Why the Midterms Matter for Market Liquidity | Macro Mondays: Nov. 2, 2026

With the U. S. midterm elections just one day away, Andreas Steno and Mikkel Rosenvold are back to break down the forces shaping markets as November gets underway. They examine the battle for control of Congress and what the outcome could mean for markets, the disconnect between surging AI investment and selling pressure across technology stocks, and why liquidity could become the next major market catalyst. 🏆 The Real Vision Trading is now open! The best trade ideas on the platform compete for $80,000 in cash. 📈 Trading League: https://realvision.com/your-future Timestamps: 00:00 - Welcome to Macro Monday's 01:25 - Three News Items: Anthropic Q3, ISM & Iran Oil Drop 02:26 - Iran Peace Deal: Trump’s Way Out 03:30 - Real Vision Trading League Launch 04:31 - October Market Panic: Liquidity & Hedge Fund Deleveraging 06:31 - Extreme Positioning & October PPI Turning Point 08:36 - Peace Deal Could Spark Rally Like April 09:12 - US Midterms: Michigan, Texas & Democratic Sweep 13:29 - Lame Duck Period: Appropriations & Debt Ceiling 15:19 - Anthropic: Fastest $1B to $75B Growth in History 16:42 - “No More AI CapEx” Credit Investor Consensus 18:09 - Tech Sector Priced Below 2022 Bottom 20:02 - Anthropic IPO: Why Steno Prefers OpenAI 21:19 - GPU Spot Prices Soaring Since October 22:06 - LLM Margins & Commoditization Debate 24:01 - This Week on Real Vision: Drill & Drinks with Raoul 26:10 - Positioning: Semiconductors Still Look Great 27:45 - Closing Thoughts Learn more about your ad choices. Visit podcastchoices.com/adchoices

• 0:06Speaker 00

  Hello all there, welcome to Real Vision, welcome to Macro Mondays. My name is Michael Rosenwald and I'm calling in from a bit of a special location here. I'm at an office space in West London. I'm currently borrowing a conference room, so I hope I'm not getting kicked out. If I am, I'm sure Andreas will be here to take over because I am obviously joined as usual by you, Andreas. Welcome to the show.

• 0:27Speaker 01

  Thank you, Michael, and it's good to see that you actually spend some time in our London office. I'm not too good at that, but yeah.

• 0:34Speaker 00

  And you know, Andreas, it tells a lot about video settings because I look like I just spent the last three weeks in the south of Spain while you were in the North Pole. But that's absolutely not the case. You were with me in London for most of the weekend and yeah, it's just a matter of lighting that I look like I'm a complete sunburnt here. I am mostly definitely not, you can attest to that. We have a great show for you guys today. We're going to be talking obviously a little bit about the US midterms, but also looking at this big de-crossing and the AI trade. Looking a little bit about the liquidity plumbing heading into November and what might be in store for us. So hopefully breathing a bit of hope into a very, very, very bad mood in markets, Andreas, here.

• 1:19Speaker 01

  Michael, can I start with three quick ones?

• 1:22Speaker 00

  Before we...

• 1:23Speaker 01

  Yeah.

• 1:24Speaker 00

  Absolutely. That sounds good.

• 1:26Speaker 01

  Yeah, we just got, you know, three major pieces of news out more or less just before we went on air. We got the confirmed third quarter numbers from Anthropic. Nothing majorly surprising about them. It is clear that they've lost a little bit of momentum during the third quarter compared to the half one figures that were known the week in advance. But still, I think they look good overall. On top of it, ISM manufacturing actually printed higher than expectations today. A bit of a surprise to me as well. It's a very benign report across the board. So activity up, prices down, orders up, employment still looks solid.

• 2:10Speaker 01

  And that's the final of the three that I wanted to mention upfront. Oil is dropping like a stone because the Ayatollah has given a green light to negotiations. So, Michael, peace deal?

• 2:23Speaker 00

  That's a big question. I mean, I put the bait of Iran running out of money at October 8th. And it might have been right. It's, we will never know for sure, but we have definitely over the past weeks seen gradual steps towards Iran easing their stance and being more willing to negotiate. I think Iran is legitimately afraid that Trump will initiate a big attack after the midterms, which is almost planned. So they are maybe trying to avoid that by getting a peace deal in. They're probably not going to make it in time for the midterms. That would be sensational if they can pull that on the eve of the midterms.

• 3:08Speaker 00

  But in any case, there's a hope that we, that the US don't have to go through this restart of the war. And I definitely think that's the bottom line. To answer your question, Iran is ready for a peace. They're going to have a much lighter peace deal or a much, a peace deal that's, contains more concessions from the side than what we have in the summer. So you have to get Donald Trump some credit there. He found himself in a hole, he stopped digging, and maybe he's found a decent way up of that hole. But obviously with huge costs to markets, which we are, we're feeling, Andreas. Before I get back to your other, to your other points and the view on markets here. Remember guys, we are running the Real Vision Trading League. It's open now.

• 3:52Speaker 00

  We're competing for over 100,000 prizes with, for, for putting together the best little three, three stock or one, two, or three stock portfolio in there. So go check out realvision.com/your-future for more on the Real Vision Trading League. You can sign up at this, you can sign up for free and get, get yourself into this contest. I'll get back to what else we haven't sold for you this week on Real Vision later, Andreas. But decent news, news out of Anthropic, very decent ISM numbers. Why the panic in markets right now?

• 4:28Speaker 01

  So we have, we have a slight plumbing issue in liquidity. I think that's noteworthy to begin with. October has been difficult for a lot of hedge funds. You and I run a hedge fund service called Nowcast. I, we've seen, to be honest, a bloodbath among clients, especially this, this month or sorry, in October, right? To some extent during the latter parts of September as well. And when there's a plumbing issue, a liquidity issue, while there is already AI fears, it

• 5:11Speaker 01

  sort of amplifies the worries around the whole funding market stress and all of that. So I think that's the simple way of understanding it. If you look at how hedge funds have actually behaved this month, it's very, very safe to say that the average hedge fund manager has taken off not sure exposure during the month. And it's probably the biggest deleveraging event that we've seen, yeah, basically over the past 10 years. I, yeah, I, I looked into some Morgan Stanley prime brokerage data and it looks incredibly nasty.

• 5:53Speaker 01

  You know, a part of this drawdown already happened. For those of you who've remembered, you know, the momentum drawdown in June and into July when Leopold Asenbrana was stopped down of his positions and all of that. Part of it happened there, but it's been even worse in October. And in, in a so-called de-crossing event, right? Essentially what happens is that positions are squared because when you, when you bring down your overall gross exposure, you basically sell what you've already bought and you buy back what you've already sold in such a book, right?

• 6:33Speaker 01

  So you basically try to bring back the overall notion of the book on both sides of the long and shorts in the book. And when we look at positioning right now, which kind of rhymes with what I said on oil and Iran to begin with, we have a market that is incredibly long oil. We have a market that is incredibly short bonds. We have a market that is net short, everything related to NASDAQ. And we have a market that is net long dollars. So I actually think it all started with the PPI report in October. Remember that PPI report, the producer part of the inflation equation came out incredibly

• 7:18Speaker 01

  hot. And 30 minutes after, bond yields were down, as far as I remember, 30, 35 basis points, something like that, which was a bizarre move in the opposite direction of what was basically supposed to happen, given the data that was coming out. That was to me very telling for the kind of environment that we saw in October, that even though many of these levered players actually had the direction right, it seems that their positioning. When a position fails to move in the direction it should, based on incoming information, it is typically a turning point for markets and something that could trigger these de-crossing events.

• 8:03Speaker 01

  I'm tempted to say now that we're approaching the, the final hours of this de-crossing event since it is the biggest that we've seen in 10 to 12 years. So they don't come around that often. And what typically happens is, is that it takes some time for markets to rebuild confidence in a direction after this. It could be fast tracked if the oil price continues to slide the way that it's, it's done today.

• 8:34Speaker 00

  That's the big one.

• 8:36Speaker 01

  And if I'm right about that whole setup, Michael, you know what it reminds me of? Late March, early April of this year, right? Because that, that kind of had the same setup. And if a peace deal is added to that mix, I'm not going to give any promises on that. I've probably used my, my ammunition in terms of, of calling for an end to this war. But if, if we get, you know, sequential progress towards a peace deal here, it should alleviate a lot of the concerns that we've seen this month.

• 9:11Speaker 00

  Yeah. That's interesting. I'm really trying to make some mental notes because in four years' time, we might be in a position where we say, oh, this was all due to the midterms. If this was actually the bottom, and in fact, it had probably had nothing to do with the midterms. If we get a huge rally out of this over the next week, we'll say, ah, that was the midterms. And in fact, that had nothing to do with that. And then, you know, I've had this question over and over for the past few weeks. Ah, we usually have a rally after the midterms. You know, we have so few observations of midterms because they only come every four years. But this could really skew that statistic. So I'm just, yeah, I'm just trying to make some mental notes of this guarding 2026 in that case. But let's not count on cheating yet here, Andres.

• 9:53Speaker 00

  On the midterms, Andres, we are obviously talking about a lot about this. We were at the Real Vision VIP event here in London. We had some great talks on this. And it's, we're seeing a small opening for the Republican side, maybe or maybe not in Michigan. Because we're obviously very focused on the Senate election. That is where we have a decent or some chance of the Republicans actually holding on to their to their majority. Michigan is one of the states that they need to win. And it seemed like Mike Rogers had gained some momentum against Abdul El-Sayyed.

• 10:30Speaker 00

  But it's turning around now. So, I mean, I don't have access to better polls than anyone else. I'm looking at the same polls and the same prediction markets as all of you. And by the way, if knowing if they're right or wrong. I'm a little bit skeptical about the, the, the blue wave that we're supposedly seeing. It seems a little too good to be true for the Democratic side. But how do you think market reactions will be if this holds true, Andres? If we have a democratic sweep of both the House and the Senate?

• 10:56Speaker 01

  I don't, I don't think it will matter a lot because that's basically what everyone expects. And it, I'm just looking at the nationwide map of the contested seats right now. And as far as I can see from prediction markets, the, the average move is expected to move 12.7 percentage points away from the Republicans towards the Democrats in the voter split compared to the, the last election of the same seat back in 24 or 22, right? So it's a massive move that is priced in. I, I, you know, I don't have the imagination to, to, to find something that is more extreme than that.

• 11:41Speaker 01

  So I, I basically think that if you look at it from a market perspective, the surprise potential is in some kind of a rebound for the Republicans in the Senate.

• 11:55Speaker 01

  When you look at Michigan, right?

• 11:58Speaker 01

  El-Sayyed narrowly won the, the primaries against Haley Stevens. And Haley Stevens then, I think it was yesterday, withdrew her support for El-Sayyed and basically told the Democratic voters to vote for Rogers instead. Initially, we got a move in, in the prediction market pricing, but it's not really something that has lasted.

• 12:23Speaker 00

  No, to the contrary, apparently.

• 12:25Speaker 01

  Yeah, that's, that's, that's actually a little bit interesting. But, you know, overall, Michigan is interesting to look at. Texas, obviously, with Ken Paxton receiving billion after billion from Elon Musk in his attempt to, to win against Talarico in the Senate race down there.

• 12:46Speaker 01

  In short, I'm, I'm of the view that the Republicans can only surprise positively versus this pricing. More or less. And, and, and again, it rhymes with what I've said on positioning across markets, right? That we, we have an extreme positioning right now with the needle maybe moving ever so slowly in the other direction. So I think it's a very, very interesting backdrop. And yes, you're right, that if this turns out to be an event that wrong foots positioning across the board, then a lot of people will look back in four years and say, okay, the midterms basically triggered that rally. And it might have been the Ayatollah's that, right, or something else? Yeah.

• 13:29Speaker 00

  The Ayatollah or the midterms? Who decides the US markets here? It's, no, but honestly, Andres, also, I'm, I'm, I'm going to be writing an entire, the drill about this, this, this week. Because again, I'm, I don't have access to any polls that anyone else doesn't. But I have a feeling that the upcoming lame duck period, so the period from now until the new Congress convenes could be even more productive than the past two years have been since Donald Trump took off. Because he hasn't passed a whole lot. He passed a big, beautiful bill, huge one, the Secure America Act, huge bill, genius act, huge bill. But that's it. The rest of it was some appropriations, bills, and then naming post, post offices and veterans affairs and stuff like that.

• 14:11Speaker 00

  But if you get a democratic sweep, you're looking at a very, very tough two years for President Trump. So I think the administration is going to push very hard for, at the very least, passing the 2027 appropriations bills, the defense appropriations bills, potentially already now racing the debt ceiling. That's the joker for me because that could, that removes a big obstacle or a big risk for markets. It's going to be very, very tricky because you're going to have the likes of, you're going to need to persuade the, the likes of Rand Paul, et cetera, to, to, to vote this through.

• 14:45Speaker 00

  But it must be tempting for Donald Trump to try and see what, what he can squeeze out of this Republican

• 14:51Speaker 00

  Congress before the Democrats essentially take over. Because when they take over, he's, he's going to get nowhere with his appropriations. We're always seeing that also on the, the AHA Act on, on the energy grid expansion, et cetera. So again, much more on this in my The Drill article later this week. But I think we, we have some interesting times ahead of us and we need to, to, to brush up on our history on, on government shutdowns. If, if the Republican majority don't, don't fix that during the lame duck period here.

• 15:19Speaker 01

  Michael, and can I just show the chart on page five? Because I want to show it every time I am on air, anywhere.

• 15:27Speaker 00

  Speaking of Anthropic, you mentioned their, their Q3 numbers earlier today.

• 15:31Speaker 01

  Yeah.

• 15:32Speaker 00

  And even before that.

• 15:34Speaker 01

  It is. I, I took the liberty of assuming that they were at 75 billion ARR in Q3, which is about right in this chart. So I kind of, I did front run the release of numbers today, admittedly.

• 15:48Speaker 01

  But what we're looking at here is the inflation adjusted or money adjusted journey from 1 billion to 75 billion in annualized recurring revenues from, you know, a range of tech companies, some of the big players we obviously all know, right? I find it interesting that the company that without doubt has moved from 1 to 75 billion, the fastest ever in history, even when you adjust for the inflation of money, right? That everyone is so pessimistic around that whole build out, that everyone only looks at, okay, they have a lot of commitments going forward on compute.

• 16:30Speaker 01

  And it, it seems like no one's, it's, it's just accepting the fact that this is the best capital allocator in history so far.

• 16:40Speaker 00

  It's interesting what you're putting there.

• 16:42Speaker 01

  And, and, and it seems like no one's accepting that this is the company that has grown the fastest, fastest ever in history.

• 16:51Speaker 01

  So we spent a lot of time with, with, with various people over the weekend discussing this. And also last week, I attended this huge credit investor conference. And, you know, the conclusion from, from most market participants right now is that no more CapEx. We cannot provide any more capital to this corner of the economy. I don't know whether you can call it a corner of the economy anymore, but you get what I mean.

• 17:18Speaker 01

  We're, we're full on AI CapEx. We cannot, we cannot, we cannot, we cannot, we cannot. That's basically the message everywhere.

• 17:29Speaker 01

  It's quite, quite interesting that the company and the sector that delivers the fastest growth in history gets that kind of response from a market. And it is in, and I mean, I cannot put this in words. It is in such a sharp contrast to the buildup to year 2000, where the opposite was true. Give us more, give us more, give us more from, from the credit investors and from the equity investors. We're currently pricing the tech sector in forward terms lower than we did during the bottom in 2022.

• 18:10Speaker 01

  So the market is, is very conservative in terms of, you know, paying up for future earnings from, from the companies involved in this chart and in the technology sector overall. Which, which, which I think is, you know, I kind of like that the market is prudent and that they're, you know, glass half empty because it actually allows this cycle to run for longer, in my opinion, than in the opposite scenario where everyone just ran around as euphoric idiots, right?

• 18:40Speaker 01

  But it's, it's still the overwhelming consensus everywhere you go that AI CapEx is over. We cannot cope with anymore. We cannot stomach this volatility. There is zero mode on AI. So even though it's the fastest growing company in the history of mankind, they apparently have a product that everyone can just rip off and duplicate. That, that is the consensus everywhere. The, the margin of Anthropic's product will go to zero. I hear that in every single client meeting.

• 19:12Speaker 01

  Again, it, it's not like, I'm, I'm not ruling out that some of this could have elements of truth to it. I just find it incredibly interesting that we see such uniform pessimism around the best case that mankind has ever delivered. There is no doubt that it is the best case ever seen in the history of, of humans doing business with each other. And yet, we're only talking about that they don't have anything whatsoever that protects their business. I, I think it is so incredibly wrong that I cannot put it in words. But that is how, you know, that is how I'm perceived in every single client meeting at the moment. I just have to admit that.

• 19:55Speaker 02

  So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now.

• 20:12Speaker 00

  Yeah. So how, how do you approach the, this Anthropic IPO when we get in, Andres?

• 20:19Speaker 01

  Yeah, I'm not, I'm not, I'm probably not going to buy it myself. You know, just to answer that question to begin with. Uh, because I'm, I'm a little annoyed with their second derivative, you know, the second derivative of growth. Given that they have compute constraints, they also write that today. Um, so you know, as of now, and I've said that basically continuously since June. Um, I like to be involved in the sector, but I prefer to be involved in OpenAI than Anthropic. Uh, due basically due to the second derivative of growth.

• 20:51Speaker 01

  Um, it's not that I dislike Anthropic, I've just spent 10 minutes telling you that it's the best business ever, but, but, um.

• 20:57Speaker 00

  But it's more representative of the AI trade you're talking about in topic, essentially.

• 21:01Speaker 01

  Yeah, and, um, you know, right now, it's a bigger issue for Anthropic that the compute capacity is as scarce as it is. We, you know, look, look at this, um, I'm not sure I've brought a chart with this, uh, on, on it with this today, but, but look at the spot pricing of compute. Uh, GPUs prices have been on an absolute tear since, uh, start of, the start of October, basically because, you know. Now even more so with all of the glass half empty types not willing, being willing to provide capital for, for compute. Of course, the existing compute will have to price up, be priced up, right? Because

• 21:41Speaker 01

  the risk of more compute coming online is lower than it was a couple of months ago. I, I think that's a fair assessment. Um, so the spot price of, of everything from, yeah, GPUs to, you know, broad data center capacities is, is up a lot. Um, if you look at the B200s, for example, uh, yeah, it's, it's just straight lineups. So then that's bad if you're a topic because you're trying to find more compute spot.

• 22:07Speaker 00

  That's your income.

• 22:07Speaker 01

  Uh, while, while open, yeah.

• 22:09Speaker 00

  But at the same time, they've managed to, you know, actually create a profit margin on each token.

• 22:14Speaker 01

  Uh, yeah.

• 22:16Speaker 00

  While prices are, are, are exploding like that. So, so, um, yeah. Interesting to have in it, yeah.

• 22:23Speaker 01

  I've got, I've gotten that question a lot of times. Okay. The large language models will ultimately be commoditized. There are zero modes. Um, the market will not be willing to pay anything for an L L M. Let's just assume that for a second, that it's true, right? You're still, as a provider of an L L M, need to pass on, as a bare minimum, the cost of the compute. We can discuss the margin on top of that, of course, but as a bare minimum, you need to pass on your input costs. And, you know, as you've rightfully said, Anthropic has passed on the input cost times two over the past quarters.

• 23:09Speaker 01

  Um,

• 23:12Speaker 01

  and this notion that China can just deliver compute capacity for free to everyone is utter bullshit. I know that they're running zero margins or maybe in some cases even negative margins when they really want to, to, you know, penetrate a market and gain market shares, could be the case here. Uh, in such case, everything China related will be banned from entering the West in, uh, in an AI context in a matter of seconds.

• 23:35Speaker 00

  You've seen that already, yeah.

• 23:36Speaker 01

  Yeah, yeah, but I, I get the point that, um, sure, some providers may be willing to provide an L L M at the price of compute.

• 23:48Speaker 01

  But this notion, and I see it all the time online, that L L Ms will be priced below the compute cost. Why on earth should anyone be willing to do that? I mean, it just doesn't make any sense over time. Uh, so the price of an L L M as a user is the compute price plus some size of a margin that we can discuss the size of currently is actually pretty decent.

• 24:18Speaker 00

  Yeah. Okay, Andres, before we round over this small talk on your positioning in the, uh, this situation of the markets, just a little reminder that we have uh, all kinds of big content for you this week on Real Vision. You just released your Steno Signals article to the address and doing the drill with a little bit ahead at the upcoming months and years of US politics after the midterms, what happens after the midterms. Uh, we have our portfolio update on Friday and then, um, if you like, Roll Pal or good pal, Roll. Um, there's a couple of shows here and you, you, you get to choose, do you want to have a drinks with Roll or coffee with Roll? Drinks Roll, Drinks with Roll is tonight at five, um, five P M. Eastern, uh, for free on all platforms, it's on YouTube, uh, Real Vision everywhere you go.

• 25:02Speaker 00

  You don't want to miss that. But also if you're a Real Vision Alpha subscriber at Wednesday at 10 A M., you get a slightly more intimate coffee with Roll set up at 10 P, 10 A M. Eastern. That's actually also in, uh, decent hours for Europe, uh, might be more of an, an afternoon cup of coffee here. Um, and he'll be walking members through, um, the charts that are on top of his mind and, uh, and some of the new features in Real Vision. So do you check, do check out that, either drinks or coffee with Roll. I think I'll join the coffee one myself. I don't know about you, Andres.

• 25:30Speaker 01

  No, so, uh, it was actually quite fun. Both, both of us had, you know, two glasses of, of wine on Saturday. Um, and we spent the entire breakfast discussing Sunday morning how we had, you know, a, acid in our stomachs because, yeah, I, I, I almost never drink wine and I.

• 25:52Speaker 00

  It was great wine, great wine, a hundred, a hundred dollars a bottle, probably.

• 25:57Speaker 01

  Yeah, yeah, but, uh, yeah, I can't, I literally cannot stomach. So.

• 26:02Speaker 00

  And I did one more because I did a dinner last night. I had, I had two glasses last, last night as well. Oh, it's, it's.

• 26:11Speaker 00

  I mean, we're getting, it's, it's the way it is. Um, Andres, just a final, some final notes, this situation with all the deleveraging and the AI, all the panic, all, um,

• 26:27Speaker 00

  what's your positioning? What are you, what are you buying into right now?

• 26:31Speaker 01

  Uh, yeah, so we, in all honesty, we still think the semiconductor space is, is looking great. Um, fundamentally speaking, that is, if you look at what's needed for it to, to trigger the next leg upwards, it's, it's probably a slightly more benign inflation picture and, and bonds behaving slightly better. We're starting to see that, uh, but it's early days. We need the rate of change in growth to improve. The ISM manufacturing was a great first step in that direction today. Our now casting on US growth is showing signs of life. Uh, again, as a, uh, slightly lagged consequence of bonds doing better, um, you know, with this kind of market, Michael, in, in a month from now, that's, that's the crazy part of it. Um, we could be back to everyone discussing how semiconductors is the only play and, you know,

• 27:14Speaker 01

  it, it's been like that for a long time and I cannot recall a market in my adulthood and I include the, the GFC here, I, you know, I'm not going to claim that I was super old in 2000, but I cannot recall during COVID, during the GFC and all of those crises, I cannot recall

• 27:38Speaker 01

  a moment like this where everyone is so skeptical around something that's still showing great momentum. Um, so this notion that this is incredibly similar to the buildup of dot com. I simply don't buy it and let me be that, uh, let be, be, let it be my famous last words for this show.

• 28:02Speaker 00

  Absolutely. Uh, I completely forgot all the half of the week, Andres, there was supposed to be something about the silver trade, but we'll, we may touch on that next week. You did your victory laps on that, so I think we'll, we'll keep it at that for now. Uh, anyway, guys, that's all we have for you this week. Remember to follow all our accounts at Real Vision and, uh, on, on these platforms. We'll be back next week. See you around.

• 28:23Speaker 02

  You obviously enjoyed the episode because you're here with me at the end, but listen, don't forget to go to realvision.com/join and grab a free membership. It's an incredible community packed with alpha, great investment ideas and the research that you need to help you unfuck your future. So get started now. Go to realvision.com/join.