Capital Flows: Equity Strategy

NVDA Earnings Is THE Catalyst For This Week

Capital Flows — Mon, 18 May 2026 20:08:52 GMT

Today, Jaymes and I broke down the dispersion between semiconductors and software, the cybersecurity unwind in Palo Alto and CrowdStrike confirming the February report, and the full earnings setup for Nvidia, Intuit, Workday, Home Depot, and Lowe's this week. The SMH ETF is melting up with implied vol rising at the same time as price rises, which is the commodity-like price action that only happens when capital is forced to participate. Inflation risk is still greater than recession risk, stocks over bonds remains the framework, and the entire question of the week is whether Nvidia delivers the AI capex affirmation the market needs.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. The SMH ETF is functioning like a commodity with implied vol rising alongside price. In a normal equity setup, vol rises when price falls. In SMH right now, vol is rising as price rises, which is the same dynamic crude shows when traders are forced to buy calls to cover exposure. Companies and capital cannot afford to not be long the AI build out, which mechanically forces them into the same names. That is a commodity flow pattern overlaid on equities.

2. The IGV dispersion thesis is playing out exactly as I laid out in the February report on cybersecurity. Palo Alto and CrowdStrike were sold indiscriminately with the broader software complex on the AI disruption thesis. Both are now ripping to new highs as the dispersion separates winners from losers. The names with proprietary data moats are emerging as the winners. The ones without are staying suppressed.

3. IGV implied vol is at the same level as January, which means the market is pricing a very wide outcome range for software. When vol stays elevated this long without resolving in either direction, you have a positioning setup where any earnings catalyst that injects clarity into the moat question forces a massive vol crush. The Intuit print this week is the catalyst to watch.

4. Nvidia earnings this week determine the next leg of the AI capex flow. Watch for any signal from Jensen on China developments. If geopolitical risk in the AI space drops further after the Trump-Xi meeting, that is an immediate bid across the entire complex. Positioning is heavily long Nvidia, which means the bar is high for the report to extend the move. But the broader capex flow is what matters more than the single name.

5. PURR continues to be the cleanest expression of the Hyperliquid thesis with no VC overhang and no aligned promoters. No VCs got an early allocation because there was no allocation. Anyone with public commentary on Hyperliquid is not paid to pump it. The absence of coordinated promotion is the cleanest signal that the value proposition is structurally underpriced. Goldman Sachs initiating a position and a single buyer taking a million shares last week are the early institutional confirmations.

6. SPY versus RSP concentration is widening into Nvidia earnings, which is characteristic of a melt-up. The top names are absorbing the marginal flow because the AI capex theme is concentrated there. The equal-weighted index will lag as long as that concentration continues. Late-stage melt-ups feature this exact pattern and the unwind happens when rates spike or positioning catches offside.

7. Inflation risk is still greater than recession risk, which means stocks over bonds remains the framework. Headline CPI is ticking up, core is not transmitting yet. Inflation swaps are sitting at the highs while real rates compress. As long as the Fed stays inactive into rising inflation expectations, real rates fall and capital keeps moving out the risk curve. The melt up extends until the transmission breaks.

8. The two main sectors to watch for the consumer transmission are housing and staples through Home Depot, Lowe’s, and Walmart earnings. Mortgage rates ticking up is putting marginal pressure on home builders. Home Depot and Lowe’s move in lockstep with the home builder complex. Walmart prints give the cleanest read on food inflation through groceries. These earnings confirm or refute the consumer resilience thesis underlying the broader credit cycle framework.

Slide Deck and Playbooks:

Here are all the decks and charts from today’s livestream: Positioning breakdown, earnings analysis, and TSMC asymmetry for chip buildout.

Cfr Tsmc Capital Cycle Geopolitics

327KB ∙ PDF file

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Cfr Earnings Week May19 22 2026

402KB ∙ PDF file

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Capital Flows Livestream 2026 05 18

2.58MB ∙ PDF file

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Narrative Arc Deck

41.5MB ∙ PDF file

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Tomorrow's Livestream: Is China Trying to Become the Next World Power and How Are They Attacking the Global Stage Through Economic Warfare

Tomorrow, I break down how China is actively trying to become the next world power and the specific economic warfare tactics they are deploying to attack the US and the global stage. Yuan suppression, rare earth controls, dollar substitution narratives, and the AI supply chain dynamics are all part of the same coordinated playbook. I map what is actually happening and what it means for cross-border positioning.

TOMORROW’S LIVESTREAM: LINK

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Walking The Thin Line: How AI Is Compressing The Tails

Capital Flows — Tue, 05 May 2026 04:34:07 GMT

Today, I went deep on how AI is functionally retooling the production function of the entire economy. This is the same setup as 2021, with one substitution: the constraint is no longer monetary; it is technological. AI is forcing capital into equities the same way negative real rates did four years ago. joined the second half to walk through the equity valuation identity and how cross-border flows are transmitted through the rate complex. Today’s IGV up 200bps while SMH down 100bps was the cleanest expression of the equity long short positioning unwind in real time.

The paid subscriber section is at the bottom of this report, where I cover the proprietary research.

LIVESTREAM RECORDING FROM TODAY:

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Today’s Livestream: Main Talking Points

1. The world is short vol. Non-participation is the greatest risk in a system where change compounds faster than capital can react. In 2021, holding cash meant losing 22 percent of purchasing power as real rates went negative. The 2026 analog is the obsolescence tax from AI. If you are not integrating AI into your business, portfolio, or capital allocation framework, you are functionally short the system. The compounding rate of AI capability is faster than the rate at which holding cash got punished four years ago.

2. The intelligence age is the new negative real interest rate. A six month software build now takes three weeks. That changes how much capital companies need, how fast they can deploy it, and how quickly they take market share from competitors who do not adapt. Same mechanism as 2021, different input. In 2021 it was monetary. In 2026 it is technological. The output is the same: capital is forced into equities because non-participation has a compounding negative return.

3. AI is no longer a tool inside a production function. It is the new production function. The gap between Mag 7 and the broad S&P has blown out since the ChatGPT launch because the market is rewarding companies rewriting their entire production stack around AI. Palantir is the cleanest example as the one stop shop for non technical companies to integrate AI into their decision systems. Q4 2025 commercial bookings up 103 percent. Palantir is the picks and shovels for the production layer rewriting.

4. The 600 billion dollar question is whether the AI capex prepayment ever pays off. NVIDIA reported quarterly data center revenue of 47 billion. Cumulative capex commitment across the hyperscalers is closer to a trillion. Actual revenue from AI services is roughly 50 billion. If the run rate from OpenAI, Anthropic, and the rest never catches up, the entire valuation premium across the sector unwinds. CoreWeave is the cleanest expression of this trade because the stock is the wedge between forward GPU lease commitments and ultimate AI revenue.

5. The obsolescence tax is faster than inflation. Companies and individuals not adapting to AI bleed at a higher rate than holding cash bled in 2021. The Goldman Sachs AI beneficiaries versus AI at risk index is the cleanest visualization. The spread is at extremes since 2025 because the market is pricing the devaluation of capital not exposed to the AI cycle. If you are not on sides, you are losing money in real terms even with positive nominal real rates.

6. AI is no longer a financial cycle. It is economic statecraft. Every country needs its own AI production stack, which transmits directly into geopolitical risk. The semiconductor index at highs while the Shanghai composite is at lows is the cleanest expression of the AI arms race priced into asset markets. China actively wants to close that spread, which raises the probability of more aggressive geopolitical action across Taiwan and the broader supply chain. The TSMC chokehold transmits directly into hyperliquid, perpetuals, and cross border flows.

7. The credit cycle melt up always sows the seeds of its own demise. We are walking the thin line right now. Real rates near zero, AI capex build out, equity valuations at the highest level in US history on price to sales, S&P dividend yield at lows last seen in 2000. If AI capex run rate disappoints, valuations get crushed and the IPO window closes. If real rates turn negative on top of the current cycle, you get a 2021 style melt up that compounds further. The two outcomes are diverging fast.

8. IGV up 200bps and SMH down 100bps today is the equity long short positioning unwind in real time. Hedge funds are positioned long SMH and short IGV. Today’s geopolitical shock from crude moving up should have hit the entire tech complex evenly. Instead it hit hardware and lifted software. That divergence is mechanical, not fundamental. Microsoft holding flat as the institutional anchor for OpenAI and Azure tells you the unwind has more room to run as IGV reprices higher and SMH reprices lower.

Slide Decks From Livestream:

Macro Thesis 2026 05 02

6.82MB ∙ PDF file

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Capital Flows Livestream 2026 05 03

11.9MB ∙ PDF file

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Here is the report I referenced on the timing for WHEN AI begins to unravel the labor market:

You can follow all of work here:

Tomorrow’s Livestream: Cross Asset Positioning and Equity Long Short Positioning Inside the AI Compression Trade

Tomorrow, I will map cross-asset positioning and equity long-short positioning as they directly connect to the AI compression of the tails framework I laid out today.

TOMORROW’S LIVESTREAM: LINK

Paid Subscriber Section: Proprietary Macro Research

Liquidity Is Expanding and Panic Buying Has Begun

Capital Flows — Mon, 27 Apr 2026 22:08:51 GMT

Today I had on the stream to walk through the macro setup heading into FOMC week and how it lines up with the execution levels in ES, NQ, SMH, and the Russell. The panic buying has officially started. April US junk bond issuance is nearly thirty billion dollars, more than triple last year’s total. Intel just kicked off a fourteen billion dollar bond sale. Oracle wrapped sixteen billion in financing for the Michigan data center. Real rates are 28bps from turning negative. The Russell is outperforming, IGV vol is at the same level it was at the prior lows without making a new low, and the entire sector rotation setup is primed for another aggressive leg higher.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Credit issuance is at 3x last year’s pace and that single fact refutes every “liquidity is contracting” thesis in the market. April US junk bond issuance is nearly thirty billion dollars, more than triple last year’s total. Eleven billion in high yield notes sold in the past week alone. Intel kicked off a fourteen billion dollar bond sale to fund its Aryan Lead acquisition. Oracle wrapped sixteen billion in financing for its Michigan data center. This is not investment grade. This is high yield. When credit markets are absorbing this much issuance at this kind of pace, it is mechanically impossible for liquidity to be contracting. The bears are getting falsified by the credit markets in real time.

2. Real rates are 28 basis points from turning negative. That is the same setup that fueled the 2020-2021 melt-up. One-year real rates are at new lows. Two-year real rates are 1bp from negative. If we cross into negative territory, you get the same dynamic that produced one of the largest melt-ups in human history four years ago. The setup does not require Fed cuts to get there. It requires the Fed to keep doing what it is doing now: nothing. The Fed’s inaction is the liquidity impulse, and it is mechanical.

3. Geopolitical risk premium has been faded by the market and the over-extrapolation is unwinding. Geopolitical risk attribution to the S&P dropped from roughly forty percent at the lows to under ten percent now. The Marko Papic framework is doing exactly what it does every cycle: actual geopolitical risk events get priced into the market, the market over-extrapolates them, and three to six months later the premium gets faded. We are now in the fade phase.

4. The IGV positioning unwind is the cleanest setup for the next leg of the melt-up. IGV implied vol is at the same level it was at the prior lows, but IGV has not made a new low. That is a massive divergence. Call skew is rising in SMH. If IGV starts squeezing to the upside, equity long-short positioning has to unwind both sides of the trade, which mechanically forces buying in IGV and potentially selling in SMH. Microsoft is holding key levels and is the third largest weight in the index. If Microsoft and the broader IGV complex squeezes, the entire NASDAQ melts up further. Software is half of tech, tech is thirty five percent of the index, and the unwind has not happened yet.

5. The Russell is the cleanest range compression in the market right now and has the cleanest setup to break out. The Russell has tighter range compression than the S&P or NASDAQ. It is the structural recipient of the AI capex transfer because the Mag 7 are paying Russell-weighted companies to build the data centers. Capital is moving out the risk curve, and the Russell is where that flow has the most leverage. If we get a small pullback into FOMC, the Russell is the cleanest long expression on the bounce. If we just continue higher, the Russell breaks out of the range first and drags everything else with it.

6. The Anthropic vs OpenAI market share chart is the most underpriced data set in the market. Anthropic is now at roughly thirty percent market share, just under OpenAI. The last two software-sector selloffs in IGV were caused by Anthropic and OpenAI model releases. With Anthropic gaining share and a higher IPO probability than OpenAI, the next inflection in the IPO window directly transmits into IGV positioning. This is why I am long Oracle. Larry Ellison hits the bid, sector flows turn, and the move compounds.

7. FOMC week setup: the PCE data is the single most important release. Energy spiked in the recent CPI print. The question is whether that pass-through hits core CPI or stays contained at headline. If core stays contained, the Fed pauses cleanly and real rates keep falling. If core reaccelerates, long-end rates blow out and we get a temporary pullback before the structural bid resumes. GDP this week also matters because it confirms growth is positive and not contracting through the inflation impulse, which keeps the Fed’s pause framework intact.

8. The three ways the credit cycle ends, and why none of them are happening right now. First way: recession from AI capex disappointment, layoffs, and delinquencies. Second way: long-end rates blow out from inflation pass-through, the Fed has to hike, and we move into a real bear market. Third way: cross-border flows reverse and you get the 2025 tariff-style dollar-and-equity selloff. None of these conditions are present right now. Capex is rising, delinquencies are non-existent, the Fed is pausing into supply-side inflation rather than hiking, and cross-border flows are still pushing capital out the risk curve. Until one of these three triggers, the structural bid stays intact.

Slide Deck and Playbooks:

Slide deck from livestream:

Capital Flows Livestream 2026 04 27

5.69MB ∙ PDF file

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Additional charts I referenced:

Tomorrow’s Livestream: FOMC Setup: How Powell’s Last Meeting Reshapes the Real Rate Path

Tomorrow I map the full FOMC setup heading into Wednesday’s meeting. This is functionally Powell’s last meeting that matters before the Warsh handoff, and the way the curve is positioned for it is going to determine the next leg of the credit cycle melt-up.

See the breakdown I did of Warsh here:

TOMORROW’S LIVESTREAM: LINK

Labor, Growth, and Inflation: How Interest Rates Drive the Credit Cycle

Capital Flows — Thu, 23 Apr 2026 21:26:00 GMT

Today I walked through the full transmission from labor, growth, and inflation into interest rates, and why the credit cycle melt-up thesis keeps extending through this setup. Jaymes Rosenthal and I mapped how attribution analysis exposes the actual drivers of the rally, why 1-year real rates 45bps from negative is the single most important chart in macro right now, and how the Z6/Z7 SOFR spread is the cleanest expression of the Warsh regime change as it prices through the curve. The framework collapses the “it’s just short covering” narrative cleanly. If you have been sitting on the sidelines waiting for a pullback, the data has been telling you the answer for weeks.

TODAY’S LIVESTREAM RECORDING:

Today’s Livestream: Main Talking Points

1. Attribution analysis shows the rally is not short covering. Geopolitical risk dropped from 40 percent of S&P attribution to 9 percent, and that drop alone explains most of the move. When the index was at the lows, geopolitical risk was over 40 percent of the attribution weight. Today it is at 9. That collapse in geopolitical risk sensitivity is the structural driver of the melt-up, not hedge fund short covering. Short covering is the second or third order effect, not the cause. If you frame the rally as just a squeeze, you miss the underlying regime shift and you stay on the sidelines while the market keeps compounding higher. Connect the attribution to the driver, not to the surface noise.

2. 1-year real rates are 45 basis points from zero. That is the most significant chart in macro right now, period. Two-year real rates are also collapsing. Ten-year real rates are following because nominals are not keeping pace with inflation swaps. If Warsh pulls back the balance sheet and cuts rates in parallel, real rates cross into negative territory. That is the specific trigger for the next leg of the credit cycle melt-up across equities, metals, and real estate. Negative real rates mean the market pays you to take out debt on a purchasing power basis. That is the regime that fueled 2020-2021, and the setup is forming again faster than positioning is prepared for.

3. The Fed’s inaction is a liquidity impulse. Wait-and-see policy into supply-side inflation is net stimulative. The Fed is threading the needle by not hiking into the oil shock and not cutting preemptively either. That inaction, in a market where inflation swaps are still elevated, mechanically pushes real rates down. Real rates falling is liquidity expansion regardless of whether the Fed cuts the nominal rate. This is the framework that most positioning misunderstands. You do not need a cut to get a melt-up. You need the gap between nominal and inflation expectations to widen, and that is exactly what is happening.

4. The Z6/Z7 SOFR spread is the cleanest expression of the Warsh regime change pricing through the curve. Z6 is pricing zero cuts for 2026. Z7 is pricing 25bps of cuts for 2027. The spread between them is the market saying: the Fed pauses this year and cuts next year. If Warsh takes over and the framework shifts, that spread moves and both contracts reprice together. Watching Z6 in isolation misses the full picture. The spread is what actually reflects the regime change. That is where the alpha is for anyone trading rates into the Warsh transition.

5. The GS High Yield Debt Sensitivity index at new highs refutes the liquidity contraction narrative. The most-shorted index at new highs confirms capital is moving out the risk curve. If liquidity were contracting, the companies with the most leverage and highest credit risk would not be breaking out. They are. That is a definitional refutation, not an opinion. The most-shorted index hitting new highs is also part of the same transmission: capital moving out the risk curve drives squeezes in the highest short interest names because the marginal flows force it. The squeeze is a symptom of the liquidity expansion, not the cause of the rally.

6. NQ up 17 percent is not short covering. The math does not work. Mega-cap short interest has collapsed over the years because nobody shorts the index given passive flows. A 17 percent move in a mega-cap-heavy index cannot mechanically be driven by short covering. You need actual fundamental bids coming in, which is exactly what we have seen from the software inflection, the data center REIT rally, and the Russell 3000 low quality breakout. The tape is broader than just the squeeze names. The “it is just short covering” take is a cognitive cop-out used to avoid engaging with the underlying regime shift.

7. Long-end rates at ZB, UB, and ZN are the specific levels to watch for a pullback risk. But even if they break, the structural thesis holds. If long-end rates blow out and start dragging on equities, expect a pullback, but not a break below the prior structure. Credit issuance, the capex cycle, and cross-border flows are all structurally supportive. A pullback within the range is a buying opportunity, not a regime change. The only scenario that invalidates the thesis is core CPI reaccelerating meaningfully and forcing the Fed to hike, and that is not the base case for at least another month or two.

8. Monitoring the situation is a race to zero. Timeless principles are where the asymmetric edge lives. The Eric Jorgensen tweet captures the dynamic. If you are terminally online, refreshing the timeline and chasing every news headline, you will never develop an original thesis. The best trades come from foundational frameworks that do not require you to be first, because by definition nobody else is positioned for the outcome. The PURR and Oracle trades are working precisely because they are second and third order effects of the AI capex and stablecoin regime that most macro investors are not mapping. Build the framework from first principles and the pricing takes care of itself.

Slide Deck and Playbooks

This is an important time to review the video and the connected slide deck I shared yesterday about the regime change at the Fed:

I would also encourage you to check out this video on understanding how to avoid tilt in trading.

Weekly Wrap: Regime Change, Real Rates, and the Positioning Map for Next Week

Tomorrow is the weekly wrap with Jaymes Rosenthal. We walk through how the Warsh regime change, the real rate setup, the attribution framework, and the credit cycle melt-up all come together into the positioning map. What worked this week, what did not, and where the asymmetric setups are for the next leg.

TOMORROW’S LIVESTREAM: LINK

Real Estate, Mortgage Rates, and the Second Leg of the Credit Cycle

Capital Flows — Wed, 22 Apr 2026 01:03:00 GMT

Today, I walked through the full real estate framework in the macro context. Home prices are still at highs despite mortgage rates at cycle elevation, delinquencies are nowhere near 2008 levels, the mortgage index is ticking up off cycle lows, and the real interest rate setup is 78bps from unlocking another leg higher across the entire sector. Myself and Jaymes Rosenthal broke down the macro side of real estate, the XLRE versus ITB divergence, the mortgage-to-inflation-swap spread mechanics, and the specific stocks in the sector that are being amplified or disrupted by the AI theme. The full paid report with sector attribution is attached below.

LIVESTREAM RECORDING FROM TODAY:

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Today’s Livestream: Main Talking Points

1. Everyone calling for another 2008 in real estate has been falsified by the data, not my opinion. If you were bearish in 2020 or 2021 and did not buy a house, you are now structurally worse off. Home prices are higher, mortgage rates are higher, and the people who locked in sub-4 percent mortgages at low cost basis have no incentive to sell. That is not a collapsing market. That is the most resilient housing structure we have seen in modern history, and it has been resilient through one of the fastest rate-hiking cycles ever recorded. Connect your view to the data or abandon the view.

2. The mortgage payment math is what actually drives real estate, and it is locked in for the majority of homeowners. Median home price mortgage payments went from roughly 1,000 dollars in the 2015-2020 window to materially higher as the interest rate component spiked. The people who bought during the 2020-2021 window have that lower payment locked in for 30 years. Those homeowners do not sell unless the labor market cracks, which is the single variable that would change the entire thesis. We are not seeing that crack.

3. Mortgage delinquencies are not increasing. The narrative that defaults are exploding is anecdotal, not broad-based. Delinquencies only ticked up marginally through the 2022-2023 rate cycle. That is a fundamentally different setup from 2008, where delinquencies were already spiking before prices cracked. If you want a 2008-style unwind, you need delinquencies rising, supply flooding the market, and forced selling. We have none of those conditions right now. Pulling anecdotal evidence from one neighborhood and extrapolating to the national market is how bears have been getting cooked for five years.

4. Supply came online in 2023 and 2024 and got absorbed without breaking prices. That is the cleanest demand signal in the market. Building permits and housing starts spiked in 2021 and 2022. Those completions hit the market in 2023 and 2024. Under any bearish framework, that supply wave should have crushed prices. It did not. Prices consolidated slightly and held. That tells you demand is structurally stronger than every bearish narrative on Twitter. More supply is coming, but mortgage rates have come down enough to keep the supply-demand balance roughly stable.

5. The mortgage rate to Treasury spread is compressing, and that is a stimulative signal for real estate. The 30-year mortgage rate is at 6.39 percent, the 30-year Treasury is at 4.88 percent, and the spread between them is the credit risk premium for mortgages. When that spread widens, real estate gets squeezed. When it compresses, real estate gets support. The spread has been dropping, which is one of the structural reasons real estate has stayed bid even at elevated nominal rates.

6. Real purchasing power is now the dominant framework for real estate, not nominal rates alone. Mortgage rates relative to inflation swaps matter more than the headline mortgage rate. If nominal rates stay flat but incomes rise with inflation, people can afford houses again even without rates falling. That is the exact setup that is developing now. As real interest rates fall and incomes catch up, the real cost of carrying a mortgage drops even if the nominal payment does not. This is how the credit cycle transmits into real estate even without the Fed cutting.

7. XLRE and ITB are diverging for a structural reason: commercial real estate rolled over at higher rates, residential locked in lower ones. Commercial real estate typically has 5-year debt terms. REITs levered up in 2020 and 2021 at low rates. Those debts rolled over in 2023, 2024, and 2025 at much higher levels, which is why XLRE has not made new all-time highs. ITB, on the other hand, made a new all-time high in 2023 at elevated rates because the 30-year fixed mortgage structure means homeowners do not sell. The balance sheet duration difference is what explains the divergence, and it is also why XLRE is set up for the next leg higher as real rates fall.

8. 2-year real rates are 78 basis points from turning negative. That is the specific trigger for the second leg of the real estate melt-up. If real rates cross into negative territory, people get paid to take out debt on a real purchasing power basis. That is the environment that fueled the 2020-2021 real estate boom. If we get there again in the next 12 months, which is possible given the Fed’s current stance and where Warsh is likely to take policy, you will see capital flow into home builders, REITs, and commercial real estate in a way that most positioning is not prepared for. EQIX has already led. CoStar is on the disrupted side. The rest of the sector is setting up for a fundamental attribution split that the paid report breaks down in detail.

I would also encourage you to watch my friend most recent video on the importance of understanding trading and risk management with how the world is changing right now.

Slide Deck and Playbooks

Slide deck from livestream:

Capital Flows Livestream 2026 04 21

2.09MB ∙ PDF file

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The four reports that frame where we are in the credit cycle and the bets I am taking within it:

All of the credit cycle research:

Credit Cycle Playbook: Stagflation vs Melt Up
The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up
My Largest Bets in the Credit Cycle Melt-Up
Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing
See the paid subscriber positioning report section here for detailed market views for this week: LINK

Tomorrow’s Capital Flows Livestream: Decoding the Warsh Testimony: What the Next Fed Chair Actually Said

Kevin Warsh testified before the Senate Banking Committee today. He laid out an explicit reform agenda that includes a new inflation framework, a smaller balance sheet, the end of forward guidance, and a fundamental rethink of how the Fed measures inflation and sets policy in an AI-driven supply-side regime. Tomorrow I go line by line through his most important statements, connect each one to the macro charts that make the transmission mechanism tangible, and map what a Warsh-led Fed actually means for rates, the dollar, the balance sheet, and the credit cycle melt-up. If you want to understand what the next two years of monetary policy are going to look like, you cannot miss this stream.

TOMORROW’S LIVESTREAM: LINK

Paid Subscriber Report On In-Depth Real Estate Sector Analysis and My Personal Thoughts On The Changes In Real Estate:

A 56-page deep dive on every stock in the S&P 500 Real Estate sector, with a 3-factor attribution engine breaking each name’s return into market, sector, and idiosyncratic components so you can see exactly where the dispersion is coming from. Every constituent gets a full-page profile with rolling attribution, rolling betas, and a specific “what you’re actually trading” read — plus a position-sizing framework that maps every name to the macro book actually driving it. Use it to tilt your exposure inside the sector rather than settling for a passive weighted average of fundamental winners and fundamental losers.

Pair Trades and Derivative Expressions for the Next Leg

Capital Flows — Tue, 21 Apr 2026 00:59:53 GMT

The tape came in today exactly the way I laid out on Friday. Russell is leading, the GS High Yield Debt Sensitivity index is at new highs, the most-shorted index is breaking out, gold and silver are consolidating for the next leg, and real estate is refusing to crack despite every “credit cycle is contracting” take on Twitter. Today, I walked through the full pair trade and derivative expression map for where capital is moving next, including the specific sector-by-sector short interest names in the Russell that are setting up for squeeze trades. Tomorrow I will go deeper into real estate in the macro context, because the XLRE setup right now is directly disproving the 2008 comparison narrative and creating a specific positioning opportunity across REITs, homebuilders, and commercial real estate.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. We are at all-time highs in human history for equity valuations, not just prices. That distinction determines everything. The S&P price-to-sales deviation bands show we are above the 2021 peak on valuation multiples (all charts in the slide deck below). The 2022 bear market was a valuation re-rating driven by inflation and Fed hiking, not a recession or earnings contraction. Post-2022 we have had both earnings expansion and valuation expansion stacking on top of each other. This is the setup where liquidity becomes the single most important variable to track, because valuation multiples at these levels are hyper-sensitive to any shift in the liquidity regime. The valuation level is not the sell signal. A change in liquidity is the sell signal.

2. The Goldman Sachs High Yield Debt Sensitivity Index just made new highs. That is the cleanest refutation of the “liquidity is contracting” narrative in the market. By definition, the companies with the most leverage and the highest sensitivity to high yield debt cannot be making new highs while liquidity is contracting. That is not a matter of interpretation. It is a matter of definition. Every take circulating on Twitter right now that says liquidity is contracting has been falsified by that single chart. Connect your view to price action or admit the view is wrong.

3. The Fed is pricing a full pause across April, June, July, and into September. The Z6 contract is at nine basis points of cuts for the year. That is functionally a hold. We went from 75bps of cuts priced, to 50, to 25, then into the capitulation where the market briefly priced hikes. Now we are back to 9bps of cuts, oscillating between a pause and 25bps. The Fed is threading the needle on supply-side inflation rather than hiking into it, which is exactly what allows capital to continue moving out the risk curve. How Warsh plays it when he comes in will determine whether this oscillates higher or lower from here.

4. The capex rotation has moved past Nvidia into second and third order beneficiaries. EQIX just ripped to new highs with barely a pullback. Nvidia has been lagging because the market already priced that leg. Capital is now moving into data center REITs, electrical equipment, utilities connected to the AI build-out, and the companies in the Russell that actually receive the capex transfer. The Russell is outperforming for a structural reason: the Mag 7 companies are spending nearly a trillion dollars of capex and they are not building data centers themselves. They are paying Russell-weighted companies to build them. That capital transfer is why the low-quality Russell 3000 stocks are bid, not short-squeeze mechanics alone.

5. The most-shorted index is on the verge of breaking out to new highs and setting up a 2021-style positioning unwind. The GS Most Shorted rolling index is printing higher highs. AMC has bid from the lows. GameStop has ticked up. I would not be surprised to see GameStop trade up to 30-35 dollars. This is not the 2021 cycle repeating with the same names. It is the same positioning mechanic playing out in the specific stocks that have been shorted into the current cycle, which means the Russell names with the highest short interest across consumer discretionary, communications, financials, technology, utilities, and industrials.

6. Cross-border flows are still the dominant liquidity channel. The G10 carry trade index just made another high. The global carry trade rising is capital moving out the risk curve on an international basis. Investors are borrowing in low-rate currencies, converting, and bidding risk assets. That is the structural force funding the melt-up beyond what US domestic liquidity alone could produce. This is why the DXY continues to bleed against EUR, GBP, AUD, and the peso. The EUR setup at these levels is one of the cleanest long entries I have flagged this cycle. Same with the pound, the Aussie, and the peso. EWW and EWZ still look like great opportunities on the equity side of that flow.

7. Gold and silver detached from real rates because global trade rebalancing took over as the dominant driver. In the prior regime, gold moved in lockstep with real interest rates. That relationship broke this cycle. The reason is that global trade rebalancing and FX flows are now structurally larger inputs to gold and silver than real rates alone. Gold did not bid on geopolitical risk during the Iran/Strait of Hormuz shock, which told me it had flipped its primary sensitivity to equity beta and the credit cycle. When the dollar topped and the capitulation finished, gold and silver bottomed exactly where the dollar rolled over. The setup from here is clean: DXY making new lows into Warsh, metal beta continuing to bid, and the entire metals complex melting up with equities rather than against them.

8. The Nikkei is in the same melt-up scenario as the US, and the DAX is the next setup to watch. The BOJ is allowing real rates to be negative and the Ministry of Finance is spending into one of the hottest economies Japan has ever had. Those factors alone are enough to keep the Nikkei in melt-up mode. The DAX and Euro Stocks have not made new all-time highs yet, but vol has crushed and call skew is rising. If any geopolitical risk gets expressed overnight in European indices, I am a buyer of any dip there. Same logic applies to the Nikkei on any consolidation.

Slide Deck and Playbooks

Slide deck from today:

Capital Flows Livestream 2026 04 20

30.4MB ∙ PDF file

Download

All of the credit cycle research:

All educational primers on credit risk, duration risk, the yield curve regime model, and the equity risk curve are free here:

Real Estate, Mortgage Rates, and the Second Leg of the Credit Cycle

Tomorrow I map real estate in the full macro context. Why XLRE making new highs is refuting every 2008 comparison circulating right now, how the ITB and XLRE divergence tells you where capital is actually flowing, and how the real estate setup connects to the broader credit cycle melt-up through mortgage rate dynamics and household balance sheets.

TOMORROW’S LIVESTREAM: LINK

For Paid Subscribers: Tonight’s Positioning Report

Positioning Unwinds and the Next Leg of the Melt-Up

Capital Flows — Fri, 17 Apr 2026 23:32:15 GMT

Today’s tape is exactly the compounding impulse I have been laying out for paid subscribers all week (see livestream from April 9th: LINK). Crude is getting flushed, vol is crushing, ES is ripping into the weekend, the Russell is leading, and the dollar is continuing to bleed against the full basket. The credit cycle melt-up is now in the phase where every bearish positioning has to get unwound in sequence. Myself and Jaymes Rosenthal broke down the full positioning map today, where real rates are relative to negative, and the two specific bear scenarios that would actually take this apart. Next week, I will go deeper into the specific pair trades and derivative expressions that have the best risk-reward as this leg extends.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Stocks are melting up, bonds are lagging, and the dollar is bleeding against the full basket. That is the exact combination I said you wanted to be positioned for. ES and Russell are both bid with Russell outperforming, bonds are sitting in their range with the curve steepening marginally as long bonds lag, and the dollar is getting sold against AUDUSD, AUDJPY, and the peso. I was explicit with paid subscribers that the trade expression was long stocks and short the dollar, not playing the bond side (LINK). That is exactly what has worked. When the forward curve repriced from 25bps of hikes at the capitulation back to 12bps of cuts for this year, that was the shift that unlocked this leg.

2. Crude positioning got flushed today and vol cracked. The call skew that blew out twice is now getting unwound in full. Going into the Iran/Strait of Hormuz news, crude call skew blew out aggressively. When crude had its first flush, traders doubled down and spiked call skew a second time. I flagged on stream that week that everyone just got levered long calls again at a lower high in vol, and that the position was going to flush. That is exactly what is happening today. Crude is off hard, OVX is cracking, and the geopolitical risk premium that was priced into equities is coming out.

3. Short-end real rates are 55 basis points from going negative. That is the specific signal everyone should be tracking. The Fed has let one-year and two-year real rates collapse this entire move because they are pausing into supply-side inflation. If short-end real rates actually cross into negative territory, you get a 2021-style melt-up that most people cannot even conceive of right now. If the Fed moderates and holds the line, the melt-up is still real but more measured. The exact magnitude depends on how far the Fed lets real rates fall. That is the signal to watch, not a price level.

4. Ten-year real rates are steepening versus two-year real rates, and that is a growth signal, not a warning. Two-year real rates have collapsed. Ten-year real rates have held or risen marginally. The real rate curve steepening tells you that growth is not collapsing through this inflationary impulse. If growth were actually deteriorating, long-end real rates would be falling faster than the short end. That divergence is why equities have the runway for at least another month of melt-up, and why the Russell is outperforming as cyclical conditions hold up.

5. Inflation swaps are pricing this shock as short-term and supply-driven, not as a structural repricing. One-year and two-year inflation swaps have risen. Ten-year and thirty-year inflation swaps have actually come down. That decomposition tells you the market is correctly pricing this as an oil-driven supply shock rather than a demand-driven inflation regime change. The Fed does not control the supply side, so they are letting it pass through rather than hiking. That is the optimal setup for liquidity to keep moving out the risk curve.

6. Tech is 35 percent of the S&P 500 and software is roughly half of tech. The software inflection is the mechanical driver of the next leg. Over the last month, tech has contributed almost five percent of the index return on a weighted basis. If software continues to bid from here, you could have another month where the S&P adds another ten percent and tech contributes six or seven points of that alone. That is not a stretch scenario. Software was the most under-owned subsector in the market for six months. Yesterday’s IGV rally into the Opus 4.7 release confirmed the positioning inflection. The mechanical path from here is passive flows rebalancing back toward neutral weights, which closes the air pocket under software fast.

7. The Russell is outperforming because it is the index that actually receives the capex spend. The Mag 7 companies are spending nearly a trillion dollars in capex. They are not building data centers themselves. They are paying companies in the Russell to build them. So the Russell is the balance sheet that absorbs the capex transfer, which is why it held the triple low during the geopolitical shock and why it is now leading on the upside. Once liquidity comes back in and geopolitical risk drops, the Russell has the cleanest setup because the capex transmission is still in its early innings.

8. Gold and silver are inflecting. The metals beta is about to have a significant melt-up. I called the low in gold and silver earlier this week almost exactly. The thesis is that metals are fading the geopolitical risk premium and switching their primary sensitivity back to the credit cycle. People ask how metals can rally when crude is falling and geopolitical risk is dropping. The answer is you have to net out the drivers. Credit cycle liquidity is a structurally larger driver for metals than the geopolitical risk premium. As cross-asset vol compresses and real rates fall, metals bid. That is the setup heading into Warsh coming into the Fed and the DXY making new lows later this year.

Credit Cycle Playbooks

All educational primers on credit risk, duration risk, the yield curve regime model, and the equity risk curve are free here:

Next Week: Capital Flows | Pair Trades and Derivative Expressions for the Next Leg

Next week, I will map the specific pair trade constructions and derivative expressions that have the best risk-reward as this leg of the melt-up extends. How to size long dollar-short positions against the specific G10 crosses that are benefiting most from real rate differentials. Where to express the software inflection through names that are still lagging IGV. And the specific out-of-the-money call structures on the high short interest quintile names that offer the asymmetry I want into what could be the largest IPO window in financial history.

MONDAY’S LIVESTREAM: LINK

My Largest Bets in the Credit Cycle Melt-Up

Capital Flows — Tue, 14 Apr 2026 21:51:59 GMT

My Largest Bets in the Credit Cycle Melt-Up

The macro regime is confirming everything I have been mapping. Real rates falling. Russell outperforming. Oracle up double digits. Software catching a bid. Today I zoomed out and walked through how I actually express the macro regime in trades -- not through a diversified portfolio, but through a small number of concentrated bets with the highest sensitivity to what is actually happening in the credit cycle. The two largest positions I am running right now are PURR and Oracle. Below, I walk through why each one is the best expression of the macro setup we are in.

Today’s Livestream: Main Talking Points

1. Seventy to eighty percent of all market returns are driven by macro. This is the foundational reason why mapping the macro regime comes before any individual position. Even the best fundamental thesis gets cooked if you are on the wrong side of the macro cycle. That is why everything starts with the GIP framework, real rates, and the credit cycle. Get macro right first. Then find the concentrated bets within it.

2. Diversification is the enemy of exceptional performance. If you keep adding positions, you eventually own the index with more friction. Exceptional returns require concentrated bets with genuine conviction. The entire financial industry has been structured to prevent people from doing that. Most managers own fifty to a hundred names and then wonder why they can’t beat the index. The math does not work. You need a few high-quality bets where you have real edge.

3. PURR is the highest-sensitivity vehicle to the most disruptive change in the financial system. Hyperliquid has built the one-stop shop for perpetual liquidity with no VC funding, eleven employees, and $900 million in revenue. More than half of the volume running through Hyperliquid is now in traditional financial products -- gold, silver, equities, nat gas -- not crypto. That number keeps rising. Institutions cannot own the Hyperliquid token in the current US regulatory framework. PURR is the only institutional-grade vehicle to front-run that regulatory unlock. When Hyperliquid gets added to the US financial system, the institutions that have been locked out will need to buy something. PURR is that something.

4. PURR’s execution differentiates it from every other digital asset treasury. Every other treasury company issues stock to buy more of the underlying asset, destroying shareholder value for current holders. PURR buys back stock when trading at a discount to MNAV and issues shares when at a premium. That mechanic creates compounding shareholder value instead of just chasing token accumulation. PURR has been outperforming the Hyperliquid token itself since the merger. That outperformance is confirmation that the execution is working. If a DAT is underperforming the underlying asset, there is no reason to own it over the spot token. PURR is doing the opposite.

5. The PURR thesis stacks three sources of asymmetry simultaneously. First, macro liquidity expanding as real rates fall pushes capital out the risk curve toward exactly this type of asset. Second, Hyperliquid regulatory integration in the US is a binary event that is not priceable in advance by the institutions that will need to buy. Third, a leveraged PURR balance sheet, once the company activates their credit facility, multiplies the underlying Hyperliquid exposure without diluting shares. All three of those are independent asymmetries pointing in the same direction.

6. Oracle is the single most mispriced AI sensitivity company in the world. They have done something no other company has done. They leveraged the entire balance sheet, issued stock, slashed free cash flow, and poured everything into AI infrastructure CapEx at a moment when consensus was punishing companies for spending. Free cash flow went negative for the first time in over a decade. The stock drew down more than fifty percent. Every possible source of selling -- fundamental, sector, market, geopolitical -- hit simultaneously at these lows. And none of it changed the backlog, the data center build-out, or the fact that Larry Ellison owns forty percent of the company with his entire net worth tied to the outcome.

7. Larry Ellison has structured Oracle like a call option on the AI infrastructure cycle. He pulled all the negative returns into the present and pushed the positive returns into the future. That is not an accident. That is a deliberate compression of the risk-reward profile. My view is that he wants the stock at eight hundred dollars and he is structuring the company accordingly. When the Texas data center build-out begins generating cash flow this year, the free cash flow picture reverses. When it reverses, he starts buying back stock again. That is how he gets there.

8. The attribution model confirms the setup is changing. The indicator I have built decomposes Oracle’s daily returns into market beta, sector flows, subsector flows, and fundamentals. At the lows, every single factor was negative simultaneously -- fundamentals, tech sector, IGV subsector, and the broad market from the geopolitical shock. That was the maximum compression point. Right now, on a day where Oracle is up double digits, fundamentals are contributing positively for the first time in months. That is the marginal change I have been waiting for. When that persists and accelerates, the thesis is in full execution.

All of the reports and models that I referenced in the livestream:

The AI Reflexivity Loop (this moment will define you)
This is my next big bet (Oracle Risk reward)
- Oracle Model: LINK
AI Playbook, Larry Ellison’s Big Bet With ORCL, and New Stock Models
Hyperliquid Strategies (PURR) Report and Models
- PURR fair value model: LINK

Tomorrow: Capital Flows | Cross-Border Flows, the Dollar Devaluation, and the Global Trade Rebalancing

Tomorrow, I am going deeper into something most people are completely missing in the dollar narrative. The dollar falling against the yuan is not a liquidity contraction story. It is a deliberate trade rebalancing play that connects Trump, Scott Bessent, Kevin Warsh, and the entire US policy apparatus. Understanding how cross-border flows and currency policy interact is one of the most important things you can know right now.

TOMORROW’S LIVESTREAM: LINK

The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

Capital Flows — Tue, 14 Apr 2026 00:23:44 GMT

The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

The S&P is pushing higher. The Russell is outperforming. Oracle is up 12% on the day. Software is finally catching a bid. All of this is happening while most people are still trying to figure out whether the geopolitical shock was a bear market catalyst or not. It was not. Today, I laid out the credit cycle framework for why we are in a melt-up setup, what is driving it mechanically, and where the risk curve goes from here. Below are the main talking points. The weekend paid report is linked in the section below.

LIVESTREAM FROM TODAY:

Today’s Livestream: Main Talking Points

1. Credit cycles are path-dependent, not clock-dependent. There is no predefined length to an expansion. The post-war expansion of the 1960s ran over a hundred months. The one following 2001 ran less than half that. The 2009 cycle ran 128 months before COVID ended it by external shock rather than internal exhaustion. The cycle does not follow a schedule. It follows the sequence of shocks inside it. That shift in framing changes everything about how you allocate capital right now.

2. The geopolitical shock was a stress test, and the balance sheet passed. When a shock moves through the system and nothing cracks, that is not noise. It is information. Corporate leverage at the hyperscaler level is low. AI credit issuance is accelerating through the volatility. Junk bonds have erased March losses and gone positive on the year. The lowest quality credits in the Russell 3000 are sitting near all-time highs. The shock revealed the underlying balance sheet, and it is not what the stagflation narrative requires it to be.

3. Real rates are 48 basis points from turning negative and that is the mechanical trigger. One-year real rates have already made new lows. We are 48 bips from negative. The last time real rates went deeply negative, the system produced a full TINA melt-up where people losing real purchasing power in cash were mechanically forced into risk assets. The Fed pausing into a short-term supply-side inflation impulse produces the same setup. You do not need a cut. You just need the Fed to do nothing while inflation runs above the nominal rate.

4. The equity risk curve moves mechanically with cost of capital, not randomly. When real rates rise and credit spreads widen, capital is forced up the quality curve into balance sheet strength and out of leverage and speculation. When real rates fall and spreads tighten, capital moves back down the curve into high yield, small cap, and non-profitable growth. That is not a sentiment story. It is mechanical. Right now the movement is down the risk curve. High yield outperforming mega cap, low quality Russell outperforming S&P, non-profitable tech beginning to catch bids. These are not coincidences. They are confirmation of the setup.

5. Central bank balance sheets are not the right liquidity input, and that has confused everyone. Central bank balance sheets have been contracting or flat. People who track only the central bank balance sheet said liquidity was falling, equities should not be rising. They were wrong. Liquidity also flows from government bill issuance, private sector debt issuance, fiscal spending, and cross-border flows.

6. The stagflation risk requires two things simultaneously that the current data does not support. Durable transmission of the inflation re-rating into core CPI, and a Fed response that compounds rather than absorbs the growth slowdown. Core CPI projections remain broadly neutral. Base effects are adding downward pressure on year-over-year numbers. The Fed is at pause as the most hawkish available outcome. The stagflation path is not foreclosed, but the evidence for it is not building.

7. PPI this week is the next data point that matters. Headline PPI expected at 4.6%, up over 100 bips from the last print. But ex-food, energy, and trade, the more core component, is only expected at 3.8% versus 3.5% prior. A small acceleration. If core PPI accelerates significantly beyond that, it reintroduces the hike discussion. If it does not, the normalization path holds and the melt-up setup strengthens.

8. PURR and Oracle remain the two largest positions and the thesis on both is unchanged. Oracle up 12% today, software sector finally rallying. Per continuing to make new highs while Bitcoin chops in a range. PURR is the only institutional-grade vehicle for US investors to front-run the Hyperliquid regulatory integration. The macro liquidity setup that is building is the exact environment that makes that asymmetry most powerful.

[SLIDE DECK]

Here is the slide deck and regime dashboard from the livestream today:

Capital Flows Livestream 2026 04 13

3.6MB ∙ PDF file

Download

Credit & Inflation Regime Dashboard

883KB ∙ PDF file

Download

Weekend Report: Credit Cycle Playbook: Stagflation vs Melt-Up

If you missed the paid report I published over the weekend, this is the one to go back and read before the week gets going. It is the full analytical framework behind the actual sources of liquidity and how they connect to the credit cycle.

Tomorrow: Capital Flows | My largest bets in the credit cycle melt up

Daily at 8:30am MST

Tomorrow I am going to zoom out and explain the two largest bets I am taking in the credit cycle right now: PURR and ORCL

LIVESTREAM FOR TOMORROW: LINK

Top Stocks in Each Sector Driving Information Flow

Capital Flows — Sat, 11 Apr 2026 00:54:12 GMT

Top Stocks in Each Sector Driving Information Flow

CPI came in below expectations this morning. The geopolitical shock is continuing to be retraced. The S&P is almost back to flat on the year after one of the largest energy shocks in US history. What happens next is going to be driven not by the macro narrative everyone is talking about, but by the underlying fundamental flows that have been expressing themselves through this entire period of noise. Today, I ran through every sector in the S&P 500 and pulled the top names by fundamental attribution over the last three months. What you find tells you exactly how informed capital has been positioning and where it is going next. Below are the main talking points. Slide deck embedded below. This weekend I am sending a private report exclusively for paid subscribers.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. The selloff was market beta compression. The signal was which stocks didn’t compress. When geopolitical risk drives a selloff, everything moves together because it reprices the same macro input. But the stocks that resist that compression, that hold or make new highs while the index sells off, are being driven by fundamentals that the sector and the market simply cannot explain. That divergence is the most precise read you can get on where informed capital is actually positioned.

2. The energy sector rallied on crude, but the fundamental leaders are all AI stories. EQT, TPL, CTRA, OKE. Every high-fundamental name in the energy sector is a natural gas play, a royalty land business, or a midstream toll road. None of them are pure crude beta. EQT is the largest US natural gas producer being priced as AI power infrastructure. TPL owns 900,000 acres of Permian Basin royalty and water rights with near-zero cost of capital. The energy sector’s fundamental dispersion is an AI power thesis expressing itself through gas and infrastructure, not an oil thesis.

3. CF Industries in materials is the textbook second and third order effect of the crude shock. Natural gas in, nitrogen fertilizer out. CF’s margins are a spread trade on cheap US gas versus global nitrogen prices. When crude spikes, food inflation follows, and fundamental investors bid CF before the transmission shows up in CPI. It was up 52% over the three month window. Watch CF and BG alongside breakevens. When they begin to make new lows, that is the signal the inflationary impulse is clearing the system and bonds become the trade.

4. Defense in industrials is a structural position, not a geopolitical trade. Northrop Grumman up 20% year to date while the S&P is down. Lockheed Martin outperforming the sector and the index. These are not positions that will unwind on a ceasefire. Defense budgets are structurally higher across NATO, Asia, and the US regardless of any single event. The fundamental attribution in these names reflects a multi-year fiscal tailwind, not a tactical hedge.

5. Consumer discretionary has a Tesla problem. Tesla is making new weekly lows and not bidding on the relief rally. That matters because SpaceX at 95% Polymarket probability of IPO this year creates a capital allocation split for everyone who wants Elon exposure. Once there are two ways to express that trade, Tesla’s premium compresses. Watch the Tesla-SpaceX spread as it develops.

6. EQIX is the single most important name in the entire screen. Up 30% on a three-month basis while the sector is up 6 and the S&P is down. 88% fundamental attribution. The world’s largest data center REIT making all-time highs through a geopolitical selloff is not a coincidence. It is fundamental investors pricing physical AI infrastructure. Watch EQIX relative to IGV and SMH. When EQIX is outperforming the software sector and the chip ETF simultaneously, the market is telling you exactly which layer of the AI stack is being rewarded.

7. The utility sector is now the second most important expression of the AI CapEx trade. NextEra Energy, American Electric Power, SRE. Every high fundamental name in utilities is connected to the power and transmission layer of the data center build-out. Ohio, Virginia and Texas, the three states with the most AI infrastructure under construction, are also the primary service territories for these companies. The semiconductor ETF was the first mover. Utilities and industrials are the second wave.

8. Real rates are only 57 basis points from turning negative and that changes everything. The Fed pausing into a short-term inflation spike is creating a passive liquidity injection. Eurozone real rates already turned negative briefly last week. Japan’s two-year real rate turned positive for only a moment before reversing. When real rates go negative, TINA flows begin. People losing money in real terms on t-bills are forced into risk assets. That is how melt-ups start. The entire fundamental attribution picture across every sector is consistent with a market that is beginning to price exactly that setup.

[SLIDE DECK]

All charts and models from today’s stream:

Capital Flows Livestream 2026 04 10

10.8MB ∙ PDF file

Download

Tradingview Models From Livestream: LINK

Monday: Capital Flows | The Melt-Up Trigger: The Playbook For The Credit Cycle Melt Up

I am doing a livestream every weekday at 8:30am MST because I believe this is the most important time in history to be completely locked in.

The livestream on Monday will be the entire playbook for HOW to play the credit cycle melt-up that is beginning to shape. I will cover how to think about the drivers, the risks surrounding positioning, and why the melt-up will eventually lead to a bear market.

MONDAY LIVESTREAM: LINK

Paid Subscribers: Weekend Private Report

This weekend, I am sending out a private report exclusively for paid subscribers. It will cover the full fundamental attribution of the credit cycle across all major countries, the specific names I am watching most closely heading into next week, the real rate framework applied to the melt-up timeline, and my updated view on and Hyperliquid as the macro liquidity setup develops. This is the most comprehensive breakdown I have put together since the start of the stream series this week. This would be a great time to do a free trial if you haven’t pulled the trigger yet.

7 Day Free Trial

Equity Dispersion and the Rotation: Mag7, Oracle, and OpenAI

Capital Flows — Thu, 09 Apr 2026 01:54:35 GMT

Equity Dispersion and the Rotation: Mag7, Oracle, and OpenAI

The geopolitical risk premium is coming out of markets faster than most people expected. Crude went from 117 to 95 overnight, ES gapped up, and the Russell outperformed everything. If you were following the positioning breakdown I laid out yesterday (LINK) and last week, none of this was surprising. What matters now is what comes next -- and that is an entirely different question. Below are the main talking points from today's stream. The slide deck is embedded below those. Paid subscribers get the full equity dispersion breakdown and attribution model output tonight.

LIVESTREAM RECORDING FROM TODAY:

Today’s Livestream: Main Talking Points

1. Implied correlation spiked because the selloff was geopolitical, not fundamental. Stocks moved together because they were repriced on the same risk input. When that correlation rolls back over, fundamental dispersion returns -- that is where the opportunity is now.

2. The ceasefire rally confirmed the positioning read from last week. Macro covariance between stocks, bonds, and the dollar was already weakening before the Iran news. The Russell outperforming, EURUSD bidding, gold and silver catching -- all exactly what the positioning setup was pointing to.

3. The selloff was a valuation story, not an earnings story. Geopolitical risk repriced the multiple and the equity risk premium. It did not touch Mag7 earnings, tech earnings, or industrial earnings. If you bought the dip, you bought a valuation compression that is now unwinding.

4. AI CapEx is still accelerating and it is now a GDP story. Microsoft +82% CapEx year over year. Alphabet +140%. Meta +75%. Oracle +100%. AI CapEx is now contributing over a point to US GDP growth. Without it, US corporate CapEx would likely be negative.

5. The five layers of AI infrastructure tell you where flows are going. GPUs, networking, power and cooling, data center REITs, and memory. DLR just hit an all-time high during a geopolitical selloff. Map these layers and you map where the CapEx dollars actually land.

6. Oracle is the most mispriced asymmetric bet in the AI trade. Cloud infrastructure up 84% year over year. 500 billion dollar backlog. Down 54% from all-time highs. CDS spreads pricing more default risk than 2022. Larry Ellison owns 40% of the company and has leveraged the balance sheet to swing for the fences. The fundamental attribution in the model is about to flip (see tradingview model below).

7. The OpenAI IPO is one of the biggest potential melt-up catalysts for equities. 852 billion valuation, 2 billion a month in revenue. If they go public this year, expect a wave of model releases into the IPO window that pulls capital into everything in the AI stack. Watch Polymarket on the IPO timeline -- that is the leading indicator.

8. The dollar makes another leg lower from here. The geopolitical bid is reversing. A weaker dollar means real rates fall faster without a Fed cut. That is the passive liquidity injection that pushes gold, silver, and the equity melt-up scenario forward.

[SLIDE DECK]

All charts and models from today’s stream are in the deck below.

Capital Flows Livestream Wednesday, April 08, 2026

1.4MB ∙ PDF file

Download

Tradingview Models From Livestream: LINK

Tomorrow’s Livestream: Capital Flows | PCE, Real Rates, and the Melt-Up Setup

CPI prints Friday. PCE prints tomorrow. These are the macro clearing events that will tell us how much of the crude shock transmitted into core inflation -- and therefore how much room the Fed has to let real rates fall. Tomorrow I am mapping the exact levels to watch, what a soft core print means for the dollar and gold, and how the equity melt-up scenario develops from here if the data cooperates.

I am doing a livestream daily at 8:30am MST. TOMORROW’S LIVESTREAM: LINK

Equity Dispersion and Attribution Report:

The Geopolitical Risk Premium: What Markets Equity and Rates Are Actually Pricing

Capital Flows — Thu, 02 Apr 2026 17:39:00 GMT

When we came into this year, the central question was HOW MUCH impact AI would have on jobs and the software industry. Geopolitical risk and higher crude prices have since layered additional complexity onto that picture. Here is what you MUST understand: there are three forces driving markets right now: AI thematic flows, geopolitical risk flows, and positioning unwinds. If you can quantify ALL three, you can begin to map WHEN each is moving the market and HOW things are likely to play out.

If you are brand new to Capital Flows, my goal is very simple: map the macro regime so that I am on the right side of it, and find the few large, asymmetric bets that become home run trades.

Since the beginning of the year, I have been focused on building out a full suite of agentic macro models that quantify the macro regime and identify asymmetric bets in alignment with how I think about markets. I will be sharing some of the outputs below.

Let me set the context before diving into the report:

My geopolitical framework for the current situation is laid out here: LINK. If you feel like there are a lot of confusing and conflicting opinions on Iran and Trump, read this. It is about the larger structure, not predicting coinflip news events.
My AI report explaining how the supply chain, adoption, and labor market impact breaks mechanically into three distinct phases: LINK
All of the educational primers I have written on macro and markets, with a full suite of free models if you do not have a Bloomberg: LINK

With these as context, the positioning note below is going to make a lot more sense, and the market is going to become a lot clearer.

S&P500: How much is geopolitical risk, and how much is the economy?

Notice that on a YTD basis, ever since the negative rolling returns in ES gained persistence, 30% has been driven by geopolitical risk premium.

As I laid out in this video, there are multiple factors causing positioning unwinds in equities from crude, to STIR, to FX (link):

Now here is where we can quantify the STRENGTH of these macro moves even further. This gives us insight into HOW PERVASIVE these forces are, which sets the stage for identifying WHEN divergences take place and how that creates opportunity.

The positioning unwind is bullish for equities

Capital Flows — Wed, 18 Mar 2026 02:58:16 GMT

The positioning unwind is bullish for equities

I have laid out my view on the geopolitical risk and crowded positioning levels in all of the livestreams this week:

Sunday Livestream: LINK
Monday Livestream: LINK
Today’s Livestream: LINK

The implication is that I believe all of the premiums that have been aggregated in markets are likely to unwind and push risk assets higher as we move through FOMC. I laid out the logic for this in the regime dashboard that I shared today.

Full PDF of the dashboard is here:

Regime Dashboard (2)

2MB ∙ PDF file

Download

The misconception about FOMC and inflation here is that we are moving into a 2022 type of environment where inflation is going to crush equities.

I don’t believe this

In fact, I believe there is so much of a premium in equities that if we don’t have further escalation in the geopolitical side of things, traders will have to unwind their hedges to buy back equities, sell the DXY, and likely sell crude.

Notice that we are already moving in lockstep with what I laid out on Sunday (link): SPX is bidding, crude is hitting a ceiling, and the DXY just got sold for two straight trading days.

We are already seeing the Nikkei begin to find a bottom despite Japan being net short oil as a country.

The risk-reward for crude is likely lower in the absence of any further escalation. Here is how I view the risk-reward moving into tomorrow:

The amount of exhaustion and unwind that has taken place in Bitcoin is likely beginning to help set a bottom in the spot price:

MSTR specifically could see a significant short squeeze since it has been so aggressively sold during the last year:

Vol already blew out when we were at the lows a month ago, so we likely have limited downside moving into the next 2 months.

With this being said, I think the intensity of rotations in equity markets is only going to get more aggressive. Tech has so aggressively dragged on the index as the energy sector is melting up:

But it is clear that the dispersion in the AI and tech space is beginning to be THE largest factor to understand over the next 2 months. Notice that all of the private credit concerns are being priced, but that the AI chips and AI power themes are remaining resilient. The hardware side of the market is literally the only thing keeping the S&P500 from going off a cliff right now: (chart from: https://www.liquidationnation.ai/)

This is why I would encourage you to review the video and connected reports I published on how the AI endgame is playing out. This is still the most important playbook I have published YTD.

Risk and Opportunity:

My view on the global economy is that recession or stagflation is not an imminent risk. However, we are not seeing a massive injection of credit or liquidity yet in the cycle that would smooth over all skeletons hiding under the floorboards.

The implication of this is that you really need to choose your spots. This is why I have talked about my two highest conviction plays being and

Oracle bet (still at a great entry spot): LINK
Hyperliquid Strategies - PURR (up almost 100%): LINK

I am working on the next big bet that I am taking and will be sharing a comprehensive breakdown of the FX market this week as well, with the new AI tools I am running.

I will also be covering the FOMC meeting tomorrow at this livestream link:

Thanks

This is my next big bet

Capital Flows — Wed, 11 Mar 2026 14:24:33 GMT

This is my next big bet

My entire goal in markets and on this Substack is very simple: map the macro regime so that I’m on the right side of it, and find the few large, asymmetric bets that become home run trades.

I laid out how Hyperliquid is going to disrupt the crypto and tradfi industry, and that the best expression is due to the regulatory arbitrage. I laid all of this out for paid subscribers when we were in the low $3s, and we have almost doubled since then (link). This has been the largest position in my portfolio, and I continue to hold the trade (see my interview with the PURR CEO here: link).

Markets pay you to hold risk and take volatility. The entire industry is set up to suppress volatility, which is why when someone like Larry Ellison decides to take a massive bet and do the opposite of the entire industry, I want to be long.

My next big bet is ORACLE, and I am bullish with the following risk-reward (see my note below about building a position last week at $156):

If you were a paid subscriber, then you got my note last week about beginning to build a position in earnings around the $156 level and are now up after the pop. I have added more, and this is my next big trade.

If you want my entire thesis on Oracle, you can find it here. It is very simple, though. Larry Ellison has taken the entire company and leveraged the income statement and balance sheet to the AI build out, and he is the only major company that is pulling all negative returns into the present in order to have massive returns in the future.

The earnings call is beginning to show the escape velocity of all their capex coming into sight:

Keep a very close eye on the TradingView indicator I provided to map the flows. We need to see continued buying pressure from sector flows and fundamental flows in Oracle: https://www.tradingview.com/chart/2taQ63im/

I am taking a small portion of my Oracle exposure and putting it into ORCL US 12/17/27 C310 Equity:

My Large Cycle View:

I have been very clear that I believe the current macro environment is unsustainable. We have significnat structural risks building under the surface in liquidity, the microstructure of the market, and positioning. However, we are not at a point in the cycle where there is a constraint to unwind it. And this is a global phenomenon.

This is why my recent comment to Burry focused on how to relate the changes in AI with macro liquidity. I believe there is a ton of importance to the risks Burry brings up, and I will always have respect for any risk taker. My larger concern is why all equity indices are sitting at all-time high valuations, and the driver of this:

@michaeljburry While we agree on the risks, i think the key is quantifying the transmission into the balance sheet and then connect this to how much is currently priced into the market\n\nif this entire bearish reality is currently priced then your thesis is correct but the market can rally from ","username":"Globalflows","name":"Capital Flows","profile_image_url":"https://pbs.substack.com/profile_images/1775914379982389248/N59oRUId_normal.jpg","date":"2026-03-10T18:04:04.000Z","photos":[{"img_url":"https://pbs.substack.com/media/HDEUFTPagAAFIL-.png","link_url":"https://t.co/PUcJniTKHJ"}],"quoted_tweet":{},"reply_count":5,"retweet_count":5,"like_count":68,"impression_count":11415,"expanded_url":null,"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM">

If you want to understand more of my thought process around these trades and my current framework on the macro regime, I will be doing a livestream tomorrow at 9:15 AM MT.

Here is the link for joining:

Geopolitical Risk Is Crashing Equities

Capital Flows — Mon, 09 Mar 2026 03:07:56 GMT

Geopolitical Risk Is Crashing Equities

It is quite ironic that Trump is crashing the stock market for the second time at functionally the same time he did last year, but this time into midterms with crude as the catalyst instead of tariffs.

We are seeing crude prices now drag up the VIX and cause bear steepening in the curve as there is a marginal inflationary impulse:

VIX futures are now sitting at the same level they were at when we were at a 20%+ drawdown last year:

Here is the key factor to understand to frame the next move.

AI Playbook, Larry Ellison's Big Bet With ORCL, and New Stock Models

Capital Flows — Tue, 24 Feb 2026 05:36:26 GMT

AI Playbook, Larry Ellison’s Big Bet With ORCL, and New Models

Today I recorded a livestream breaking down how the major shifts in AI are converging, and why Larry Ellison is making a massive bet with Oracle, one that I want to take with him once the signals align.

The stream covers three things: a full breakdown of the AI playbook, a deep dive into Oracle and the bullish case, and a TradingView model that decomposes flows in a single stock into fundamental, sector, and broad beta components. Once you strip those layers apart, the picture gets a lot clearer.

Below you’ll find the livestream recording, the slide deck, and the TradingView models. I’d encourage you to watch the full recording so you can start framing how to take risk.

Slides:

The Oracle slide deck is here:

Orcl Deck

2MB ∙ PDF file

Download

Tradingview Model: LINK

Here is the Naval podcast slide deck I referenced as well:

Naval Slide Deck

684KB ∙ PDF file

Download

You can find Naval’s podcast here: LINK

If you haven’t gone through it yet, the AI playbook and connected reports are all laid out here. That includes a full video breakdown of how to map the AI supply chain and position across the companies involved, along with four in-depth reports explaining the key shifts underway.

Finally, last week, I also recorded a podcast with the CEO of Hyperliquid Strategies discussing the opportunity in. This was a very revealing interview about how significant the oppurtunity in Hyperliquid and especially is right now. My full report on PURR can be found here: LINK

We are back below fair value, and this is likely going to be a massive opportunity for Hyperliquid Strategies to both acquire more HYPE and buy back stock, increasing long-term shareholder value. There are a number of bullish catalysts setting up that have yet to be realized in either or HYPE.

The Shift:

The environment is shifting fast. AI is repricing entire supply chains, capital is flowing into new infrastructure at a pace we haven’t seen before, and the opportunities sitting in front of us, from Oracle to Hyperliquid, are a direct result of that repricing. The playbook is there. The models are there. The catalysts are building.

What matters now is how you position into it. The people who will capture the most from this shift are not the ones with the biggest teams or the most capital. They are the individuals who think differently, who see the signal before consensus forms, and who have the conviction to act on it. In a world being reshaped by AI, a single person with a differentiated framework is the most dangerous participant in the market.

My Large Macro/Crypto Bet: Updated Analysis, Fair Value Indicator & Full Report

Capital Flows — Wed, 11 Feb 2026 17:21:33 GMT

PURR: Q4 2025 Earnings, Updated Fair Value Model & Live TradingView Indicator

If you have been following my work, then you know I have two simple goals:

Map the macro regime so that I stay on the right side of it.
Find asymmetric bets that function as homerun trades.

This process is what I lay out for paid subscribers every day.

PURR has been one of those be…

Equity Strategy: Software, The Trade That's Fooling Everyone

Capital Flows — Wed, 04 Feb 2026 23:41:33 GMT

Software: The Trade That’s Fooling Everyone

Over the last few weeks, “software” has gone from market darling to punching bag.
In this video, I walk through why that’s the wrong headline, how the market is actually repricing growth quality, and what that means for picking winners and losers inside the selloff – plus when these rotations are likely to stop dragging on the index.

Here is the chart deck and referenced articles from the video:

Software Deck

2.61MB ∙ PDF file

Download

If you want to stop treating “software” as one trade and start separating compounders from capital‑destroyers, the full report below goes deeper on:

How to distinguish durable compounders from names that cannot fund growth or defend margins in a higher‑for‑longer regime
Which balance sheet, cash flow, and customer mix traits actually matter for software survival vs multiple compression
How to read the rotation signals that tell you when sector drags are likely to exhaust or flip from headwind to tailwind for the index
Specific software names and themes that look mispriced for this macro backdrop, with clear rotation and risk setups

Main Macro/Tech Ideas:

Software stocks just had their worst month since the 2008 financial crisis. IGV is down 22% from its highs. $1 trillion in market cap has been destroyed. Hedge funds have minted $24 billion shorting the sector. Jefferies is calling sentiment the "worst ever." JPMorgan says the sector is "being sentenced before trial." Bloomberg Intelligence says software is "radioactive."

And yet, the dominant narrative driving this carnage -- that AI is going to destroy SaaS -- is fundamentally wrong.

Here is how I am thinking about the software selloff and what it actually means for the broader market:

THE BIG BET: WHY THE GAP IS WIDENING

Capital Flows — Mon, 02 Feb 2026 19:06:24 GMT

THE BIG BET: UPDATE AND NEXT STEPS

My goal in markets is very simple: stay on the right side of the macro regime and take big bets.

If you can consistently map the macro regime and develop a base of knowledge over time, the big bets will find you.

We are seeing significant rotations in risk assets (read this if you’re trying to understand these risks: LINK), which means you can’t blindly buy beta with leverage and hope for the best; you actually have to pick your spots.

is THE spot I have laid out for paid subscribers, and it continues to be my biggest bet. If you are a paid subscriber on here, you get all of the real time updates and analysis on how I am mapping the regime and taking these bets. The key is developing these bets with foresight, not in retrospect.

This is the original report that I wrote on HYPE and PURR. What I want to do today is update you about some very important changes that are shifting HOW I think about the trade.

Hyperliquid and Hyperliquid Strategies (PURR)

There are two significant gaps in how the market understands Hyperliquid and Hyperliquid-based strategies. Understanding both of them is the key to framing when short-term tops and bottoms occur.

Equity Strategy: How Are AI Rotations Driving The S&P500

Capital Flows — Mon, 02 Feb 2026 03:36:53 GMT

Equity Strategy: How Are AI Rotations Driving The S&P500

As we head into a new week, it’s essential to understand WHY macro changes are happening, not just that they’re happening. Buying and selling pressure constantly flows through asset classes, and making sense of these moves requires the right context. Right now, the biggest question is how the new Fed chair will reshape equity market rotations across AI, interest rates, and global FX.

Are we witnessing a rotation or a risk-off environment in the S&P500?

And how does the new Fed chair factor into positioning for major trades? That’s exactly what I’ll be breaking down in today’s report for paid subscribers.

I laid the groundwork for this analysis in Saturday’s livestream for paid subscribers. We’re setting up for a larger macro bet that takes advantage of multiple converging factors.

If you missed the livestream, the recording is available at the bottom of this report along with the accompanying slide deck. Use these resources to integrate this framework into your redundancy planning and risk management.

I also recently published a short article on differentiating yourself in markets and in life, linked below. If you’re serious about generating exceptional returns, it’s an important one. How to Become So Differentiated That No One Dares Compete With You (4 min read)

This is going to matter because we’re at a point where macro forces and equity rotations are converging to create clear trade setups.

AI, Interest Rates, and The Earnings Cliff: