Syz the moment

WalMart reported ugly same store sales, which grew below the lowest Wall Street estimate, a slowdown the company blamed on disappointing sales at its Health & Wellness pharmacy division. As a result, $WMT stock plunged more than 10%, Source: Zerohedge

Treasury's move initially compressed the long end, which should ordinarily have supported tech through lower discount rates, but tech underperformed the rates rally. Now the 10-year yield is back where it started and tech is rolling over again. With AI increasingly capital-intensive, hyperscaler CDS widening and semis vol having collapsed, the setup is worth watching. Rates relief didn't do much for tech. Now that relief is disappearing. Source: The Market Ear

Source: Barchart

But as volatility in Japan rises and the Bank of Japan gradually moves away from ultra-low interest rates, investors are increasingly looking for alternatives. One currency is emerging as a natural candidate: the Swiss franc. The logic is straightforward. Swiss interest rates remain close to zero, making the franc one of the cheapest major currencies in the world to borrow. At the same time, the Swiss National Bank remains attentive to excessive currency appreciation, reducing—at least in investors’ eyes—the risk of a sharp and uncontrolled strengthening of the franc. Positioning data suggests traders are taking notice. Hedge funds have pushed net short positions in the Swiss franc close to a two-month high, while speculative short positions in the yen have declined for a second consecutive week. The performance differential is already becoming visible. Over the past month, a carry trade funded in Swiss francs and invested in the Mexican peso would have generated a return of roughly 4%, compared with around 1.3% for the same trade funded in Japanese yen. The yen is unlikely to lose its status as the world’s dominant funding currency anytime soon. But the backdrop has changed. Expectations of higher Japanese interest rates, combined with the persistent risk of currency intervention, have made yen-funded carry trades less predictable. By contrast, Switzerland combines extremely low borrowing costs with relatively low interest-rate volatility. That is putting the franc firmly back on traders’ radar. There is, of course, a striking irony in all of this: one of the world’s ultimate safe-haven currencies is increasingly being borrowed to finance risk-taking elsewhere. The Swiss franc may still be a refuge when markets panic—but in calmer times, it is increasingly becoming the fuel behind the carry trade. Source: Bloomberg

Bloomberg reported today that Broadcom is preparing another gargantuan SPV deal, and is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies. The financing, which is still being ironed out, may also include a roughly $30 billion junior debt tranche, said some of the people, who asked not to be identified because the information is private. Under the proposed plan, Broadcom would guarantee a portion of the senior-secured tranche, which could range from about $60 billion to $70 billion. The numbers under discussion would potentially bring the total to as much as $100 billion, which would make it the largest SPV deal ever funded. The agreement would add to a rush of deals aimed at financing artificial intelligence infrastructure. AI companies like Anthropic are taking a bigger role in the build-out, aiming to ensure they have enough computing capacity. Broadcom, meanwhile, is looking to sell more chips and other data center equipment, challenging Nvidia in this lucrative market. Broadcom’s debt is interesting because its recent competition for Google’s TPU business has been accompanied by a spike in CDS. And, as Bloomberg notes, the monster debt deal will do little to alleviate that pressure and will likely feed down to the CDS of other chip / hyperscaler credit. Source: zerohedge

More money printing. More debt. Higher prices. Source: Charlie Bilello

Billionaire investor Sir Christopher Hohn’s TCI has quietly built a major exposure to loans backed by some of Italy’s most prestigious hotels. 🏨 $392M — Hotel Danieli, Venice 🌊 $132M — Caesar Augustus, Capri 🏔️ $74M — Six Senses, Lake Como 🏙️ $38M — Mandarin Oriental, Milan The thesis is simple: scarcity + pricing power. Italy’s revenue per available hotel room surged 53% between 2019 and 2025, the strongest increase in Europe, driven largely by luxury properties. Historic palazzi, prime waterfront locations and strict planning rules mean supply cannot easily respond to booming demand from wealthy international travellers. For Hohn—an investor obsessed with businesses able to raise prices faster than inflation—ultra-luxury Italian hotels increasingly look like real-estate monopolies in disguise. And TCI is financing them. Source: FT

Source: zerohedge