🏛️ Divided government just repriced two trades at once: deficits and data centers... 🏭 📉
Deficits first. Bond traders are betting a split Washington borrows less, and the 10Y has slid roughly 45bp below its early-October peak, the highest since 2002. The dollar index hit its weakest since late September.
Gold pays no yield, so it trades as a real-rate instrument. It surged more than 3% on Wednesday, and the driver was bonds and the dollar, not fear.
$XAU at 4,113 is up 1.68%, but it has won back only 28% of the 4,700 to 3,881 drop. Daily RSI(6) is 71. December hike odds still sit near 81%. Friday's payrolls decide whether this is a trend or a bounce.
Now the other trade. Roughly three in four voters told exit pollers they oppose new data centers near them. Memory is the purest derivative of build-out volume. No servers, no RAM.
On Wednesday Microsoft rose 6.6% and Amazon 6.1% while SanDisk fell 7.9% and Micron 7%. Capex is one company's revenue and another's cost. The market just picked a side.
$SNDK at 890.76 is down 53% from 1,908.69, with daily RSI(6) at 16.5. $SOXL the 3x chip ETF, is down 29% in 24 hours and roughly 70% from its peak, RSI 19.
SanDisk's latest quarter showed revenue up 378% year on year. That is a market pricing the second derivative: not demand, but the growth of demand.
Oversold readings say the selling is stretched. They do not say the policy question is answered.
If permits and power become the binding constraint on AI, does the scarcity premium migrate from the chip to the megawatt?
Deficits first. Bond traders are betting a split Washington borrows less, and the 10Y has slid roughly 45bp below its early-October peak, the highest since 2002. The dollar index hit its weakest since late September.
Gold pays no yield, so it trades as a real-rate instrument. It surged more than 3% on Wednesday, and the driver was bonds and the dollar, not fear.
$XAU at 4,113 is up 1.68%, but it has won back only 28% of the 4,700 to 3,881 drop. Daily RSI(6) is 71. December hike odds still sit near 81%. Friday's payrolls decide whether this is a trend or a bounce.
Now the other trade. Roughly three in four voters told exit pollers they oppose new data centers near them. Memory is the purest derivative of build-out volume. No servers, no RAM.
On Wednesday Microsoft rose 6.6% and Amazon 6.1% while SanDisk fell 7.9% and Micron 7%. Capex is one company's revenue and another's cost. The market just picked a side.
$SNDK at 890.76 is down 53% from 1,908.69, with daily RSI(6) at 16.5. $SOXL the 3x chip ETF, is down 29% in 24 hours and roughly 70% from its peak, RSI 19.
SanDisk's latest quarter showed revenue up 378% year on year. That is a market pricing the second derivative: not demand, but the growth of demand.
Oversold readings say the selling is stretched. They do not say the policy question is answered.
If permits and power become the binding constraint on AI, does the scarcity premium migrate from the chip to the megawatt?
