$SPY
@ammar814.bsky.social
Markets & Economy | Not investment advice | Reposts & likes ≠ endorsements
MELIUS, on Elon’s statement that $SPCX “has decided to exclusively use Nvidia compute and suggested the company could deploy closer to 8GW of AI compute during 2027”:
The capex boom is mostly a US story, as projected capex relative to sales for Europe and Asia Pacific do not look anything like the North America (mostly US) capex/sales data. Which helps explain why projected free cash flow has grown slower in the S&P 500 than for ACWI Ex-US since early 2025.
Where I’m at on things: -Strong demand for AI capex for at least 9-12 months minimum -That gives enough time for the lagging cyclical/rate-sensitive industries (housing and even office) to inflect higher -That means the labor market will be solid -Which means consumption is fine
looks like we had another one of those market up, vols up legs. and notice as soon as ES stopped going up just after 1:45 vols also topped, add now they roll back down. I don't think anything happens for the next ~3 weeks. come back in the 2nd half of august
Wage growth has likely bottomed absent a new shock to labor demand (which is the opposite of what looks to be happening at the moment).
Here's my shakedown of big US bond dealers on how they're thinking about tomorrow's Treasury Quarterly Refunding. Next week's note and bond auction sizes will be announced and, by convention, sizes through October projected. www.bloomberg.com/news/article...
Bond Dealers Expect US Will Avoid Signaling Auction Increases
The US Treasury will need to increase the sizes of at least some of its fixed-rate borrowing programs next year but is unlikely to signal the shift just yet, according to bond dealers.
bloomberg.com
Private-sector job gains 7.8 million, losses 7.2 million, during fourth quarter 2025 www.bls.gov/opub/ted/202... #BLSdata
RBADVISERS: “.. Dr. Copper (a supposed PhD in Economics) continues to scream for the Fed to raise rates. No one seems to be listening.”
Good June #JOLTS report with modest firming: -Hires rate improves to 3.4% from 3.3% in May -Quits rate flat at 2% (May revised up from 1.9%) -Job openings down slightly to 7.36m from 7.54m -Layoffs unchanged at 1.77m 1/
Barclays: well, that was quite a week Now time to go risk-on baby
“There’s also been a rush to trade the so-called picks and shovels of the AI goldrush: chipmakers like Nvidia and Broadcom. Gavan Nolan, executive director at S&P, said these have been the worst-performing CDS names in the whole tech complex as hedging activity has picked up”
Chris Whittall@chriswhittall.bsky.social · 2d agoNEW: Trading frenzy builds in hyperscaler debt and CDS markets A record $127bn of AI-linked corporate bonds changed hands in July, ~15% of total US IG trading volumes (vs 4.5% in 2025) CDS volumes also through the roof Hyperscalers now the driving force in US credit www.ifre.com/topic-codes/...
Manufacturing PMI at a four-year high in July. Big winners sound like computing and aerospace.
Through last month, construction spending on data centers (note: only the building, not the servers) looked to have stabilized around $59bn annualized. But April was revised +4.9%, May +7.6%, and June ended up 18% higher than March at $68.3bn annualized.
Business investment in computer equipment has increased from 0.5% to 1.3% of GDP in less than 3 years. Higher than the Dot-Com peak.
We can pretend the market has really changed its mind and come to jesus on hyperscalers’ AI ROIC or....
"The Manufacturing PMI® registered 55.6 percent in July, 2.3 percentage points above the June figure and the highest reading since May 2022 (55.9 percent)."
$MSFT +26% last 3 days... best rally since 2000 @stockcharts And a few thoughts from me on @seekingalpha seekingalpha.com/art...
“.. Data center construction spending rose again in June, bringing the y/y pace up to +45.8%.” - Schwab
The 30-year Treasury yield just hit its highest level since 2007, and mortgage rates are now nearing 7%. A $600,000 mortgage now costs almost $1,500 more each month than it did in 2021. And that’s before property taxes, homeowners insurance, HOA fees, maintenance, utilities, or a single repair.
This is where/why the “hyperscalers so cheap” argument is borderline irresponsible (Price to 12m forward FCF ratios)
GOLDMAN DESK: “.. this simply plots expectations for S&P forward EPS. you tend to see this rate of acceleration coming out of big holes (e.g. $LEH or COVID). I’m not saying this boom is lost on the market, but it continues to strike me as something that you shouldn’t pick a serious fight with ..”
With the Aug 4 earnings call and Aug 6 stock unlock on the horizon, I have some thoughts about SpaceX and Tesla. montanaskeptic.substack.com/p/elon-musks...
Elon Musk's Hubris May Doom any Tesla-SpaceX Merger
With Tesla shrinking fast, a bailout merger would fit the Musk pattern. But there are some key impediments to consider.
montanaskeptic.substack.com
"Wall Street’s forecasts for Big Tech require a major leap of faith: that the biggest AI hyperscalers can boost revenue much faster than the costs of running their businesses." -Spencer Jakab, WSJ
"There's something for everyone as the dust is settling: AI bulls can say a massive positioning overhang has now vanished; AI bears can point to the well-earned warning that the most vicious rallies are bear market rallies." -Luke Kawa, Sherwood
