Fed Divided | Nvidia Leads | Housing Lags | Mortgages Rewired

At first glance, it looked like risk was back. Look closer, and you can feel the restraint.

Stock indexes rose, led by the Nasdaq, as Nvidia caught a fresh bid on its Meta deal and Analog Devices delivered clean numbers that pulled industrial tech along with it. This wasn’t a free-for all. It was selective participation.

Selective Strength

• Nvidia rallies as AI buildout gains credibility.
• Analog Devices jumps on firm guidance.
• Palo Alto drops despite a beat, guidance misses matter.
• Oil climbs toward $70 as Iran tensions simmer.
• The 10-year edges above 4.08%, dollar firms.

The market rewarded funded growth. It penalized margin uncertainty. 

At the same time, higher oil and a stronger dollar quietly tightened financial conditions. Not dramatic. Just enough to remind everyone that liquidity isn’t expanding.

Fed minutes showed officials split on what comes next. Cuts remain possible. Timing does not.

The market is currently pricing AI infrastructure durability while treating the rest of tech with skepticism. The primary risk is multiple compression where cash conversion lags.

The Discipline Test

This wasn’t relief. It was filtration.

Balance sheets tied to compute and industrial demand held control. Duration-sensitive software felt pressure. Energy reintroduced inflation math.

If you felt cautious confidence today, that was correct.

The tape isn’t chasing dreams. It’s auditing them.

For decades, this corner of the market was largely inaccessible to everyday investors. Then a recent executive order quietly changed the rules. What was once off-limits is now available in a much more accessible way, and it’s already drawing attention.

See what changed.

On paper, the economy looks steady. But zoom in and you see two different tracks.

First, the good news. 

Core capital goods orders rose 0.6%. Shipments jumped 0.9%. Factory output just posted its strongest gain in almost a year. That’s not random. 

AI investment is pulling real equipment into motion… servers need power systems, wiring, metal fabrication. Companies are writing checks, and factories are responding.

Now here’s the other side.

Housing starts ticked up, which sounds encouraging. But permits, the forward-looking piece, slipped. 

Builders are still wrestling with land costs, labor shortages, and mortgage rates tied to a 10-year yield that won’t fall much below 4%. So even when construction begins, the pipeline ahead looks cautious.

This is the split. Capital spending tied to automation accelerates while housing remains pinned by rates and land constraints.

• AI-driven capex lifts equipment orders.
• Factory production strengthens without adding many jobs.
• Single-family permits edge lower.
• Builder confidence stays restrained.
• Residential investment likely contracts again.

The Coffee Take

The market is currently pricing strength in infrastructure and automation. The pressure point is housing and household formation. 

Growth looks fine in aggregates, but affordability lags. That gap can keep shelter inflation sticky while equities favor machines over mortgages.

Here’s something that looks boring at first glance. It isn’t.

Since 2008, capital rules pushed banks out of mortgage origination and servicing. That allowed nonbanks to dominate the channel. That shifted duration and stress absorption outside the regulated core, which is precisely what the Fed is now trying to reverse.

• The Fed proposes easing capital tied to mortgage holdings.
• Larger down payments would mean less capital friction for banks.
• Mortgage-servicing rights would sit more favorably on balance sheets.
• Big banks regain room to scale originations.
• Nonbanks face share pressure as distribution power shifts.

This is not about cutting mortgage rates tomorrow. Rates still hover near 6%. The near-term impact is competition, not affordability.

But step back. During the pandemic, bank-serviced loans saw more flexibility. Nonbanks lack the same liquidity backstops. The Fed is trying to rebuild resilience before the next downturn tests the system.

The Credit Reset

The market is currently pricing mortgages as a fragmented channel dominated by nonbanks. The primary risk is concentration of servicing and duration outside the banking core. If banks step back in, credit plumbing changes. The next stress may look very different.

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© 2026 Boardwalk Flock LLC. All Rights Reserved. 2382 Camino Vida Roble, Suite I Carlsbad, CA 92011, United States. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Readers acknowledge that the authors are not engaging in the rendering of legal, financial, medical, or professional advice. The reader agrees that under no circumstances Boardwalk Flock, LLC is responsible for any losses, direct or indirect, which are incurred as a result of the use of the information contained within this, including, but not limited to, errors, omissions, or inaccuracies. Results may not be typical and may vary from person to person. Making money trading digital currencies takes time and hard work. There are inherent risks involved with investing, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk.

Let’s zoom out for a second.

We’ve been debating models, benchmarks, and demo clips. Meanwhile, the real contest may be happening in power plants and capital budgets.

Microsoft’s Brad Smith said U.S. firms should “worry a little” about Chinese subsidies. That sounds mild. It isn’t.

China is backing its AI champions with national funds, cheap energy, and global data center buildouts. That shifts the fight from code to cost structure.

• Beijing deploys multi-billion-dollar AI funds and energy vouchers.
• Lower-cost Chinese models gain traction in developing markets.
• Huawei and Alibaba expand data center footprints abroad.
• U.S. firms lean on premium chips and private capital depth.
• Governments become silent partners in global AI rollout.

Here’s the connective tissue. If emerging markets adopt lower-cost Chinese stacks, the prize is not app downloads. It is default infrastructure. Once a tech stack becomes baseline, switching costs rise.

The market is currently pricing AI as a product cycle led by U.S. firms. The primary risk is routing. Adoption may follow subsidy and power access, not brand preference.

The Infrastructure Moat

This is industrial policy in motion. Subsidies and cheap megawatts are the new feature set. 

For investors, AI exposure now carries geopolitical alignment risk. Margins abroad may compress. Domestic support tied to chips, energy, and export controls becomes more central.

The software selloff suddenly has a face… and a clock.

Mistral’s CEO just said more than half of enterprise SaaS could shift to AI. Not trimmed. Not optimized. Replaced. That’s not a product upgrade. That’s a spending reset.

If you’re a CIO staring at a seven-figure workflow renewal, the math just changed. Why keep paying for a vertical tool if an AI layer can replicate the outcome in weeks?

Here’s how this starts to ripple:

• Enterprises test AI against existing workflow tools.
• Custom apps get built in days, not quarters.
• Renewal conversations turn into pricing standoffs.
• Systems of record hold their ground.
• Everything layered on top gets squeezed.

First experimentation. Then budget review. Then vendor pressure.

The market isn’t debating whether AI works. It’s debating who loses wallet share first. The current pricing assumes software durability is broad. The real risk is that it isn’t.

The Fault Line

Data infrastructure and system-of-record players gain leverage. Generic workflow vendors face compression. This isn’t “AI wins.” It’s a tax on certain software tiers.

The urgent question for portfolios: which revenue streams get renegotiated first?

This one doesn’t look dramatic on the surface. No crash. No scandal. Just quieter carts.

GLP-1 drugs are changing how Americans eat, and the ripple is starting to show up in earnings calls. 

Roughly one in five U.S. households now includes a user, and those users consume about 40% fewer calories. That’s not a fad. That’s a demand shift.

• Snack volumes soften as “mindless munching” fades.
• Dessert and alcohol purchases fall sharply.
• Fresh produce and protein see outsized gains.
• Family grocery baskets shrink 4–6%.
• CPG firms accelerate reformulations and smaller packs.

First comes appetite suppression. Then portion control. Then product redesign.

PepsiCo trims ingredient lists. Coca-Cola pushes protein milk. General Mills leans into higher-protein cereal. Capex budgets are rising because the old volume model is wobbling.

The market still treats staples as defensive cash machines. The primary risk is that habit-driven consumption no longer anchors margins the way it used to.

The Reset

This is a product race now. Brands that adapt to smaller portions and protein demand gain leverage. Those that rely on nostalgia and volume face compression.

GLP-1s aren’t just a healthcare story. They’re quietly rewriting the economics of the grocery aisle.

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Today wasn’t about excitement. It was about filtration.

Capital leaned into compute and industrial balance sheets that can fund the AI buildout. Software names with weaker guidance were punished quickly. Oil’s move toward $70 quietly tightened the backdrop.

The Fed minutes confirmed something important: there is no clear glide path yet.

This is a market that will pay for durability and penalize fragility.

The AI trade isn’t fading, it’s narrowing.

And in this phase, selectivity is not optional.