NeutralCRWVCoreWeave, Inc.CoreWeave, Inc.NVDANVIDIANVIDIA

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Headline inflation above 4% closes the door on "one-and-done," but the AI trade is bouncing anyway. TL;DR 1/ Tuesday's CPI print above 4% year-over-year has killed the "one-and-done" narrative and forced the market to price a genuine hiking cycle, with the 10-year set to breach 5% cleanly on reopening. 2/ The AI trade is bouncing on hard demand evidence (CoreWeave beat, OpenAI's first $10B revenue quarter, Anthropic IPO momentum), but this is a vol-structure-driven relief rally in a negative gamma regime, not a durable re-rating. 3/ NVDA is cheap on every metric but functions as a value trap until the board resolves the Jensen Huang situation ahead of November 17th earnings. 4/ Hormuz throughput at 30% of pre-war levels, Iran hardening on nuclear talks, and an overnight Ukraine strike on Russian export infrastructure at Ust-Luga mean commodity tail risk is not priced out. Regime: Fragile. Use the buyback re-entry window to selectively add AI infrastructure exposure, but keep sizing disciplined given short gamma and unresolved rates repricing.

UVXYProShares Ultra VIX Short TermBullishProShares Ultra VIX Short TermCBRSCerebras Systems Inc.NeutralCerebras Systems Inc.GOOGAlphabetNeutralAlphabetGOOGLAlphabetNeutralAlphabetIRENIREN LIMITEDNeutralIREN LIMITEDMETANeutralNBISNebius Group N.V.NeutralNebius Group N.V.

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Tuesday, November 10: The Fed Gets Louder, Equities Don’t Listen End of Day Summary October CPI came in hot. Core rose 0.3% against 0.2% expected (0.296% unrounded), the second straight 0.3% print, and headline rose 0.4%. The same morning, Fed Governor Waller said he supports a 25bp hike in December and that 50bp “should be considered” if core ran around 0.3% or more, which it did. He also argued that lower oil isn’t relief, because energy may now pass through to core inflation, and that the AI buildout is pushing up tech goods prices. In the afternoon, Vice Chair for Supervision Bowman turned more hawkish than in October, saying “progress on lowering inflation has disappointed” and estimating October core PCE at 3.3%. She stopped short of endorsing a hike, though: she said further tightening has to be weighed against its costs for rate-sensitive sectors. The most important part of her speech was a detailed warning on AI financing. She said AI-related debt is on track to exceed $800 billion this year, off-balance-sheet commitments are more than three times that, and the structures create “the appearance of circular financing.” If AI revenues disappoint, she expects a sharp correction in AI equities and tighter credit, which would slow both growth and inflation. The bond market took it seriously. The 2-year rose 17bp to 4.74%, and the 3-month to 2-year spread widened 9bp to 50.8bp as December hike pricing came back. The curve bear flattened, with 2s10s down 7bp to 25bp, and the 10-year finished at 4.99% after briefly trading above 5%. Real yields drove most of the move: the 2-year real yield rose 13bp to 2.51%, the highest of this cycle. Front-end breakevens rose too, with the 1-year inflation swap up 13bp on the CPI print even with oil lower. The 5y5y inflation swap fell 2bp, a sign the bond market is rewarding a Fed willing to tighten. The dollar rose 0.6%, the yen weakened to 158.72 (moving toward 160, where Japan has intervened before), and gold fell 1.8% to $4,039. Equities barely moved. The S&P fell 0.4% to 7,521, NQ 0.5% and the Russell 0.6%. VIX actually closed lower at 19.5, still below VIX3M, and implied correlation fell to 12.5. Credit agreed with equities rather than rates: CDX IG was flat, HY widened 2bp, and the hyperscaler spread index tightened to 163.6bp, its lowest since the November 3 rebalance. The damage stayed concentrated in the AI suppliers, with IREN down 7.9%, Nebius 5.3% and Cerebras 3.1%. Long-dated Alphabet and Meta-linked bonds fell about 0.8 point, which was a rates move, not credit. The bigger story is the gap. Since Friday’s close, the 2-year yield is up 22bp and the 2-year real yield 25bp, and two Fed governors have turned more hawkish. Over the same two sessions, the S&P is up 2%, VIX has fallen from 25.6 to 19.5, and hyperscaler spreads have tightened. Dealer positioning after Monday’s vol crush is likely keeping the index pinned. Moves this far apart usually close one of two ways: either the Fed backs off, or equities and credit reprice toward rates. My sense is that it will be the latter

UVXYProShares Ultra VIX Short TermNeutralProShares Ultra VIX Short Term

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Hot core CPI + Waller floating 50bp: 2y +19bp to 4.75%. 10y back above 5%. 2y real yield 2.52%, the high of the cycle. But the 5y5y fell 2bp. The bond market is rewarding a Fed willing to hike. Equities: S&P -0.7%, VIX still below VIX3M. The calm is the risk. Lets see how the 10year auction goes

IWMRussell 2000BearishRussell 2000

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Seems like a good time to swap shorts back into the IWM as interest rates back on the rise

NVDANVIDIABearishNVIDIA

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CPI at 0.3% or above reopens the 50bp debate and unwinds the only real support holding equity multiples together. TL;DR 1/ Monday's 2.35% crash-up was a mechanical convulsion driven by negative gamma and leveraged fund dynamics, not a recovery signal. 2/ Today's CPI is the session's binary: a hot print validates Waller's 50bp threat and unwinds the post-midterm Treasury rally that's been holding up equity multiples. 3/ The NFIB's four-year-high price-raising intentions make Waller's hawkish optionality credible and argue against fading the repricing on top-down disinflation alone. 4/ The AI complex is priced for perfection while the Anthropic IPO, NVDA overhang, and post-midterm regulatory headwinds actively dispute that outcome. 5/ Systematic sellers are nearly exhausted and the buyback window is reopening, but neither resolves the underlying gamma fragility or widening credit spreads. Regime: Fragile. Fade any hot-print rally attempt and treat a soft-print relief move as tactical, not a regime change.