Per Charles Schwab: Weird times for the Tech sector.
On average (so far) this earnings season, a Tech stock that beats EPS estimates is underperforming the S&P 500 by 3.3% the day of/after reporting. Source: Charles Schwab, RBC
NDR's latest assessment suggests the market may be underestimating the risk of a near-term Fed rate hike.
Their view is that several Fed governors remain concerned about inflation and are reluctant to ease policy too soon, fearing it could undermine the Fed's inflation-fighting credibility. In other words, preserving credibility may take priority over delivering the rate cuts markets are expecting. Source: NDR
Hedge funds face demands to stump up collateral as AI stocks tumble
FT Exclusive: Wall Street banks have asked funds heavily concentrated in certain industries to provide additional collateral, highlighting the mounting fears about the scale of losses across several popular strategies Wall Street banks have demanded more collateral from hedge funds in recent weeks as a rout in AI stocks accelerates and triggers heavy losses across several popular strategies. Banks asked funds whose holdings are heavily concentrated in certain industries to provide additional collateral to keep their existing levels of leverage, according to four people familiar with the matter. The collateral demands highlight the mounting fears on Wall Street about the scale and speed of the sell-off in AI stocks over the past fortnight, which has upended a rally in a sector favoured by many funds. Source: Financial Times
Aramco just revealed the hidden cost of avoiding Hormuz
Saudi Aramco has built an alternative route that bypasses both the Strait of Hormuz and the Red Sea. Oil moves from Yanbu to Ain Sokhna, through the SUMED pipeline, exits via Sidi Kerir, and then sails around the Cape of Good Hope to reach Asia. The catch? That "safer" route now costs about $5 per barrel more once freight, insurance, and pipeline fees are included. On a typical cargo, that's roughly $10 million in additional costs. The impact is now so significant that Aramco is developing a separate pricing formula for these shipments because its standard Asia Official Selling Price (OSP) no longer reflects the true economics. The key takeaway: The market has been treating alternative routes as a free solution. They never were. Those costs are now becoming visible, and they're another reason why the true cost of oil is moving higher, even when headline crude prices don't fully reflect it. Source: Jack Prandelli on X
U.S. Dollar does it again 🚨 15-Year Trendline cannot be defeated
Source: Barchart
A record amount of IPOs in 2026 as the billionaires rush to cash out.
Source: Financelot
Hyperscalers correlation to the NDX
Source: Goldman Sachs
The US can't afford much higher interest rates.
Here's why: Around $8 trillion of US Treasuries must be refinanced over the next 12 months. The average coupon on that debt is roughly 3.3%. The 2-year Treasury yield is now around 4.3%. Refinancing $8 trillion at today's rates would add roughly $80 billion in annual interest costs before accounting for the financing needs of an ongoing $2 trillion annual deficit. This is why today's environment is fundamentally different from the Volcker era. In the early 1980s, inflation had already eroded the real value of government debt, helping push US debt-to-GDP down from roughly 120% after WWII to around 30%. That gave policymakers room to raise rates aggressively. Today, US debt is back near 120% of GDP. The sequence matters: inflate the debt away first, then raise rates to bring inflation under control. Doing it in reverse risks making the debt burden even harder to sustain. Source: Lukas Ekwueme, FT
