Casino
October 29, 2025
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–FOMC today, followed by earnings reports for MSFT, META, GOOGL with AAPL and AMZN Thursday. Stock index futures again pressed higher as NVDA announced deals all over the world. From @KobeissiLetter: BREAKING: Nvidia announces partnership with Palantir. This Nvidia event is crushing every possible expectation by a mile.
–NVDA market cap nears $5T. XOM and CVX combined are around $800b. Russell 2k total cap ~$3.4T.
–The Fed Effective rate ticked up to 4.12 on Monday. From there, a cut of 25 equates to 3.87 or 9613. However, FFX5 settled 9615.0. Perhaps the 4.12 print is an outlier and 4.11 should be EFFR. I suppose there’s a bit of premium just in case Miran gets his way for a 50 bp cut. Jan Fed Funds ended 9639 or 3.61. So another 25 is priced for the December meeting. QT will likely end today as bank reserves no longer appear to be ample. I would anticipate a negative market response if QT does NOT end.
–New lows once again in treasury curve measures. 2/10 edged to a new low 48.7 with 5/30 at a new recent low 93.3. Ten year yield eased another 1.6 bps to 3.979 (with TYZ5 113-150). SOFR strip slight flattening: SFRZ5 9636.0, -0.5, Z6 9700, -0.5, Z7 9690.5 +0.5 and Z8 9671.5 +1.0. As boring as it looks.
–What I was somewhat struck by yesterday is weakness in gambling stocks. Spillover from NBA betting scandal? Or just the realization that a large chunk of the financial architecture resembles a rigged casino? DraftKings (DKNG) tested April’s Liberation Day low. FLUT (parent of FanDuel) had its weakest close since May. Casino stocks also weak: WYNN, MGM, BYD all soft. Perhaps unsurprisingly CME and ICE also ended lower on an up day. This month Polymarket bought derivatives exchange QCX in order to regain access to the US market. Could it be that it’s now just the rats eating the rats?
