On August 3rd these pages said the base rate argued for skepticism that the July 29th low would hold.
On October 19th they added that the real bottom has come with AI credit peaking together.
On October 26th it was noted that the funding leg had broken at the top.
Since then:
The Nov 1st note concluded: “The AI trade broke on funding. The capex continues, but at a much higher cost”.
Alphabet’s search growth slowed to +12% and free cash flow went to -$9.1bn; it now funds the buildout with notes and stock.
Amazon’s free cash flow went deeply negative. Meta launched up to $95bn of equity, with Nvidia, AMD and Broadcom lined up to buy.
SMH closed November 4th at $504.27, on the July low, and broke it today: about $458 intraday, ‑31% from its June peak.