Rekt Mkts: Midterms are here...can they change the mood?

Well, soon enough we will find out the results of midterms, and my theory that a resolution will be positive for the market shall be tested. Polymarket currently prices in a 77% chance of a Dem sweep. It's tough to judge whether the market has already price in this outcome or not...obviously both crypto and AI have been beaten up heavily in the past few sessions but there are real concerns wrt earnings, spending and security threats...I suppose the argument is that maybe these moves are somewhat exacerbated due to the midterm uncertainty.

December WTI futures are recovering some of yday's roughly 8% fall on hopes of a diplomatic resolution to the US-Iran war. Reports of a US strike on Qeshm Island and an Iranian official saying a deal remains far off have made that relief harder to rely on. There are still reports of efforts to restart negotiations, but that isn't an agreement to end the war and by now at this hour it's starting to feel a bit like clutching straws. The US 10Y is around 4.91%, edging higher after finishing Monday around 4.89%, while gold is giving back much of Monday's gain.

US equity futures are mixed, with Nasdaq-100 futures outperforming (+0.4%) as chips bounce despite Apple's decline. Apple is down around 4% in premarket after warning that rising memory costs will squeeze its holiday-quarter gross margin to 45-46%. Revenue beat expectations, but shareholders are focused on how much of those sales it gets to keep. Yday's brief framed Apple as a different earnings test from the hyperscalers because it isn't spending on data centres at anything like their scale...avoiding that cash burn hasn't spared it from a squeeze elsewhere it seems! Nvidia, AMD and Micron are higher in premarket, so this isn't simply another session of every chip name getting sold and shows company-specific developments starting to hold more weighting. Expensive memory is good for suppliers' pricing and a problem for customers like Apple, which helps explain why the same news doesn't have to mean the same thing for both. AMD reports after the close today. Its outlook gives the market something more concrete to respond to than election expectations, particularly whether demand is strong enough.

BTC is down around 0.8% over 24H, ETH 0.4%, SOL 1.3% and HYPE 1.2%. ETH is holding up better than the other majors here, altho it's no longer positive as it was in yday's brief. Crypto still isn't giving much relief ahead of the election, even with US chip stocks trying another premarket bounce. US spot BTC ETFs lost $398.6m yday, taking the outflow across Friday and Monday to roughly $1.04bn. ETH funds lost $139.7m, their sixth consecutive session of outflows. BTC's four-day run of inflows last week has now been followed by two much larger withdrawals...the start of the new week hasn't reversed that deterioration. ZEC is down 4.6% and VVV 1.7% over 24H. Their BTC ratios are down around 3.8% and 0.9% respectively over the same period, so both are underperforming rather than just following a weaker BTC. ZEC holding up through previous market dips was the useful distinction in recent briefs...today the PA is different. One day doesn't settle the longer-term case for privacy, but it does make it harder to treat that theme as protection from the immediate selling; nonetheless, there is a decent rebound today and I still believe it's the best asset to "hide" in for now. Good luck today.