Dick Taylor

The timing of today's market crash is noteworthy. As selling pressure spreads, the Nasdaq 100 is now down nearly -5% on the day. Meanwhile, the market-implied odds of a Democrat "sweep" in the Midterms next week has surged from 65% to 72% today, a record high. That's +7 percentage points in 2 days amid this market downturn. We have yet to receive a comment from the Trump Administration regarding the current situation in the market. However, what is clear is that the timing of today's market crash will be consequential. And, even as technology stocks drop sharply, US Treasury Yields are barely seeing any relief. This leaves us with high rates, a falling stock market, $100+ oil prices, and rising CPI, PPI, and PCE inflation. Next week is going to be interesting, to say the least.

BREAKING: The Nasdaq 100 extends losses to -3.6% on the day, now on track for its biggest daily decline since June 5th. The index has erased over -$1.3 trillion in market cap today.

BREAKING: Anthropic is now expected to receive a "high junk" rating from major credit rating agencies after its IPO, which could come as soon as November, per FT. Details include: 1. Blackstone has told investors that Anthropic likely will not receive an investment-grade rating immediately after its IPO 2. Blackstone is working with banks that stumped up financing on selling the debt on to other investors 3. An investment-grade rating is "central" to Anthropic's ability to continue its AI buildout 4. The company says it expects to spend over $800 billion on computing infrastructure between now and 2045 Debt markets are increasingly in the spotlight as AI funding becomes less abundant.

BREAKING: The Nasdaq 100 extends losses to -4.2% on the day, erasing -$1.7 trillion in market cap.

Reddit's earnings call has exposed the new reality for thousands of companies. "AI mode does not drive traffic. Not for us and not to anybody as far as I know. It used to be a traffic driver. Now it's not." - Reddit CEO. The reality is that AI is fundamentally changing the way that humans access the internet. Just 24 hours prior to this statement, Google's stock erased -$480 billion on the same issue: AI is disrupting the traditional search model. For decades, the internet operated on a simple model. Search engines directed users to websites, and those websites monetized the traffic. AI is destroying this business model, and it's happening at an accelerating pace. The traditional model of internet traffic is rapidly becoming outdated. The internet has entered a new era.

US oil refiner stocks are skyrocketing: The S&P 500 Oil & Gas Refining & Marketing Index is up +136% YTD, set for its best annual performance on record. This is more than double the +65% gain seen during the 2022 energy crisis. By comparison, the next best years for the sector since 1996 were +80% in 2012 and +77% in 2005 Marathon Petroleum, $MPC, Valero Energy, $VLO, and Phillips 66, $PSX, are leading YTD gains, at +174%, +142%, and +117%, respectively. Furthermore, the oil refiners ETF, $CRAK, is up +65% over the same period, putting it on track for its strongest annual performance since its launch in August 2015. US oil refiners are experiencing a historic year.

Something that the world is quickly learning in the age of AI: If something can be hacked, it will be hacked. This week has been a prime example of this. Security has never been more crucial than it is now

BREAKING: Binance has been hacked with wallets across the Ethereum, Bitcoin, and TRON networks seeing outflows of -$5.7 billion. The hack includes $1.45 billion worth of Bitcoin and $875 million worth of ETH. If confirmed, this would mark the biggest hack in crypto history. We expect more information shortly.

Tech Stocks in Bear Market Territory: 1. AppLovin, $APP: -65% 2. CoreWeave, $CRWV: -57% 3. Coinbase, $COIN: -56% 4. Western Digital, $WDC: -52% 5. Oracle, $ORCL: -50% 6. Arm Holdings, $ARM: -49% 7. Circle, $CRCL: -44% 8. Sandisk, $SNDK: -42% 9. Robinhood, $HOOD: -40% 10. Seagate, $STX: -39% 11. ServiceNow, $NOW: -37% 12. Super Micro Computer, $SMCI: -35% 13. Intel, $INTC: -35% 14. Adobe, $ADBE: -34% 15. Broadcom, $AVGO: -31% 16. Marvell Technology, $MRVL: -30% 17. Alphabet, $GOOGL: -28% 18. IBM, $IBM: -25% 19. Micron, $MU: -24% 20. Meta, $META: -22% We are in a "stealth" bear market. Read our analysis below.

Demand is becoming a bigger driver of US inflation: Demand-driven components contributed +1.2 percentage points to the +3.4% YoY increase in PCE inflation in August, the largest contribution since September 2023. At the same time, supply-driven factors added +1.0 percentage point, while ambiguous factors accounted for another +1.2 percentage points. This contrasts with the post-pandemic inflation surge, when supply disruptions were the main driver. In 2022, supply-driven components contributed an average of +3.1 percentage points per month to headline PCE inflation, compared with +2.6 percentage points per month from demand-driven factors. This is a key distinction for Fed policy, as rising interest rates can slow demand, while their impact on supply-side pressures is limited. The composition of US inflation is shifting.

BREAKING: Home prices across America's 20 largest cities rose +0.3% MoM in August, marking their 5th consecutive monthly increase. YoY, prices jumped +2.7%, bringing the 20-City Composite Home Price Index to a record 346.6 points. Since the start of 2019, home prices have surged +56.5%. Chicago led all metros in August for the 6th consecutive month, recording a +6.7% YoY increase. New York and Cleveland followed, with YoY increases of +6.2% and +4.3%, respectively. Housing affordability continues to deteriorate.