Markets Are Entering A New Era Of AI-Driven Disruption | Weekly Roundup
Speakers
tyler_neville_
— Macro trader
Quinn Thompson
— Co-Host, Forward Guidance / Founder, Lekker Capital
Felix Jauvin
— Co-Host, Forward Guidance
Summary
The hosts discuss a violent de-leveraging week across markets, with AI capex replacing buybacks, Mag7 under pressure, and crypto selling off. They debate the Fed's likely rate-cut response, curve steepening, credit risks, and rotation into regional banks, small caps, commodities, and gold. The conversation also covers AI productivity winners and losers, gold versus Bitcoin, and political/social risks around the Epstein files and midterms.
- Markets saw heavy de-leveraging and factor dispersion, especially in tech, momentum, and crypto.
- AI capex is replacing buybacks at mega-cap tech, pressuring Mag7 and raising credit risk.
- Hosts favor curve steepeners, long regional banks/short Mag7, and watching high yield credit.
- Gold is favored over Bitcoin as a trust/reserve asset amid dollar diversification.
- Japanese banks and commodities are cited as beneficiaries of inflation and AI productivity shifts.
- Private equity and leveraged loans are flagged as vulnerable to software markdowns and AI exposure.
- Political and social topics included the Epstein files, midterms, and potential sector dispersion.
Ideas
Long metals, short Mag7 on positioning.
Positioning was extremely offside with everyone long tech, and the unwind is creating violent factor dispersion; long metals and short Mag7 captures the rotation out of crowded tech into hard assets.
Long metals, short Mag7 on positioning.
The Warsh/Bessent playbook is lower Fed funds but less support for the long end, steepening the curve and making banks more profitable; deregulation of SLR and risk-based ratios can shift marginal liquidity creation from the Fed to banks, especially regional banks that lend to small businesses.
Long AI hardware, avoid software multiples.
AI is a tectonic productivity shift, so investors should be in the AI supply chain and hardware where capex is going; hardware companies are massively outperforming as the lynchpin for the next productivity unlock, while software companies with stretched P/E multiples are being sold.
Long AI hardware, avoid software multiples.
AI is a tectonic productivity shift, so investors should be in the AI supply chain and hardware where capex is going; hardware companies are massively outperforming as the lynchpin for the next productivity unlock, while software companies with stretched P/E multiples are being sold.
Short Mag7 as buyback bid fades.
Mega-cap tech buybacks were a key incremental bid and suppressed volatility; as AI capex replaces buybacks, cash flow falls, debt and equity supply rise, and the market structure becomes more fragile, making shorting Mag7 viable if credit or bond volatility picks up.
Avoid Coinbase on bank valuation mismatch.
The Coinbase bull case of becoming a bank is flawed because a 30x price-to-revenue company should not be valued like a bank; the valuation mismatch makes it a bad setup.
Steepener: long front end, short long end.
Policy is shifting toward cutting front-end rates to support growth while letting the long end free float; that duration pressure plus supply issues and foreign reserve diversification should produce a massive curve steepener, opposite of the post-2022 flattening policy.
Steepener: long front end, short long end.
Policy is shifting toward cutting front-end rates to support growth while letting the long end free float; that duration pressure plus supply issues and foreign reserve diversification should produce a massive curve steepener, opposite of the post-2022 flattening policy.
Long small caps as tech rotates.
Capital is rotating out of tech into smaller caps, with IWM retesting its 50-day and regional banks breaking out; small amounts of capital leaving tech can move less crowded sectors.
Long regional banks, short Mag7.
The Warsh/Bessent playbook is lower Fed funds but less support for the long end, steepening the curve and making banks more profitable; deregulation of SLR and risk-based ratios can shift marginal liquidity creation from the Fed to banks, especially regional banks that lend to small businesses.
Watch high yield credit tightening risk.
A steepening yield curve can trigger credit tightening; high yield spreads are widening, private equity debt and zombie companies could surface, and a large HY tail put buyer suggests hedging demand, so credit should be watched closely.
Long Japanese banks on inflation lending.
Japanese banks are recovering from the debt bubble and inflation is forcing them to lend; investing in banks in Japan is a way to stay ahead of inflation.
Long gold as trust breaks down.
When trust in institutions and the dollar system breaks down, capital goes to gold; gold's share of world reserves is rising as the USD share of global currency reserves falls.
Long gold, avoid Bitcoin as trust asset.
Trust breakdown is driving capital to gold; China may back a digital yuan with gold rather than Bitcoin because Bitcoin has been co-opted as American, and US dollar backing of Bitcoin is unrealistic; gold is rising as a share of world reserves while Bitcoin bleeds.
Long gold, avoid Bitcoin as trust asset.
Trust breakdown is driving capital to gold; China may back a digital yuan with gold rather than Bitcoin because Bitcoin has been co-opted as American, and US dollar backing of Bitcoin is unrealistic; gold is rising as a share of world reserves while Bitcoin bleeds.
Short dollar on reserve diversification.
The dollar is retesting its yearly open and the USD share of global reserves is falling; capital is seeping out of US assets, and the liquidity ultimately needed to fix the economy will be dollar negative, so more dollar weakness is ahead.
Long 2-year, short 10-year Treasuries.
Expects the Fed/Treasury to attempt curve steepening, so he is doing a similar trade to Felix: long 2-year Treasuries and short 10-year Treasuries.
Long 2-year, short 10-year Treasuries.
Expects the Fed/Treasury to attempt curve steepening, so he is doing a similar trade to Felix: long 2-year Treasuries and short 10-year Treasuries.
Avoid private equity, leveraged loans.
Private equity and private credit are unregulated shadow banking; PE firms levered software assets and are now funding AI capex, facing markdowns and AI exposure, while leveraged loan bids are ugly and supply is increasing, creating many landmines.
Long AI supply bottlenecks, avoid AI risks.
Citi's AI supply bottleneck basket is rising while AI-at-risk companies face disruption; in a secular productivity boom there will be winners and losers, with some AI-at-risk companies functionally dead, complicating market-cap weighted passive investing and Fed response.
Long AI supply bottlenecks, avoid AI risks.
Citi's AI supply bottleneck basket is rising while AI-at-risk companies face disruption; in a secular productivity boom there will be winners and losers, with some AI-at-risk companies functionally dead, complicating market-cap weighted passive investing and Fed response.
Long commodities, avoid Mag7 real returns.
Mag7 are sacrificing share prices for productivity in the S&P 493, but most investors own the index and Mag7; holding the S&P 500 over 5-10 years should produce poor real returns, while AI productivity beneficiaries and commodities needed for resources continue rotational blowoffs.
Long commodities, avoid Mag7 real returns.
Mag7 are sacrificing share prices for productivity in the S&P 493, but most investors own the index and Mag7; holding the S&P 500 over 5-10 years should produce poor real returns, while AI productivity beneficiaries and commodities needed for resources continue rotational blowoffs.
Up Next
This Forward Guidance video, published February 06, 2026, features Quinn Thompson, tyler_neville_, Felix Jauvin discussing XME, MAGS, AI-SECTOR, IGV, COIN, 2-Year Treasury, TLT, IWM, KRE, HYG, TOPIX-BANKS, GLD, BTC, USD, PSP, BKLN, Citi AI At-Risk Basket, DBC, SPY. 23 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Quinn Thompson, tyler_neville_, Felix Jauvin · Tickers: XME, MAGS, AI-SECTOR, IGV, COIN, 2-Year Treasury, TLT, IWM, KRE, HYG, TOPIX-BANKS, GLD, BTC, USD, PSP, BKLN, Citi AI At-Risk Basket, DBC, SPY