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AI Bubble? Research Firm Says the Hype Has Already Peaked Artificially low interest rates drove billions into artificial intelligence, but independent research firm MacroStrategy Partnership warns the boom has already hit its limits. The firm, led by former UBS strategist Julien Garran, argues the AI surge isn’t just another bubble — it’s potentially 17 times larger than the dot-com crash and four times bigger than the 2008 housing collapse. Cheap Money, Bad Allocation Their analysis leans on economist Knut Wicksell’s principle that capital is best allocated when corporate borrowing costs stay above nominal GDP. Instead, a decade of ultra-low rates distorted the system, funneling trillions into misallocated assets: AI, housing, real estate, NFTs, and venture capital. LLMs at the Breaking Point The research also casts doubt on AI’s technological foundations: With no clear competitive moat, escalating costs, and weak commercial applications, MacroStrategy sees diminishing returns setting in fast. Risk of Recession Ahead The firm warns this could trigger a reversal similar to the dot-com bust in 2001. If data-center spending and wealth effects stall, the economy — already slowing — may tip into recession. Policy options for the Fed or the Trump administration could prove limited, raising the risk of a drawn-out reflation effort, like after the early ’90s S&L crisis. Where to Invest Instead MacroStrategy advises: John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Wall Street Fear Could Push Stocks Higher, Says Popular Newsletter Editor Stock futures slipped as the fourth quarter begins under a government shutdown and without key jobs data. But one closely watched market voice says nervous investors may actually be setting the stage for more gains. The anonymous author of Lord Fed’s Gazette — Substack’s 13th most popular finance blog — argues that Wall Street’s so-called “smart money” remains too skittish. That hesitation, he says, will only give the S&P 500 more room to run. Lord Fed’s calls have been on point before. In August, he predicted the index’s move to 6,500 would launch a new leg higher. By September, the S&P had logged eight record closes in a month and 23 for the quarter. But hedge funds are still blinking. Goldman data shows managers cut tech exposure at the fastest pace since August as the S&P neared 6,700 — even after sitting out most of the rally. “They’re selling into strength because they’re convinced this is the top,” Lord Fed wrote. “That’s not how tops happen. That’s how bull markets extend.” His bottom line: fear is fuel. And after the latest round of selling, his 7,000 target for the S&P looks more likely than ever. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

S&P 500 Heads Into Historically Strong Fourth Quarter The S&P 500 is closing out the third quarter with a 13% year-to-date gain and record highs, setting the stage for what has historically been its strongest stretch of the year, according to Bespoke Investment Group. Since 1928, the index has averaged a 2.1% return per quarter, but fourth-quarter gains have been higher at 2.9%. When the S&P enters Q4 already in positive territory, average returns jump to 4.4%, with gains in more than 83% of those years. Bespoke noted that this trend has become even more pronounced over the past 30 years. So far, 2025 has delivered steady momentum, with the benchmark on track for a fifth straight monthly gain and a third-quarter advance of over 7%. Investors are also monitoring broader economic signals: the Fed resumed rate cuts this month, GDP growth was revised up to 3.8% for Q2, and a possible government shutdown threatens to delay key labor market data. Markets started the week higher, with the S&P 500 up 0.3%, the Nasdaq Composite climbing 0.5%, and the Dow adding 0.1%, per Dow Jones Market Data. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Investors Are Rethinking AI’s Trillion-Dollar Spending Spree Stocks opened the week at record highs, but momentum has faltered. The S&P 500 (SPX -0.50%) has now dropped three straight sessions, down 1.3% overall. Some of the weakness can be traced to stronger economic data that pushed bond yields higher, along with Fed Chair Jerome Powell’s cautious stance on rate cuts and his warning about lofty equity valuations. But there’s also a bigger question hanging over the bull market: whether Wall Street’s AI boom has gone too far. That mood shift may have started Monday, when Nvidia’s Jensen Huang and OpenAI’s Sam Altman unveiled plans for a $100 billion investment during a CNBC interview. By Thursday, hedge-fund billionaire David Einhorn gave voice to growing unease. Speaking at the New York Stock Exchange, the Greenlight Capital founder warned that the enormous sums earmarked for AI infrastructure—hundreds of billions annually—risk destroying vast amounts of capital, even if the technology itself proves transformative. “The numbers being thrown around are so extreme that it’s really hard to understand them,” Einhorn said, according to Bloomberg. “There’s a reasonable chance that a tremendous amount of capital destruction is going to come through this cycle.” His skepticism mirrors his long-running complaints about market inefficiency, from frenzied crypto bets—he once called it the “fartcoin stage” of the cycle—to today’s AI arms race. Einhorn also flagged faltering U.S. job growth and shrinking workweeks as signs the economy may already be in recession. And the shift in AI sentiment is spreading. On Friday, CNBC’s Jim Cramer wrote on X that while he once saw endless praise for the data center buildout, he now sees only warnings of bubbles, waste, and an impending crash. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com