PolycarpFX

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Artificial intelligence is causing a net U.S. loss of 16,000 jobs per month, per Goldman Sachs.

The head of technology at Jane Street made an interesting argument against AI replacing traders. Dwarkesh Patel asked him the obvious question: if AGI can do everything humans can do cognitively, couldn't it just replace what Jane Street does? His answer: trading is "AGI-complete." He borrowed the term from computer science. NP-complete means every hard problem in computing reduces to it. His point: every hard problem in the world ends up influencing what you're doing in trading because trading is fundamentally about figuring out what things are worth. And then he said something that cuts against the entire narrative around AI taking jobs. "I have never been more desperate to hire more engineers and more traders than I am today." Not less. More. Because everything people are doing is more valuable than it was, not less. He's also skeptical that AGI is as close as the hype suggests. And he pointed to the bond market as the proof. Equities went electronic decades ago. The conventional wisdom at the time was that everything else would follow. Bonds. Options. Credit. All of it. Twenty-five to thirty years later, bonds are still nowhere near the level of automation seen in equities. People still size up trades via chat and phone calls. Human judgment about adverse selection is still the product. This is the thing most people miss about AI in finance. The firms doing the hardest work are not worried. They are hiring.

@1769_alex Tax advantage makes it a cheat code so many overlook, not to mention the advantages once options go ITM, gains can escalate quickly

Why I pick $SPX over $SPY: • Tax Advantage 💰: 60/40 long-term capital gains treatment, even on day trades • Overnight Trading 🌙: Allow you to get in/out during extended hours especially in current market where Trump likes to tweet during market closed 😅 • Cash Settled 💵: No assignment risk, clean exits Simpler, more tax-efficient, and more flexible. If you trade size, $SPX is the upgrade IMO. You team $SPX or $SPY? 👇

"History shows the S&P 500 has delivered above average returns during periods of monetary tightening when the yield curve is positively sloped" - @AriWald

There was euphoria in Micron and memory during 1995 and it was early days for the tech bubble, but Micron still rolled over before making a new high again at the top of the cycle. It’s hard to say what the overall market will ever do, but in either scenario of early or late cycle, memory likely gets some nasty corrections.

@TexasOncologist Right, that's the thing. I can't say it feels like it did toward the end yet. But maybe I'm wrong. There's still a LOT of active euphoria and not as much "hey wait just a second, WHEN do I get my money back??"

I genuinely, deeply hate to say this because people are going to think I'm predicting the future of the stock market, and I'm not. I have no more of an idea how long they can levitate this than you do. I lived in Austin from '94 to '03. I *vividly* remember friends dropping out to take insane jobs that you couldn't pass up (in tech) that paid absurd money and offered stock options. Multiple friends were Dellionaires. I remember the nights out on them on Sixth Street. One night, a stranger I was shooting pool with at the Tavern offered me $$80k+ a year (in 1999 dollars) to "play video games all night, drink Dr Pepper, and answer the help line in case anyone actually calls it." He had money to burn and he was going to. His investors demanded it. A friend with an (non computer) engineering degree from MIT got a job paying him $350k a year with a company that hadn't sold a single widget yet because they needed to make it look like they were a) hiring great people and b) spending their money on the sort of things they thought their investors wanted to see. The money coming in from investors was euphoric and it needed to be spent or the spigot would be turned off and we all knew it. The stories were real. I watched it first hand. It's feeling eerily similar. I'm not suggesting the coming stock market is 2000-2003 because things *have* changed and the tricks to keep the illusion alive have gotten a lot more complex. Maybe this goes on forever. But, man, I gotta tell you. EMOTIONALLY, there are actual similarities to late 90s Austin investor-cash euphoria. Feel free to stay optimistic, but tread carefully.

Buying IPO stocks isn’t usually rewarded. But S&P 500 index tells a different story. 3 months post major IPOs, $SPX was positive in 16 of 18 cases with a median gain of 4%, and no instance saw drawdowns exceed 10%. Upcoming trillion dollar IPOs could act as tailwind for $SPY.

PEACE DEAL NEARLY DONE Following calls with leaders from Saudi Arabia, the UAE, Qatar, Pakistan, Türkiye, Egypt, Jordan, Bahrain, Israel, and others, a major peace agreement involving the U.S. and Iran is close to final approval. Final details are now being discussed and will be announced soon. The Strait of Hormuz is also expected to reopen. — President Donald J. Trump

KOSPI data suggest this is is late cycle, NVDA reading actually shows it as a bullish read based off its past performance. I am just sharing the data. During the Dot Com shorting above 100 would have been a mistake, same in 2016, so the read in 2023 would have actually supported holding the position. Where as EWY / KOSPI has multiple cycles like this and the data shows negative returns, suggesting maybe not the best time to buy. $NVDA $EWY

@PolycarpFX @TheLAPurchaser Am I reading your chart wrong, or would Dec 23 been 100%, which is where you are now with kospi?

If not $CPNG, what are the ways to play Korean GDP/consumer inflection? Please do not name a multinational business (i.e. luxury) that has <5% exposure to Korea.

@bennpeifert This is literally historic stuff going on... It's absolutely wild to see!!

@AndrewM61370616 @TheLAPurchaser Turns out it actually would have been saying to load the boat in 2022 $NVDA

@PolycarpFX @TheLAPurchaser I dont find this chart remotely relevant. A chart with just price action like this would have you shorting nvda in 2023

@AndrewM61370616 @TheLAPurchaser A little late to the game for that

@TheLAPurchaser Why not just buy the primary driver and be long the semis?

@TheLAPurchaser $KB and $PKX

US AND IRAN CLOSE TO EXTENDING CEASEFIRE BY 60 DAYS, SAY MEDIATORS

@EquityBrian 📌

It ain’t over till the fat lady sings (or until memory pricing rolls over for like 5 minutes)

BREAKING: CBS News reports that the Trump administration is preparing for new strikes against Iran

To make these prospective purchases of the SpaceX shares, they will also have to sell an equivalent dollar amount of the other stocks as part of the rebalancing. That would have some ripples, especially if SPX, NDX, and RUI all do this move on the same day.

@traderhc The read

Michigan sentiment just printed 44.8. That's a consumer in freefall. $SPY sitting at 747. VIX barely flinched. Equities shrugged it off like it was noise. But here's what's bothering me. Funding markets haven't moved in three months. Literally. Same spread since March through oil spikes, an ISM beat, a PPI print that came in nearly 3x above estimate, a new Fed Chair, and now a sentiment collapse. Every other market is doing its job. Equities swing. Oil swings. Vol ranges from 16 to 25. The one market that's supposed to price corporate stress is a flatline. Passive flows and CLO demand can suppress repricing for a while. Not forever. Core PCE and Personal Spending next Thursday are the test. If spending confirms the consumer is cracking, corporate funding costs can't stay frozen at levels that assume everything is fine. I think we see real stress in funding markets before month end. The complacency gap between consumer reality and corporate borrowing costs is too wide. What's your read, is this the smartest market or the most broken?

@PharmD_KS Alot of this too 😂

Some of this for the weekend perhaps I suspect lol

-$16bn I believe this is near to the most negative delta day I've ever seen. This is put buying and call selling in size in the SPX. very very strange, and it feels not great.

$PSQ (Inverse $QQQ) - Funny you should mention that. Three large ones just arrived. 4.2M+ shares among them