Episode summary
Why the Midterms Actually Matter for Market Liquidity? With Andreas Steno & Mikkel Rosenvold
Summary
Markets are being driven by a mix of political risk, liquidity stress, and a sharp reassessment of the AI trade. Andreas Steno argues that October’s selloff was less about a single macro data point and more about a plumbing problem: hedge funds have been forced into a major de-grossing event, with crowded positioning in oil, short bonds, short Nasdaq exposure, and long dollars amplifying the move. He says the October PPI shock looks like a turning point, and that the unwind may be nearing its end.
The hosts also frame the U.S. midterms as potentially important mainly through Congress and policy follow-through, not because the election itself is likely to surprise markets. Andreas thinks a Democratic sweep is largely priced in, while the host argues the lame-duck period could become unusually active on appropriations and the debt ceiling if Republicans try to move before losing leverage.
On AI, Andreas pushes back hard on the consensus that capex is done. He says Anthropic’s growth to $75 billion of annualized recurring revenue is historically unprecedented, that compute remains scarce, and that GPU spot prices are soaring. Even so, he prefers OpenAI over Anthropic because of Anthropic’s second-derivative-of-growth problem. He ends by saying semiconductors still look strong if growth and inflation keep improving.
Key takeaways
- Andreas says October’s market stress reflects the biggest hedge fund de-grossing event in 10 to 12 years, not just bad macro headlines.
- The host argues the midterms matter most through the lame-duck Congress, where appropriations and a possible debt-ceiling move could affect market risk.
- Andreas says a Democratic sweep is mostly priced in, so the surprise risk is more in a Republican rebound than in a blue-wave outcome.
- Andreas says the AI capex panic is overstated because Anthropic’s growth is unprecedented and GPU spot prices are rising sharply.
- Andreas still prefers OpenAI over Anthropic for the AI trade because he worries about Anthropic’s second derivative of growth.
- Andreas says semiconductors remain the best-looking part of the market if inflation and growth data keep stabilizing.
Notable quotes
“October has been difficult for a lot of hedge funds”
“we have a market that is incredibly long oil. We have a market that is incredibly short bonds”
“we're currently pricing the tech sector in forward terms lower than we did during the uh bottom in 2022”
“we still think the semiconductor space is is looking great”
How the episode opens
Hello out there. Welcome to Real Vision. Welcome to Macro Mondays. My name is Rosenval and I'm calling in from a bit of a special uh location here. I'm uh at an office space in West London. I'm currently borrowing a conference room, so I hope I'm not getting kicked out. If I am, I'm sure Andreas will be here to take over because I am obviously joined as usual by you. Andreas, welcome to the show.
Thank you, Miguel. And it's good to see that that you actually spent some time in our London office. I'm not I'm not too good at that, but yeah.
And you know, Andreas, it it tells you a lot about video settings because I look like I just spent the last three weeks in this to the south of Spain while you were in the at the North Pole, but that that's absolutely not the case. if you were with me in London for most of the weekend and yeah, it's just a matter of lighting that um I look like I'm completely sunburnt here. I am mostly definitely not.
You can you can attest to that. We have a great show show for you guys today. We're going to be talking obviously a little bit about the US midterms, but also looking at this big degrossing and uh the AI trade and looking a little bit about um the the liquidity plumbing heading into November and what might be in store for us.
So hopefully breathing a bit of hope into very uh very very bad mood in markets. Andreas here. Um Michael, can I start with three quick before we Yeah.
Yeah. That sounds good. — Yeah. We just got, you know, three major pieces of news out more or less just before we went on air.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us midterms
- market liquidity
- ai capex
- tech stock positioning
- hedge fund deleveraging
Companies and tickers mentioned
- Anthropic
- OpenAI
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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