Potential Market Rebound and Shipping Latest

CoreWeave

Across the shows: 34 speakers in other episodes, 10 bullish and 32 bearish calls, past 30 days

• Ben McMillan · IDX AdvisorsBearish

  CoreWeave's debt-funded GPU-rental model is the canary; its bonds and CDS have blown wider.

  Neoclouds act as middlemen. They take on long-dated debt to build power and data-center capacity, then rent out GPUs, which depreciate. CoreWeave funded this with borrowing, so its bonds have backed up and its CDS has exploded as Wall Street demands more compensation. He calls it the canary in the coal mine for how the AI build-out is being financed.

  “CoreWeave, I think, was kind of the canary in the coal mine last week... CoreWeave borrowed a lot of money to do that... You see their bonds back up. You see their CDS explode.”at 17:18

Nebius Group

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Ben McMillan · IDX AdvisorsBullish

  Nebius, funding its neocloud build with equity rather than debt, may offer a way into the trade.

  Nebius runs the same neocloud model as CoreWeave but funded it with shareholder equity rather than debt. Its stock sold off with the group, but discerning investors are starting to see that as a potential entry point into the AI infrastructure trade. He presents this as chatter he is hearing, not a firm call.

  “...like Nebius is a good example. They have the same business model, but they funded it with shareholder equity.”at 18:14

Meta Platforms

Across the shows: 28 speakers in other episodes, 29 bullish and 7 bearish calls, past 30 days

• Ben McMillan · IDX AdvisorsBullish

  Meta's audience and cash let it fund AI spending better than debt-funded middlemen.

  Meta owns the audience and distribution, so its AI business is not a glorified middleman that borrows to rent out GPUs. Companies with an established channel and cash can fund their AI build-out without the financing risks CoreWeave faces. He expects these large companies to flex that strength in their earnings.

  “We own the audience. We have the [moat] already... this isn't a glorified middleman business.”at 19:32

Shipping, trucking & logistics

• Oscar de Bok · DHL Group

  US container imports are up about 10% year-on-year, with retail inventories building ahead of peak season.

  Container imports into the US are about 10% higher than in September last year, and retail inventory moved up about 5% year-on-year in DHL's US business. He expects that inventory build to level off, leaving the peak season similar to last year. He cites this as the physical evidence that stock is building up ahead of demand.

  “If I take the containers imports about 10% up compared to September last year, so we actually really start to see that happening.”at 27:05

• Oscar de Bok · DHL Group

  Freight capacity is shrinking relative to demand, pushing ocean and air rates higher, air most.

  Partial use of the Suez Canal adds about ten days to transit times, which cuts effective ship capacity by about 10% against rising demand. In air freight, US demand is up about 15% while supply is growing only in single digits, because aircraft cannot be built quickly. Those factors, along with AI demand, are pushing up ocean and air freight rates, with air rising more.

  “the overall available capacity of ships is therefore reduced by 10% compared to an increased demand.”at 28:53

• Oscar de Bok · DHL Group

  Firms now dual-source across continents, making supply chains longer and more complex but more resilient.

  Since 2019, companies that depend on supply chains have become much more agile, and customers can respond to surprises faster than before. Companies now avoid sourcing key components from one continent, so they can respond to disruptions. That adds complexity and raises the average distance a product travels.

  “I don't think any global company would anymore source their products from one single continent... always make sure that you have an alternative in different continents.”at 31:22

US stock market outlook

• Anwiti Bahuguna · Northern Trust Asset Management

  Quality, low-volatility, income stocks offer equity exposure outside tech, which is 40% of the S&P.

  Tech and AI make up about 40% of the S&P 500, so investors who want equity exposure without that concentration need an alternative. Her firm screens for stocks with strong quality, low volatility and income, which tend to have negative beta to tech. That is why investors are rotating into dividend payers and sectors such as staples, healthcare and energy.

  “then what is your alternative to tech and AI, which is 40% of the S and P index? And you need to look for something else.”at 4:43

• Violeta Todorova · Leverage Shares

  Equities' overall trend stays up over the next year despite choppy price action.

  The S&P 500 is near its record high while tech sells off, and she expects Q3 earnings growth above 30%, with earnings holding up in Q4 and through 2027. Earnings are carrying the market despite higher Treasury yields. She expects more choppy trading and the easy gains to be over, but she still sees further upside in equities over the next twelve months.

  “I'm not bearish as yet. I think there is further upside in equity markets.”at 16:05

Credit markets

• Anwiti Bahuguna · Northern Trust Asset Management

  Northern Trust is moving to take credit risk after yields widened on growth worries.

  Her firm is adding credit risk because growth worries have pushed yields wider, which makes credit more attractive. She argues bonds currently pay a large income and can also appreciate if credit spreads tighten. This follows a month in which her team had been underweight and then closed that position.

  “...the growth worries and how the yields have widened recently, we are ready to take some credit risk.”at 8:49

• Ben McMillan · IDX Advisors

  Credit stress is the early warning; bondholders see risk first, and contagion could drive derisking.

  He is not surprised the trigger came from credit, because bondholders see risk first. CoreWeave's credit problems shocked Wall Street into being more discerning about risks beneath the index. He expects contagion, with investors moving out of credit and long duration and buying insurance, which would push the VIX higher.

  “I'm not surprised that it was credit that got it there... the bondholders see the risks first.”at 22:54

US inflation

• Anwiti Bahuguna · Northern Trust Asset Management

  US inflation is moderating unevenly, but geopolitics could keep inflation front and center.

  She sees US inflation moderating, though not in a straight line. Her concern is that the geopolitical situation is still not under control, and that could keep inflation the dominant market story for some time.

  “We do see inflation moderating in fits and starts. What's worrying us a bit is the fact that we still don't have a handle on the geopolitics situation... Which means maybe the inflation story remains front and center for a while.”at 2:21

AI: overall outlook

• Anwiti Bahuguna · Northern Trust Asset Management

  AI story shows some cracks, but a recent setback is a one-off; solid productivity gains still expected.

  She sees a few cracks in the AI story after a recent company-specific setback. She still believes that setback is a one-off and that AI will deliver a solid productivity boost and improve the growth picture. Her firm remains positive on the AI and productivity trade, so it stays long the US and emerging markets.

  “the AI story is beginning to have a few cracks... we still think that is a one off and we are going to see solid productivity boost from AI.”at 2:42

US Treasuries & yields

• Anwiti Bahuguna · Northern Trust Asset Management

  Bonds remain a decent hedge; her firm closed its underweight and moved to neutral.

  Her team had been long equities and short bonds, which worked, but it has now closed the bond underweight and moved to neutral. The reason is that if the AI story develops cracks, the portfolio needs a hedge, and bonds still work as one.

  “This month, we went and closed our bond underweight and moved neutral bonds because if there are some cracks to the story, you need a hedge and bond still remains a pretty decent hedge in the portfolios.”at 3:30

International equities

• Anwiti Bahuguna · Northern Trust Asset Management

  Overweight emerging markets; EM index projected to return about 30% this year.

  Her firm is overweight emerging markets because the EM index is projected to post the best returns this year, above the US at around 30%. She admits EM is still largely a tech story, with exposure to Korea, Taiwan and semiconductors. Her firm uses it as diversification away from US tech.

  “So, we are overweight emerging markets, but that is still a tech story. EM index has the best returns projected this year, higher than actually The US returns at around 30%.”at 5:39

US dollar

• Anwiti Bahuguna · Northern Trust Asset Management

  Dollar's rally is fading as the AI trade wobbles; a reversal of capital inflows is a risk.

  Strong front-end yields made US assets attractive and supported the dollar, and US earnings helped too. The dollar has recently weakened as the AI trade wobbles and as the market has focused on capital flows into US stocks. If those flows reverse, she sees that as a worry.

  “...that sees some wobbles as the AI trade sees some wobbles. And you see the currency also depreciate recently... If that starts reversing, that's something to worry about.”at 8:12

AI chips & semiconductors

• Violeta Todorova · Leverage Shares

  Chip stocks likely rebound into earnings, then slide about four more months before bottoming.

  The Philadelphia Semiconductor Index is down 24% from its record high, and its momentum indicators have broken below the bull-market range. The current selloff resembles the 2022 and 2024 declines, which fell roughly 43-49%. She expects an initial rebound through reporting season, but more weakness over the next four months, with semis peaking around June.

  “I think we are likely to see an initial rebound, especially for the next couple of weeks throughout reporting season. However, over the next four months, I think it could be potentially more weakness coming.”at 12:18

AI bubble & tech valuations

• Violeta Todorova · Leverage Shares

  Current chip selloff isn't dot-com-like; bull-market sell-offs typically last seven to eight months.

  Some journalists compare this to the dot-com bust, but she says the setup is different. In 2000 the semiconductor index fell 84% over a two-year bear market. Sell-offs within this bull market have lasted about seven to eight months. Earnings are also supporting the AI names, with Q3 earnings growth expected above 30%, which was not the case in 2000.

  “I think we are not having a similar setup when the semiconductors index declined 84% and the bear market lasted for two years. Those sell offs throughout the bull market last around seven to eight months.”at 12:34

US rates & the Fed

• Violeta Todorova · Leverage Shares

  Fed has three more hikes ahead, with the hiking cycle peaking after them.

  She expects three more Fed hikes: one in December and possibly two more in the first half of 2027, after which the hiking season peaks. Growth of 25-30% in earnings would be enough to offset elevated borrowing costs. If Brent falls, the Fed may not need the last two hikes.

  “So we are looking at three more interest rate hikes, one in December and potentially another two in the first half of twenty twenty seven.”at 14:38

Oil & fuels

• Violeta Todorova · Leverage Shares

  A Middle East resolution and Brent falling toward $70 would lower yields and boost equities.

  She ties the rate path to Brent crude and the Strait of Hormuz. If the Middle East conflict is resolved in the coming months and Brent retreats toward $70, Treasury yields should fall and the Fed may skip two 2027 hikes, a big tailwind for equities. If Brent stays high, she expects another three hikes and that would put earnings to the test and make price action choppy.

  “If we have a resolution in the Middle East conflict in the next couple of months and we see a retreat in Brent prices, I think treasury yields will drop... if we start seeing Brent dropping to around $70 which will be a massive tailwind for equities.”at 15:29

Open-source AI models

• Ben McMillan · IDX Advisors

  His firm shifted nearly all its AI compute spend from frontier models to open-weight models.

  His firm spends about $20,000 a month on AI compute. Over the last eighteen months that spend moved almost entirely from frontier models to open-source, open-weight models, which he says many other companies have also done. He cites this as evidence of a broader shift in the AI zeitgeist, alongside concern about a slowdown in token growth.

  “we went from being entirely frontier spend... we spend $20,000 a month on AI compute. Over the last eighteen months, that shifted... almost entirely to open source, open weight models.”at 19:37

Market sentiment, positioning & volatility

• Ben McMillan · IDX Advisors

  VIX is too low; extreme index dispersion is latent risk that is now re-rating higher.

  Implied correlation between stocks was in about the first percentile, which means very high dispersion beneath an index near highs. That is a powder keg, and it partly detonated after the recent selloff. VIX has since backed up to around 22, reflecting that the VIX at sub-19 levels was too low for the underlying risk.

  “You're seeing a lot of dispersion... that's a powder keg, which we actually saw, to some degree, kind of detonate... that is the latent risk that was there under the hood.”at 22:54

AI infrastructure & data centers

• Oscar de Bok · DHL Group

  AI data-center buildout absorbs 42% of air freight capacity, adding strain to global supply chains.

  Growth in AI data centers is absorbing a large share of air-freight capacity, which he puts at about 42%. Together with the Suez detour and limited aircraft supply, this adds pressure on global supply chains and freight rates.

  “growth, for instance, in AI data centers, which is absorbing about 23%... Sorry, [42%] of the total capacity in air freight at the moment is related to AI data center buildup.”at 29:34

Middle East & Iran

• Oscar de Bok · DHL Group

  Middle East conflict pushed freight insurance costs up on routes through the region in recent months.

  In the hottest months of the year, which have just passed, the cost of insuring freight moving through the Middle East became a real issue for customers and for DHL. The conflict drove this, and the cost was passed through to customers who ship goods along those routes.

  “in The Middle East, in the hottest months that we have behind us that was actually really an issue, the insurance cost of freight going through, for obvious reasons.”at 30:25

Russia & Ukraine

• Oscar de Bok · DHL Group

  Airspace closures over Russia force Western carriers onto longer routes, lengthening freight transit.

  Most Western airlines can no longer fly over Russia, so air-freight routes are longer. That lowers effective capacity and raises costs, on top of the detours caused by avoiding the Suez Canal. The Ukraine war is therefore affecting logistics through rerouting, not only through direct sanctions.

  “the whole air space above Russia... for most of the Western airlines is closed. So that means that distances are longer.”at 30:44