There’s nothing quite like a half a trillion dollars appearing then disappearing from a single stock within the span of a trading session.
If it doesn’t make you question the “value” of your portfolio, you’re like the scarecrow in Oz.
Here we are, business as usual, on the way to the top of the AI investment bubble. It’s as if a caffeinated stage magician is orchestrating the indexes.
At the very least, if you’ve taken some profits off the table and you’re calm enough to observe the headlines, you’ll also appreciate that days like yesterday are an engaging study in collective behavior. It also provides as good a reason as any not to trust your retirement on big-name, headliners like Nvidia.
Nvidia’s $900 billion round-trip this week wasn’t about some revelation in Jensen Huang’s chip factory. The business is firing on all cylinders – and may yet be one more reason for the market to soar higher into 2026.
The culprit was the macro — one gust of wind from the labor market and trillions in valuation shifted like sand dunes.
Nvidia’s earnings lifted the market at the open, but the jobs report’s undertow snapped sentiment like a dry twig. As we pointed out this morning, the S&P notched its biggest intraday reversal since April.
The first half of the move was classic Wall Street choreography: blowout earnings, analysts breathless with adjectives, and every fund manager terrified of underweighting the patron saint of AI.
That’s how you get a $450 billion melt-up at the very top of the index.
We’ve been concerned with the concentration of capital in the Magnificent 7 since the June 2024 Goldman Sachs report expressing the same. Nvidia has been auditioning for the lead role of Cisco Amid-The-Bubble, a remake of the 2000-01 dotcom bust ever since. (Source: Bloomberg/Stephen Roach)
Then came the jobs report, a chilly splash of realism across the collective face. Hiring slowed, but not enough to force the Fed’s hand. Rate-cut odds sagged toward “don’t count on it,” and suddenly the altar of long-duration tech didn’t look so sacred.
Nvidia, the biggest, most liquid, most over-owned boat in the harbor, became the easiest one to dump for cash.
Cue the $450 billion slide.
A play-by-play offered up by Adam Kobiessi also provides today’s entertaining exhibit of crowd psychology near the frothy top of the S&P 500. If you’ve got the cojones, you could try to trade options on these ETFs. But if you’re simply trying to manage your own money, we wouldn’t advise it. (Source: The Kobeissi Letter)
In more poetic terms, yesterday’s session arrived with a bright grin and left through the back door muttering to itself.
The VIX leapt higher — fear finally remembering its job — while tech stocks tried to explain why borrowing tens of billions to build data centers at 5.5% interest might not be a sustainable business model.
Crypto? Bitcoin ETFs stopped hemorrhaging for a day… then resumed bleeding when traders remembered that volatility cuts both ways. Mark Jeftovic’s comments on Grey Swan Live! were about as timely as we’re likely to ever get chatting about investments in real time. (Replay details below).
Why the Crash? The One-Headline Theory
At these valuations, stocks don’t need much of an excuse to make money managers twitchy at the trading desk.
Yesterday, the excuse arrived at 11:20 a.m., when the Labor Department announced it would delay the release of the missing October jobs reports until December 16.
Bureau of Labor Statistics (BLS) estimates released yesterday show the U.S. economy created 119,000 jobs in September, higher than the 51,000 expected by Wall Street. If past is prologue, however, the number is likely overstated. (Source: Bureau of Labor Statistics)
The Fed, the crowd knows, will head into its December meeting without fresh data — a kind of economic blackout.
In forty minutes, $2 trillion of market cap evaporated. Poof. Odds of no rate cut soared.
The reality is more straightforward: if you’re paid to watch investments for a big bank or hedge fund… you don’t want to be the arsehole who held on too long.
When the herd shares common beliefs, momentum provides its own incentive. One minute, everyone thinks the future belongs to AI and its infrastructure build-out. In the next, every reminder that there’s a real-world economy behind it, looks like a pin.
Jensen Huang Lights a Candle
To calm the herd, Nvidia’s CEO took to his podium and performed the modern equivalent of FDR’s fireside chat.
“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point, we see something very different.”
Investors exhaled. According to Huang, Blackwell chip sales are “off the charts,” cloud GPUs are “sold out,” and AI is “going everywhere, doing everything, all at once.”
Even better: the path to $500 billion in accelerator revenue — laughed at a month ago — now looks merely implausible rather than insane.
If you squint, you can almost see the next 20% melt-up rally.
Walmart Leaves the NYSE
Unlike its less-well-visited cousin, Target, Walmart reported a robust quarter: global online sales up 27%, low-price strategy working, affluent consumers showing up in surprising numbers, holiday optimism brewing.
Then it dropped the real bombshell: it’s leaving the New York Stock Exchange for the Nasdaq. The largest market-cap departure in NYSE history.
Why? Walmart now considers itself a tech company. For real.
With AI-driven logistics, a booming ad business, smart TVs through Vizio, and a partnership with OpenAI that allows shoppers to reorder groceries through ChatGPT, the humble Arkansas retailer is beginning to resemble Silicon Valley, albeit with better parking.
CEO Doug McMillon is stepping down, but the digital pivot will continue. If you want a consumer bellwether for 2026, Walmart is it.
Oracle Becomes the AI Bubble’s Mood Ring
In credit markets, Oracle has become the canary in the $7 trillion AI coal mine. The firm borrowed tens of billions to chase the data-center boom and embedded itself in a dense web of AI-related deals.
We haven’t made a specific call yet, but something wonky about private credit has been capturing our attention for most of the 2025 run-up in the indexes. (Source: Bloomberg)
Now traders are piling into Oracle’s credit-default swaps as the easiest way to hedge the AI complex. Swap volumes are surging, liquidity is thinning, and Goldman reports a wave of macro shorting across ETFs and futures.
Lenders have started hedging aggressively. Where there’s smoke…
BlackRock’s CLO Problem
It gets worse. The world’s largest asset manager quietly waived millions in management fees to prevent one of its corporate-loan funds from failing an over-collateralization test.
Translation: too many borrowers in the portfolio couldn’t repay their loans.
Companies collapsed. Fraud investigations spread. Defaults jumped.
BlackRock has patched the hole, but the hull is still cracked.
Andrew Packer has been looking askew at the private credit markets for over a year now. These rising defaults – often hidden in terms such as “equity stake” or “payment in kind (PIK)” mask trouble in the credit markets.
Our premise is: with AI sucking up a lot of oxygen in the stock market, the K-shaped economy increasing the divide between regular folks and the billionaire class… something’s gotta give.
The private credit market may be harboring one of those crisis points that could dominate headlines soon…. sending individual investors scrambling for an explanation of exactly what “private credit” is.
Private credit now stands at $1.7 trillion — much of it lent to shaky middle-market borrowers with optimistic cash-flow models.
If BlackRock is struggling to keep its structures upright, imagine the chaos that would ensue when the smaller, hungrier, and less competent managers reach their breaking points.
That’s when the trouble starts.
The Jobs Report: Good, Bad, and Useless
The long-delayed September jobs numbers finally arrived. Payrolls beat expectations — 119,000 jobs added. Good news on paper.
But unemployment jumped to 4.4%, the highest in four years. Worse, August’s report was revised from +22,000 jobs to –4,000. This has become a habit.
Zoom out: Healthcare and hospitality created 100% of net job growth in 2025.
Every other sector is shrinking.
This leaves Jerome Powell in a jam. Without a fresh October report — and with the November report landing after the Fed meeting — he’s flying blind.
No data, no clarity, no rate cut.
Which is why the market panicked yesterday.
Thanksgiving Travel: Bus Edition
Today begins the most traveled week of the year. Airports remain snarled from the shutdown’s after-effects, if less so than last week. Trains, travelers are discovering, offer little price discounts to air. So buses — yes, buses — are enjoying a renaissance.
Greyhound bookings are up 17%. AAA expects 82 million Americans will travel 50 miles or more from home this Thanksgiving.
Despite absurd political differences, we are still a nation willing to go to great lengths for a piece of pie. And a good ‘ol alcohol induced family dust-up.
~Addison
P.S. Yesterday’s Grey Swan Live! with Mark Jeftovic and Ian King may prove one of our more timely episodes.
Mark and Ian covered key developments in stablecoins and how the current selloff impacts our “Dollar 2.0” digital asset thesis. Including specific guidance on the stocks in your Dollar 2.0 research report.
Yesterday’s video is now available for Grey Swan members on our site.
Meanwhile, we’re about to go live with your tax planning event this afternoon (Friday, November 21, 2025 at 2pm EST/11am PST).
We’ve invited our friend Nick Buhelos from Prime Financial Services back to help you with tax planning for your investment portfolio ahead of the holiday season and closing out the trading year 2025.
Nick will walk you through the correct financial structure you need totake advantage of explicit IRS business rules that apply to individual investors, including the new tax structure from the Big Beautiful Bill that starts January 1, 2026.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
