Rekt Mkts: Crypto holds its rebound

There's been a very strong and clear initial response to the Dem sweep in the names we're looking at. First, crypto likes it. ZEC led the charge yesterday but we also saw a strong move in ETH while BTC has reclaimed 80k. Secondly, AI names DO NOT like it. This appears to be as a result of an expected slowdown or halt in the buildout of data centres in states like Texas where incoming new blue Senators have touted moratoriums. All in all, comfy in crypto.

WTI futures are around $88.81, up 0.8%, while gold futures are up 1.8% to $4,146.50. Oil's small bounce follows another heavy decline yday as markets bet the election result increases pressure for an end to the Iran war. The US 10Y finished yday around 4.89%, down roughly 6bps on the session. The Bank of England decision is next, with inflation still above target despite the recent drop in oil. Its guidance on further tightening matters more than simply assuming cheaper energy means the pressure is over.

S&P 500 futures are up 0.2% while Nasdaq-100 futures are down 0.5%. Asian memory has had a much nastier session: SK Hynix finished down 9.5%, Samsung 7.6% and Kioxia 13.1% (marking 3 brutal days for the latter). Yday's small declines in Korean memory have turned into heavy selling. The US session yday was already ugly for the same theme: Micron closed down 7%, Sandisk 7.9%, Nvidia 3.2% and Nebius 6.7%, while Meta gained 1.4%. The prospect of tougher scrutiny of data centres, power demand and consumer costs gives the companies supplying and building AI infrastructure another problem to deal with. Opponents of new data centres won in Texas and Georgia, altho campaign promises aren't enacted moratoriums. That could make bringing capacity online harder without meaning customers have suddenly stopped wanting compute...cheaper energy doesn't resolve that political risk or the existing questions around capex and debt. It's also already a rough start pre-market with MU down 4% and SNDK down 6% already. I sold all my memory stocks back at the beginning of October and certainly counting my blessings that I did...I do wonder if things are starting to look interesting again though. I just think it's a matter of national security to continue to push AI development (think about DPRK hacks/China affiliation) and the forces that realise this (hopefully they all do) won't let it crumble.

BTC is up around 2.1% over 24H, ETH 3.6% and SOL 2.8%, while HYPE is down 5.5%. ETH is still leading among these majors, and SOL is doing more than BTC too. Crypto is holding its post-election rebound even as chip stocks have another rough morning, altho HYPE's weakness has become much more pronounced than in yday's brief. US spot BTC ETFs took in $74.6m yday, ending three consecutive sessions of outflows. ETH funds added $53m, ending seven consecutive sessions of outflows. That's a welcome reversal for both, but Monday through Wednesday still comes to net withdrawals of $439.6m for BTC and $172m for ETH. ZEC is up just 0.2% over 24H, with its BTC ratio down around 1.8% over the same period. That's a very different comparison from the big outperformance in yday's brief, even though ZEC itself is still positive. VVV has reversed more sharply, down 10.7%, with its BTC ratio down 12.5%. The rebound in the majors hasn't carried those two themes with it in the same way today. Good luck today.