汇丰策略师：AI交易基本面未变，市场属流动性抛售

Well, let's dig into the market moves that we're seeing today on a significantly negative day for equities. We've got Max Kastner with US services chief multi-asset strategist for more. Max good morning. I wonder in all of the shakedowns that we've seen of eye related trades over the past couple of months, where you place what we're seeing over the past 24 hours, is this a moment of reckoning or something much less dramatic?

No, I think it's a sort of moment like we had, uh, if you guys remember the end of January 2018, the blow up and all the inverse vol products, that feels pretty similar, right? We had obviously the news that you guys broke on on one of the hedge funds, uh, shutting part of their equity business. Uh, then the rumors coming, is there going to be more more than that? Um, that feels very similar to what we had eight years ago or nine years ago.

One was now, um, remember back then it was the smart beta product blowing up. It was all the inverse VIX, Eaton's and inverse VIX ETFs blowing up. And then people were also for a couple of days saying right, which, which you know how much AUM can can blow up. How systemic is this going to be a lot. So I think this is pretty similar to that. Um, the only real difference this time around is this that obviously in the next two weeks we'll talk about the entropic IPO and my my guesses as good as anyone else's.

Is it going to come. Is it not going to go I'm going to come. What valuation. If it's a lower valuation, is that going to be read positively. Is it going to be written negatively? It's it's just anyone's guess. That's the the key difference I think to to 2018 though. So actually Bloomberg Scholar Montgomery County provide someone they might block that for, at least for today. Before we get to the anthropic IPO, the setting is now the risk.

And I mean, she says there's no fundamental point to this move. Do you agree with that? Yeah. I mean, fundamentally, it's not like anything has changed yesterday, right? What's changed yesterday was uh oh my lord, we have forced selling now because funds are it's not pods liquidating, it's now funds liquidating. And is that going to be the only one or is that just the first one? Fundamentals. I mean, we've we've stopped caring about fundamentals weeks ago.

Right. And so if you think about it like fundamentally, um, even one of the oldest Nvidia chips, the B 300, the rental yield has been going parabolic higher in the last two months. If you had told me two months ago that rental yields for GPUs, even for the oldest ones, are going parabolic higher, I mean, uh, 1,000,000%. I would not have told you. Yeah. The trade of short semis ready. So yeah. So, you know, in terms of the timing, I don't quite understand why we why semis were ripping in August and in September.

And likewise I don't really understand what's happening right now. I get it that you know, with the Democrats maybe the, uh, the dynamic slightly different. Sure, but. Well, if this market's so hard to understand. What are you doing? How are you trading this? What's your advice to clients? Um, you look less at what is fundamentally correct because that doesn't really matter. And you look more. And what is the current narrative?

You try to figure out what is the current narrative, and then you try to figure out what is the potential catalyst for that narrative to end in the potential timing, right? So think a month ago, this pretty much today a month ago was the high end yields, right. We had almost 535. Well what were a good 50 basis points lower from know a month ago when you look could you guys look at the terminal and you plot those term frequency charts.

So how many stories there are on things like government debt. It was genuinely off the charts. Like you have to change the scale because people in September were just freaking out about fiscal sustainability, fiscal deficits, too much government debt ends up and so on and so on. Whereas in reality, did that really change within four weeks already? Like fiscal dynamics, like they change within four weeks? No. Come on.

Even the price action didn't didn't really fit right because things like the ten year auction, for example, right a month ago was the best 1 in 23 years. I surely if you're worried about fiscal, you wouldn't have the best ten year auction in more than two decades. But that was the narrative, right? So you trying to figure out, okay, when is that narrative over? What's the next narrative now? The narrative obviously is I is dead.

I cycle is dead. So we got to figure out who has number one. Has it fundamentally really changed? Which I don't think it has. Right. Uh, and that means what's the what's the next narrative? Is the next narrative really that I'm continuing to play broadening to? I really want to buy consumer staples that have just ripped 20%. Do you want to buy a Costco that is exposed to like the lower end of the cage? Just singling it out.

But you can do Walmart. You can to target. All of those have rallied 20% plus in the last five weeks. You know, staples are trading almost at 25 times earnings. Tech is a trading at 17. Does that make sense. Of course it doesn't fundamentally makes no sense. But we got to figure out what is the catalyst for that. For me the catalyst really is the entropic IPO. If you get that over the line, if you get it at a reasonable valuation, um, then what is what is a reasonable valuation for that?

I, you know, obviously not 2 trillion. I would even be happy if it's a trillion or even below it. Right. I don't think we need the headline. Oh my God, it is $1 trillion IPO. Because I think what's actually more important is the secondary right, is because if we got a dynamic like we had the space X, that you get it on secondary and then uh, stock reps for a couple hours, but then it dumps in the current environment.

You don't want to have that. So it might actually even be better if you have it a bit bit lower than one and a half. It's like somewhere between. I don't know. I don't know what it is like. Is it bit below 1 trillion but above a 1 trillion? I think that would probably be good to be good enough. But if they delay again, does that become a bigger story? I'm not sure. Look, I'll tell you what. 24 hours ago I would have said there's no way.

Now come on, we've ripped and everything. Like, of course it's going ahead now. I'm a bit I don't know, I really don't know. Like the point. I will say it's like we've just chatted about it offline, right? Like, who knows if the Nasdaq isn't going to rep three 4% by the end of today? Because yesterday really was the flushing out where there was indiscriminate selling. Look at Europe this morning is not like tech is driving the selloff, right.

It's just everything including the that defensive. So this this feels much more like general broad based flush out, you know, if in the next, uh, next couple of hours and next week Nasdaq rips 5% higher. Cool IPO's back on again. Um, briefly. Is there a haven trade here? Yeah. Look at the UK looks in the Europeans. Or are we all locked into this AI story whether we like it or not, you're either locked in with a correlation of one or correlation of minus one.

No, that's basically it. Unless you want to do like you know, there is of course some stories like 5250 I quite I am quite bullish about the UK because we've had so many positive economic surprises. So yeah, I think those ones are probably the unrelated ones, but they're obviously in terms of the size of the trade, way smaller. Um, but if you look at the ten year yield versus the Nasdaq now in the last three months, it genuinely looks like it's the same line.

So I the people up until a month and a half ago I've been saying, oh I and higher I CapEx means higher nominal growth. Higher nominal growth means higher star. That means the ten year needs to go maybe even to 6% and now say the entire opposite.