Bubecy

Actively in pursuit of more....
Keep pushing cos nothing good comes easy!!!

[NFL @NFL]

24 HOURS UNTIL FOOTBALL IS BACK 🏈

[Tió🧊 @KidBold]

diesel card (with verification).
track mpg (many devices that can track this on alibaba)
navigation tracker.

all reported to you daily.

[Bubecy @meetbubecy]

@ancientmind A bad system will always beat the best guy.

[Bubecy @meetbubecy]

@KidBold IMO, cutting costs without identifying the bottleneck and working on it, is overkill. Identify, exploit, subordinate, elevate, repeat. Precision beats full on bombardment any day, any time.

[Bubecy @meetbubecy]

@KidBold All because the current Daedalus gave him his wings. Another casualty of the orange man wagon.

[Boring_Business @BoringBiz_]

If AI gains consciousness, this is the first person they will come after

[Bubecy @meetbubecy]

@hthieblot MySpace

[Black Panther Capital @BlackPantherCap]

US and Trump is playing 4D chess with the whole world, and no one on X have connected the dots yet...

The market is navigating a classic macro divergence where regional vulnerability, monetary policy, and energy shock timelines are pulling global assets in completely different directions.

US is holding a unique position right now, EVEN as equities take a heavy hit.

Walk with me:

1. Is the market collapsing?

No, but global markets are fracturing.

Emerging/Asian Markets: Index drawdowns like South Korea's KOSPI reflect regional exposure to energy supply bottlenecks (via the Strait of Hormuz) and elevated global shipping costs. South Korea relies heavily on Middle Eastern energy imports, making its export-heavy semiconductor and manufacturing sectors hit hardest by margin compression and currency pressures.

US Equities: The US market remains far more resilient. Because the US is a net energy exporter and benefits from robust productivity and capital expenditure in tech/AI, US corporate earnings and broader markets are insulated from the energy-driven inflation shocks hitting Asia and Europe.

2. Is the market in an uptrend, or turning bearish?

It is a split market.

US: The fundamental uptrend remains structurally intact, though it is in a late-cycle, high-volatility phase. The broad US economy continues to expand at a solid pace, buoyed by strong corporate investment.

Rest of the World (EU/Asia): Moving toward a bearish/stagflationary regime. Rising inflation probabilities in the UK, India, and Eurozone reflect how foreign central banks are forced to deal with imported inflation (energy + supply chains) even as growth slows.

The US probability sits way below, explaining the market's divergence.

3. Where are we at in the cycle?

We are in a Late-Cycle "Macro Divergence" Phase.

Normally, late-cycle dynamics feature synchronized global rate hikes and falling margins. Right now, structural US energy independence and domestic capex have decoupled the US late-cycle from Europe and Asia. The gap between US policy/inflation expectations and the rest of the world is at historical highs because foreign economies face supply-shock inflation, whereas US inflation remains primarily driven by domestic demand dynamics and localized policy.

4. September FED Meeting: Cut or Hike?

The base case is another HOLD, but the marginal risk is shifting toward a HIKE, not a cut.

Yesterday’s FOMC decision was a hold at 3.50%–3.75% with a 9–3 vote split.

3 hawkish dissents (Hammack, Kashkari, Logan) preferred a +25 bps hike immediately due to sticky inflation and energy supply concerns.

The Data: Fed Chair Kevin Warsh and the FOMC statement emphasized "no tolerance" for persistent inflation and cited Middle East energy supply shocks as ongoing upside risks.

Unless U.S. labor market data weakens substantially before September, rate cuts are off the table for September. The Fed will either hold rates steady or be pushed into a 25 bps rate hike if energy price pressures spill over into broad core inflation.

5. Middle East War Impact & Timeline

The Middle East conflict acts as a direct supply tax on non-US economies. High oil and LNG freight prices act as imported inflation for Europe and Asia, constraining central banks from lowering rates to support growth.

So, when does the war need to resolve to avoid a global recession?

The 2-to-3 month window: Historical energy shocks (e.g., 1990 Gulf War, 2022 Ukraine invasion) show markets can absorb temporary oil spikes if supply routes resume within 60 to 90 days.

The tipping point: If supply route disruptions (particularly the Strait of Hormuz) persist into late Q3/Q4 2026 (past the ~90-day mark), corporate margin erosion will lead to widespread earnings revisions, demand destruction, and debt refinancing stress in Asia and Europe. That is the threshold where a regional equity correction turns into a broader global recession.

Here's the but...

6. The US PMI Trend:

Both the Global Composite PMI (53.6) and ISM Manufacturing PMI (53.3) are firmly above the 50 expansion/contraction threshold.

What this means for the macro picture:

A PMI above 53 signals that the US economy is still growing at around a 2.0% annualized rate, driven by steady new orders and services demand.

Because domestic manufacturing and services are holding up well, the Fed has zero economic pressure to cut rates to avert a domestic recession. The solid PMI numbers validate why the Fed can prioritize holding rates steady to fight energy-driven inflation rather than rescuing global markets.

7. If the Rest of the World Enters a Recession While the US Avoids One

This exact scenario, often called "US Exceptionalism" has distinct consequences for the stock market:

A) US Equities Outperform, But Broad Multiples Get Capped

US stocks (particularly the S&P 500) will act as a primary safe haven for international capital flight. However, because roughly 30% to 40% of S&P 500 company revenues come from foreign markets, a global recession will still drag down top-line earnings growth for multinational giants (e.g., $AAPL, $MSFT, $CAT, $AMZN, $GOOG)

B. The US Dollar Spikes, Creating Headwinds

When the global economy struggles while US PMIs stay strong, global capital floods into the USD for safety and higher yield. A surging US Dollar makes US exports more expensive abroad and reduces foreign earnings when converted back into dollars, acting as an automatic brake on corporate earnings growth.

C. Strong Rotation Within the US Market

If international markets are stagnant, money won't leave equities entirely, it will rotate internally within the US index:

Winners:
Domestic-focused sectors (US small/mid-caps with purely domestic revenue, domestic utilities, US-focused healthcare) and cash-rich mega-cap tech with pricing power.

Losers:
Global cyclicals, heavy industrial exporters, and foreign index funds (e.g., emerging markets and European ETFs).

D. Valuation Premium Widens

The gap in price-to-earnings (P/E) ratios between US stocks and foreign stocks will stretch even further. Foreign equities will look extremely "cheap," but they will stay cheap until global central banks can cut rates or energy pressures subside.

A solid US PMI amid global turmoil is a double-edged sword. It protects US corporate balance sheets from outright insolvency, but it prevents the Federal Reserve from easing financial conditions. Expect the S&P 500 to stay Range-Bound to Moderately Bullish, heavily outperforming Europe and Asia, but struggling to break into a roaring bull market until global growth stabilizes.

8. Impact on the US AI Buildout

A) The CapEx Machine Stays Intact

The AI buildout is primarily funded by mega-cap hyperscalers (Microsoft, Meta, Alphabet, Amazon) sitting on immense cash reserves. Strong US PMIs and domestic revenue generation mean these tech giants do not face immediate solvency or cash-flow constraints. Their multi-billion-dollar AI capital expenditure plans are treated as strategic necessities, making the core US AI buildout far more resilient to global downturns than traditional cyclical industries.

B) Domestic Power and Infrastructure Become Strategic Bottlenecks

Middle East turmoil and rising energy probabilities in Europe and Asia highlight the value of secure, domestic energy supply. The main bottleneck for US AI isn't demand, it's access to megawatt-scale power and grid connections. Consequently, infrastructure built on US or North American soil gains a premium as global supply chains and energy imports face heightened geopolitical risk.

9. Short-Term Outlook for High-Beta Stocks ($NBIS, $IREN e.g.)

A) The Short-Term Trade - High Volatility & Multiple Compression

Because the Fed is held back from cutting rates (and hawkish dissents tilt toward holding or hiking), capital costs remain high. High-beta growth names requiring heavy capital expenditure to expand data center capacity or GPU fleets face valuation multiple compression.

Both NBIS and IREN carry higher beta than index benchmarks. During global risk-off episodes triggered by geopolitical tension, these stocks will experience outsized downside swings regardless of operational updates.

Expanding capacity requires continuous capital. Higher interest rates make debt financing costlier and increase the risk of equity dilution if companies issue shares to fund expansion.

B) The Long-Term Trade: Monetizing Scarcity & Capacity Overflow

As hyperscalers scramble for power-ready land and electrical interconnections, firms with secured North American power assets stand as prime beneficiaries. Long-term power purchase agreements and gigawatt-pipeline capacities give infrastructure hosts immense pricing power.

As top-tier cloud providers hit capacity limits, enterprise customers and AI startups turn to specialized GPU cloud providers. NBIS's full-stack GPU clusters position it to capture demand overflow from companies that cannot wait for custom hyperscaler buildouts.

As the sector matures, the market will stop pricing these names solely on capacity announcements and start judging them on utilization rates, operating margins, and free cash flow generation. High-beta names that successfully convert CapEx into recurring revenue will decouple from macro volatility.

-BP

Not financial advice.

[Bubecy @meetbubecy]

@mktoon @asemota Seems a high percentage of Americans are unfamiliar with the culture, folklore and history of countries other than theirs. Sadly, it's not limited to a particular social class. I wonder if that's by design or the result of being 'on the top' for too long?

[Elnathan John @elnathan_john]

This made me smile. What beautiful sounds.

[Bubecy @meetbubecy]

@elnathan_john Music is the one intangible entrance into the higher world of knowledge which understands mankind, but which mankind cannot understand.

[Bubecy @meetbubecy]

@Olashoneye @FinPlanKaluAja1 Yes you do. Paper covers rock.

[Bubecy @meetbubecy]

"While happy families are all alike, every unhappy family is unhappy in its own way.."
Tolstoy

[Bubecy @meetbubecy]

@Ssaasquatch SHM 👍

[Bubecy @meetbubecy]

Strong institutions + knowledge bank + finance via commercialization of knowledge, possible recipes for successful national development ??

[Bubecy @meetbubecy]

Chance favours the prepared mind

[Bubecy @meetbubecy]

@Officially_Kriz Am I missing something?
I thought GP was Rev minus CoS.
How's 13m - 0.955 m =13.9m??

[Bubecy @meetbubecy]

@Harri_obi @asemota Seen other videos of the crash and something sad stuck with me. When a plane you are traveling in crashes, why is getting your luggage a part of your immediate concern ?