Nasdaq is down 5% in the pre-market as Nomura;'s Charlie McElligott points out that a potential “Repricing of the Left Tail” in a crowded “AI / MegaCap Tech” market leadership theme sees a substantial bout of Vol reintroduction and consensus narrative rethink to start the week...
An Equities scare originating from a potential paradigm shift of assumptions within the multi-year US Market leadership “AI / MegaCap Tech” theme and is spiraling into a meaningful “risk-off” cross-asset move, hitting Crypto, violently squeezing Equities Index iVol AND US Treasuries, where a gap lower in Yields is then too dragging US Dollar lower after initially having earlier seen a FTQ bid…because after-all, “Tech Innovation” is a massive part of the crowded “US Exceptionalism” –trade thesis
DeepSeek R1 self-learning AI model is acting as a potential shock disruption-agent (already now the most downloaded app across platforms now in recent days), and endangering the “concentric circles of Tech” status quo asset performance leadership (NVDA -11.5% premkt US Eq / AVGO -12.0%, SMH -7.0%, Bitcoin -5.0%)--where the sudden introduction of such a cheap-yet-completely viable AI tool which is self-guiding its own training and built via reinforcement learning without standard controls (i.e. MAGNITUDES lower operational cost not requiring the massive semiconductor spend of the newest and most expensive chips, yet showing functionality there with OpenAI et al on its LLM chops, particularly with elite Math and Coding output)—is threatening the prior assumptions on the AI ecosystem, with massive implications on Pricing Power, CAPEX / Spending trends and market Valuations of the current hierarchy of leadership in the space
