Rekt Mkts: Oil drops as the equity rally pauses

US futures are pretty much flat after yday's AI-led rally, while oil is falling again and bonds are getting some relief. Crypto majors are still higher over 24H, altho the buying looks a lot less broad once you dig into what's moving.

Brent is around $98 after falling as much as 3% as the geopolitical backdrop continues to improve. An Iranian official has said Tehran could reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade of Iranian ports. Those are still conditions, not an agreement. Both developments offer a way to get more barrels moving, which helps explain why oil has reversed lower again. The US 10Y is around 4.93%, down about 3bps, while gold futures are around $4,364. TBH I'm kind of surprised we're not higher on stocks given this move in rates + oil but I suppose we've had a pretty big move in the last couple of days already.

S&P and Nasdaq futures are pretty much flat after yday's rally. Meta's Muse AI assistant has given the market a consumer-demand story to get excited about, with Meta jumping more than 11% yday and the buying reaching the chip names too. The appeal is easy enough to see: widespread use of these products would give the huge AI spending plans a better justification. It still leaves the question of how much that usage earns, but for now the market has rewarded the adoption story rather than kept selling the capex. Futures haven't given the rally straight back, altho another broad leg higher hasn't arrived yet either. I kind of expected memory names like MU/SNDK to have a bigger move yesterday but it didn't really materialise and SNDK actually finished lower. MU reports earnings soon (30th Sep is the expected date I believe) and perhaps we just see more tepid activity going into it. The last earnings call marked a local top, but I wonder with these stocks now sitting a meaningful amount off their highs we can see a better price reaction on good numbers...thing is...what is "good"? The last Q performance is not that important (provided they didn't miss) and it's more about future outlook...but then all these guys are incentivised to say the same thing wrt future outlook...so I'm not really sure still what the market is looking for and it does not seem to trust the commentary on LTA/SCAs...lmk if you have any thoughts on this one!

BTC, ETH and SOL are still higher over 24H, but the pace is much slower than yday's surge. The majors have held onto a positive move while the follow-through further out is getting patchier. VVV is giving some back after its big rally, and LIT is softer too, rather than every recent winner carrying on together. NEAR is the big mover once again today up yet another 7%...while ZEC was a notable underperformer yday but is starting to bounce again today. The privacy narrative has been around for a while and comprised of the best-performing coins in the bear market; it leads me to believe these may also be the best-performing coins of the bull market and I think the narrative as a whole is strong enough to be a cycle play. Previously I was pretty big int he Robinhood ecosystem but that has quietened down a lot now; I still think the tokenised RWA angle is very interesting and will play a main character role, but I've struggled to find anything to buy since the PONS trade that I would deem genuinely non-vapourous. I do like ZEC a lot and the quantum resistance or at least the acknowledgement of it I think is tough to ignore over the next couple of years. Good luck today.