• Artificial Intelligence fears disappear (for now)

• Meta the first to show monetization is possible

• Pressure on yields persists

• Is China pressuring Iran?

• Positioning has become more bearish (or at least less bullish)

• Earnings expectations are still accelerating, and P/E ratios are falling

• Housing is stable (but still not great)

• Quick Hits

• Where did all the crypto money go?

• Chart Crime of the week

• Jake can smell the oil burning

This week in the markets was a perfect example of the recent choppy action as the narratives ebb and flow.  Last week’s fear and loathing over Artificial Intelligence killing humanity quickly faded.  Cooler heads prevailed – it was obvious that much of the doom and gloom was a scare tactic by the incumbents (Anthropic and OpenAI) to entrench their moats and shield themselves from liability.  Maybe more importantly, Meta released a product that might show there is light at the end of the AI tunnel in terms of monetizing all this insane capex spending.  It is too early to tell when “Agentic AI commerce” will be adopted.  And there will likely be numerous competitors traveling down this path with countless potholes:  How will it affect the ad business which is the backbone of the internet?  Will fraud run roughshod (people are already “joking” about setting up agents to file millions of fraudulent refund claims for products they never bought)?  Will merchants adopt and accept this new technology – Amazon has already kicked Meta’s Muse off its platform; Shopify has embraced it.  But overall, this step was what the market wanted to see…real life applications and not just silly chat bots.  Also, the much-feared collapse in compute prices is still not imminent. Neocloud Nebius (basically a reseller of compute) is raising prices…the demand is still rampant.  But not all the AI talk was positive. Oracle is warning its data center partner (Blue Owl who is providing much of the equity financing) that it might not pay for the datacenter.  Or at least that was the headline.  Of course, Oracle said it would not pay for the datacenter if it was not up and running on time.