MSTR & STRC Hurt by Macro, BTC Steady.. AI & Risk-on Sell Off All Linked to Yields, Oil, and MidEast

0:00 Hello everybody. So this video is entitled MSTR hurt by the macro sell-off. MSTR is hurt by the sell-off in broad indices which get confounded with risk-on. It's it's a general sell-off of anything that is so-called risk-on by the market. And of course, this sell-off is trigger triggered by yields, right? Really bad CPI this past Wednesday, really bad PPI this past Thursday, really bad Kevin Warsh speech this past Friday which actually led the odds of rate hike for December and January go up. This is all triggered, of course, by the bigger underlying issue of oil prices. And these oil prices are so high because of a little mistake in the Middle East.

0:53 to say at least a little mistake. That's the reason why we're not getting the 2026 that, you know, we've all been waiting for. That's the reason why the market has been troubled. The market has been broken this decade. This This is not like the 2010s. This is a decade of a broken market. And so MSTR, unfortunately, is also being hurt by all of this macro nonsense. So be before I start, I just want to say, and you know, as predicted, right now everybody's fearful about Monday's open. You have viral posts calling for a black Monday. I saw a very nice thread on X talking about how these posts were wrong with 17 last time they called for a black Monday. But you have posts yet again calling for a black Monday. They do this for engagement. They want you to click on their posts. They want you to follow.

1:49 And of course, being negative helps much more than being positive. Anything positive, by the way, is not going viral at all. If you actually looked at the All-In podcast, they were overwhelmingly positive except when talking about Coreweave, but we've always known about Coreweave's debt issue. It's idiosyncratic. It's Coreweave specific. The market is just saying it's the whole sector. It's not the whole sector. The debt of Coreweave is only about Coreweave, right? They signed their contracts too early. They signed long-term contracts before the prices reached levels of today. And so now they're caught, you know, between a rock and a hard place cuz cuz now they got to refinance not refinance, they got to finance 35 billion at much higher rates and the economics may not work because they signed these long-term contracts, right?

2:42 Very positive to our podcast. It's not going viral. I'm not seeing these clips going viral, you right? And I saw a few clips of this podcast. They don't go viral. They don't get the millions of views. What gets the millions of views is the black Monday, right? I I mean I mean it's it's it's crazy. The algos are just so bad on these social media. I understand why people are are just taking off social media for a week and going on vacation, etc. You may just stay at home and close social media, close the stock market, and then your mood comes back up. Anyways, risk-on stocks are caught in this fear trade. And if you if you look at stocks that that really have nothing to do with each other. I just I just took three stocks I've covered on the channel before, right? So Strategy, the topic of this video, Hims, darling of the channel, covered it a long time, and then Micron, right?

3:34 Micron, stellar company, stellar Q3, in the heart of the next bottleneck of AI. And if you look at the chart, whether it's Micron, whether it's Strategy, whether it's Hims, they're down 10%. And it's par for the course. Everybody's down 10%. Every Every company that is at the edge of innovation is down 10% even though they may not be at all in a situation like CoreWeave. None of these companies have anything to do with CoreWeave. But they are still down exactly the same. And and I will point out what I pointed out in in my prior video on this, which is Bitcoin barely moved.

4:15 Minus 1% in 5 days. That's that's not that's not a move worth writing home about. It's It's not really a move. It hasn't moved. Bitcoin hasn't moved. It's down 1%. It hasn't moved. But the stocks have moved tremendously to the downside. So this tells me this is some some contagion level Wall Street type sell-off and not a sell-off triggered by Bitcoin prices. But case in point is if you look at strategy, strategy was hurt by Wall Street. Strategy was hurt by the macro sell-off, which is all about the inflation, which is all about the oil prices, which is all about the Middle East. And and and if you if you if you look at the MNAV, unfortunately we've compressed tremendously on the MNAV.

5:01 We're at 1.18 MNAV at the at the start of this week. Now at the end of the week, we are at 1.07 in after hours. 1.07. We move from 1.18 to 1.1 1.07. So 1.18 was already not very juicy to do the common ATM. At 1.08 you really don't want to do the common ATM. So my guess for the the buy that Saylor announced, I'll get to that in a second, but my guess for that buy, right, we found more room for orange. We found room for more orange. I guess that buy is going to be a small buy, you know, like 100 million, 200 million, something like that. My guess is it's going to be a very small buy because there's just no room to ATM at 1.08 MNAV. And and so this continues what I've been saying for strategy and what frankly I've been saying for a lot of stocks in 2026 is we need to wait for the macro situation to improve. We need to wait for the Middle East to improve.

5:57 Now it looks like the Middle East is not improving. So what does that mean? Well, what that means is that we need to wait now for market participants to forget. And so if this conflict last, you know, 7 years, 10 years, 15 years, market participants will start to forget, right? But forgetting a big macro problem for a market usually that takes about 18 months, right? Between a year and 18 months for a market to forget. So if the Middle East situation is going to be ongoing for a decade, we probably have another 8 months of the market working on forgetting.

6:36 And by the way, the Emirates are working very hard on these pipelines and so and so the problem may be avoided all together as some of these new pipelines get opened up. Hopefully, and hopefully it doesn't worsen. Like let's let's maintain the status quo and not worsen the situation. But but this is all because of because of rate expectations and rates going higher up. And and and it's very unfortunate, right? And so so I'm happy to see this fear and greed back below 50. I think that I think that's very healthy, you know.

7:08 You know, Bitcoin's holding up so well. 81 I'm surprised that Bitcoin is so high when you consider how bad the macro is. I mean the macro could not be worse. We've had no positive developments in the macro. Zero positive development. We've only had negative developments in the macro, right? The the 10-year hit a 5.3. Okay, it retreated a little bit, but we're at 5.3% on the 10-year on the Treasury yield 10-year. It's crazy. So so we haven't had positive news and Bitcoin is holding up at 81,000. Think about that. That's I mean we can be very proud of Bitcoin. I'm I'm just very impressed of of Bitcoin right now. It's very impressive. Very impressive. So, anyways, what's going on in this market? Same story since March. Same story as ever.

7:55 The Middle East need to be resolved. If you resolve the Middle East, the oil prices will be resolved. Or at least the expectation of oil prices stopping going up and eventually moving down, that will hit the inflation number and the inflation numbers will be resolved. And if the inflation numbers are resolved, the interest rates are not going higher. Unfortunately, as long as the Middle East keeps going on, oil prices keep go keep going up or staying up, inflation keeps staying up and interest rates keep going higher. This is the unfortunate situation. That's why AI crashed, by the way. Why did AI crash? Because of the debt Well, at least market participants are claiming it's mostly because of corporate debt hitting 15%. Why did that debt get so high? Because the market is anticipating that they're going to have to borrow at a much higher interest rate. And why are they going to have to borrow at a much higher interest rate? Because of the expectations of interest rates in the market in general. Because of the awful tenure, because of longer-term debt being way higher than 5% to the 30-year is way higher than 5%. And also because of this this change in rate hikes. Like we we Like okay, so it seems like we're not getting a hike in in in October 28th. So, that's that's pretty good. but this is what has changed a lot is a December rate hike.

9:21 We now could get a December rate hike and we could get a January rate hike. well, may we don't know if it's going to be January or March, but we could get we could get a rate hike, you know, probably in March. So, so two more and then another rate hike maybe in maybe in in in June of next year. So, three more rate hikes. That wasn't like that before. This is what the market is anticipating. This is what the market is is reacting to.

9:47 And so, Bitcoin going up is really not helping Stretch that much because as as Bitcoin's going up, the rates are also going up in lockstep in the same in the same vein, the rates are going up. So, so so we we're fighting an uphill battle. Like like we're getting better. but that's not helping the stock price of Stretch because the macro situation is getting worse and the yields are getting worse as as at least as far of a perspective of strategy having to pay the yield or these issuers having to pay the yield. This is just a really bad macro.

10:22 And that's why Stretch can't get back to 100 when the risk-free, quote unquote, big quote unquote here, when the risk-free yield keeps climbing at the same pace as the creditworthiness of Stretch, we can't get to 100. So, so and we have the last thing, which is the risk assets are hurt because why are risk assets hurt right now? And strategy, of course, is a risk asset. But but but you know, stocks in general, Nasdaq the Nasdaq, why is everything hurt? Because stocks, remember, are the present value of future cash flows. And the present value of future cash flows is getting much lower. Why? Because of the higher discount rate that you put in the estimates because because because the risk-free rate that you input in the estimates keeps being higher. So, analysts, Wall Street in their little models, they keep saying, "Oh, the risk-free rate is going to be this high.

11:15 So, we need to lower the stock price right now to justify getting to that terminal value." And and that's that's the big problem. I mean, I mean, these companies could be doing much better. But what if it what if it what if a 10-year moves from 5% to 6%? Like, you know, that's that's a near that's a not quite that's a near 20% increase. So, it doesn't really matter that your revenue growth or your earnings growth is going up 20 to 30% if the risk-free rate is also going up 20 to 30% in a year, which is what has been the case in in in 2026.

11:48 And it's all because of the Middle East. So, it's completely nonsensical what it what what is happening. And it's unpredictable, of course it's unpredictable because it's it's it's it's it's very much akin to randomness and and gambling. You got in in the medium term because this is not short term anymore. This madness is now medium term. In the medium term, it's a handful of men and their their whims and their decisions who decide where this whole situation is headed, right? Besant, Poitras, and Walsh. These are the big players. And and and it's just it's just just just extremely frustrating. Extremely frustrating because you do fundamental analysis, you do all of these and then you find out that really the biggest skill you can have in this market is patience. That's the biggest skill in Oh, has our patience been tested. And unfortunately, it looks like we're not going to have good macro news at the open tomorrow Monday morning. It looks like we're not going to have macro news.

12:53 You know, oil oil is way up. Brent is way up. And it looks like the over conflict over there, you know, sending a thousand drones to oil terminals. And of course, the first casualty of conflict is is truth. Like, I have no idea what's going on over there. The market has a very hard time figuring it out. But either either way, that's that's not that's not very good news. And so and so, you know, I'm I'm not happy about it. I'll be here. I'm still waiting. We're just We're just waiting. That's all we have to do. We're still We're still waiting, you know.

13:26 Kind of wish Sailor stopped doing anything and just just just went silent and waited for another 3 months. Maybe in another 3 months things will be looking up. We'll see. Anyways, this was not investment advice. This is not financial advice. This is only entertainment. I'm hoping you are entertained. Please like. Please subscribe. Follow me on Patreon. Follow me on X. Thank you for watching and have a wonderful wonderful day.