Core Insights - The Calamos Phineus Long/Short Fund (CPLIX) reported a 1.29% increase in Q3, underperforming compared to the S&P 500 Index which gained 7.8% [3] - The fund's net exposure averaged 22% in Q3, a slight decrease from 24% at the end of Q2, with a year-to-date NAV increase of 11.36% [3][4] - The fund's strategy involved reducing exposure to momentum-driven mega-caps while increasing investments in pro-growth cyclicals, particularly benefiting from industrials due to data center buildouts [4][11] AI and Economic Dynamics - The AI development race has revitalized the US's economic and financial dominance, although concerns about an AI bubble have emerged [5][49] - The current AI infrastructure buildout is primarily equity-funded, which may provide resilience against traditional cost-of-capital constraints [6][35] - The AI spending surge is characterized by significant capital expenditures, with hyperscaler capex projected to exceed $3 trillion by the end of the decade, necessitating annual sales of over $1.3 trillion by 2030 to justify these investments [13][62] Market Performance and Trends - The US equity market has shown exceptional recovery since April, driven by AI-led mega-cap profitability, creating a challenge in timing investor euphoria peaks [7][9] - The S&P 500 and other indices have shown varied performance, with the MSCI World ex-USA gaining 22.6% year-to-date, while the Russell 2000 and MSCI Emerging Markets also performed well [10][12] - The fund's long positions in traditional cyclicals, such as industrials and consumer discretionary, contributed positively to performance, while short positions faced challenges [58][59] Investment Strategy and Risk Management - The fund's strategy emphasizes balanced exposure to both AI infrastructure and cyclical opportunities, aiming to mitigate concentration risks associated with AI investments [6][31] - The narrative surrounding AI has led to synchronized investor behavior, increasing the risk of market volatility due to overexposure to AI stocks [46][47] - The fund's performance reflects a cautious approach, with a focus on stock selection and sector allocation to traditional cyclicals while managing short positions effectively [57][58]

Core Viewpoint - SanDisk Corporation has significantly outperformed major AI stocks like Nvidia and Microsoft, with its shares surging from $36 to $220 since its spinoff from Western Digital, representing over a sixfold increase [2][4]. Company Performance - SanDisk's stock has seen a remarkable increase due to strong demand for NAND flash memory chips, particularly from AI hyperscalers, which has allowed the company to raise prices [6][7]. - For the quarter ending October 3, 2025, SanDisk reported a 23% year-over-year revenue increase and a 21% quarter-over-quarter increase, despite a 33% year-over-year decline in earnings per share (EPS) [8]. - Management expects revenue for the current quarter to be between $2.55 billion and $2.65 billion, with non-GAAP EPS projected between $3 and $3.40, indicating anticipated sequential growth of 12.6% in revenue and 162.3% in earnings [9]. Future Projections - Wall Street analysts estimate SanDisk could report EPS of $12.81 for the fiscal year ending June 2026 and $20.21 for the fiscal year ending June 2027 [10]. - The stock currently trades at a forward price-to-earnings ratio of 17, which is lower than Nvidia's 23, indicating potential for further valuation expansion [11]. Market Dynamics - Demand for memory chips is expected to remain strong, with capacity expansion likely several quarters away from meeting demand, suggesting continued favorable trends for SanDisk [12]. - SanDisk's recent addition to the S&P 500 index may provide additional support for its share price [14].

Accessible version Global Equity Derivatives & Strategy Year Ahead 2026: The Bubble era AI already big bubble or nothing to see here? Both unlikely Some say clear bubble, others say nonsense. As we noted in Jun 2024 (see Vol suggests AI isn't a bubble…yet), a bubble may be hard to avoid as big tech leaps since 19th century led to big bubbles—and AI is government backed. Biggest IPO gains since 90s, record dip-buying, fear & vol show bubble's progression. Promise of a magical future just out of reach may ush ...

Core Insights - The S&P 500 Index has recently rebounded and is close to its all-time high, indicating a positive market sentiment [1] - The index experienced a rise for five consecutive days, suggesting a strong upward momentum [1] - The cooling fears of an AI bubble have contributed to this rebound, reflecting a shift in investor sentiment [1] - Additionally, the odds of a Federal Reserve interest rate hike have influenced market dynamics positively [1]

Core Viewpoint - Nvidia has shown significant long-term growth, with a 1,200% increase over the past five years, but has faced volatility in 2025 due to external factors like tariffs and concerns over an AI bubble [2][3]. Group 1: Nvidia's Market Position - Nvidia is a leader in designing high-performance graphics processing units (GPUs), essential for AI training and applications, having entered the market early and maintained a competitive edge through continuous innovation [4]. - The company has experienced explosive earnings growth, with annual revenue and profit increasing in double- and triple-digit percentages, surpassing analysts' expectations in recent quarters [5]. Group 2: External Challenges - Investor sentiment has been affected by concerns regarding tariffs, economic growth, and the valuation of AI stocks, which has led to fluctuations in Nvidia's stock price despite strong earnings reports [6]. Group 3: Future Outlook - Nvidia's CEO, Jensen Huang, predicts that AI infrastructure spending could reach between $3 trillion and $4 trillion by the end of the decade, indicating a substantial market opportunity [8]. - Major customers like Amazon and Microsoft have reported increasing demand and plans to expand capacity, suggesting a growing need for Nvidia's GPUs [9]. - With reasonable valuation at 38x forward earnings estimates, Nvidia is positioned to potentially return to investors' "buy list," making it a strong candidate for growth in 2026 [10].

Core Insights - Palantir's management is emphasizing that its AI platform is a viable solution for corporations and governments, not just a demonstration [1] - The company reported record revenue of $1.18 billion in Q3 2025, driven by significant growth in U.S. commercial activity and government contracts [4] - There is a divide among investors, with some bullish on Palantir's growth potential while others express concerns about an overheated AI market [2][3] Financial Performance - Palantir's U.S. commercial revenue doubled year-over-year, with contract values reaching an all-time high for contracts over $5 million and $10 million [9] - Profitability has improved alongside revenue growth, indicating operational leverage is becoming effective as deployments increase [5] - The company ended the quarter with strong cash flow and no immediate liquidity concerns, allowing for potential share buybacks and conservative stock-based compensation [6] Market Sentiment - Skeptics warn that the AI market may be experiencing a supply-driven cycle rather than sustainable demand, which could impact software pricing and ROI timelines for customers [7] - Notable investors, including Michael Burry, are publicly opposing Palantir, suggesting that the current environment may resemble past tech bubbles where strong companies faced significant valuation compression [8] Future Outlook - Management anticipates continued growth in quarterly sales and sustained GAAP operational profitability [6] - However, there are concerns that if business pilots do not become widespread, U.S. commercial growth may decline from its current triple-digit levels [10]

Crypto traders have long been fixated on how much Bitcoin it will take them to buy a Lamborghini. But after a woeful November for Bitcoin and other cryptocurrencies, an old joke has popped back up online: crypto bros lining up for jobs at McDonald’s. The McDonald’s memes have surfaced during other low periods for Bitcoin. In early 2022, Nayib Bukele—the president of El Salvador who made Bitcoin legal tender in his country—photoshopped himself wearing a McDonald’s uniform after the cryptocurrency dropped.  ...

Market Overview - U.S. stocks are poised for modest gains as futures trading resumes after a 10-hour outage at CME Group due to cooling issues at a data center [1] - Futures tied to major indices like the Dow, Nasdaq-100, and S&P 500 rose by 0.3% or less, while individual stocks, including Alphabet and chip makers like Micron Technology and Intel, saw gains in premarket trading [2] Monthly Performance - The Nasdaq composite is on track to record its first monthly loss since March, down approximately 2.1% for the month, amid concerns regarding an AI bubble [3] - The S&P 500 and Dow industrials have also seen declines of 0.4% and 0.3% respectively this month, although the broader index remains up nearly 16% for 2025 [3] Global Market Trends - Global markets showed little change, with the Stoxx Europe 600 slightly higher, Japan's Nikkei 225 up by 0.2%, and Hong Kong's Hang Seng Index down by 0.3% [4] - Expectations are building for the Federal Reserve to cut benchmark interest rates in December, influenced by signs of a cooling labor market [4] Currency and Cryptocurrency - The U.S. dollar remained steady against a basket of currencies after a recent decline [5] - Bitcoin has risen above $92,000, recovering from a drop below $81,000, but is still significantly lower than its October peak of over $126,000 [5]

The Dow Jones Industrial Average (^DJI) concluded Friday's abbreviated trading session higher, up 289.30 (0.61%) points, closing at 47716.42. This marked the fifth consecutive day of gains for Wall Street, wrapping up a volatile month on an optimistic note. The primary catalyst driving the market was escalating hopes for a Federal Reserve interest rate cut next month, reinforced by recent comments from Fed officials and stronger-than-expected economic data. Traders are now pricing in a high probability of a ...

Core Viewpoint - GMO warns that the AI sector is exhibiting classic signs of an investment bubble, characterized by high valuations and rampant speculation [1][7] Group 1: AI Bubble Concerns - The firm has consistently cautioned about an AI bubble, reiterating its bearish stance as market exuberance grows [1] - Quantum computing stocks have surged by over 1200% in the past year, leading to valuations that make other stocks appear undervalued [2] - GMO's concerns are specifically focused on the AI trade, suggesting that there are still opportunities in other areas of the stock market [2] Group 2: Market Comparisons - The current market environment is compared to the dot-com bubble of 2000, which should provide some reassurance to investors [3] - Dynamic, valuation-driven asset allocation strategies have historically helped investors avoid significant losses during market bubbles [3] Group 3: Investment Opportunities - GMO identifies developed market value stocks and non-US small-cap value stocks, particularly in Japan, as attractive investment opportunities [4] - The firm emphasizes that investors can shift their portfolios away from AI stocks without sacrificing long-term expected returns [6]