Craig Shapiro

Bonds ignored a 15% oil drop, soft PCE, and a dovish Fed voice.

Five of six conditions from October 1987 are back, and the long end has run out of excuses to rally.

New memo, a map not a forecast.

Link below.

TD VOLS!!!

Loving this weekend with my daughter celebrating the Tennessee Vols

Strong first half. Up 10-6 even with the refs screwing us with a few horrible calls. All good.

Dark mode activated.

Never been louder.

Go Vols!!

@Neyland_Stadium

Tonight. Neyland Stadium. Homecoming.

Dark mode activated.

Time to prove the rankings are wrong.

See you for kickoff at 615pm

Go Vols!!

@Neyland_Stadium @Vol_Football

Week in Review

The election didn't remove the AI risk. It moved it.

Governors-elect in Texas, Georgia and Ohio campaigned on data center moratoriums, and the market split the AI trade in two.

The spenders' credit improved: Meta CDS ~11bp tighter, Alphabet and Meta-linked bonds up more than a point.

The suppliers took the hit: CoreWeave CDS +31bp to 1,162, the CoreWeave-linked Helios bonds -2.6 pts, Nebius -8%.

Thursday turned that rotation into a liquidation. S&P -4.4%, correlation from 9.7 to 22, VIX above VIX3M into the weekend. HY still finished the week tighter. A growth scare in the AI supply chain, not a credit event.

Meanwhile the Fed got further away, not closer. Oil fell 6% to ~$90 and took 34bp out of 1y breakevens, but the 2y real yield rose 14bp.

Then payrolls came in at 165k vs 70k, with upward revisions and 0.4% wage growth.

A December hike is back on the table, and CPI next week decides it.

The risk: a Fed tightening into a slowdown concentrated in the AI supply chain.