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January 18, 20264 min read

Morning Brief: SMCI +11% on $250B Deal; S&P Stalls at Valuation Wall

A massive $250B US-Taiwan trade pledge reignited the AI infrastructure trade, sending Super Micro Computer (SMCI) surging 11% to $32.66 while the broader S&P 500 stalled at 6,940. Despite strong earnings beats from JPMorgan ($46.8B revenue) and Bank of America (+18% EPS), financial stocks saw muted action, confirming that the "higher for longer" net interest income benefit is fully priced in. The divergence is stark: capital is aggressively rotating from value sectors back into hardware capex plays, even as the S&P 500 trades at a precarious 22.2x forward P/E—significantly above the 20.0x historical average. Elsewhere, ImmunityBio (IBRX) rocketed 40% on revenue data, signaling speculative appetite for organic growth outside the tech complex. Watch the 10-year yield as Fed Chair speculation shifts toward Kevin Warsh; a "hawkish institutionalist" appointment could challenge the valuation premium currently supporting the index.

Morning Brief: TSM Confirms Supercycle, but 'Warsh Premium' Spikes Yields

Markets

January 18, 20264 min read

Morning Brief: TSM Confirms Supercycle, but 'Warsh Premium' Spikes Yields

Taiwan Semiconductor ([[TSM]]) confirmed the AI supercycle with a massive $52-56B capex commitment, yet the S&P 500 finished the week flat as the "Warsh Premium" drove 10-Year yields to a 4-month high of 4.23%. While TSM consolidated Friday, the hardware complex ignored the rate spike—Micron ([[MU]]) surged 7.8% and Super Micro ([[SMCI]]) jumped 10.9%—validating the infrastructure buildout thesis. The variant view: The Russell 2000 hitting a record high despite rising yields signals that "animal spirits" and M&A hopes are currently overpowering cost-of-capital headwinds, a divergence that typically resolves violently. A key confirmation signal emerged in Micron, where an insider purchased $8 million in stock near all-time highs. Watch the 4.30% yield level next week; a breach likely triggers algorithmic selling in risk-parity funds, threatening the rotation trade.