Alex Malitas, CFA

Macro @BiancoResearch

[Alex Malitas, CFA @AlexMalitas]

Rational Dissent Episode 011 out now!

[Jim Bianco @biancoresearch]

A few days ago, I argued that excessive debt wasn't driving yields higher (link).

The repost is my argument for why yields are moving higher, and why they are no longer expensive.

https://t.co/AcrblgHGGS

[Alex Malitas, CFA @AlexMalitas]

I've been arguing that the question for OpenAI & Anthropic is how much value they can generate above and beyond current projections.

Whether it's 80/20, 90/10, or some other mix. Most tasks (both prompt-response and workflow automation) can be accomplished with much cheaper models.

GrokBot & Muse are examples. Neither requires frontier models. They require the harness level above it to be considered thoughtfully.

If the frontier-capable models capture only frontier-level tasks...then the frontier duopoly holds only a small piece of the pie.

What Google, Amazon, Meta & Microsoft are spending on is the capacity to spin up use cases. Don't be surprised if 'personal assistants' is more than a fad and becomes a big part of the 'why' behind the spending.

[Charlie Bilello @charliebilello]

The AI capex boom is accelerating at a staggering pace.

Spending by Alphabet, Amazon, Meta, Microsoft & Oracle is expected to jump from $412 billion in 2025 to $789 billion in 2026.

That's a 92% increase in just one year.

By 2029, estimated capex from these 5 hyperscalers is nearly $1.2 trillion a year.

At some point, investors will demand to see a return on all that spending.

[Alex Malitas, CFA @AlexMalitas]

We often highlight these two charts. One shows that inflation has outpaced average hourly earnings since April 2020.

The second shows how Wall Street views inflation versus how the average person does.

The average person sees the prices of what they buy as 30% higher. Economists & Wall Street see that yoy inflation isn't 9% anymore

[Alex Malitas, CFA @AlexMalitas]

Great example of the K-shaped economy in 2026... Wall Street sees rising equities boosting wealth, but most of the country doesn't own equities. Consumer sentiment is at an all-time low because they care about real dollars. 1/2

[The Kobeissi Letter @KobeissiLetter]

US consumer confidence is collapsing.

The Consumer Confidence Index dropped -6.7 points in September, to 81.9, its lowest since April 2014.

This marks its 4th consecutive monthly decline, totaling -11.2 points.

The Present Situation Index fell -7.9 points, to 109.3, its lowest since February 2021.

At the same time, the Expectations Index fell -5.9 points, to 63.6, its lowest since April 2025, marking its 3rd consecutive monthly decline.

Over the last 6 months, confidence across all age groups and nearly all income groups has declined.

Consumers are also increasingly citing high prices, the cost of goods and services, and oil and gasoline prices as major factors weighing on the economy.

US consumer confidence is at crisis levels.

[Alex Malitas, CFA @AlexMalitas]

Same/Similarly measured data but shown as actual net positions

[Global Markets Investor @GlobalMktObserv]

Institutional investors are DUMPING S&P 500 futures:

Hedge funds, asset managers, and other investors have sold S&P 500 futures in 5 of the last 6 weeks, cutting their positioning by -$68.1 billion over that period.

This marks one of the most aggressive selling episodes on record, with only the 2020 and 2022 bear market liquidations exceeding the current decline.

The selling comes as conviction and sentiment have deteriorated rapidly among investors, even while the S&P 500 remains near record highs.

Uncertainty around monetary policy has also increased, helping drive the sharp reduction in directional exposure.

The market is near its highs, but investor conviction is collapsing.

[Alex Malitas, CFA @AlexMalitas]

Agree.

CCC is only about 9% of the junk market and something like 6 issuers are driving most of the move in CCCs. Everything above it still isn't moving much.

[Andy Constan @dampedspring]

HY Spreads Merton Model - Doomers take a breath please. 1) Yes HY spreads are spiking over the last 4 months. 2) you have to squint to think this is high spreads or stress 3) a merton model using equity vols and levels and corporate leverage tracks spreads pretty well. 4) Corporate spreads are pretty cheap relative to Long term equity "puts" as level and vol and leverage suggests credits are just fine.

[Jurrien Timmer @TimmerFidelity]

Which is not to say that TIPS will generate a positive return over the next 5 years. But they should outperform nominals if inflation stays elevated, and no worse than nominals if inflation reverts to 2.5%. 🧵(7/7)

[Alex Malitas, CFA @AlexMalitas]

@GlobalMktObserv Asset managers still hold a big net long position.

Weekly changes in net positions need to be measured against the total net position. In this case, a 100k increase in short positions is hardly anything

[Holger Zschaepitz @Schuldensuehner]

A bottom for bonds? TLT, the 20+yr US Treasury ETF, is 55% below its 2020 peak, excluding distributions. Now longtime bond bear @biancoresearch has turned bullish for the first time since 2020. @dailydirtnap is bullish too. A turning point after years of pain?

[Alex Malitas, CFA @AlexMalitas]

@lisaabramowicz1 Using forward earnings yield gives a slightly different picture, but the conclusion is the same.

On a starting-yield basis, the competition is getting closer, but as you said, growth expectations still drive the decision.

[Alex Malitas, CFA @AlexMalitas]

The average S&P 500 quarterly earnings growth since 2011 has been 9.32%. We just saw two quarters north of 20%, even without non-operating income.

Still expecting two more above 20%, followed by two more above 15%.

@biancoresearch