Morning kings.
And welcome to our new 300+ subscribers.
If you missed the post from Monday you can find it below. In it we discussed the violent attacks across the US, tensions being driven by immigration, and why normies have no clue what’s going on.
Are You Awake or Still Watching Shadows?
Today we’re getting back to crypto and markets.
The big news headline off the bat this week is that the clowns who rule us in DC have not been able to avoid (or wanted to spur) a government shutdown. As of 12:01 AM ET on October 1, federal funding lapsed, and the U.S. government has officially shut down (first time in nearly 6 years).
Major disruptions are already unfolding, with more than 11,000 FAA staff sidelined, delays expected across health and research agencies, and the potential for up to 750,000 workers to be affected overall.
The White House has signaled an unusually aggressive posture, preparing not just for furloughs but also possible mass layoffs (750K lol) if the standoff drags on, raising the risk of lasting economic and social fallout.
On the markets side things remain strong. U.S. equity markets have tended to shrug off government shutdowns in the short term, even though the political noise and headlines feel dramatic.
This recent dip is not going to last in my opinion.
Just this morning Bitcoin snapped up to $116,500 for the first time since September 19th. The “hard assets as a hedge against government failure” theme is going hard this week as Gold and Silver continue to climb higher as well.
Globally it would seem that we are close to some major happenings in Europe and Asia with strong indicators of potential conflict surfacing if you are paying attention (we will get into that later today).
We’re in prime Arbitrage Andy territory. Global and domestic chaos and cracks beginning to grow in legacy institutions and organizations.
That means plenty of opportunity for those who see what’s happening.
Let’s get into it.
State of The Markets
Stocks are holding near highs this week, with the S&P 500 and Nasdaq still buoyed by tech inflows and strong momentum, even as cracks start to show under the surface.
Gold hit a record high of $3900 this week.
A partial government shutdown has kicked in, highlighting Washington gridlock, while consumer confidence slumped to its weakest level in months as inflation and job market worries linger.
Rate cut odds in October are at 99%.
Fund flows remain positive, with billions moving back into large caps on the back of continued AI optimism, but sticky non transitory inflation, delayed data releases, and new waves of political dysfunction are adding to the sense that markets are skating on thinner ice than the headline numbers suggest.
It’s going to be interesting to see what equities do if we continue to see crypto pump. If alt coins start to catch a bid that might mean we see some short term profit taking on popular retail equity names as people cut to rotate.
Jim Cramer says this AI boom is different than the dot com bubble, he also said earlier in the week it was time to buy the crypto dip
100,000 federal workers are set to resign today, which is the largest resignation in history
Pfizer PFE 0.00%↑ CEO Albert Bourla said this week: “I truly think the best days of Pfizer are ahead of us, because Covid was for me like a rehearsal”
BlackRock’s Larry Fink said the shutdown chaos proves “institutions are broken” but also noted record inflows into ETFs show retail still trusts Wall Street to manage their money
Tesla TSLA 0.00%↑ shares whipsawed after reports Elon Musk is lobbying for AI-specific subsidies
Jamie Dimon has warned investors this week that “geopolitics is the real black swan” citing rising risks in both Asia and the Middle East
Nvidia NVDA 0.00%↑ passed a $5 trillion market cap milestone briefly on Tuesday
The Kobeissi Letter pointed out on X this morning: US private companies unexpectedly lost -32,000 jobs in September, well below the expectations of a +52,000 gain. This marks the largest drop since 2023. Meanwhile, August’s private payroll number was revised down from +54,000 to -3,000. Another revision lol.
Note that this will be the last jobs data we get this week if the government shutdown continues through Friday.
On one side, weak jobs data raises the odds of aggressive Fed cuts and looser policy, which will pump liquidity into markets. On the other side, it signals the real economy is softening and Jerome might get cute with us into year end.
In any case I am holding my bets from the last two weeks including:
Long on AMD 0.00%↑
Long on BBAI 0.00%↑
Long on NB 0.00%↑
I am actively adding to my defense plays including LMT 0.00%↑ LHX 0.00%↑ and PPA 0.00%↑ but at this point MOST of my spare capital is allocated for alt coins if I continue to like what I see with crypto majors.
Higher for longer in my opinion. Ignore the noise.
Crypto
Price action over the last week and a half continues to convince me we are in a consolidation phase rather than at the end of the bull cycle.
Particularly if you factor in this surge this morning.
What comes next might catch quite a few people off guard.