yitai

HF Allocator

[Neil Sethi NEW account, please refollow @neilsethinew]

BofA (Woodward): Since late May investors have fled the perceived risks from unfriendly global central banks and profligate tech borrowers.

The Magnificent Seven “hyperscalers” have spent $234B in capex this year, but their stocks are up just 0.5%. The free cash flow of these companies is expected to turn negative over the next twelve months for the first time since at least 2007.

Rallies of 10-40% in sectors like communications, tech, semiconductors, and other growth stocks have reversed in June (Exhibit 5).

Investors kept buying small caps and started buying the losers: financials, down as much as 12% YTD, are now positive on the year, and health care stocks reversed a 7% drawdown into 7% gains.

[Cassandra Unchained @michaeljburry]

Now, Class, repeat after me. I will never buy cyclicals at low PEs and record earnings. Say it again. I will never buy cyclicals at low PEs and record earnings.

[Nick Timiraos @NickTimiraos]

Warsh's communications task force is co-led by three people with loads of expertise in how a central bank talks to markets:

• Peter Fisher (NY Fed from 1990-2001, the last half of that as the SOMA manager)
• Arminio Fraga (governor, Central Bank of Brazil, 1999-2002)
• Mervyn King (governor, Bank of England, 2003-2013)

This trio, compared to the other four, is probably the most markets-facing of the bunch. Fisher ran the desk that actually executes the Fed's operations and later worked at BlackRock; Fraga came out of Soros and later founded the hedge fund Gávea.

Fraga was parachuted into Brazil's central bank in early 1999, weeks after a currency crisis forced the real to float and sent it down more than 60% in a month. He stood up a full inflation-targeting regime in months, publishing explicit targets to give markets a new anchor after the old exchange-rate peg collapsed.

King ran the Bank of England for a decade, through the 2008–09 crisis. He's since become one of the sharpest critics of "forward guidance"—the practice of signaling where rates are headed. In a 2022 paper he argued it had become a liability. His point: the future is uncertain, so a central bank shouldn't pretend to know its own next moves. Instead of talking about the modal rate path, the Fed should explain how it reacts to a changing economy.

"The communications of a central bank need to focus on explaining its reaction function and developing a narrative about the state of the economy that changes over time meeting by meeting, report by report. The only forward guidance markets and economic agents need is an unswerving commitment to price stability." Link: https://t.co/vRvpbbDBWW

(It's worth noting, so far Warsh has sounded skeptical of spelling out that much, but it's early days.)

King is also known for his "Maradona theory" of interest rates—the idea that a credible central bank, like the soccer star who beat defenders by running straight while they braced for a swerve, can move markets through expectations alone.

[Nick Timiraos @NickTimiraos]

Warsh's balance sheet task force will be led by

• Jeremy Stein (former Fed governor appointed by Obama)
• Karen Dynan (senior Treasury official in the Obama administration)
• Raghuram Rajan (former governor of the Reserve Bank of India from 2013-16)

Of note: Rajan co-authored a paper presented at Jackson Hole in 2022 that drew considerable attention from assembled central bankers.

That paper is here: https://t.co/0ML4nOr7SL

The paper highlighted the asymmetry of QE and QT via a ratcheting effect: The borrowing and lending habits banks develop while the Fed is flooding the system with cash may not fade when it reverses course, leaving the financial system dependent on a level of cash that becomes risky to remove. As a result, "our work suggests careful reconsideration of the merits of QE."

[Edgerunner @edgerunner17888]

I'm still amazed that someone would actually invest in her fund.

[TechFlow 深潮｜APP 已上线 @TechFlowPost]

印度，第一个被 AI 做空的国家。

· 印度 IT 指数较历史高点回撤超过 40%，成为今年表现最差的行业之一

· TCS、Infosys 等龙头公司裁员、缩招，软件外包行业增长明显放缓

· Anthropic、OpenAI 等公司的 AI 产品发布后，板块多次出现大幅下跌

· 当软件开发越来越自动化，全球最大的程序员出口国开始承受新的压力

AI 会不会取代程序员，讨论了很多年。
而印度，可能是第一个需要回答这个问题的国家。

[Andy Constan @dampedspring]

Hedge fund profits made during all manner of rebalances is directly sourced from the AUM of investors in index ETF's leveraged ETF's and hard benchmark index tracking mutual funds, insurance products, and pension funds

Just in case you didn't realize where these returns come from.

It's the "cost" paid by people who will not tolerate any slippage vs their benchmark. The hard benchmark causes entirely inelastic buying and selling at a particular moment in time and pays massive bid offer spread to achieve the benchmark

[Andy Constan @dampedspring]

If rebalancing generates 3BN at one hedge fund in a month Korea and leveraged ETF rebalancing must be part of their strategy. Russell isn't big enough and the SPX and NDX adds subtracts and reweights didn't have that much juice.

[烦恼小羊 @fannaoxiaoyang]

人类历史上最大的CapEx开支不应错过，但要注意Alpha正在从中游向上游移动。

即便没赶上AI Beta普涨、云厂商和芯片储存，但能源基建仍处相对洼地。不同于中游芯片的摩尔定律迭代，上游能源由于基建周期长，产能受物理极限约束，因而长远看，能源供给端将随着AI算力层爆发而出现结构性紧缺。

此外，由于能源基建折旧周期较长，配合下游CapEx高确定性订单（数据中心），会形成较为稳定的估值上涨空间。因此，CapEx下半场可以关注核电、变压器、开关设备、液冷等基建细分板块。从财报解构思路看，就尽量把仓位放在CapEx订单确定性高，折旧周期长的环节。

战场在变，花期在变，但CapEx的宴席还在继续。

[Jared Kubin @JaredKubin]

A fun game 🇺🇸🇺🇸

1) Steve Cohen
2) Stanley Druckenmiller
3) Adage trio: Gross / Atchinson / MacDougall
4) David Tepper
5) Paul Tudor Jones

[Kris Sidial🇺🇸 @Ksidiii]

My personal top 5 American traders of all time 🇺🇸

1) Jim Simons
2) Izzy Englander (special salute)
3) William O’Connor
4) Ed Thorp
5) Robert Kanter (special salute)

[夏日堆雪 @ku3cp2Vktz34951]

预期下跌已走完
美元指数目前看涨
对股市压制

[Edgerunner @edgerunner17888]

$PLTR Palantir's CEO just said what every big company thinks but won't say out loud: "They don't trust the AI labs. Not because AI is weak — because it's too powerful to hand to someone else."

His words: "Who controls the models, who controls the weights, who controls the value of your business."

This is the shift almost nobody is pricing in yet: the real AI war is not about smarter models. It's about who OWNS the intelligence.

Countries are spending billions on it. Companies are racing for it. And the ones without it could get left behind.

I break down "Sovereign AI," explain why it decides the winners, and identify the exact tickers poised to thrive.

Read it 👇
https://t.co/xMNgJu5imm

[Andy Constan @dampedspring]

I've traded corporate capital structures for 38 years. Nothing is black and white but perhaps the most fundamental recurring misunderstanding over my career is that people think perpetual preferreds are "like bonds" are "fixed income instruments" are "credit instruments". The reality is they are much much closer to dividend enhanced common stock than fixed income.

[Andy Constan @dampedspring]

As of the close Claims on 100% of $MSTR Assets are worth 90% of the value of the assets themselves.
My view has always been that this company is a leveraged closed end fund. After a tumultous week it is now priced like one. The days of the right side of the balance sheet being worth more than the left are over. That said its decently priced today. BUT @Saylor can absolutely fuck it up by selling more stock at current levels. 9 months of dividends before he must sell btc or more stock. Neither are great options but the discount in MNAV knows this.

[烦恼小羊 @fannaoxiaoyang]

鉴于下半年信贷环境，BTC不太可能出现V型复苏，因此本轮熊市底部应当为平坦U型。

除非突发衰退劳动力市场崩盘→流动性瞬时枯竭→ Fed紧急纾困救市→重现2020年V型复苏；否则就已知宏观环境来看，这种极端波动的概率并不高。

考虑到BTC有基于时间屈服的特性，叠加下半年货币环境的紧缩压力，依然不排除Q3大类资产同步去杠杆的可能。因此科学的买入策略是在6-10月作动态DCA（定投），这可以既兼顾底部积累，又实现风险分散。

技术层面，BTC已失守图示黄线200W MA，回顾过去十年，在该下方区域定投买入（熊市中后期）的平均价格可以最大程度做到接近于周期底部。

[烦恼小羊 @fannaoxiaoyang]

和过去每次一样，金融市场需要测试Warsh的底线和边界。

先试探领导的决心，再在框架内做生意，是华尔街和建制派几十年的默契。

[Mike McGlone @mikemcglone11]

Is Copper Next in Line? Hedge Fund Sell-Stops and Commodity Tops

Speculator sell stops may be cascading across commodities, potentially marking an enduring 1H peak. Managed money (hedge funds) have begun liquidating overweight net-longs in petroleum and grain futures, which could leave metals -- notably economically and stock-market-sensitive copper -- as a next potential sell-stop target.

Full report on the Bloomberg here: https://t.co/480BtR90Sz {BI COMD}
#copper #futures #stockmarket @Bloomberg

[Mike McGlone @mikemcglone11]

Implications of Extreme Gold-to-S&P Correlation

The highest gold-to-S&P 500 (SPX) 60-day correlation in our database since 1975, as well as the greatest 180-day volatility disparity since 2007, highlights the historical aberration and potential burden on the stock market to remain resilient.

Full report on the Bloomberg here: https://t.co/Yz7A4M36xq {BI COMD}
#gold #stockmarket @Bloomberg

[Mel Mattison @MelMattison1]

The Rotation Is Coming… Here’s Where The Money Goes Next w/ Mel Mattison https://t.co/6ojuU4nIbU via @YouTube