Rekt Mkts: Rising from the bloodbath

As you know, I've been waiting for the market to give me lower levels and yday finally did. The Fed held rates, but there was no relief rally: SPX fell 1.5%, NDQ lost 2.1% and memory got hit again. Tbh if even no hike is getting sold then the sell on strength mentality clearly hasn't gone anywhere...but it does feel like a good point to add some risk to me. The big headline ofc is Situational Awareness allegedly facing big losses. What's funny to me is that the headline reads something like "SA suffers big losses and therefore seeks to raise capital" - I think that is the wrong take...this isn't an operating company it's a fund. Some of their LPs must still be up huuuuuuge, so my guess is while they may have had a bad couple of months they're going back to raise more capital to buy the dip, and I think they'll pull it off + make money.

The Fed left rates at 3.5%-3.75% yday, with three voters actually preferring a 25bp hike. The market did not like the outcome: SPX closed down 1.5% and NDQ fell 2.1%. This morning SPX futures are up around 0.4% and NDQ futures around 0.8%, which looks more like a pause after the selloff than a meaningful bounce so far. The latest Treasury close had the 10Y around 4.62%, up about 2bps, and the 30Y around 5.14%, up nearly 5bps. WTI is slightly lower around $84 this morning, while gold is up more than 2% near $4,130. That is a pretty awkward mix imo. The Fed did not hike, but long rates and gold are higher while equities sold off. I don't think there is one neat explanation for all of it, but it certainly does not look like the clean macro relief setup ppl were hoping for (but tbh I don't think anyone was really expecting yday to be bullish enough to pump the market). To me it says inflation and geopolitical risk remain in the price while crowded tech positions are still being reduced.

The memory unwind accelerated yday. MU fell 9.9% to $739, SNDK lost 7.3%, NVDA dropped 3.6% and NBIS fell 12.7%. That last bit matters coz this was broader than just one disappointing Hynix print, although memory is still taking the worst of it (and SA headlines make it make a lot more sense now). Korea has extended the move today rather than bouncing. KOSPI closed down 1.2%, SK Hynix fell another 5.6% and Samsung lost 0.7%. Hynix underperforming the broad index again after record profit is not exactly the reaction bulls wanted. Big tech is still bifurcated this morning. Microsoft is up around 8% pre-mkt after Azure growth beat estimates, while Meta is down around 10% after weaker guidance and free cash flow fell from $8.55bn to $784m. So ppl will still pay for AI spend when the cash generation is visible, but they are not giving everyone the benefit of the doubt. I have exposure to both MU and SNDK now from dip slurps yday. SanDisk reporting next week is gonna be fun. If good numbers still cannot hold a bounce, I think we probably get better entries. If the market finally absorbs good news, then I can add with a bit more confidence...given the rout I think risk/reward into these earnings are changing compared to when SK Hynix reported (yes things really do flip on a dime in this mkt).

Still a powerful outperformance of crypto over tech. BTC is around $64.5k this morning and up modestly today, with ETH around $1,915 and SOL around $74. My crypto risk continues to be predominantly in $PONS and $REKT and I'm not focused on any coins outside the RH ecosystem. I still think $PONS is massively mispriced after it pulled in another 70%+ mkt share day yday in fees, putting it at like a 0.7x MC/revenue multiple. Mkt is still waiting for V2 to be launched which will allow creators and the platform to earn fees in ETH/WETH/stables rather than the native token and I think that will have a significant impact on volumes, fees, revenues and market share - any strong dev team wanting to launch a coin on Pons will wait for that. Good luck today.