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MacroEngine@TheMacroEngine·2h

@GrindeOptions Thinking NVDA will miss earnings and capital will flow into software x.com/themacroengine…

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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Cole Grinde@GrindeOptions·3h

Will $NVDA be over or under $220 after the company reports earnings after hours tomorrow? 👀

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MacroEngine@TheMacroEngine·5h

Reminder on this before NVDA earnings tomorrow. If they don’t beat expectations by a wide margin, capital will flow into software. @Globalflows

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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MacroEngine@TheMacroEngine·6h

@KobeissiLetter Will they be added to QQQ?

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The Kobeissi Letter@KobeissiLetter·6h

BREAKING: SpaceX has selected Goldman Sachs to lead its record-setting IPO, per CNBC. Also working on the IPO will be Morgan Stanley, Bank of America, Citigroup, and JPMorgan. SpaceX could publicly disclose its prospectus as soon as Wednesday.

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MacroEngine@TheMacroEngine·11h

@KobeissiLetter We’re seeing unprecedented times in Macro right now and the markets seem unphased

5/17 Current Macro Environment (watch the yield curve) 🚨 1. Long end is doing the damage: The 30Y is over 4.95% and rising, while 10Y real yield is still around 1.93%. That keeps the discount-rate pressure alive even while equities rally 2. Curve steepening is the main macro tell: The 2s10s at +48 bps says the market is moving away from deep inversion and toward a more late-cycle/reflationary setup. CAN BE BULLISH IF DRIVEN BY GROWTH. 3. Risk assets are ignoring any and all bond market stress: S&P 500 is strong, gold is strong, and credit/volatility look calm Stocks are rallying. Gold is rallying. Credit looks calm. Vol is contained. The bond market is the headline this week. 30Y yield near 5%, 10Y real yields still elevated, and the 2s10s curve has steepened back to positive territory. That is not a clean “Fed easing is coming” setup. It looks more like a market pricing resilient growth, sticky inflation risk, and higher term premium at the same time. The key warning sign: breadth is fading while the S&P keeps pushing higher. Translation: risk appetite is still alive, but the foundation is getting more rate-sensitive. This is not a panic setup yet. It is a “don’t ignore the long end” setup. If yields keep rising and breadth keeps fading, the equity rally becomes much more vulnerable. @Globalflows

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The Kobeissi Letter@KobeissiLetter

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The Kobeissi Letter@KobeissiLetter·11h

BREAKING: The average interest rate on a 30Y Mortgage in the US surges to 6.75%, the highest since July 2025. Housing affordability is at an all-time low.

Bond markets are flashing red. Today, the US 30Y Note Yield officially hit its highest level since July 2007, at 5.19%. This will soon become Americans’ biggest problem, yet the vast majority do not even know it is happening. What is happening? Let us explain. (a thread)

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MacroEngine@TheMacroEngine·11h

@TradingThomas3 Only risk is that if they miss earnings or don’t greatly exceed, capital will likely flow out of semis and into software

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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TT3@TradingThomas3·11h

$NVDA Should be 99.9% chance it beats earnings tomorrow so free money.

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MacroEngine@TheMacroEngine·11h

@KobeissiLetter Funny thing is that even with these numbers markets are only going up x.com/themacroengine…

If you can’t wrap your head around 10Y yield at 4.57% while the market is near highs, please keep reading to understand the credit cycle and why stocks will only go higher 10Y at 4.575%. $SPX near all-time highs. Inflation expectations creeping up. Supposed to be impossible, it’s not. Yields are rising on growth, not fiscal panic. Real yields barely positive, breakevens stable at 2.3-2.5%, nominal GDP repricing higher. That’s reflation, not stagflation. CREDIT. HY sub-300bps. IG sub-100bps. Tariff stress test came and went and spreads went mostly unchanged. Corporate cash flows are outrunning the rate burden, the only thing that actually matters for whether higher yields kill the expansion. Inflation expectations up with tight credit = the market saying nominal growth is hot enough to absorb sticky inflation without breaking balance sheets. That’s a melt-up regime in one sentence. Real-yield negative still forces capital down the risk curve. Pensions, insurers, sovereigns can’t hit return targets in cash or bonds. They’re structural buyers of equity and credit no matter where the 10Y prints. Higher yields with no Fed cuts priced and equities at ATHs = the bond market endorsing soft-landing-to-no-landing. The regime needs the Fed not easing into a weak tape. The kill signal isn’t a hot CPI or a 5% 10Y. It’s HY spreads breaking 400bp while breakevens stay above 2.5%. Corporates losing the race against their cost of capital. Until that shows up, higher yields are a feature of the expansion, not a threat to it. Watch credit, not the 10Y level. @Globalflows

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The Kobeissi Letter@KobeissiLetter·13h

Bond markets are flashing red. Today, the US 30Y Note Yield officially hit its highest level since July 2007, at 5.19%. This will soon become Americans’ biggest problem, yet the vast majority do not even know it is happening. What is happening? Let us explain. (a thread)

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MacroEngine@TheMacroEngine·11h

@KobeissiLetter US Bonds are still surging as well, especially on the long end. x.com/themacroengine…

5/17 Current Macro Environment (watch the yield curve) 🚨 1. Long end is doing the damage: The 30Y is over 4.95% and rising, while 10Y real yield is still around 1.93%. That keeps the discount-rate pressure alive even while equities rally 2. Curve steepening is the main macro tell: The 2s10s at +48 bps says the market is moving away from deep inversion and toward a more late-cycle/reflationary setup. CAN BE BULLISH IF DRIVEN BY GROWTH. 3. Risk assets are ignoring any and all bond market stress: S&P 500 is strong, gold is strong, and credit/volatility look calm Stocks are rallying. Gold is rallying. Credit looks calm. Vol is contained. The bond market is the headline this week. 30Y yield near 5%, 10Y real yields still elevated, and the 2s10s curve has steepened back to positive territory. That is not a clean “Fed easing is coming” setup. It looks more like a market pricing resilient growth, sticky inflation risk, and higher term premium at the same time. The key warning sign: breadth is fading while the S&P keeps pushing higher. Translation: risk appetite is still alive, but the foundation is getting more rate-sensitive. This is not a panic setup yet. It is a “don’t ignore the long end” setup. If yields keep rising and breadth keeps fading, the equity rally becomes much more vulnerable. @Globalflows

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The Kobeissi Letter@KobeissiLetter

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The Kobeissi Letter@KobeissiLetter·11h

BREAKING: Japan's 10Y Government Bond Yield surges above 2.80% for the first time in history. This truly is one of the most insane charts ever seen.

Bond markets are flashing red. Today, the US 30Y Note Yield officially hit its highest level since July 2007, at 5.19%. This will soon become Americans’ biggest problem, yet the vast majority do not even know it is happening. What is happening? Let us explain. (a thread)

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MacroEngine@TheMacroEngine·14h

@KobeissiLetter Started the week below 5%… knew yields would be the story this week x.com/themacroengine…

5/17 Current Macro Environment (watch the yield curve) 🚨 1. Long end is doing the damage: The 30Y is over 4.95% and rising, while 10Y real yield is still around 1.93%. That keeps the discount-rate pressure alive even while equities rally 2. Curve steepening is the main macro tell: The 2s10s at +48 bps says the market is moving away from deep inversion and toward a more late-cycle/reflationary setup. CAN BE BULLISH IF DRIVEN BY GROWTH. 3. Risk assets are ignoring any and all bond market stress: S&P 500 is strong, gold is strong, and credit/volatility look calm Stocks are rallying. Gold is rallying. Credit looks calm. Vol is contained. The bond market is the headline this week. 30Y yield near 5%, 10Y real yields still elevated, and the 2s10s curve has steepened back to positive territory. That is not a clean “Fed easing is coming” setup. It looks more like a market pricing resilient growth, sticky inflation risk, and higher term premium at the same time. The key warning sign: breadth is fading while the S&P keeps pushing higher. Translation: risk appetite is still alive, but the foundation is getting more rate-sensitive. This is not a panic setup yet. It is a “don’t ignore the long end” setup. If yields keep rising and breadth keeps fading, the equity rally becomes much more vulnerable. @Globalflows

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The Kobeissi Letter@KobeissiLetter·15h

BREAKING: The US 30Y Note Yield rises to 5.18%, its highest level since July 2007.

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MacroEngine@TheMacroEngine·16h

@TradingThomas3 Preping for NVDA earnings… unless they crush capital will flow from semis to software x.com/themacroengine…

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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TT3@TradingThomas3·18h

Koreans selling semis again

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MacroEngine@TheMacroEngine·16h

@BeardoTrader NVDA needs to crush earnings or semis will get hammered. I see capital flowing into software x.com/themacroengine…

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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Beardo@BeardoTrader·17h

Nothing really matters until $NVDA reports earnings tomorrow.

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MacroEngine@TheMacroEngine·1d

@KobeissiLetter Could be a sign that the American consumer is weakening

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The Kobeissi Letter@KobeissiLetter·1d

BREAKING: Credit card serious delinquencies rose +0.4 percentage points in Q1 2026, to 13.1%, the highest since Q4 2010. This is only below the 2010 peak of 13.7%, in the aftermath of the 2008 Financial Crisis. Since Q3 2022, serious credit card delinquencies have surged +5.5 percentage points, even larger than the +3.9 point increase in 2007-2010. Furthermore, student loan 90+ days delinquencies jumped +0.7 percentage points in Q1 2026, to 10.3%, the highest since Q1 2020. Auto loan serious delinquencies increased +0.4 percentage points, to 5.6%, the highest on record. US consumers are falling behind debt at a crisis pace.

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MacroEngine@TheMacroEngine·1d

@lidokidz @JesseCohenInv Haha yessir!

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XTRADERZ@lidokidz·1d

@TheMacroEngine @JesseCohenInv Yup

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Jesse Cohen@JesseCohenInv·1d

Who's buying the dip in chip stocks ahead of $NVDA earnings?

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MacroEngine@TheMacroEngine·1d

@KyberSoze My website macro-engine.com

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Matt Schwartz@KyberSoze·1d

@TheMacroEngine Where is the screenshot of data from?

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MacroEngine@TheMacroEngine·2d

5/17 Current Macro Environment (watch the yield curve) 🚨 1. Long end is doing the damage: The 30Y is over 4.95% and rising, while 10Y real yield is still around 1.93%. That keeps the discount-rate pressure alive even while equities rally 2. Curve steepening is the main macro tell: The 2s10s at +48 bps says the market is moving away from deep inversion and toward a more late-cycle/reflationary setup. CAN BE BULLISH IF DRIVEN BY GROWTH. 3. Risk assets are ignoring any and all bond market stress: S&P 500 is strong, gold is strong, and credit/volatility look calm Stocks are rallying. Gold is rallying. Credit looks calm. Vol is contained. The bond market is the headline this week. 30Y yield near 5%, 10Y real yields still elevated, and the 2s10s curve has steepened back to positive territory. That is not a clean “Fed easing is coming” setup. It looks more like a market pricing resilient growth, sticky inflation risk, and higher term premium at the same time. The key warning sign: breadth is fading while the S&P keeps pushing higher. Translation: risk appetite is still alive, but the foundation is getting more rate-sensitive. This is not a panic setup yet. It is a “don’t ignore the long end” setup. If yields keep rising and breadth keeps fading, the equity rally becomes much more vulnerable. @Globalflows

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MacroEngine@TheMacroEngine·1d

@Ashton_1nvests $NVDA (rage bait)

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Ashton Invests@Ashton_1nvests·1d

What company has the biggest gap between sentiment and fundamentals?

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MacroEngine@TheMacroEngine·1d

@InvestingAddict If anyone thinks markets can’t go higher, remember they climbed 100% in a single year in Japan. And funny enough we have a very similar set up right now as they did x.com/themacroengine…

Japan’s Stock Market was up over 100% in 1972. The USA right now has a remarkably similar setup to Japan in the 70s. This month is just the start of a massive bull run that has never been seen before. $SPX could be in for a RECORD YEAR and here’s why: The similarities between now and 1970s Japan: • Excess liquidity flooded into a narrow group of assets → Japan: land, golf memberships, equities → Today: AI infrastructure, mega-cap tech, private markets • Index concentration masked weakening breadth → A small group of winners carried the entire market higher • Energy shocks hit during speculative expansion → 1973 OPEC crisis → Today’s geopolitical/oil supply disruptions • Inflation stayed sticky while central banks were trapped → Tightening too hard risked recession → Staying loose fueled speculation further • Valuations detached from underlying economic growth → Financial assets inflated faster than the real economy And here’s the part most people miss: Japan’s market didn’t collapse immediately after the oil shock. The Nikkei continued climbing for years because liquidity and speculation overwhelmed deteriorating fundamentals. That’s what makes late-cycle bubbles so dangerous. They can survive bad news far longer than people expect. The 1970s in Japan were not the crash. They were the setup.

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Investing Addict@InvestingAddict·1d

I am starting to think all the $VOO and chill posts have made people hate the S&P 500.

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MacroEngine@TheMacroEngine·1d

@charliebilello This is layed out in detail in the weekly macro report if anyone wants to see the numbers x.com/themacroengine…

5/17 Current Macro Environment (watch the yield curve) 🚨 1. Long end is doing the damage: The 30Y is over 4.95% and rising, while 10Y real yield is still around 1.93%. That keeps the discount-rate pressure alive even while equities rally 2. Curve steepening is the main macro tell: The 2s10s at +48 bps says the market is moving away from deep inversion and toward a more late-cycle/reflationary setup. CAN BE BULLISH IF DRIVEN BY GROWTH. 3. Risk assets are ignoring any and all bond market stress: S&P 500 is strong, gold is strong, and credit/volatility look calm Stocks are rallying. Gold is rallying. Credit looks calm. Vol is contained. The bond market is the headline this week. 30Y yield near 5%, 10Y real yields still elevated, and the 2s10s curve has steepened back to positive territory. That is not a clean “Fed easing is coming” setup. It looks more like a market pricing resilient growth, sticky inflation risk, and higher term premium at the same time. The key warning sign: breadth is fading while the S&P keeps pushing higher. Translation: risk appetite is still alive, but the foundation is getting more rate-sensitive. This is not a panic setup yet. It is a “don’t ignore the long end” setup. If yields keep rising and breadth keeps fading, the equity rally becomes much more vulnerable. @Globalflows

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Charlie Bilello@charliebilello·1d

The 30-Year US Treasury Yield ended the day at 5.14%, its highest close since July 2007. The Federal Reserve and Federal Government continue to spin the lie of low inflation while the bond market reveals the truth.

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MacroEngine@TheMacroEngine·1d

@KobeissiLetter Meanwhile the US is demonstrating a more top heavy risk appetite. The biggest stocks are carrying the market along…

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The Kobeissi Letter@KobeissiLetter·1d

Risk appetite in South Korea is exploding: Margin loans outstanding on Korean stocks are up to a record $24.3 billion. Since the start of 2025, margin debt has surged +140% and is up +32% since the beginning of this year alone. To put this into perspective, the value of leveraged bets on Korean stocks was ~$5.0 billion in 2020. This also likely understates the real scale, given that many loans taken out to buy stocks are labeled under other categories. Meanwhile, domestic investors have poured ~$25.3 billion into South Korean shares year-to-date. Retail investors in South Korea are aggressively rushing into stocks.

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MacroEngine@TheMacroEngine·1d

@JUST_KAWS The best asymmetrical trade for NVDA earnings is in software. Unless NVDA beats earnings by a lot, capital will flow into the software sector. x.com/themacroengine…

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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JUST KAWS@JUST_KAWS·1d

POV: The whole stock market if $NVDA fails to beat earnings…..

Brew Markets@brewmarkets

Nvidia, the world's most valuable company, reports earnings on Wednesday.

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MacroEngine@TheMacroEngine·1d

@shagsverywell @TradingThomas3 Think about it… we’ve hit all time highs with oil and yields at elevated levels. What’s keeping that from continuing. This post explains the dynamic well x.com/themacroengine…

If you can’t wrap your head around 10Y yield at 4.57% while the market is near highs, please keep reading to understand the credit cycle and why stocks will only go higher 10Y at 4.575%. $SPX near all-time highs. Inflation expectations creeping up. Supposed to be impossible, it’s not. Yields are rising on growth, not fiscal panic. Real yields barely positive, breakevens stable at 2.3-2.5%, nominal GDP repricing higher. That’s reflation, not stagflation. CREDIT. HY sub-300bps. IG sub-100bps. Tariff stress test came and went and spreads went mostly unchanged. Corporate cash flows are outrunning the rate burden, the only thing that actually matters for whether higher yields kill the expansion. Inflation expectations up with tight credit = the market saying nominal growth is hot enough to absorb sticky inflation without breaking balance sheets. That’s a melt-up regime in one sentence. Real-yield negative still forces capital down the risk curve. Pensions, insurers, sovereigns can’t hit return targets in cash or bonds. They’re structural buyers of equity and credit no matter where the 10Y prints. Higher yields with no Fed cuts priced and equities at ATHs = the bond market endorsing soft-landing-to-no-landing. The regime needs the Fed not easing into a weak tape. The kill signal isn’t a hot CPI or a 5% 10Y. It’s HY spreads breaking 400bp while breakevens stay above 2.5%. Corporates losing the race against their cost of capital. Until that shows up, higher yields are a feature of the expansion, not a threat to it. Watch credit, not the 10Y level. @Globalflows

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Flash@shagsverywell·1d

@TheMacroEngine @TradingThomas3 Nothing is ripping higher with oil this high and yields this high.

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TT3@TradingThomas3·1d

Dip buyers punished on back to back days, miracles happen 🤯

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MacroEngine@TheMacroEngine·1d

@Globalflows I think SMH/IGV overlayed with NVDA chart with earnings markers visualizes this nicely

NVDA would need to crush earning to sustain the gap that semis have formed over software. SMH/IGV is the best expression of capital flows to watch through $NVDA Earnings. SMH/IGV ratio (blue) vs NVDA price (orange). Look at what's happened since November: The ratio is up 150%+ off the lows. NVDA is up ~50%. The semis-over-software trade has massively outrun NVDA itself. This means the AI capex regime has broadened past just NVDA. AVGO, TSM, and the rest of chip makers are carrying the trade. A couple notes headed into earnings. 1. NVDA is no longer the whole AI trade, but the rest of AI leans on it. The ratio inflects hard at every earnings date (vertical lines). The print sets direction for the entire semis complex, not just one stock. 2. The bar is higher than it looks. SMH/IGV at 250 vs NVDA at 150 means semis are pricing in a better outcome than NVDA's own tape. A beat and raise is needed just to hold the ratio. In-line guide and the ratio rolls hard. 3. The recent ~10% pullback in the ratio while NVDA held up is big. Market is starting to question whether the rest of the semis complex deserves the multiple it's been given. NVDA carries the print, the reaction gets priced into everything else. The setup: NVDA can beat and the ratio still falls if guidance disappoints on hyperscaler capex. That's the asymmetric risk nobody's talking about. Software (IGV) has been the funding leg all year. A rotation back to monetization names would be violent. @Globalflows

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