Fed Policy & Market Impact - The Fed's 25 basis point rate cut was largely expected, but the dovish messaging, highlighting concerns about labor market weakness and potential overstatement of non-farm payroll numbers by approximately 60,000 jobs, surprised the market [1] - The Fed acknowledged the need to start treasury bill purchases at $40 billion per month, signaling continued liquidity support, which is seen as positive for assets like gold and Bitcoin [1] - Equities reacted positively, with small caps and transports rising, indicating a shift towards cyclical, pro-inflation trades, while growth stocks underperformed value stocks [2] Bitcoin & Crypto - Bitcoin's chart looks weak, but there are buy signals, with expectations of a surge back to $100,000 if it can get above $93,000, and Ethereum is outperforming Bitcoin [2] - The long-term view is that Bitcoin will benefit from the AI-driven hyper-productivity growth, as AI models compete with each other, diminishing moats and emphasizing adaptability, making Bitcoin a compelling large-cap growth investment [6][26] AI & Technology - The progress in AI models, particularly from GPT-4 to GPT-5, is based on advancements in reasoning and reinforcement learning, rather than solely on hardware, but the Blackwell deployment is crucial for visual language models and physical world applications like robotics and robo-taxis [3] - The consensus in San Francisco is that recursive self-improvement in AI will be reached in the next 2-4 years, leading to hyper-productivity and computers solving problems in energy and biology [5] - Open-source AI models are gaining traction, offering faster and cheaper solutions, but Blackwell chips provide a significant performance jump, potentially favoring closed-source models in the long run [5][6] Economic Transition & Investment Strategies - The US economy is transitioning from analog/electronic to digital, causing disruption and "shedding skin," with small business bankruptcies at a record high, but also creating opportunities for individuals to create income streams online [8] - The focus is shifting from software to hardware, with opportunities in energy, transportation, and small-cap companies making LiDAR and sensors, as the physical world is still essential to fuel technology [9] - The IPO market is expected to be historically active in the next 12-18 months, with companies like Anthropic, XAI, OpenAI, and SpaceX going public, requiring capital to build out physical infrastructure [8] Risks & Opportunities in 2026 - While a major recession is considered low probability, 20-30% market corrections are expected in the next 5 years due to events impacting profit margins and productivity [9] - A potential risk is the capex hole, where hyperscalers are spending heavily on infrastructure but not yet seeing corresponding revenue increases, potentially impacting valuations [9] - Embodied AI, starting with robo-taxis, is a major theme for the coming year, creating opportunities in hardware, batteries, and commodities like copper [10][11][12][13][14][15][16][17]

All right, so let's talk more about the Federal Reserve. What does the bond market really want to hear from Jerome Powell at that big speech in Jackson Hole tomorrow morning. I don't know, but Rick Santelli does.He's in Chicago with more in the bond report. Rick. Yeah, I'm not sure that the market wants to hear something specific from Jay Powell.I really think it's more the other way around. I think Jay Powell is has a bigger issue trying to read the markets. And if we look at today, today was a big day. Lo ...