Morning.
It looks like me may have a classic shakeout dump on our hands in global markets.
Exciting times.
As a reminder on Tuesday we dropped our interview on prepping with former SEAL TEAM commander Sam Havelock. We covered financial, social, mental, and physical prepping considerations for 2026 and beyond. It is a critical time for people to be prepared for a variety of adverse and unexpected scenarios and Sam had some excellent insight to offer readers across digital, cyber, and physical threat environments.
Hell, this week the Nasdaq even reported major network disruptions that were impacting U.S. stock market data feeds, a threat we specifically covered.
You can read it below.
Also welcome to all SOFX subscribers that have joined Arb Letter.
Financial Markets
Inflation picked up again this week, with energy/gas driving a sharp jump and underlying price pressures remaining pretty sticky.
Rough day yesterday in markets as nearly everything turned red.
The S&P 500 posted its worst day since July 29th, erasing -$800 billion of market cap (Kobeissi Letter). Yesterday circuit breakers tripped on South Korea’s KOSPI index. Yesterday you could feel the panic growing from equity investors.
As equities sell off, investors appear to be moving into Treasuries for safety, pushing bond prices higher and yields lower. The 10Y Note Yield is falling (sitting somewhere around a range last visited in late September).
CoreWeave CRWV 0.00%↑ has been demolished now down 22% in the last 5 days of trading with the immediate alarm coming from their bonds. It seems some are thinking that the AI trade is finally losing the bulk of it’s steam. For CoreWeave Reuters reports yields are near 16%, indicating that their investors want substantial compensation for credit risk.
I kind of like it on the dip here……
“When you are building a new type of technology company, there will be periods of time when the market misunderstands and acts irrationally. We are confident in our business model, our customers, the extraordinary quality of our execution, and the relentless discipline around the financial engine we have built."
— CEO Mike Intrator
BlackRock CEO Larry Fink warned this week that banning data center construction could trigger a US recession (WatcherGuru)
Global smartphone shipments plunged 22% in the worst quarterly decline on record, driven by soaring memory costs fueled by AI demand (Polymarket)
The TSLA 0.00%↑ Tesla Model Y ranks as Japan's #1 imported car model for September 2026 (Polymarket)
Elon Musk’s TSLA 0.00%↑ is back in headlines with a range of major updates. There is a Roadster demonstration scheduled for tonight, with rumors that Musk may debut a flying feature for the vehicle. Odds on Polymarket sit at a 76% chance that it does in fact fly tonight……
And then you have Tesla–SpaceX merger speculations are beginning to ramp up with SPCX 0.00%↑ trading around $145 as of today. Musk has said recently he expects SpaceX to hit a market cap of $100 trillion “if there isn’t a major world war”.
Anthropic told investors this week it is cash flow positive and that third-quarter revenue is at a whopping $16.8B. The IPO (currently slated for November) will target a valuation over $2 trillion.
Amid all of this volatility Unusual Whales and others dove into the expanding wealth gap and K-shaped economy that is coming to define the US.
Median net worth for households headed by someone under 35 fell 23% between 2022 and 2025, to about $33,000, while households headed by someone 75 or older saw a 37% increase, the largest gain of any age group. The youngest households saw the biggest drop of any group, while the oldest saw the biggest gain (Unusual Whales)
This is pretty wild. The older generations are printing with assets and the middle and younger generations are getting squeezed.
As I have said before, expect this economic disparity to play into midterm election and the Democratic platform for 2028. Despite what you think of Trump or the Democrats, it is undeniable that this environment young people find themselves in financially is unprecedented.
People are genuinely shocked by the receptiveness to socialism and extremist candidates like Mamdani, but why should we be?
People are looking for extreme solutions and until they feel their needs are met don’t expect them to vote any differently (regardless of how many times we have tried socialism).
When it comes to equities I am actively looking to add on this dump, you can reference the following list, which we can expand on next week:
AVGO 0.00%↑ - Fundamentals looking really solid, would have thought this would have made a solid move by now
AMD 0.00%↑ - Down 12% in last 5 days of trading, no brainer imo
AXON 0.00%↑ - Federal agencies added 22,000 Axon body-worn cameras this year and the DHS chose Axon’s Axon's Dedrone platform for threat mitigation for critical infrastructure
PLTR 0.00%↑ - no brainer
ONDS 0.00%↑ - call me crazy but I am not giving up on this drone gem. They just landed a new partnership with PLTR 0.00%↑ and a new contract with U.S. Naval Forces Southern Command
I added to SPY 0.00%↑ and XLK 0.00%↑
SMCI 0.00%↑ I still like
OLN 0.00%↑ is starting to look interesting to me again if chemical demand and pricing recover
Look, some people want to panic and give in to this week’s FUD (fear uncertainty doubt) of choice and that’s fine.
Me? I am watching the same dance we’ve endured now for like 12+months…..
My longer term view is that policymakers will have to respond forcefully if market stress threatens the actual functioning of the financial system.
For the nervous nellies we just need to distinguish falling stock prices from a literal funding crisis.
Understand this, the turbo bullish thesis doesn’t require an immediate rescue despite what doomers are yelling. It requires earnings and investment to hold up, inflation eventually to ease, and financial stress to remain manageable (or for them to tell us it is manageable).
What would change my mind?
Sustained earnings deterioration
Tighter credit that starts choking off viable businesses
Persistent inflation
Those would change the game and require us to revisit the medium term bullish scenario.
But until then, I see reasons to remain constructively bullish on risk assets while being selective on what I add.
Remember guys a bull market can punish excess/greed, shake out leveraged jesters, and spend months going nowhere before eventually advancing again. Staying bullish doesn’t require believing every stock is cheap or that this is the last down day.
And zoom out a bit if you still have doubts about how ridiculous markets even are now.
President Trump is still doubling down on his $5,000 for every adult citizen pledge if the Republicans win the Senate and House in midterms. Then layer in this insane AI infrastructure spending race, retail degenerate investors buying every dip, and (this is the most important facet)……
a political system with zero appetite for a prolonged downturn.
Take that to heart. Our current system will not function if markets were to truly collapse or correct seismically.
Own assets or get left behind is the motto guys, and I really cannot stress this enough. Ignore the noise and shakeouts.
Crypto
Nice little correction in crypto on the heels of this hot inflation data with $858.88M in long liquidations as of 10:12 am ET, although it looks like we are beginning to bounce a bit. Bitcoin and Ethereum spot ETFs saw massive single day outflows losing about $391 million total of the course of yesterday.
Do I think crypto is cooked for good? No.
I think this is part of a larger shake out stemming from inflation uncertainty and the AI hype being critiqued a bit more seriously.
I remain bullish on the entire space and will be looking to add if this continues through week end.
Keep an eye on alts and assets that are holding up relatively well despite the pull back as they will probably be the first to run it back when the vibes shift. NEAR looks particularly good right now during the dump and it is reassuring to see that it has successfully navigated multiple pull backs now without losing steam. I am watching Solana and Avalanche as well as Aave here.
I do believe Bitcoin will lean into the inflation narrative soon. The vicious reaction by Gold and Silver to CPI/PPI data was interesting, but I think Bitcoin has plenty of room to break out and differentiate itself through year end as macro potentially clears up.
Chainlink has launched Data Feeds and Data Streams on StellarOrg
Ripple has launched 24/7 perpetual futures trading for Wall Street institutions (WatcherGuru)
France - based cryptocurrency hardware wallet maker Ledger is now pivoting to a new smartphone and halting South-east Asia sales from resellers amid instances of devices being tampered with that resulted in loss of funds for many users. This is the just the latest development in the cold storage saga of crypto in which many top providers have suffered from large financial hacks or data leaks.
My advice remains the same - spread out your assets on the leading cold storage device (purchased from ONLY the company site) I use Trezor, and across reputable exchanges. Do no have one or two points of failure.
This is still the wild west and you can’t enjoy the gains if you get knee capped before the market turns again. Utility, privacy, and AI are going to continue to be the themes that define the next cycle in my humble opinion.
We will expand on crypto Tuesday as we dive into the institutional landscape (to see which whales are doing what) to give you guys a solid read on who is doing what.
If you guys need a refresher on the crypto assets/projects I am most bullish on in the coming months and in 2027 make sure to review the post from a few weeks ago.
The Next Crypto Mega Cycle
Geopolitics
One of the wilder international stories covered by our friends at SOFX this week was the clash in the Democratic Republic of the Congo (DRC) in which famous US influencer and former Green Beret/UFC fighter Tim Kennedy was injured in a firefight with Rwandan forces (reportedley backed by the M23 rebel group).
Erik Prince’s Vectus Global (private military and security company), which Kennedy was working for with two other contractors, has become quite active in the DRC given the valuable resources and competing interests of several nation actors (Russia/China). SOFX Reports:
Vectus has been active in Haiti as well, hired in March 2025 under a long term framework to help combat armed gangs controlling Port-au-Prince.
The US Army awards Anduril a $162.8 million contract for a new battlefield command system in the Pacific, with potential expansion to $1.8 billion (AFPost)
The UN is warning of a major food crisis across Asia & Africa as the U.S. & Iran fail to reach a deal to allow fertilizer shipments through the Strait of Hormuz (Polymarket)
The U.S. is deploying several hundred troops from the 10th Mountain Division down to Latin America as the Pentagon expands its campaign against drug cartels (Clash Report)
𝕏 has suspended more than 13,000 accounts linked to suspected foreign influence operations from Russia, China, & Iran ahead of the U.S. midterm elections (Polymarket)
The US military is considering using the MOAB or “mother of all bombs” to target Iranian energy infrastructure and nuclear sites should President Donald Trump give the order according to a CNN report (Spectator Index)
Iran is stepping up attacks in the Strait of Hormuz, knocking out a tanker recently as media reports say that the Trump administration is considering the use of a MOAB in Iran to target energy infrastructure.
While it could be wild speculation for those unfamiliar the MOAB is officially known as the GBU-43/B Massive Ordnance Air Blast (MOAB).
It is a fat daddy 21,600-pound airburst weapon containing about 18,500 pounds of H6 explosive, and is a GPS/INS-guided munition deployed via a C-130 Hercules aircraft. The use of this would mark a substantial escalation in the Iran campaign and would likely rattle global markets further.
As of now, President Trump has said that no new strikes will take place prior to midterms on November 3rd but I think we all know, depending on those results, we could see some decisive campaigns ramp up as soon as the outcome is determined.
Short one today guys, I will see you all one Tuesday. Have a solid weekend.
Andy