Inverted order

Technology stocks are sliding again. Except for Apple. The second largest company in the world can, and will, from time to time, demonstrate its indifference to what everybody else is doing. 

Still, it’s been more than twenty years since AAPL has been this inversely correlated to its peers. Concerns about AI being overhyped have resurfaced, helping to push the Nasdaq 100 Index 1% lower on Tuesday. AAPL rose 2.6%.

Over the past month, shares of the iPhone maker are up 7% versus a gain of just 1% for the Nasdaq.

According to CNBC, referencing ThinkOrSwim data, the 30-day correlation between AAPL and the Nasdaq (in which AAPL maintains a 7.5% weighting) last week hit a 21-year low of -0.86.

“When the AI trade gets questioned, Apple doesn’t sell off,” said Dave Mazza, CEO of Roundhill Investments. “It has become the hedge inside the Nasdaq.” 

Going back to 2013, September has been Bitcoin’s worst month. Over that period, BTC has had just five positive Septembers — and three of them have come in the last three consecutive years. Even with recent history on its side, BTC on average experiences a 3% loss return in the ninth month, one closely associated with students returning to their classrooms.

Granted, it’s only been a couple of days. But so far this month, the biggest crypto has been getting schooled.

BTC concluded August (one of its single-best months ever) at about $78.7K. At last check this morning, BTC, per CoinGecko, was $76.7K.

Tensions in the Middle East and a global bond sell-off have put pressure on risk assets.

“Investors are staring directly into the eyes of an inflation monster,” cautioned Dan Coatsworth, head of markets at AJ Bell, in a note to clients published earlier today.

The U.S.-Iran war, now entering its seventh month, continues to drag on, stoking fears about higher prices for extended periods. Traders in greater numbers anticipate a rate hike later this month. The 10-year Treasury note yield earlier today reached a fresh multi-year high.

Meanwhile, speaking to a podcaster yesterday, OpenAI CEO Sam Altman blurted out how he’s now actually seeing the first signs of “unsustainable silliness” surrounding the broader AI/cloud industry’s plans for hyper-enormous compute buildouts.

With chip stocks under pressure and crypto rebounding, there’s at least one equities sub-sector enjoying a heady ride of late. We’re talking about digital asset treasury companies (DATs). The best-known DAT, Michael Saylor’s Strategy (MSTR), has gained 30% since mid-August as Bitcoin partook in a late-summer rally. Another Bitcoin-hoarding vehicle, Bitmine (BMNR), is up 27%.

But some of the best-performing DATs are those that are new to the scene and do things differently, such as hitching their wagons to digital assets that are not called Bitcoin.

“New-age DATs with less attention have been some of the best-performing crypto-related vehicles so far this cycle,” said The Block, referring specifically to two such names, CYPH and PURR.

This latter DAT, PURR, is associated with DEX Hyperliquid (HYPE). But PURR doesn’t just buy and hold HYPE. It runs a Hyperliquid validator to vote in governance. PURR has gained 62% since mid-August. That’s even better than the HYPE token, up 36%.

CYPH, as The Block explained, operates a mining operation to contribute hashrate to the Zcash network. CYPH has gained 142% in the past two weeks, versus a 56% gain for Zcash’s native ZEC.

Participation within a given ecosystems furnishes these next-gen DATs a “unique value proposition within their blockchains,” The Block said. And as they gain traction, the new DATs enable “an accretion flywheel” in which issued shares are used to buy more tokens.