DHUnplugged #822: Flying and Lying

AI leaves the building.

Five days at the podium – that is it?

Tesla finally takes flight…

$500 toothbrush can’t handle water.

LESSON – DO NOT MIX YOUR POLITICS WITH MARKETS

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

Love the Show? Then how about a Donation?

Follow John S. Dvorak on X

Follow Andrew Horowitz on X

Warm-Up

- AI leaves the building

- Five days at the podium

- Tesla finally takes flight

- $500 toothbrush can't handle water

- LESSON - DO NOT MIX YOUR POLITICS WITH MARKETS

Markets

- AI trade starts to crack

- Two trillion deeper in debt

- Hot inflation, cooler yields

- Earnings face the pressure test

DHU MAILING LIST! - Go to DHUnplugged.com

Trump Media's fusion fizzles

- DJT shares headed toward an all-time low Friday despite its pending merger with nuclear-fusion developer TAE.

- TAE shareholders would receive Trump Media stock, leaving them exposed to the declining share price.

- Billions in Trump's paper wealth have evaporated since the company went public.

DJT Stock

INFLATION WON'T LEAVE

- September CPI rose 0.6%; annual inflation hit 3.7% versus 3.6% expected.

- Core prices rose 0.3% versus 0.2% expected; annual core inflation reached 2.6%.

- Producer prices jumped 1.3%, the biggest increase since March 2022; up 6.3% annually.

- Wholesale goods prices rose 2.6%; services increased 0.8%.

TWO TRILLION SHORT

- Fiscal 2026 deficit reached $1.992 trillion, up $217 billion; third-largest on record.

- Revenue rose 3% to $5.4 trillion. Spending increased 6% to $7.4 trillion.

- Debt-service costs climbed 12% to $1.36 trillion; national debt exceeded $40 trillion.

- Tariff refunds totaled $145 billion following the Supreme Court ruling; net tariff revenue fell 11%.

BONDS FIND BUYERS

- The 10-year Treasury ended the week near 5.10%; the 30-year near 5.44%.

- The 30-year yield fell about 16 basis points, its biggest weekly decline since April 2025.

- Yields declined for the week despite hotter inflation reports.

AI TRADE UNRAVELS

- Nasdaq suffered its worst week since June, ending a four-week winning streak.

- Semiconductor ETF SOXX posted its longest losing streak in 20 years.

- VIX moved above 20 as investors questioned AI spending and investment returns.

- Energy, utilities and consumer staples attracted interest during the tech retreat.

COREWEAVE CREDIT CRACKS

- Five-year credit protection reached 1,194.5 basis points, a record intraday level.

- Swaps implied more than a 60% probability of default within five years.

- The gauge jumped as investors reacted to plans to tap insurance capital.

- CoreWeave's speculative B rating and bond yields above 10% highlight refinancing pressure.

- The 60% figure is market-implied pricing, not a confirmed default or a near-term deadline.

LENNAR FINDS A FAMILIAR BUYER

- Hunterbrook alleges Millrose, spun off by Lennar in 2025, bought roughly $200 million of Lennar homes.

- At least 356 purchases allegedly closed during the final week of Lennar's fiscal quarter.

- The report claims Millrose paid above individual-buyer prices, then rented homes at unattractive yields.

- Lennar fell 6.7%; Millrose dropped 8.5% after the report. Hunterbrook disclosed short positions in both stocks.

- Both companies declined comment on specific claims; one analyst questioned whether purchases were material.

LEN Stock

****ALL THE ABOVE ARE RELATED****

(Warren Buffet would say that when the tide goes down is when you can see who is actually swimming naked)

DAVOS IN THE DESERT GOES DARK

- Saudi Arabia postponed its flagship investor conference until next year after Houthi attacks.

- Riyadh airport remained closed; earlier plans for remote attendance were scrapped.

- No new date for the event, a showcase for attracting investment beyond oil.

BUILDERS CUT, BUYERS WAIT

- Builder confidence fell to 29 from 32,