📈 Friday Crash, Monday Comeback

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Good Morning & Happy Monday

Grab your cappuccino, today’s newsletter dives into Wall Street’s rebound after Trump’s tariff U-turn, a crypto crash marred by insider-trading claims, and Xiaomi’s EV tragedy shaking investor confidence. Plus, we explore Strava’s IPO plans, the AI boom’s hidden risks, and why there’s no such thing as “cash on the sidelines.”

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Market News

📈 Wall Street Recovers From Friday’s Selloff After Trump Calms China Tariff Fears
Wall Street is set for a strong rebound as U.S. stock futures climbed sharply Monday morning, with the Dow up 1% and the Nasdaq jumping nearly 2%, following President Trump’s softer tone on China trade tensions. After Friday’s $2 trillion market wipeout, Trump’s remarks on Truth Social and to reporters suggested a possible thaw in the standoff, easing fears of a deeper trade war. Still, he maintained that new 100% tariffs on Chinese goods could take effect Nov. 1 unless a deal is reached.

🤔 Crypto anger as speculators claim insider trading in Trump crash
Crypto markets were rocked after Donald Trump’s threat of 100% tariffs on China sparked a sudden sell-off, wiping out $400 billion in value within 24 hours. Reports suggest an anonymous trader made up to $200 million by shorting Bitcoin and Ethereum just 30 minutes before Trump’s announcement, fueling insider trading allegations. Bitcoin fell 6.1%, Ethereum 8.3%, and Dogecoin 17.7% before partially recovering as Trump later softened his tone toward China.

📉 Dollar stumbles after Trump tones down tough talk on trade
The U.S. dollar slipped Monday as investors bet Washington would ease its trade tensions with China following Friday’s market turmoil. The dollar index fell 0.1% to 98.91, extending losses after Trump’s threat of 100% tariffs on Chinese goods reignited global jitters. Meanwhile, political instability in France and Japan weighed on the euro and yen.

🔋 Xiaomi shares see biggest drop since April after fatal EV crash sparks safety concerns
Xiaomi shares plunged over 5% Monday after reports that a fiery crash involving its SU7 electric sedan left one person dead and doors that failed to open during the blaze. The stock dropped as much as 8.7% in Hong Kong, its steepest fall since April, after footage of the burning car went viral on Chinese social media. The tragedy has renewed scrutiny of electronic door handles, a Tesla-inspired design now under review in China for potential safety risks.

🏃 Strava eyes IPO as Gen Z trades dating apps for running clubs
Strava is reportedly gearing up for an IPO, with CEO Michael Martin confirming plans to go public as the fitness app’s popularity surges among Gen Z. Valued at $2.2 billion, the San Francisco-based company now boasts 50 million monthly users, up 80% year-over-year. Strava’s rise mirrors a cultural shift toward social, sober fitness communities, as young people swap dating apps for running clubs, turning workouts into a new form of social currency.

Invest & Strategies

😅 Is This the Top?
Are we nearing the top? Paul Tudor Jones believes the market may be headed for a “melt-up”, a blow-off rally reminiscent of 1999, fueled by AI optimism. Ben Carlson argues that while the AI boom is powering growth, it also leaves the economy vulnerable if spending slows. Whether the bubble pops or not, he says predicting the end is impossible, investors should prepare for a range of outcomes, not chase calls for tops or crashes.

📈 Why the Real Risk in AI Isn’t a Bubble
The AI boom may not be a bubble, but it’s creating serious risks. While today’s rally is driven by highly profitable tech giants, not speculative startups, sky-high valuations compress future returns, leaving investors vulnerable to short-term shocks. The author argues that AI’s transformative power brings “creative destruction” on an unprecedented scale, potentially disrupting even today’s biggest players. With U.S. stocks now acting like long-duration assets, investors may want to diversify away from concentrated AI bets, especially if their time horizons are short.

💸 Tax brackets and rates for 2025-2026
Think you know your tax bracket? It’s more nuanced than you might realize. Your income isn’t taxed at a single rate, it’s divided into portions, each taxed at different levels known as tax brackets. For 2025 and 2026, there are seven brackets ranging from 10% to 37%, with the IRS adjusting income ranges annually for inflation.

😂 Stop Saying There’s ‘Cash on the Sidelines’
“Record cash on the sidelines” isn’t the bullish signal it sounds like. While money-market assets hit a record $7.7 trillion, that rise simply reflects a larger overall market, not untapped buying power. As portfolios grow, cash balances grow too, even if allocations stay the same. In fact, cash as a share of total market value is near record lows, meaning there’s no mysterious pool waiting to flood stocks, just a bigger market and bigger numbers.

👀 Behind the Rally: Record Call Buying
Stocks have ripped higher, the S&P 500 up ~33% since April, but under the surface, single-stock volatility is surging even as index vols stay “mid.” Record call option buying has fueled a “stock up, vol up” dynamic, echoing 2021’s speculative energy but with far lower correlations across names. Analysts note that vols look expensive relative to realized moves, suggesting the market’s conviction is soft and hedged, investors are adding exposure through calls, not outright stock buying. The setup points to a potentially stabilizing pullback, with traders eyeing put spreads or calendars as smarter downside plays.

Our Recommendations:

💻️ MEXC - Where we find and trade Crypto with low fees.
📈 TradingView - Software we use to chart stocks.
🔐 Trezor - Our favorite hardware wallet to keep our Crypto secure.
🦑 Kraken - Where we buy crypto with cash / withdraw profit to our bank.