watch the party die by kendrick lamar

Summary

The everything rally seems to be losing steam: nearly all assets (equity indices, bonds, commodities) are weaker this week, but one standout kid remains—Bitcoin. While CPI numbers came in as expected, the progress feels like it’s stalling a bit, meaning the Fed might not cut rates as quickly as hoped. On the AI front, Bloomberg reported that LLMs could be hitting their ceiling, with OpenAI’s Orion (the supposed GPT-5) in the works and their new AI assistant ready to take over your computer. The age of AI agents is officially here, adding a whole new layer to an already unpredictable macro environment.

I. The Bitcoin rally: is the printer going brrr or Trump?

Last week we analyzed the Bitcoin rally and its correlation to Trump betting odds, but this week we saw this Reddit post and were curious if the rally had anything to do with Global M2 money supply. As the plot confirms, this rally seems to be driven by vibes at the moment, with rolling correlation diverging from global M2 money supply in recent weeks.

Why does it matter? Historically, M2 global money supply was one of the biggest factors driving Bitcoin returns for the past decade, but this latest rally seems to be breaking this trend recently.

II. The everything rally part deux

Nearly all assets are underperforming this week compared to last week... except for Bitcoin (although we'll see by the end of today). Now that the everything rally is cooling down, it'll be a good time to see if earnings fundamentals keep the market afloat heading into Q4 (also this is a preview of the next update for Avanzai 😉)

Why does this matter? The regime now is: are the macroeconomic factors strong enough to confirm we're not in a recession, but is inflation also weak enough to justify rate cuts? This entire balancing act is happening while Trump volatility is back in play.

III. What sector to look for across inflation regimes

Defensive sectors like Utilities, Consumer Staples, and Healthcare are showing stronger performance during inflation deceleration, with returns increasing 0.5-0.7 percentage points compared to acceleration periods.

Why does it matter? As the Federal Reserve continues to evaluate its rate policy trajectory, sector rotation into defensive names could indicate investors are preparing for economic uncertainty ahead, which may influence both asset allocation and risk management strategies in portfolios.

IV: The age of agent is officially here

OpenAI and Salesforce have both either announced or are about to announce their agent solutions. For OpenAI this means their tool can control your computer and complete things for you like booking travel. From sales to marketing to finance (😉) AI agents are looking to make your most cumbersome workflows in your white collar job automated.

Why does it matter? What this means for all white collar workers: the UX of the chatbot is slowly transitioning to the UX of having a bot. I'd expect there to be a few winners here as enterprises would rather have one cohesive solution than many that will compete with each other. I guess it's good news we're in a M&A friendly environment now?

That is all for this week folks! If you enjoyed please subscribe! 🤝