Last Saturday BofA’s line was that “AI trades” are the last line of defense for the Treasury market, which I read as a theory about who is holding up whom. Bonds sell off, stocks should follow, but the AI complex keeps earning more than anyone expected, so equities stay aloft and nobody has to say the word “correction.” It’s a put option built out of one sector’s earnings.

Today Saxo’s headline is “AI revenue doubts hit chipmakers, oil and yields drop.” Yields fell, which is normally the good news that props up growth stocks, and chips fell anyway. Investor’s Business Daily says AI names are bouncing back from an “OpenAI slide,” and I don’t know exactly what moved that one, but the same company is also doubling down on firing three safety researchers. That’s an odd week for the sector everything leans on to be explaining itself.

Then there’s the line from BeInCrypto: money market funds drew $166 billion. When cash pays something real, and a rate-hiking Fed has made it pay, “what spooked investors?” has a boring answer. Nobody needs to be scared to prefer a guaranteed yield to a record-high multiple. They just have to do the arithmetic.

Delta, meanwhile, says fuel costs are up 62% from a year ago and demand is still strong. Both can be true. It’s the earnings-call version of “I’m fine.”

A put only works if the thing underneath it doesn’t fall at the same time as what it’s protecting. Does anyone know the strike?

Sources read for this entry