Global Markets & Economic Data
It's a ghoulish time in the markets as investors digest a busy week of corporate earnings and central bank announcements.
- US: Large cap tech earnings were received with a mixed, but mostly positive tone. The Fed lowered rates by 0.25%, but Powell's communication was considered more hawkish than expected.
- UK/EU/Switzerland: UK house prices rose in October and are up 2.2% y/y; EU Q3 q/q GDP growth is estimated to be 0.1%; inflation figures are running near forecasts in the 2.2% to 2.4% y/y range. The ECB held rates at 2.15%. Swiss ZEW economic sentiment readings picked up in October but remain negative.
- China/Japan: China Q3 GDP slowed to 4.8% y/y; Tokyo October CPI was 2.5% y/y. The BoJ held interest rates at 0.5% and consumer confidence figures ticked higher.
- Perma bear journalist Bond Vigilantes.com put together a spooky chartpack. Among the scariest of charts was one showing a slowdown in freight shipments.
- The Cass Freight Index is approaching GFC and covid low levels.
- Restrictive monetary policy and a weaking consumer has fueled the drop in activity since 2021, and the impact of tariffs have yet to be fully reflected in the data.
Market Spotlight: HyperSCALING: What is Priced In?
- Massive data center AI capex projects are starting to show up in economic data. It is truly impressive to witness such a fast-paced dynamic change in the real economy based on a new technology breakthrough.
- This week the hyperscalers reaffirmed future capex plans as the AI arms race heats up. The projected numbers for the next few years are truly staggering. It clearly is better for the real economy that these corporations spend their excessive free cash flow on R&D projects rather than stock buybacks.
- Given the first stages of AI deployment and infrastructure have transpired over recent years, much of the obvious opportunities have been monetized. Hedge funds are participating in the AI trade, but over the next twelve months the opportunity set will become more nuanced as witnessed by investors punishing Meta's capex plans on this week's earnings call.
Market Spotlight: USDJPY breaking higher
- Sell side traders are observing some serious macro hedge fund flow this week into USD/JPY call options. �oeThis trade has been well subscribed by our macro franchise mostly via digitals given realized volatility is holding up well,� he said. �oeWe�TMve also seen RKO structures to cheapen the premium expecting potential central bank intervention closer to the key level of 160.� (quote from a Nomura trader in Bloomberg article).
- A rally in the dollar is supported fundamentally due to a hawkish Fed and a dovish BoJ.
- However, hedge funds will need to tread lightly as the USDJPY screams up to the critical technical and psychological 1.60 level with Japan's finance minister saying this week that FX movements (especially those driven by speculative flows) are monitored closely and with a high sense of urgency. Japan has a long history of intervening in their capital markets at the moments that typically cause the most pain for the HF community.
Market Spotlight: Indifferent Dec. S&P 500 Calls Flows Activity
- The mainstream financial media remains in full-on hype mode to ensure all available capital participates in the next leg higher in the US equity market rally. Baseball metaphors abound as discussions come down to whether we are in the 3rd, 4th, 5th inning etc.
- Reviewing capital flows data reveals a far less enthusiastic picture in S&P 500 options markets where the bulk of December expiry call options have been purchased roughly 2% out-of-the-money. While we observe some flyer OTM calls struck at aggressively higher levels, overall flows reflect a more conservative picture than what one would expect.
Masterpiece Hedge Fund Alpha Monitor Snapshot
Analysis Period: October 1, 2025 - October 30, 2025
Analysis Period: October 1, 2025 - October 30, 2025
urn NeKteAysSsteattiVsSantialcupssehot
Key StatisStniacpsshot Analysis Period: October 1, 2025 - October 30, 2025
CUMULATIVE RETURN 10/01/25 - 10/30/25
5 DAY RETURN 10/24/25 - 10/30/25
10 DBAAYSERCEUTRURERNNCY 10/17/25 - 10/3U0S/D25
2,5D80e,p0o0s0its & Withdrawals
6,267,453.64 39,840.10 0.00 179.98 9,828.54 -2,402.96 6,657.09
M Peaaxk-DTroa-wVadloleCwyun mulative Return
Sharpe Ratio Standard Deviation
10K1/1.e800y/%2S5t-a1t0is/21t.4i5c/92s%5
1.04% 1.90% Deposits & Withdrawals 2,640,000 Dividends
PMeaaxk-DTroa-wVadlolewCynumulative Return
Sharpe Ratio Standard Deviation
10/K1e0/y25S-ta10ti/2s1.t41i/1c2%s5
MTM -1D.8e0po%sits & Withdrawals
2,609,040.4010/10/25 - 10/14/25
Valu1e0/13/25 CTR (%) 10/17/25 Bottom Per1fo0/r2m3/e2r5s
10/29/25 ValueFees & CommCisTsiRons(%)
Value Fees & ComCmTisRsion(s%)
GLD 251017C0036,1..2.0,000 USD
Consolidate0d.0N0AV 5,184,790.92
-1.80% -23,004.00Ending NAV -0.71 -27,437.25Change In NAV -0.26
GLD 251017C060,33221.,.5,5.250,60.0400
2,500,000 CTR (%) 10/01/25 Bottom P1e0r/f0o7r/2m5ers
10/13/25 Value 10/17C/2T5R (%)
SDnaisptrsAihlblooutctiaotnioonf Returns
-A0.8n8alysis Period: October 1, 2025 - OctoQbQeQr 30, 2025
PERFSOhRoMrAt NCE MESEZA5S(%UR)E
MTD 5,317,583.56 pe5r9f.6o9 rmance Sctoockms ments
Distribution 2o,8f6R9,e6t5u6.r1n4s 32.21
E2q,41u1,i8t3y1.35Lon7g7.9/5Short straCatshegies MTD
Distribution o5f02R,2e6t3u.6r8ns 16.23
-157,768.00 A3ll2oU.5ScD2ation
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-33,504.98 Fina6nc.9ia1l Inst.
has Total given12way to a better 8,908,447.34 p1e00r.0f0ormance Ttrotaaljectory
the month. 3,6780,000 Asset Class
in the back half of -2,586,890.93 Cas1h00.00 4.0St0o%cks
CUAMs52sU01e28Lt,,A92C64T33IlV..a96E86ssRETUAR25CN..C46O469UNT:
3St,o0c9ks4,213.01 100.0-20,121,263.31 82.00 Total
ShWoOrtRST REStToUckR(s%N ) Other
3dCaisfhficult since the Fed cut 5,317,583.56 on59.W69 ednesdaEyq.uities
-2,143,218.74 2.0To0t%a8l 2.85
C1a08s/,90h018/,24457-.3140/301/0205.00
10/22T4o,4/t2a1l51-,8103/13.03/525
77.9-25,51806/,81970/.2935 - 101/0300.0/025Equities
- Macro strategies: FICC strategies profited from precious and crypto 3,06O90t,h00e0r trading. EQ vol strategies from QQQs calls and S&P 500 futures. 3,6T60o,t0a0l0
135,3-52%9.t6o00% 8,908,447.34
- Equity 3,600,000 Long/Short stra-4%ttoe-2%gies: Meme -2% to 0%stock sho0%rtot2s% were a big detrTOaothtacelr tor
Net Asset Value Beginning NAV 6
DDTCoieov52ptm i,,39dao41elsm71ni,,t05dso84s&34d..55iWt60iiethsdr35a39w..063a,917l3s80,000
Equi2ti0es,052.60 3Ca,0sh94,213.01
Fees13&5,C35o9m.6m0 ission1s.520 3,720,000
3,739,807.64 4.7-830,8S5h4o.r3t5
(%) PM Ceoaamxkm-DTrooad-wVitadileolesCwyun mulative Retu-4r0n,263.0100K/0e1yA/s2sSe58tt.C-a3l1a0ts0sis/41t.4i9c/82s%5
0.6-25,143,2108.0740 100.00-274,2994.7446
Fi1xe0d0In.0co0me0.67% CUEqMuUiLtAieTsIVE RETURN
-2% to 0% -70-6,63871.40070% to 2%2.73
10/01/25 - 10/30/25 Commodities
1.29 2,411 514 5 DA1Y4R7E 10/24/25 - 1
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in this report is intended only as a reference and should not be relied upon for
to, take into account the particular financial conditions, investment objectives,
Consolidated Return the maintenance of your books and records for tax, accounting, financial, or regulatory reporting or for any otherCpuRrpSoses. This report or requirements of individual customers. Before acting on any material within this report, you should consider whGethHer it is suitable for
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*The Masterpiece HF Alpha Monitor analyzes hedge fund exposures, themes, and positioning to model the
performance of long/short liquid trading strategies. Our approach enables interactive monitoring of market
/31/2025 13:D4P0do:i4esr7vtteEfrDlooiTpblimoueAntnitsoa, lneynshotafncRineg touurrunndserstanding of the current risks and opportunities in the marketplace. 10/31/2025 13:41:28 EADTllocation
Financial Inst. PortfolioAnalyst Long
10/31/2S02h5o1r3t:41:28GEHDT (%)
20122 5.10.31 Weekly Market Note
Confidential Not SfotorckDs istribuDtioisntribution 2o,7f9R7,e5t3u7.r4n3s
-10371,6/7140.8/225 PAlalo5g.ce1a26ti/o7n
-2,101,718.33 Fi1na0n0ci.a0l 0Inst.
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