📩 Newsletter: theideafarm.com 🎙️ Podcast themebfabershow.com 📺 YouTube: piped.video/channel/UCKvWzzr…
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Vincent Deluard (@VincentDeluard) on France and the markers of a sovereign debt crisis:
“France has been kind of like a group project where someone is likable. Everybody likes him, but he doesn’t contribute anything. Doesn’t show up at the meetings and kind of rides along.”
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📊 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗗𝗮𝘆 📊
The AI investment boom has accounted for nearly half of S&P 500 earnings growth this year. Goldman expects that tailwind to fade by 2028, with EPS growth of 11% in both 2027 and 2028.
@GoldmanSachs
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New from Bridgewater: Change Is Accelerating Because It’s All Interconnected
1. Change and concentration are accelerating, increasing the risks of destabilization.
"In the past two years, Nvidia has overtaken Apple to become the most valuable company relative to GDP in history. By year-end, we will have built more compute in the last two years than in the prior six combined, most of it in the US."
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4. Different markets are pricing very different futures; most are far from pricing an unrecognizable world.
"Today, we estimate that AI equities are discounting something like 3.5% annual productivity growth. That’s more than we estimate is needed for the US to make its debts sustainable. Across a reasonable range of assumptions, we assess AI stocks to be pricing trend nominal GDP growth well above the recent past"
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5. Thoughts on Navigating This Environment
"At a point in time, we see a modal path and also accumulating tail risks....At the same time, we believe this is an environment in which it is important to hedge the asymmetric consequences of risks, including an AI accident, geopolitical conflict, and stalling AI progress."
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📊 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗗𝗮𝘆 📊
US data center installed capacity is about 3x Europe's. US stocks have also added $40 trillion in market cap since the end of 2022, more than all of Europe.
@apolloglobal
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Vincent Deluard (@VincentDeluard) on what’s really funding the US consumer:
“We started the year with about 8%, 9% growth in personal income tax collection. Now it’s closer to 5%, and 5% is my gut feeling of where inflation is at.”
“Why has consumption been so resilient? It’s because the stock market’s big enough and people have been taking money out of investment accounts, out of 401(k)s.”
“We have savings rates at generational lows. Eventually, the sole justification for the bull market is the bull market itself. It’s a very circular argument.”
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📊 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗗𝗮𝘆 📊
The US market cap sits near 2.9 times M2 money supply, while the UK, France and Japan all sit below a ratio of 1.
@Gavekal
theideafarm.com/global-marco…
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The Idea Farm retweeted
Spent a week with Vincent on the road visiting Latam clients - a high quality, must follow. Great guy and a high altitude mountain climber!
Vincent Deluard (@VincentDeluard) on where the VIX would be with normal correlations:
“What’s been extraordinary really since the summer is that this correlation matrix basically is zero. We have about a third of US stocks trading at negative beta.”
“The average stock correlation with indexes is around 5%. This is unprecedented. It probably has to do with pair trades by pod shops, the AI trade and great earnings.”
“I’ve actually recalculated where the VIX would be if we had a normal correlation between stocks. By normal, I mean 50-60%. The VIX would be around 40.”
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Vincent Deluard (@VincentDeluard) on UK pensions going from 50% to 5% in UK stocks:
“If you look at the average defined benefit pension in the UK, they used to have 50% in domestic stocks 20 years ago. Now it’s down to 5%.”
“They kept basically international stocks and they just took the balance on domestic stocks, like relentless selling of UK assets. First it was the foreigners. They sold first after Brexit.”
“The MSCI UK share of global market cap is 2%. It’s less than the UK share of GDP. And come on, the UK is still a major economy.”
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📊 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗗𝗮𝘆 📊
Coatue estimates AI capex from hyperscalers, labs and neoclouds will reach $2.8T in 2028E, about 1.5x annual US mortgage originations. That is also roughly 3x the US national defense budget and 3.5x S&P 500 non-AI capex.
@coatuemgmt
theideafarm.com/markets/publ…
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The Idea Farm retweeted
If only someone suggested investors should hedge this FX risk back then 😂
I still think it is under appreciated how important that was for returns last 15 years in Japan. And if Vincent is right, more opportunities ahead for this approach in European stocks—can like the market and not the euro!
Vincent Deluard (@VincentDeluard) on why Europe looks like Japan in 2011-12:
“Europe today is where Japan was in 2011-12, just uglier. Japan, because of its unique demography, is usually 10, 15 years ahead of the rest of the world.”
“The only way I can get growth back up is by trashing my currency so much that eventually my exports and my tourism really pick up. That’s how I get out of the debt trap.”
“That led to 13 years of a falling yen. Really massive. At one point after the earthquake, there was an 80-handle on the yen against the dollar. This summer it was 165.”
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Vincent Deluard (@VincentDeluard) on why Europe looks like Japan in 2011-12:
“Europe today is where Japan was in 2011-12, just uglier. Japan, because of its unique demography, is usually 10, 15 years ahead of the rest of the world.”
“The only way I can get growth back up is by trashing my currency so much that eventually my exports and my tourism really pick up. That’s how I get out of the debt trap.”
“That led to 13 years of a falling yen. Really massive. At one point after the earthquake, there was an 80-handle on the yen against the dollar. This summer it was 165.”
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After backing the bull since COVID, one of my favorite macro minds is turning bearish on stocks.
My guest today, Vincent Deluard (@VincentDeluard), Director of Global Macro Strategy at @stoneX_official, explains why, and also covers:
• The shadow VIX: near 40 if stocks moved together like normal
• Tax collections: a better read on the economy than GDP
• Why the euro could fall to 0.80 or even 0.60
• How Korea’s giant trade surpluses could be flowing into crypto
• UK pensions went from 50% to 5% in domestic stocks
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📊 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗗𝗮𝘆 📊
The AI-related cluster in MSCI ACWI has grown from 68 stocks across 15 industries in Dec 2023 to 110 stocks across 19 industries in Sep 2026. Its average beta is 2.30, up from 1.66 in Dec 2023.
@AB_insights
theideafarm.com/markets/equi…
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