Mortgage Rates Break Below 6% — Let’s See How the Fence-Sitters in the Housing Market Respond
Tectonic shifts are not confined to the software sector — check out what is happening to the food industry
Key Takeaways
Nvidia Selloff Signals AI Skepticism: The overriding question is what the market is signaling when we have Nvidia beating analyst estimates and yet the share price dives by -5.5% and heads back into official correction terrain. This was not happening six, twelve, eighteen, or twenty-four months ago, and seems to be the investor community now questioning sustainability — not to doubt the productivity benefits from the AI craze, but rather the lofty ROI and profit assumptions.
Bond Market Reflects Deflationary Effects: Meanwhile, the maligned bond market is sending a similar message over the deflationary impact of all this mega AI-related spending — at one point overnight, the 10-year T-note yield dipped fractionally below 4.0%. For all the constant complaining and lamenting on the bullish call on the Treasury market during the horrible inflation spasms in 2022 and 2023, the total return on the 10-year T-note is now nearly +20% since the yield peaked in October 2023 (when we doubled down and turned uber-bullish as the coupon approached 5.0%).
Weight-Loss Drugs Disrupt the Food Industry: As we all focus on how AI is wreaking havoc on the software industry, lost in the commotion is how the widening use of anti-obesity drugs is shaking down the entire food industry. What was once used to combat Type 2 diabetes is now being widely used for diet control. At risk for the food industry are 20 billion fewer calories consumed per day and roughly $1.2 billion less spent on food per week across the U.S. The average household budget on groceries has already been curbed by more than -5% from the baseline spending trend. This is not just about a secular shift in patterns, but a general decline in food consumption, period.
