Host notes individual pricing power (average hourly earnings) fell 0.7% year-over-year, showing workers are losing pricing power, an early crack in labor.
September's hike was almost certainly not one-and-done; after a CPI reading like today's, it would take a special miracle for the Fed to be finished hiking.
JPMorgan's analysis shows that when payment-in-kind deals, maturity extensions, restructured equity, and deeply discounted debt are included, the shadow default rate in private credit is about 16%, far above the 1% to 3% officially reported. The host sees a real debt problem and is more concerned about private credit risk than about AI issuance.
Bankruptcies of private credit companies will lead to layoffs, and because zombie firms have no residual assets like chips to resell, those layoffs become permanent and hurt the labor market, which is why the Fed views private credit as a problem.
Because CPI came in hot, Treasury yields should move higher, implying downward pressure on bond prices.
The host is very bullish on Broadcom (AVGO), having called it the next trillion-dollar stock two years ago; it has since reached $1.7T and is one of two primary outsourced custom ASIC and optical DSP design partners globally.
NVIDIA (NVDA) is pushing higher with buyers stepping in; the area just under $230 turns into support, with resistance and target up at $235 to $240.
Semiconductors and AI hardware have fallen for a while; with lower valuations and earnings approaching, once Korean deleveraging positions are cleared, an oversold rebound should appear soon and be very sharp.
Host warns that although AI profits are real, three hidden killers are approaching: rising costs squeezing margins, massive capex not yet translating into revenue, and declining earnings quality due to asset revaluation gains. Market expectations are extremely full; rewards for good news have halved while penalties for misses are severe, so AI share prices could face a major correction even without a catastrophic collapse.
Micron (MU) fundamentals are still decent over a one-year horizon, but ultra-high memory profits are unlikely to persist longer-term; the host holds 20 shares, bought too high, had planned to sell at 1200 but the target was not reached, and is now waiting to break even, believing recovery is not very difficult.
JPMorgan's Q3 EPS and revenue both missed, and buybacks plunged 84%, indicating Dimon views the stock as too expensive; bank stock dividends are unattractive versus Treasuries, and with bond yields above 5% their appeal is limited, making the buyback cut a risk warning.