Crypto Provides a Guide on Sentiment: 3-Minutes MLIV

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Transcript

00:00Mark I'm not going to ask you about Tesla but I am curious about the tech sell-off that we're

00:03seeing. The S&P 500 has dropped three percent since its most recent peak. Does the drop continue

00:09come Monday? My bias is pretty is it does continue. I mean three percent is pretty irrelevant

00:18given the extraordinary gains we've seen this year. I mean the key theme of the past six months

00:23is that we've seen this straight line rally with almost no pullbacks and we're getting a little

00:28bit excited this week because we're seeing a few percent. This is not really a proper kind of

00:34correction at all. Now I want to emphasize I still see stock markets making fresh records in the coming

00:40months. I think everything is dominated by the AI theme and while I think we're in an AI bubble I

00:46still don't think we're near the end of that AI bubble and the earnings story is still very very

00:50strong. The capex is extraordinary. The demand is still there for what we're doing and the problem

00:56on the revenue side is not yet coming into play. So I think we have fresh records in the U.S. stock

01:01market which means depending on your time span you don't really care if we get a further pullback.

01:06However if you ask with the next couple of weeks I find it very hard to know and I have to say my

01:11bias is we haven't seen a proper correction yet. We will get a proper correction and I think we go

01:15lower over the coming weeks but with low conviction. Is crypto the canary? Am I going to spend my weekend

01:21watching what is happening with Bitcoin? Yeah there's been a furious debate in our team about

01:28what is the leading indicator and then as a corollary of that it has seemed at the short term

01:33over the last week or so that crypto has been the leading indicator and is that just coincidence or

01:38anything relevant. I think it's really important that over the past year or two it's been very clear

01:42that the a large part of the crypto investor base doesn't overlap with a large part of the kind of the

01:48macro investor base and therefore there's not always too strong a correlation but it does affect sentiment

01:53and it affects the retail wealth factor which is driving a lot of the other names that are driving

01:57this market. So the connection isn't is an ironclad or super strong and I think ultimately you can have

02:02a material correction in crypto that doesn't collapse the rest of the market. But I think it drags

02:08and that and I do think we're in the process of a material correction the crypto space for the digital asset

02:13treasury companies that are and crypto tokens that have much more downside because that view I think

02:18it weighs on sentiment and that's why I think that the broader pullback has more to go but nothing

02:23dramatic. Mark I want I was about to call you Guy. Mark I want to talk about the bond market for a

02:30moment 409 on the U.S. tenure at the moment and last 24 hours we heard Beth Hammock over the Cleveland

02:35Fed really warning and ringing the alarm bells on the inflation risk. Does the yield on the tenure have

02:41higher to go from here? I think it has much higher to go. I've got two big disclaimers in that view.

02:50One is I thought that back in August and I was horribly wrong and I'm still smarting from having

02:54got that so completely wrong back then. And second of all I'm a little bit worried that the steepening

02:58of the curve is becoming a bit consensus. I think fiscal concerns will come back into play

03:02and overhanging this will be the Supreme Court decision on tariffs which will get people concerned as

03:07well. And we still got an inflation story out there. So I think ultimately tenure yields are going a lot

03:12higher again. I've got the timing wrong before. Let's see.