Real Vision

It’s on. Our Trading League is officially open. Post up to three trade ideas inside Real Vision between now and November 20 and compete for up to $100K in prizes.  All you need to get started is a free account. You don’t need to make any real trades, just post the idea, and it gets scored on how it plays out in the market. And we’re not sending you in blind… Last week we ran two days of live workshops with some of the best in the game, all recorded and ready to watch with your free account.  Plus you get a free Trade Agent to use for the whole League. Type a ticker, let it do the digging, then post the idea that holds up. Your future. Your move.

The most important thing in finance is not earnings. It’s the discount rate.” - @jam_croissant Bond yields are the discount rate for stocks. When bond yields climb, investors demand a higher return from stocks too, so the 60/40 hedge falls apart. In 1982, with rates at 20%, the S&P traded at five times earnings.

Anthropic is targeting a valuation of up to $1.4T, 30% below the $2 trillion floated in the summer. The business added $10 billion of run-rate revenue in October alone. The IPO is selling into a market where the Nasdaq is trading at 18 times earnings, a Covid-crash multiple. So November 18 pricing is becoming the test. A clean deal at $70 to $78 is going to show buyers are paying up for AI, and a weak one is going to mean more selling.

.@RosenvoldGeo on last week's AI selloff: "The anti-AI or AI skeptic sentiment in markets, or as a result of the midterms, simply pulled the rug from underneath the markets." "I have the feeling that this could smell a lot like a bottom."

GM Visionaries. Here's where the market stands midweek: - October CPI has come in hot, and the odds of a 50bp hike in December have jumped to 11.5%. - $NVDA has bounced back after a two-day sell-off over the board's investigation into Jensen Huang. - Microsoft has pulled out of its deal for Nscale's Essex data center, and Nscale is now weighing a delay to its $35bn IPO. - @AnthropicAI has opened its IPO roadshow at a valuation of up to $1.4 trillion, and the deal is pricing on November 18. @AndreasSteno's full report on it is dropping inside Real Vision tomorrow. What's your focus this week?

October CPI has come in hot, with headline and core both above forecast. @AndreasSteno puts most of the damage down to a 0.7% rise in energy, and those prices have been dropping since the October data was collected. He's calling this the last hot print, and the 2-year yield's jump to 4.73% a massive overreaction. The Fed's 25bp hike in December is staying locked in, but Steno doesn't see a long run of hikes after it.

Foreign investors dumped more than 12 trillion won of Korean stocks in seven sessions. The selling was about Washington: a Democratic sweep raised fears of tighter data center rules, and the chipmakers feeding those data centers fell hardest. SK Hynix dropped 10% on Friday alone. Today they bought, and the KOSPI closed up 4.39%. Supply has not changed. HBM is largely sold out into 2027, and TrendForce expects prices to more than double next year. The bounce holds as long as foreigners keep buying.

US crude has closed below $88 for the first time since August. WTI settled at $86.85 on Monday, down 4.4%, after Trump said fresh strikes on Iran were unlikely while talks continue. Diesel still trades more than $80 a barrel above crude, and US diesel stocks are at their lowest since 2003. Pump diesel is still over $6 a gallon. Until that comes down further, it won't do much for inflation.

Big tech asked for AI regulation. @RosenvoldGeo on why a Democratic Congress writing it could be good news for the hyperscalers: “I think the reactions on the AI build-out, the Democratic opposition to the AI build-out, were very overblown.” “So a Democratic Congress more willing to look at AI legislation, maybe pausing the frontier, is that such a bad thing for the big AI? I’m not sure it is.”

.@RosenvoldGeo on why today's CPI could end the hikes. "We've gone from a situation where it was about 50/50 if inflation would be greater than the latest print to an almost certainty that inflation has rolled over."

October CPI is landing at 8:30 ET. This is the last CPI print before the Fed meets in December, and a hike is already priced near 90% according to Polymarket. Economists are looking for 0.3% on the headline and 0.2% on core, down from 0.6% and 0.3% in September. There is no 12-month rate this month as last October’s prices were never collected in the shutdown. The monthly numbers carry the whole story today. A 0.2% print keeps the hike on track, but 0.1% lets the Fed wait.

The playbook that worked last decade has an expiry date.

“What’s worked for the last 40 years is an anomaly,” @jam_croissant on the 60/40 portfolio. It worked because interest rates fell from 20% to zero. Before that, it made 0% in real terms for 60 of 82 years, across three separate 20-year stretches. That's three-quarters of a lifetime for nothing.

.@jam_croissant on why the Fed will eventually buy up Treasuries. "What matters is the long end of the curve." "There are no buyers, ultimately, in the big picture of U.S. bonds. And so there has to be a buyer of last resort. And who is the buyer of last resort? It's the Federal Reserve." With @ashbennington.

Bitcoin has closed lower five weeks in a row, and last week the ETF selling sped up. US spot ETFs lost $1.28 billion in five days, the worst week since June. BlackRock’s IBIT accounted for $1.21 billion of it. The other driver is tech. Bitcoin dropped 5.6% on Thursday alongside the Nasdaq 100 and sat out Friday’s chip bounce. Right now bitcoin is trading like a leveraged Nasdaq bet, so Tuesday’s CPI and CoreWeave’s earnings will move it more than anything in crypto. @Jamie1Coutts says two levels matter from here: A weekly close below $73,191 opens the door to a deeper drop. $75,600 is the level bitcoin needs to reclaim to stop the slide.