DeepSeek has now erased $2 trillion worth of market cap in US stocks.
The biggest market headwind comes when you least expect it.
Adam Kobeissi
341 posts
Adam Kobeissi
@TKL_Adam
- OpenAI was founded 10 years ago, has 4,500 employees, and has raised $6.6 billion in capital. DeepSeek was founded less than 2 years ago, has 200 employees, and was developed for less than $10 million. How are these two companies now competitors?
- The real plan all along was to lower interest rates and lower oil prices as soon as possible. The 10-year note yield is down -90 bps and oil prices are down -25%. The tariffs are "working" as planned.
- Talk about a shift in sentiment: The 10-year note yield now pushing above 4.20% while the S&P 500 falls -4.5% in 3 hours. Yields are ABOVE levels seen before "Liberation Day." Once again, bond markets are telling us something.
- The labor market is far worse than you think: Not only was June's jobs number negative, but the US economy lost -357,000 full time jobs in August. And, the US gained +597,000 part-time jobs. Millions of Americans are piling into part-time jobs because it's all they can get.This is absolutely insane: The US just revised the June jobs report lower for a SECOND time for a total of -160,000 jobs. Now, the US has officially LOST -13,000 jobs in June, the first negative month since July 2021. What just happened? Let us explain. (a thread)
- What we're watching: Amid all the chaos, the 10-year note yield has moved in a straight line higher, now up +30 bps from its low of the day. Bond markets are telling us something.
- Game over: Crypto has now added over +$550 billion in market cap since the 5:30 PM ET bottom on Friday. This was one of the largest and fastest wealth transfers in crypto history. Markets can be a brutal game.
- After a brief intermission: We’re back on track for 8% mortgages and a recession. The real “trade war” is Trump versus the bond market.
- Egg prices are outperforming your favorite technology stocks, now up +700% since January 2024.
- The Fed is about to add rocket fuel to the fire: Since 1980, 100% of Fed rate cuts with the S&P 500 at record highs have led to more record highs 12 months later. Not to mention, this time around, we are in the midst of the AI Revolution which is barely in its 2nd inning.The time has come: On Wednesday, the Fed will cut rates for the first time in 2025 and "blame" a weak labor market. This will be just the 3rd year since 1996 with Fed rate cuts while the S&P 500 is at record highs. What happens next? Let us explain. (a thread)
- Something is breaking as we speak: The 10-year note yield just extended its 3-day rally to +15% and broke above 4.50% for the first time since February 20th. Last time yields were this high? The S&P 500 was +1,200 points higher than it is now. Something doesn't add up here.
- The rush to the exit: Asset selloffs are defying historical correlations, coming with drops in stocks, gold, bonds, and oil prices, all at the same time. It's not often you see a market where ALL assets are liquidated simultaneously. Everyone wants cash, yet so many are
- At some point, you have to ask yourself: What is going on? Gold is hitting daily record highs, yields are rising to 20+ year highs with rate cuts, and the S&P 500 is setting up for 7,000. Markets know that G7 Countries will see 3%+ inflation for years and deficit spending isThis is the definition of broken: In 15 days, the Fed will cut rates for the first time in 2025, yet the 30Y Treasury Yield is now near 5.00%. We have RISING interest rates as markets "price-in" Fed interest rate CUTS. Do you realize what's happening? (a thread)
- If there is anything we have learned since April 2025: President Trump's post about China claiming "massive" tariff increases are coming is a bargaining chip. We believe trade talks between the US and China will resume after a little turbulence. Meanwhile, the Fed is cuttingWhat just happened? At 10:57 AM ET, President Trump canceled his meeting with China and said "massive" tariff increases are coming. 40 minutes later, the S&P 500 erased -$1.2 TRILLION of market cap. Is this dip a BUYING opportunity? Let us explain. (a thread)
