fxevolution

5 Things That Caught My Attention Today... 1. Howard Marks has weighed in on something we've been discussing for weeks: can Treasury buybacks really control long-term yields? Treasury has increased the size of its long-duration buybacks, but Marks argues this doesn't address the underlying problem, large fiscal deficits and federal debt now around $40 trillion. And the bond market seems to be having its own conversation: the US 10-year yield just surged above 5.1%, its highest since 2007. You can influence liquidity in the bond market, but Marks' point is that eventually you have to deal with why so much debt needs to be issued in the first place. 2. Another big number from private credit: investors asked to withdraw 14.7% of Apollo's roughly $26B flagship private-credit fund this quarter, while the fund's normal quarterly repurchase limit is 5%. Interestingly, that's actually down from 16.8% last quarter, and Apollo says much of the demand is investors resubmitting previously unfulfilled requests. We just saw Morgan Stanley receive requests equivalent to 11.4% of its fund against its own 5% limit. These vehicles aren't banks and these limits are part of their structure, but when investors repeatedly ask for substantially more liquidity than the vehicles provide, I think the trend itself is worth watching. 3. And suddenly another Fed hike doesn't look so strange. The September flash US Composite PMI just jumped from 56.0 to 58.4, the strongest reading since July 2021. Employment growth was the strongest in more than four years, while input costs also accelerated to nearly a four-year high. Prediction markets have moved with the data: Kalshi is now pricing roughly a 67% chance of another 25bp hike in October. Strong growth sounds great until you're a bond investor waiting for inflation and rates to come down. 4. Meta's Muse story keeps getting bigger. The new personal AI agent reached #1 on Apple's US App Store, overtaking ChatGPT, while Meta shares surged more than 11% in a single session. Muse is interesting because it isn't being positioned simply as another chatbot, it can perform tasks such as research, filling forms, making purchases and booking reservations. We've spent years talking about what happens when AI becomes useful enough for ordinary consumers to use every day. This might be one of the first real tests. 5. AMD crossed $1 TRILLION in market value for the first time, with the stock jumping almost 10% as enthusiasm around AI infrastructure accelerated again. AMD was worth roughly $255B only a year ago. Now it's part of the trillion-dollar club. Patience. React, don't predict.

Month To Date i'ts been tech tech tech! https://t.co/DCcqG82G1N

Michael Burry is adding to his AI shorts… while AI demand is still exploding. At the same time, private credit investors are asking for liquidity, a major $50B AI infrastructure IPO has reportedly been delayed, and Meta’s hottest new AI agent apparently still needs actual humans in call centres to complete some tasks. If you’re watching markets this week, this is one you’ll want to catch. Patience. React, don’t predict.

$278 BILLION. That’s how much cash OpenAI reportedly expects to burn between now and 2030… while SoftBank looks to raise another $11B in junk bonds to help fund its AI bet. Meanwhile, Bitcoin just ripped through $85,000, wiping out nearly $648M in shorts, QQQ is breaking higher with volatility rising alongside it, and diesel/refining pressures are building again. In today’s video, we connect the Price Action, Data and Flows behind some of the biggest moves happening right now. Patience. React, don’t predict.

Funny how quickly the conversation changes. A week ago everyone was worried about what came next. Now the Nasdaq has closed at a new all-time high. If you've been following the price, data, flows and sentiment with us, there were clues underneath the noise. Particularly post interest rate decision. News creates Catalysts!

Bitcoin Inflows were huge for the 18th, no surprises there based on that price action! https://t.co/mrCErZrZNJ

$1.45 TRILLION. That’s how much US margin debt has now climbed to, up another $228 billion this year as leverage continues to build underneath the market. Meanwhile, CoreWeave is raising another $3B in debt, Steve Eisman is questioning the real reason AI leaders want to slow development, Blackstone is dealing with liquidity demands in private real estate, and the Dow Transports continue to weaken. In today’s video, we connect the Price Action, Data and Flows and look at what they could be telling us about the market right now. Patience. React, don’t predict.

This might be one of the most important charts people aren't watching. US margin debt has reached $1.45 trillion. Up $37B in August. Up $228B YTD. Around 4.5% of GDP. Leverage has been growing faster than the market itself. But the more leverage sitting in the system, the more interesting things can become when volatility eventually shows up.

7 Things That Caught My Attention Today... 1. This is one of the leverage charts I keep coming back to. FINRA margin debt reportedly reached $1.45 TRILLION in August, up $37B in a month and $228B since the start of the year. Relative to the economy, margin debt is now around 4.5% of GDP, above the peaks around 2021 and the dot-com era. The more leverage builds, the more important volatility becomes because falling prices can eventually create forced sellers. 2. Another interesting development in the AI financing story. CoreWeave announced a $3 BILLION convertible debt offering alongside a program allowing it to sell up to 35 million shares. This comes as the company spends extraordinary amounts building AI infrastructure: $14.1B in infrastructure investment during the first half of 2026, against a $104B revenue backlog. But here's the number I'm watching, interest expense was around $640M last quarter and is expected to reach $860–940M next quarter. 3. Steve Eisman had an interesting take on the sudden calls from AI leaders to slow development. His argument is that this may be about more than safety. As cheaper and increasingly capable models emerge, regulation and slower frontier development could potentially strengthen the competitive moats around established players. Eisman also pushed back strongly on claims that AGI is imminent, essentially asking: if the risks are really as immediate as we're being told, why are these companies simultaneously raising enormous amounts of capital and preparing for potential IPOs? I don't know which side ultimately proves correct, but “who benefits from slowing down?” is an interesting question to add to the AI debate. 4. Here's a chart that completely changes depending on what you use as the denominator. The median new US home reportedly cost around 91 ounces of gold in Q2, roughly 82% below its 1960s peak when measured in gold, even though homes look extraordinarily expensive when measured in dollars. But here's where it gets even more interesting: measure the average annual wage in ounces of gold and you get a very different picture again. The unit you choose can completely change the story an asset appears to tell. I'm writing this one up properly for the newsletter soon, so make sure you're subscribed. 5. Diamonds have quietly experienced an extraordinary bear market. Prices are reportedly around their lowest levels this century and roughly 70% below the 2011 peak. Lab-grown diamonds, changing consumer preferences and weak demand have completely changed the economics of an asset once marketed around scarcity. It's a useful reminder that something being scarce, expensive or considered a “store of value” doesn't automatically mean the price has to keep rising. 6. Blackstone is reportedly arranging a secondary transaction allowing institutional investors to sell positions in its $57.7B Blackstone Property Partners fund, while also cutting management fees by around 30% for investors that agree to limit redemption requests. Commercial real-estate values remain well below their previous highs, and what's particularly interesting is that the fund's largest exposure is now data centres. 7. And one chart underneath the equity indices continues to bother me: the Dow Jones Transportation Average. While the major indices remain relatively strong, transports have continued to weaken. I don't treat Dow Theory as some magical market-timing system, but transports give us a useful look at economically sensitive businesses moving goods around the economy. When the companies transporting those goods start behaving differently from the headline indices, I think the divergence is worth watching rather than ignoring. As always, Patience. React, don't predict.

32 straight weeks. That's how long AAII bearish sentiment has now been above its historical average. This week it jumped to 53.3%, compared with just 28.8% bullish. The crowd remains deeply uncomfortable. The wall of worry is still very much alive. https://t.co/75LwJCXznU