The Winner Take All AI Race Between The US and China
LIVESTREAM/PROPIETARY REPORT
The livestream today broke down the June CPI print, the AI IPO cycle that is now functioning as the clearing mechanism for macro liquidity, and WHY the US and China are locked in a winner take all race that runs through the entire equity market.
Main takeaways from the macro playbook section:
Limited downside in ZT and ES into CPI played out exactly as laid out: the July FOMC is now pricing an 82 percent probability of a hold, bonds caught a bid, and equity pullbacks driven by rate risk remain short term in nature. Understanding rates is the key to mapping equity beta right now.
I explained all of this here:
AI IPOs are functioning like FOMC events. Cerebras set the top in NVIDIA and SK Hynix set the low almost to the day, and SK Hynix traded up 24 percent on 61 million shares. IPOs do not come out in a contracting liquidity market, so the liquidity impulse is confirmed.
Equity valuations are the highest in human history across the S&P, the Russell, the Nikkei, and Europe, and the driver is not just the AI trade. China’s refusal to revalue its currency creates an excess of dollar liquidity that shows up as record foreign buying of US equities.
AI is a winner take all race with no prize for second place. OpenAI lost its lead to Anthropic within six months, Chinese open source models already sit near 46 percent of US enterprise usage, and the top 10 names account for a record 41 percent of the S&P 500.
The AI trade has quietly broken into four separate trades (chipmakers, hyperscalers, power, and the China cycle) while most books still hedge it as one, and the binding constraint keeps migrating along the chain from wafers to memory to power.
CME single stock futures on 55 names with a 100x multiplier are coming, with compute futures right behind them. These products will reprice hedging flows, overnight risk, and geopolitical risk across the entire AI complex.
You should sign up for their free webinar where they will lay out the playbook on how these new derivatives will function. This will be critical if you are actively trading in markets: https://t.co/0LIIPVhtEd
You can find the free recording on the AI Race Playbook here in the YouTube video:
The member section connects this framework to the live regime and positioning, with the recording linked at the bottom of this report.
Macro Decks From today’s stream:
Tomorrow’s Livestream: The Re-Industrialization Of The USA Powerhouse
Wednesday’s stream covers the re-industrialization of the USA with John Lott and Brando Brandolini d’Adda of New Vista Capital, a VC firm operating in close proximity to the most significant defense companies and the US companies pushing re-industrialization forward. We will map the full factor set behind the theme, including the parts of this buildout that most of the public never sees.
Paid subscribers can join the livestream with this link (the first half will be free and streamed to Twitter and YouTube, where the second half will only be available on Substack for paid subscribers):
Proprietary Report On The AI Race And The Warsh Regime
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