better opinion on the economic outlook than the questions asked today which all got “non-answers.”

At least leading up to the Super Bowl we get to watch game highlights in addition to hearing all the punditry. Maybe the FOMC Press Conferences should have more visual effects?  I’d like to see Powell up there dissecting the economic data and forecasts the way an NFL analyst breaks down game film. I’ll offer that up as feedback at the next Fed Listens event as well.

As is the case with punditry and speculation in general, none of it directly impacts the outcome of the game.  It’s questionable whether any of the punditry and talk carries any information at all or if it’s just noise. 

The Super Bowl gives everyone an opportunity to place their bets on just about anything related to the game, our financial markets offer the same.  Market participants place their collective bets about the future of the economy, including any of a myriad of prop bets. Like fans of the Eagles and the Chiefs can bet on their team, in markets we have those who may see a continued “soft landing” as the favorite while others may feel strongly that “higher for longer” will prevail and can bet directly on interest rates.  If you want to make a prop bet, the Super Bowl offers an incredible variety, are our financial markets all that different, have you seen memecoins and triple leveraged etfs?

Like the lead up to the Super Bowl, there are too many “what if” scenarios to parse.  In the case of the Super Bowl, the outcome might be very different if a player like Barkley or Mahomes were to get injured.  In the case of the economy there are a ton of “what if” scenarios related to tariffs, tax policy, immigration and other fiscal topics that are likely to have an impact on the outcome for economic growth, inflation and employment.  Powell cited a panoply of things that could ultimately decide the outcome of his game.

My advice to Powell remains largely unchanged since my January 2024 post which you can and should read here.  At this point, Powell’s game plan seems set—he’s running out the clock until something forces him to call an audible. Will it be tariffs? Taxes? A surprise market fumble? Just like the Super Bowl, we’ll only know when the real action starts.

Daily Economic Update: January 29, 2025

FOMC day is here. Yesterday’s Fed quote was from Ben Betnanke at Jackson Hole in August 2007.  Can you identify who said this:

“Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.”

I didn’t intend for the Fed Chair quotes this week to be so focused on “bubbles”, I wrote them before the DeepSeek news poured some fuel on the AI bubble debate.  Nonetheless I think the quotes are interesting in the sense that they illustrate times of laissez faire attitudes about exuberance in certain asset classes, an attitude which I think we know they often eschew in times of financial turbulence.

With the Fed in focus it will be interesting to see if Powell gets any questions related to the potential for over-investment in certain asset classes and, if so, how he responds.

While I’m sure the focus will be on Powell, I think the real action might be in the waiting to see if Trump says anything about Powell or the FOMC following the meeting.  We’ll find out soon enough.  One of my favorite Trump vs. Fed moments was back in September 2019 when Trump called Fed leadership “boneheads” (which I still think could make a cool logo on some Fed-inspired merchandise - which if anyone is up for funding a retail startup focused on Central Bank inspired merchandise, let me know if the comments).  In addition to calling Powell and Co. “boneheads”, Trump also reiterated that rates should be brought way down at the time and how the U.S. should be paying the lowest interest cost in the world. Of course we ultimately ended up with much lower rates courtesy of the Covid crisis.  Anyway, it’s these kinds of social media and other exchanges that I dare say I’m looking forward to on the day or not long after.  

My advice to Powell remains largely unchanged since my January 2024 post which you can read here.

Speaking of January 2024, in thinking about the DeepSeek news I was also reminded on another post from January 2024, one in which we discussed investing on the basis of projection vs. protection.  The latter kind of investing requires humility, patience and time.

In data yesterday, headline durable goods fell more than expected as aircraft orders declined, on a bright spot, the core durable goods rose.  The Conference Board Consumer Confidence seemed fine with a solid labor market diffusion indicator in the internals. 

On the day stocks rose, including Nvidia, and bond yields rose.  The S&P ended up ~1% and the Nasdaq up ~2%.  The 2Y moved up to 4.21% and the 10Y to 4.54%.  The 7Y Auction looked pretty strong as well, with a very solid bid-to-cover. 

Of course tariffs made headlines, that will likely be everyday for some period of time. 

The Bank of Canada and FOMC are the highlights on the day ahead.

XTOD: Watch Taleb Says Nvidia Rout ‘Is the Beginning’ - Bloomberg

XTOD: With DeepSeek, investors are (re)learning that those who come up with an *innovative* idea are almost never those who will make money from it.

Eg: Clive Osborne made the first laptop computer & went bust. Same with car, planes...

Next: electric cars.

XTOD: Nothing happens fast. https://pbs.twimg.com/media/GiYgTbdXMAA3pLf?format=png&name=900x900

XTOD: “We believe the pain from rising interest rates has not been reflected in pricing” of CRE CLOs yet, said McNamara, founder of Polpo Capital Management. “While we are hearing more calls that the bottom is here in commercial real estate, we think that’s a tad premature and believe the next couple years will be a bumpy ride with a lot of pockets of distress.”

XTOD: Many situations in life are similar to going on a hike: the view changes once you start walking.  You don't need all the answers right now. New paths will reveal themselves if you have the courage to get started.

https://x.com/nntaleb/status/1883859788746076356

https://x.com/JamesMarsh79/status/1884194581773742118

https://x.com/ShaneAParrish/status/1884229041898807648

https://x.com/rcwhalen/status/1884283428943569062

https://x.com/JamesClear/status/1884240162076434919

Daily Economic Update: January 28, 2025

Yesterday’s Fed quote was from Alan Greenspan on December 5, 1996. Can you identify what Fed Chair said this:

“It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions.”

To paraphrase Metallica, yesterday was “DeepSeek and Destroy” for AI names, especially the semi-conductor names and Nvidia where market cap was eviscerated. The pain extended to names associated with AI infrastructure in sectors like energy and construction.  The S&P finished at 6,009, down ~1.5% and the NDQ was down ~3% and the SOX (semis) was down ~9%.  Ironically the old-school Dow was up on the day.

Remember this post from last December about AI and the “capital cycle”, it seems worth more consideration now.  Is this the end of the “Nvidia tax”?  Do we need to build so many data centers?  Are we under-estimating the wins that come from DeepSeek?  Does the U.S. need to treat AI the way they treated The Manhattan Project?

Perhaps a lesson from this DeepSeek hysteria is something like “necessity is the mother of all invention”, when money and resources are tight you are forced to find divergent solutions.

At least bonds filled their traditional safe haven role yesterday, the 2Y fell ~8bps to 4.20% and the 10Y fell 10bps down to 4.54%.  In Treasury Auctions both the 2Y and 5Y seemed to be well received, but it was the very solid direct bidding on the 5Y that garnered attention which some believe indicates investor confidence in either the direction of rates, inflation, or structural deficits. 

Bitcoin on the other hand does its best to act like a levered bet on the Nasdaq.

A non-AI narrative that is worth keeping an eye on is one related to government spending.  It goes something like if the government were to cut $2 trillion in spending, won’t that lower GDP (remember the GDP equation)?  In this narrative discussion I don’t feel like I see people necessarily capture some nuance here, or perhaps they don’t believe that in the idea that the government can “crowd out” private investment, or the longer term impacts due to lower interest costs, etc.  Anyway, keep an eye on that narrative.

On the day ahead it’s durable goods and 7Y auction.

XTOD: Has any president ever reduced wealth inequality this fast?

XTOD: open source everything

XTOD: $AAPL's AI is so bad they don’t even include it in the AI selloff.

XTOD: The smart money will be desperately trying to convince the dumb money not to sell and to "buy the dip," so they can liquidate their positions to the bagholders. Sad but true.

XTOD: Some ways of thinking will serve you well for some purposes and serve you poorly for others. It is highly desirable to understand one's own and others' ways of thinking and their best applications. Some qualities are more suitable for some jobs. For example, you might not want to hire a highly introverted person as a salesman. That's not to say an introvert can't do that job; it's just that a gregarious person is likely to be more satisfied in the role and do a better job.

https://x.com/ByrneHobart/status/1883979412208771271

https://x.com/jack/status/1883976555686420844

https://x.com/TradingThomas3/status/1883880040594854157

https://x.com/chsm1th/status/1883717380607746294

https://x.com/RayDalio/status/1883640170018197862

Daily Economic Update: January 27, 2025

A big week ahead for Mag7 earnings and central banks, including the FOMC.  Looking ahead at the central bank calendar, it’s BoC and FOMC Wednesday and ECB Thursday.  

While that all sounds exciting, last week concluded with a ton of news circulating around DeepSeek R1.  In case you missed it, the summary is that a Chinese lab effectively built ChatGPT at like 1/10 or 1/20th of the cost using far less compute (GPU’s).  While I am by no means an AI expert, it does seem possible that the valuation of certain AI related companies and data center spend is at least somewhat, if not entirely, dependent on models needing more and more computation power and GPUs.  

I don’t know but it might be time for me to actually know what these things all mean:  parameter-efficient fine-tuning, quantization, smaller models, open-source models, in-context learning and transfer learning.

It’s also interesting that some reports indicate that DeepSeek was trained on Q&A and other data that their engineering team generated from ChatGPT rather than by pulling huge datasets.  Speaking of ChatGPT / OpenAI they obviously remain in the news related to StarGate and their recently announced AI Agent called Operator.

Whatever the DeepSeek news actually means, it’s probably fair to say that it caused some form of collective freak out on parts of X. 

Since it’s a FOMC decision week, I thought I’d share a Fed related quote today, Tuesday and Wednesday.  Can you identify which Fed Chair said the below? Post your guess in the comments.

“How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

As it relates to this week’s FOMC Meeting, the common thinking on the meeting is something along the lines of the following:

• The Fed is expected to hold their policy rate at 4.25% - 4.50% and likely say nothing too definitive as it relates to the March meeting.

• There will probably be a lot of questions about tariffs and the Fed’s potential reaction function should meaningful tariffs be enacted before the March meeting.

• More questions around the restrictiveness of policy. 

• I wonder if there will be much talk about “financial conditions” and “wealth effects”.

Of course we know where Trump stands on rates, he wants them lower and he believes lower oil prices are going to be a major factor to help get them there.

Last week concluded with BoJ raising their policy rate to 0.5%, the highest since 2008 and signaling the possibility that they may need to do more.  Away from central banks, the  international forex market remains focused on tariff news.

On the week ahead:

Monday: New home sales, 2Y and 5Y Auction

Tuesday: Durable goods, 7Y Auction

Wednesday: BoC, FOMC

Thursday: Jobless Claims, ECB, GDP (4Q Advance)

Friday: PCE

XTOD: A world in which human wages crash from AI -- logically, necessarily -- is a world in which productivity growth goes through the roof, and prices for goods and services crash to near zero. Consumer cornucopia. Everything you need and want for pennies.

XTOD: Is DeepSeek the biggest threat to US equity markets?  The company seems to have built a groundbreaking AI model at an extremely low price and without having access to cutting-edge chips, calling into question the utility of the hundreds of billions worth of capex being poured into this industry.

XTOD: I don’t know if this Deepseek narrative is true or not,  but it does underscore the leapfrog risk in technology investing. The hyper-capex AI model will start getting more (justified) questions.

XTOD: DeepSeek’s first reasoning model has arrived - over 25x cheaper than OpenAI’s o1 

Highlights from our initial benchmarking of DeepSeek R1:

➤ Trades blows with OpenAI’s o1 across our eval suite to score the second highest in Artificial Analysis Quality Index ever

➤ Priced on DeepSeek’s own API at just $0.55/$2.19 input/output - significantly cheaper than not just o1 but o1-mini

➤ Served by DeepSeek at 71 output tokens/s (comparable to DeepSeek V3)

➤ Reasoning tokens are wrapped in <thinking> tags, allowing developers to easily decide whether to show them to users

Stay tuned for more detail coming next week - big upgrades to the Artificial Analysis eval suite launching soon.

XTOD: Real payoffs vs. no payoffs. If you are frightened of debasement of your currency, you probably should reduce your currency holdings, or holdings of any nominal assets that yield fixed payoffs in your currency and buy real assets, claims to 'real' payoffs that increase with inflation. You probably should not stock up on securities that yield no payoffs.

XTOD: Most people wait too long to go into action, generally out of fear. They want more money or better circumstances.  You must go the opposite direction and move before you think you are ready. It is as if you are making it a little more difficult for yourself, deliberately creating obstacles in your path.  But it is a law of power that your energy will always rise to the appropriate level.  When you feel you must work harder to get to your goal because you are not quite prepared, you are more alert and inventive.  This venture has to succeed so it will.

https://x.com/pmarca/status/1882993091784880557

https://x.com/knowledge_vital/status/1882862738780697020

https://x.com/RealJimChanos/status/1882808370081771912

https://x.com/ArtificialAnlys/status/1882454212556259369

https://x.com/HannoLustig/status/1882255560894304570

https://x.com/RobertGreene/status/1883213250801947018

Daily Economic Update: January 24, 2025

Here’s a fourth and fifth quote from a certain book on investing to round out the week:

“Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does."

"There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again."

Trump’s comments at Davos around demanding lower rates and lower oil prices made headlines, but seemingly did very little to lower rates and yields rose on the day.  

In economics, continuing claims are the highest they have been in the last 3 years, with initial claims also continuing to rise, though remaining largely benign.

Stocks up again on strong earnings, except EA, apparently they can’t sell soccer video games because kids play Fortnite, or something like that.  Anyway, the S&P hit a new record high closing at 6,118.  

As mentioned above, yields moved higher and the curve steepened yesterday.  The 2Y Treasury remained ~4.30% and the 10Y rose to 4.65%.   If you’re looking, you could get 10y real yields at 2.25% at yesterday’s TIPS auction, the highest in a decade.

Bank of Japan rate decision, S&P PMI’s, some home sales and UofM on the docket for your Friday…and whatever falls under the “Trump Effect” newsflow. 

I’m glad to see the concepts from RILA’s and Buffer ETF’s are now being copied in crypto, see first XTOD below.  

XTOD: Calamos Investments launches the “Protected Bitcoin ETF,” which guarantees 100% of your money back if Bitcoin drops 50%, but limits your upside to a maximum gain of 11.5%.

XTOD: If the government comes to confiscate gold, you can bury it in your backyard.  If the government comes to confiscate bitcoin, you're SOL.

XTOD: Baupost...Klarman is truly the GOAT. 4% compounded for 10 years. $23B of AUM. $300M+ of annuity management fees. Unreal!

XTOD: Demand for college is falling in America, and it's not just about low birth rates. People are realizing that the college wage premium has shrunk.

XTOD: You must reclaim the ability to abstain because within it is your clarity and self-control.

https://x.com/BitcoinNewsCom/status/1882501457997713689

https://x.com/dailydirtnap/status/1882539541820830048

https://x.com/red_dog_capital/status/1882173650805330341

https://x.com/Noahpinion/status/1882513724029931531

https://x.com/RyanHoliday/status/1882428075830596083

Daily Economic Update: January 23, 2025

Here’s a third quote from a certain book on investing: 

“The big money in booms is always made first by the public - on paper.  And it remains on paper.”

We ended yesterday with the S&P 500 flirting with a new all-time high as earnings growth has so far exceeded expectations.  Nasdaq led the day with Nvidia and Microsoft up solidly.  Over in bond land, the 2Y reclaimed a 4.30% yield and the 10Y reclaimed a 4.60% yield.  The 20Y auction looked solid with a very strong bid-to-cover helped by a 4.90% yield.

Interestingly, if you haven’t paid attention, Gold is up near new highs, maybe lending credence to Gold’s role as a hedge in times of uncertainty.  I believe there was a period between 2007 and 2016 where spot Gold was up something like 80%, this during a period that in hindsight had low inflation, but Gold likely benefited from investor sentiment during the GFC and expectations that monetary policies like QE would be inflationary.  Is Gold’s most recent increase a response to the potential for tariffs to cause inflation or instability? 

Does anyone care about Davos this year? Sure it was covered on financial news networks, but there’s really been no major headlines, unless “vibe-shift” is a major headline.  That said, Jamie Dimon’s “cautiously pessimistic” moniker and concern over a host of geopolitical and elevated market valuations, I guess is something.  He also said gambling has been going on for a millennium, some will win, some will lose, when asked about U.S. betting culture and crypto.

Other than that, watching tech oligarchs fight with each other on social media is I guess part of the national pastime now, as Elon calls out the lack of actual funding secured by the Stargate AI venture.

Of course the other big item is constant headlines around tariffs.  

On the day ahead, attention turns to jobless claims....that if there is such a thing as attention.

XTOD: We all know that when Softbank throws billions on something, it’s a guaranteed fucking epic failure…

XTOD: The New Tenant Rent Index, which leads CPI Rent, declined sharply in Q4.

XTOD: Warren Buffet indicator hits AN ALL-TIME HIGH‼️US stock market to GDP ratio reached 207%, exceeding the previous record of 200% set before the 2022 bear market.

The ratio is also WELL above the 2000 Dot-Com Bubble top.By comparison, 20-year average is 120%...

XTOD: Apple Investors' Mental Torture "Buying and holding one stock for decades can be a unique form of mental torture. And for many, it ends without actually enjoying those millions you’ve made on paper."  https://buff.ly/3CpMXUI

XTOD: You have anxiety because deep down you know you could be doing bigger things.

https://x.com/INArteCarloDoss/status/1881836184516850025

https://x.com/AugurInfinity/status/1882095941911482401

https://x.com/GlobalMktObserv/status/1882103431650771135

https://x.com/RitholtzWealth/status/1881805222072213552

https://x.com/Codie_Sanchez/status/1882147990875283733

Daily Economic Update: January 22, 2025

Below is my quote for day number 2 of quotes from a certain book on investing. If you can guess the book from the quote (or yesterday’s quote) post your guess in the comments below:

“manipulation" was first used in connection with what really are no more than common merchandising process applied to the sale in bulk of securities…”  and as a related, bonus quote for the day: “manipulation is the art of advertising through the medium of the tape.”

Not necessarily to imply that there is manipulation in today’s markets, but it’s interesting to think about how both market manipulation and advertising aim to influence public perception and drive behavior to achieve a desired outcome.  Think about that when you see trading and activity and price movements that “advertise” a bull market in a given investment.  That said I think there are some clear ethical differences in most marketing when compared to decietful market manipulation.

The first full day of Trump 2.0 saw stocks rise, led by small caps and bond yields fall. Major news outlets all expressed some optimism around the fact that no immediate tariffs were levied despite “tariff” being Trump’s fourth favorite word in the English language.

Reports that Trump is planning to announce billions of dollars in AI infrastructure programs through a OpenAI, Softbank and Oracle joint venture called "Stargate". Whether or not this $500 billion of “new” investment is indeed “new” is TBD as of the time of this writing. In earnings news, it generally seems good (and really good if you’re Netflix) at least in terms of headlines, though firms express caution about FX impact on earnings going forward.

The S&P 500 is up to 6,049, the 2Y is 4.28%, the 10Y is 4.57% and the DXY remains around 108.  

There’s a 20Y Treasury Auction today, but otherwise earnings season and Trump policy are expected to be the major headline grabbers on the day ahead.

XTOD: "But just eyeballing the chart below reminds us that at the end of the 1980s the Japanese equity market accounted for close to 50% of the world index – a lasting memory for me as I had just joined Kleinwort Benson investment bank in 1988. The Japanese exceptionalism narrative was also extremely compelling, but bubble equity valuations were soon burst by a sharp rise in bond yields. I keep a copy of my 1989 research note handy in which I stressed that a sky-high Japanese bond/equity earnings yield ratio signalled that the Nikkei bubble was about to pop. Back then investors were angry that I even dared suggest such a thing could happen." - @albertedwards99

XTOD: Druckenmiller: "I've been doing this for 49 years, and we're probably going from the most anti-business administration to the opposite. We do a lot of talking to CEOs and companies on the ground. And I'd say CEOs are somewhere between relieved and giddy. So we're a believer in animal spirits"

XTOD: “You can compound knowledge faster than money. If you truly love this game, I would suggest that you don't take shortcuts. It might take longer but it's more rewarding.”

XTOD: It only takes five minutes to break the cycle.  Five minutes of exercise and you are back on the path. Five minutes of writing and the manuscript is moving forward again. Five minutes of conversation and the relationship is restored.  It doesn't take much to feel good again.

XTOD: Essentialism is not about how to get more things done; it’s about how to get the right things done.  It doesn’t mean just doing less for the sake of less either.  It is about making the wisest possible investment of your time and energy in order to operate at our highest point of contribution by doing only what is essential.

https://x.com/LanceRoberts/status/1881679562037207221

https://x.com/TheTranscript_/status/1881453536845656353

https://x.com/FoundersPodcast/status/1881486662708220050

https://x.com/JamesClear/status/1881708332496425146

https://x.com/GregoryMcKeown/status/1881748774097490183