Rekt Mkts: Google spoils the bounce...crypto still hard to chase

The awkward thing about this bounce is that good news from one part of AI keeps getting undone by another. Microsoft delivered on cloud growth, but Google's results have given ppl another reason to question to be concerned once again. BTC and ETH weren't doing much with the earlier strength in stocks and are softer too...waiting for crypto to catch up hasn't been particularly rewarding this week with majors feeling rather rooted...unless of course you picked HYPE!

Q3 GDP grew 3.4% annualised, above the 3.2% consensus and up from 2.2% in Q2. September core PCE came in at 0.3% month on month and 3.1% year on year, in line with expectations. Headline inflation was 0.5% on the month and 3.6% on the year. PCE of course creates less volatility on markets than CPI, but I think it's comforting nonetheless to have no surprises - this comment can also be repeated for the FOMC which concluded yday and it might actually be one of the quietest FOMCs I've ever experienced which is not terribly surprising as per comments from previous briefs. As we know...all eyes on midterms next week tbh.

S&P 500 and Nasdaq-100 futures are lower, with tech taking the bigger hit. Alphabet is down around 13% in early US trading while Microsoft is roughly flat, giving back its earlier gains. Google's free cash flow was negative $9.1bn despite Google Cloud revenue more than doubling, and search revenue missed expectations as LLMs eat its utility. Microsoft's better numbers have spared it that sort of punishment, but the initial enthusiasm hasn't all survived the open. Korean memory was mixed: SK Hynix finished up 2.6% (I think impressive to have held onto yesterday's big 10%+ increase on strong earnings), while Samsung fell 4.1%. Micron is down around 3.4% and Sandisk 3.1% in early US trading, so the strength in Hynix hasn't carried across to the US names and is likely more specific to its LTAs it has secured. Nebius is down around 5.6%, with the companies supplying extra compute capacity still getting a much rougher reception.

BTC is down around 0.5% over 24H, ETH 0.3% and SOL 0.4%, while HYPE is up 14.1% after announcement of Druckenmiller/ICE investments in trade(xyz). HYPE was already leading this group in Tuesday's brief, but of course the gap is much bigger now. BTC and ETH haven't fallen much; they just aren't giving much back to anyone who bought them as a catch-up trade while stocks were bouncing. My gut says HYPE still struggles to break 100 on this move which feels like a very heavy resistance point. US spot BTC ETFs took in $137.3m yday, their third consecutive session of inflows, while ETH funds lost $21.4m, their third consecutive outflow. ZEC and VVV are each down around 0.4% over 24H, a quieter picture than their gains in Tuesday's brief. Their BTC ratios are only around 0.1% higher over the same period, so there's very little fresh relative strength to get excited about today. Good luck today.