Nvidia did “the Atlas thing,” Nomura’s Charlie McElligott said Thursday, as a still-nervous US equity market struggled to hold gains following an ostensibly reassuring report from the world’s most important company.
Michael Burry’s agitated tweeting aside, the AI bubble won’t likely be bursting anytime soon. This is going to be an uphill battle for bears up to and until there’s evidence that demand for AI compute is set to slow, and Nvidia’s results and guide suggested anything but.
McElligott described Jensen Huang’s latest numbers as “just impossibly” strong, and that means mega-cap vols, which were bid in the lead-up to Nvidia’s report, now have “a lot of room to compress,” which could act as a self-fulfilling catalyst for a Santa Rally assuming we can get over lingering Fed angst and bubble jitters.
“The AI infrastructure buildout will continue to feed the beast that is the epicenter of global risk-taking, easing US financial conditions further, and acting as a tailwind to consumer sentiment and spending,” he said, at least until the next “bubble freakout ” which he expects after the turn of the year.
Fiscal policy — i.e., tax cuts and, who knows, maybe tariff “dividend” checks too — should be gas on the fire in 2026 as the Trump administration works overtime to “run it hot” ahead of the midterms.
On the broader macro, McElligott said we’re “getting a sort of Goldilocks mix with core PCE now at least with a two-handle” while the Atlanta Fed’s GDPNow tracker, hamstrung though it is by missing model inputs, tips a ridiculous 4.2% growth pace for Q4.
As for the September jobs report — released on Thursday morning on a six-week delay — Charlie suggested the robust headline print underscores the notion that the summer downshift in hiring might’ve turned a corner notwithstanding the highest jobless rate since 2021, which anyway keeps the Fed “asymmetrical[ly] biased towards easing at the first hint of concern, even with December rate-cut [odds] ultimately going to zero.”
A subtle caveat’s in order. If you ask Charlie, any melt-up into the calendar turn is more likely to be a “grinding” affair than a “ripper” following a round of profit-taking that saw folks locking in gains and calling it a year. As he put it, “we’ve lost some discretionary risk-budget in recent weeks with PNL / comp management.”
This sharp reversal seems abrupt. Do you think it is a crypto deleveraging story, issues with the Japanese Yen, or Fed jitters?
Who cares? I mean, take it from somebody who used to get paid a silly amount of money to make up narratives to “explain” intraday price action: It ain’t worth trying to parse. I can’t even count the number of “It’s all USDJPY!” quick-hitter notes I blasted out in 2015 (i.e., in another life) at the behest of a couple of guys who lived inside their Bloomies. Most of the time I was just making stuff up, and all the while I was thinking, “This is the most trivial occupation I’ve ever had.”
I mean I could sit here right now and pen an article with a chart showing the recent correlation between NDX and BTC and explaining how forced liquidations in the cryptosphere were likely spilling over into traditional assets, or how — whatever — some analyst somewhere tipped a domino with an errant comment about a line item on Nvidia’s balance sheet or how some magic level was breached triggering a cascade of mechanical unwinds, and it’d all sound totally convincing to all of you despite being guesswork at best, and total bullsh-t at worst.
I realize that’s an abrasive rejoinder, but on some days I feel compelled to remind everyone that this is all totally meaningless — just lines and numbers on a screen. You’re far better off buying a loaf of bread, finding a peaceful pond and throwing food to ducks than you are staring at a terminal until your eyes hurt.
haha..I appreciate the reality gut check!
here: https://heisenbergreport.com/2025/11/20/preach/
I read the article before i saw your comment and i couldn’t help but think it was somewhat of a response to me. I’m sure other people messaged you privately with the same questions.
Anyway, thanks for the follow up. For what it is worth, i do read your Monthly’s and i thoroughly enjoy them.
Can you bring the Weekly’s back next to the Monthly’s on the website landing page? Since i don’t see them, i forget to read them Monday morning. Just a suggestion.
I appreciate you H
This kills the ducks: https://maineaudubon.org/news/dos-and-donts-of-duck-feeding/
I feel attacked.
Cisco and Corning did “the Atlas thing” too, until they didn’t. The build out party might not be over, but it’s definitely running into capacity glut territory.