Rekt Mkts: Risk assets slip as bonds sell off

US futures are lower again after the bond selloff interrupted the earlier AI rally this week. SoftBank has raised the money for its next OpenAI payment, but the chip names are giving back gains as oil pushes higher again. Personally I think this is a buy-dips market...especially in crypto and I took it upon myself to add some risk yesterday. In the last 2-3 weeks my regrets have been selling things too early, and I feel like the PTSD is so strong still that people kinda shit themselves when we drop due to prior roundtrips but then are ever so impatient to chase pumps...I think you can be discipline and buy dips and do quite well here.

US jobless claims came in below expectations today, following yday's stronger business activity data. Neither gives the Fed much reason to worry about an abrupt slowdown. The US 10Y is around 5.10%, down roughly 1.8bps on the day after trading above 5.14% earlier...some of the move has unwound, but borrowing costs are still well above where they were before yday's selloff. It's times like these I like to point to the fact that in the last 5 years...rates and risk assets have only gone in one direction -> higher...but I suspect we continue to have noise and it's certainly a fair reason for caution. WTI futures are around $94.20, up roughly 2.2%, while gold futures are around $4,306. Oil has reversed the move below $90 we were talking about yday, with little sign of a breakthrough in the US-Iran talks. Higher oil alongside a 10Y above 5% is a much less helpful combination for stocks than we had earlier in the week...kinda funny how it's flipped so fast. Bessent says the US and China have agreed to extend their trade truce until January 10 ahead of the Trump-Xi talks. That keeps the existing lower-tariff arrangement in place for longer, rather than giving us a new trade deal. The extension hasn't been enough to turn US futures higher.

S&P and Nasdaq futures are lower, with tech taking more of the hit. MU is down about 2% today and SNDK roughly 2.4%, so the memory bid from earlier in the week is giving some back too. That is a weaker follow-through than the rally we were discussing yday, with higher yields making the backdrop less friendly. The funding for AI hasn't dried up though. SoftBank has raised $11.1bn through dollar and euro bonds to help fund the final $10bn tranche of its existing OpenAI commitment. Its dollar bonds carry coupons of 8.625% to 9.75%...the money is available, but it's hardly cheap...Mando actually used to trade the SOFTBK EUR bonds back when we were at Barclays and it's kinda crazy to see where that complex is trading now. This funds a commitment SoftBank already made, rather than another $11bn of new AI spending. It removes one funding question without giving the market a fresh increase in planned spending to price in.

BTC's rally has stalled alongside the bond selloff, but ETF buyers were still showing up yday. US spot BTC ETFs took in $346.9m, down from $714.7m on Tuesday, while ETH ETFs brought in $104.5m versus $162.2m. That puts this week's net buying through Wednesday at about $2.06bn for BTC and $536.7m for ETH. Buying has slowed each day this week, rather than flipped to outflows. The positive BTC flows haven't been enough to keep the rally going in a tougher market backdrop but I still feel it's noteworthy inflow. Lighter has a new route to investors after Bitwise launched its LIT-tracking ETP, BLIT, on Xetra yday. It adds listed exposure to another onchain trading platform after Bitwise's earlier Hyperliquid product. That makes the token easier to access for eligible investors, altho BLIT isn't available to retail clients in the UK or many parts of Europe. A listing creates another route for buying; whether it attracts meaningful money is still something to watch...and the outperformance of LIT vs HYPE has been notable. It's encouraging to see the "consensus coins" like ZEC, VVV, NEAR etc hold up relatively well in the drop in the past 24H, I still think this cycle may well be as easy as just holding this stuff and chilling. Good luck today.