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Warm-Up
- JCD BACK IN THE HOUSE
- Need a new CTP
- Airports are a mess
- Not Kosher - Futures moves

Markets
- From the Brink....All is good?
- Correction in some areas and sectors
- US Dollar Rises, Gold, Silver and Bitcoin Drop
- Crude oil DROPS after "good" talks and a deal brewing with Iran - reversing all of the above

JCD UPDATE
- AH waiting by the microphone on a Tuesday in March - - no John... 9pm, 9:05, 9:15pm...
- Health update etc...Can we get the story?
- Thoughts on John S. Dvorak (Mimi on No Agenda) - Family backup!

Market Update
- Small-Caps taking the brunt of the selling
- Russell 2000 small-caps are down 10% from their high - an official correction
-- Interestingly the R2000 is still up this year by about 2%
- Stocks up on Monday after President Trump says intense negotiations over weekend and postpones targeted attacks for 5 days (after giving a 48 hour ultimatum)

Manipulation? Say it ain't so...
- Dateline Monday morning...
- Futures took a leg down pre-market - even after Friday (after close) President Trump said he was looking to wind down the Iran affair
- At around 6:50 a.m. in New York, S&P 500 e-Mini futures trading on the CME recorded a sharp and isolated jump in volume.
- A similar pattern was observed in oil markets.
- Roughly 15 minutes later, at 7:05 a.m., Trump posted a market-moving announcement about Iran on Truth Social.
- Futures on DJ up 1,000 and oil down 89%
--- Were there really conversations and negotiations over the weekend?

A Few Leftovers that need to be discussed

Private Credit Again
- All of a sudden they are admitting there is a problem.....
- Blackstone Inc. approved redemptions of a record 7.9% from its flagship private credit fund, totaling about $3.8 billion.
- Redemption requests have increased across multiple private credit funds in recent quarters.
- Investor unease is being driven by concerns over the private credit asset class, particularly exposure to software companies vulnerable to AI disruption.
- According to Hugh Chung, CIO of Endowus, Blackstone’s experience suggests these concerns are asset-class wide, not limited to a small group of managers.
- Apollo Global Management CEO Marc Rowan warned that a shakeout is coming for private credit firms, driven by rising defaults on loans to software companies.
- Rowan emphasized that the shakeout is unlikely to be short-term, calling it foreseeable and predictable, and underscoring the importance of disciplined underwriting and strong risk management.
- He argued that investors should prefer having credit risk reside within private markets firms, rather than on bank balance sheets backed by government-insured deposits, which can amplify systemic risk.
- LATEST: Apollo is curbing redemptions from one of their biggest Private Credit funds.

Michael Gayed: Private credit default rate just hit 9.2%. That's higher than 2008 bank loan peaks. $1.8 trillion in assets, $100B in secondary liquidity. 18:1 mismatch

PRIVATE CREDIT

More OpenAI Funding
- Amazon invested $50 billion, Nvidia invested $30 billion and SoftBank invested $30 billion in the round, OpenAI said in a release Friday.
- The investment boosts OpenAI to a $730 billion pre-money valuation, which marks a big jump from its $500 billion valuation in a secondary financing in October.
- The will use some of the money to expland and buy more chips and cloud from NVDA and AMZN (? Circular?)

MORE ON THE CIRCULAR SHAM
- OpenAI said it is expanding its existing $38 billion agreement with Amazon Web Services by $100 billion over the next eight years.
-  AWS will also serve as the exclusive third-party cloud distribution provider for OpenAI’s enterprise platform Frontier, which it unveiled earlier this month.

AI and Where we stand
- Can we talk about Anthropic? Is the Government going to crush Claude?
- What is our Go-to AI bots?
- What stage are we at right now? LLMs > Infernce>Agentic
- - What comes after Agentic

Netflix OUT
- Last week, Netflix exited the bidding for Warner Bros. Discovery after a competing bidder submitted a superior offer.
- The decision followed pre-planned bidding scenarios, with co CEO Ted Sarandos saying the company knew exactly how to respond once the higher offer emerged.
- Sarandos said the Paramount deal is likely to drive significant cost-cutting, including roughly $16 billion in reductions and thousands of job losses.
- He emphasized that Netflix will continue investing in its business and explore new ways to collaborate with theater owners, rather than pursuing large acquisitions.|
- Stock rose nicely on the news

Tariff Refund Update
- You are screwed....
-- Trump administration seems hell-bent on keeping our money

Airlines
- After a rather bullish commentary from Delta last week....
-  United Airlines is cutting more unprofitable flights over the next two quarters as it prepares for a prolonged period of high jet fuel prices due to the Iran war, even as strong travel demand has allowed U.S. carriers to raise fares.
Chief Executive Scott Kirby said in a staff memo the airline is preparing for oil to rise as high as $175 a barrel and remain above $100 until the end of 2027.
- At those levels, United's annual fuel bill would rise by about $11 billion, more than twice the profit it earned in its "best year ever," he said.
- Ticket prices going up!

Gas Prices
- Have you seen diesel prices?
- > $5 gallon on average across the U.S.
-- Implications beyond
--- Let's discuss the similarities to the 1973 oil embargo. (Barry switching license plates)
- 1973–1974 ? Arab oil embargo (the classic “1970s oil embargo”)
- 1979 ? Second oil shock caused by the Iranian Revolution (not an embargo, but another major supply shock)

Even So - Fedex
- FedEx Corp. raised its full-year profit forecast, with adjusted earnings expected to be $19.30 to $20.10 a share for the fiscal year.
- The company's shares climbed after the announcement, with the stock advancing about 23% this year through Thursday's close.
- FedEx does not expect the war in the Middle East to have a direct material effect on its business, but the broader consequences, including higher energy prices and volatile shipping patterns, are adversely affecting the global economy.
- In fact, company raised its full year outlook.....
--- Not a material effect???

Bad People
- SuperMicro Co-Founder Charged!
- Super Micro shares sank 28% last Friday after U.S. prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China. (NVDA chips)
- The U.S. Justice Department charged Super Micro co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun with running a scheme to route U.S.-made servers through Taiwan to Southeast Asia.
- The defendants allegedly used a Southeast Asian company as a middleman to place orders for high-end servers containing restricted Nvidia H200 and Blackwell chips. The equipment was then repackaged into unmarked boxes and diverted to China.
- To evade U.S. audits and customs inspections, the individuals allegedly created thousands of "dummy" servers and used a hair dryer to remove and reattach serial number labels from genuine servers to the fake ones.
--- Soooo, only 3 people did all of this?

Amazon Phone
- Amazon's new phone project codenamed 'Transformer'
- Focus on AI integration, Alexa features, and mobile personalization
- Here is what we know:
-------It is a smartphone, not a wearable or accessory
- It is AI-centric, with Alexa deeply integrated
- It is meant to act as a personalized, always-on gateway into Amazon’s ecosystem (shopping, Prime Video, Prime Music, services like Grubhub)
- It is being built inside Amazon’s Devices & Services group by a skunkworks team called ZeroOne, led by former Xbox architect J Allard

OpenClaw
- Nvidia CEO Jensen Huang says OpenClaw could be the next ChatGPT as AI shifts from answering questions to taking action.
- Jensen said : Nvidia is building security around the technology with NemoClaw to enable safe and scalable adoption of AI agents.
- Project OpenClaw: “It is now the largest, most popular, the most successful open-sourced project in the history of humanity,”
- OpenClaw is an open-source autonomous AI agent platform that goes beyond traditional chatbots.
-----Instead of answering questions, these agents can complete tasks, make decisions, and take actions with minimal input from users.
- Use case: Prompt to study images of a kitchen, learn design tools, iterate ideas to learn how to design a kitchen
------- Jensen says: “Every carpenter can now be an architect. Every plumber will become an architect. We are going to elevate the capabilities of everyone”
---- What happens to the architects?

Something....
- One of the hardest hit countries in all of this mess has been South Korea
- ~70% of South Korea’s crude oil imports come from the Middle East - Most of that oil transits the Strait of Hormuz
- Margin calls kicked in as high margin debt with heavy retail participation
- Won weakened sharply (17-year low)
- Korea economy is dependent on global demand and stable energy prices
- South Korea often leads sell-offs as it is the purest RISK ON market in Asia
---- SOOOOO, if this thing ends quickly, there is a potential of EWY to move up again....

 

 

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