Growth Note · EUFN (Europe Financials)
Everyone is in the AI trade, and since 2022 European banks have beaten it.
Since January 2022, XLK, the ETF for the S&P 500
Take out AI and the party gets quiet
Since the August 24 peak, chip stocks are up 9% and the S&P 500 is up 0.4%. Everything that isn't AI is down 5.4%.
Source:
AI agents now use 5x the tokens humans do
On OpenRouter, agentic token usage hit 7.3 trillion per week, a 14x increase since February. Humans peaked around 1.4
Protection Booster · Worst-of AMZN / MSFT / GOOG
What if the rally itself bought the downside protection?
The five biggest cloud companies (Amazon, Alphabet, Meta
The Big get Bigger
The AI Big 10 (the Magnificent 7 plus Broadcom, AMD and Micron) now make up 41% of US market cap, the same peak share tech, media and telecom
Big Mac or a Blackwell?
Nvidia and McDonald's both trade at roughly 19x forward earnings. One is growing revenue 91% with 65% operating margins into the largest
Growth Note · Worst of XLY / XLP
Americans spent 6% more at stores and restaurants than a year ago, and the stocks that sell to them are down more than 5% this
Tech stopped moving with the rest of the market
The three-year correlation between the S&P's technology sector and the S&P excluding technology has fallen to 0
Fed funds went down. Your 30-year went up.
The Fed cut rates from 5.50% to 3.75% — a full 175 bps of easing. Over the same period the 30-year bond yield rose
Buffered Growth Note · Worst-of GLD / GDX
Gold stopped tracking stocks, 20% below its high, with the Street calling for new highs.
Gold’s correlation to the S&P
Rules-Based Tail Hedging · RBC Indicative Example
Tail risk, planned ahead instead of promised.
Most hedges die on two questions: what they cost while nothing
Your cell phone bill is causing inflation
Wireless telephone service is 1.6% of the core CPI basket and it caused 33.5% of August's entire monthly increase
