Syz the moment

But looking at a four-year Presidential cycle, this is actually quite common for mid-term years.” Source: Daily Chartbook @dailychartbook

Anthropic, creator of Claude, is at the center of a clash between AI ethics and U.S. defense policy. After winning a $200M classified contract, the Pentagon demanded compliance with a broader AI doctrine, conflicting with Anthropic’s safety guardrails. Tensions escalated following Claude’s military use, threatening contract cancellation and supply chain pressures. With Software & IT Services at record short levels, resolution, either compliance or Pentagon compromise, could spark a massive short squeeze, highlighting the battle over control of frontier AI. Source: ZeroHedge

"The Bank of Korea noted rising market volatility and investor anxiety, with VKOSPI spiking to levels typical of market crashes" It's very unusual for implied options volatility to rise during a rally unless there is extreme reach for call options. Normally volatility spikes at the lows not the highs. Imagine what volatility will be like at these lows... Source: Mac10

Great to see switzerland ranked #8 !

BofA highlights that software stocks could see lower P/Es even with strong earnings. Market disruption is priced before profits, low-multiple tech tends to lag, and EPS growth can compress valuations when equity supply rises. Post-ChatGPT, IT Services lost their premium, reflecting repricing rather than sentiment. Rising asset intensity, weaker leverage, and private market issues add risk. Valuations fall not from failure but from resetting expectations, meaning even strong software companies aren’t immune. Source: BofA, Neil Sethi @neilksethi

US wholesale inflation rose sharply in December as the producer price index (PPI) jumped 0.5% month-over-month, exceeding expectations, driven by higher service costs. Core PPI also accelerated, climbing 0.8% MoM and 3.6% YoY, well above forecasts. The surge pressures corporate margins, especially for companies lacking pricing power, and may influence inventory cycles and earnings revisions. Market reactions, particularly in bonds and high-multiple equities, often precede headline recognition, highlighting the importance of liquidity signals. Source: Bloomberg TV @BloombergTV

Source: zerohedge. Bloomberg

UBS projects private credit defaults could surge to ~15%, driven by AI disruption in leveraged tech and services. High leverage, weak covenants, and concentrated exposure—especially in software—raise the risk of cascading defaults. Contagion could spread to public credit, widening spreads and threatening liquidity, while banks and insurers’ large exposure increases systemic risk. The private credit market isn’t in crisis yet, but all conditions for a severe credit cycle are present. Source: zerohedge