Most of y’all aren’t paying attention to the fact that the CME just launched single stock futures trading today. We’re talking 55 standard single-stock futures and 22 micro single stock futures covering more than 50 of the largest U.S. stocks including Apple, Microsoft, Nvidia, Amazon, Tesla, Meta, Broadcom, Micron, Coinbase, and SpaceX. They’re cash-settled. No physical delivery. Simpler than options and more precise than index futures. They allow much easier shorting than traditional stocks and easier hedging of individual stock positions. Those of you who have been around legacy markets for a while may remember when they attempted this previously. It never hit critical mass, at the time, before closing, but now there are multiple things converging that may see it do so including retail participation in markets being much greater this time around, much more sophisticated algo trading, better clearing infrastructure, lower capital requirement due to micro contracts, and what may end up being most important which is the demand for 24h trading and tokenization to allow for more flexible equity exposure. The next 12-24 months is likely to decide whether this lives or dies. We need to see liquidity ramp up in this over that time period. And if it does, we are likely to see options on these single stock futures follow. Beyond that we are likely to see cross-margining with equity index futures and more sophisticated portfolio margin treatment. We would see them expanding single stock futures beyond this initial group. And then, eventually, we would see tokenized securities interacting more with traditional futures within regulated infrastructure, bringing us closer to a 24h capital market that trades across multiple instruments. As @AP_Abacus reminded everyone last week on Beards and Bitcoin, we used to say the stock market is not the economy. Today, however, that’s becoming much less true as Wall Street has moved from observing to allocating, and so markets have begun to increasingly shape the economy. Finance has moved from downstream to upstream: from economy -> market to, nowadays, market -> economy -> market. And the wealth effects make this feedback loop even stronger. AI in the loop now can accelerate it dramatically more creating a positive feedback system. Instead of asking which companies will benefit from economic growth, as investors have done for most of the 20th century, we probably now need to start asking which companies control the bottlenecks that determine WHERE capital flows? This idea of bottlenecks is something I’ve been focusing on mentioning quite a bit with energy and AI over the past two years, but it is especially important in terms of capital markets overall as well. As a result, portfolio construction will likely need to change. We’ve already been talking about the death of the 60/40 since the turn of the decade. And @dgt10011 has introduced his radical portfolio theory, which I think is a great start and he’s asking all the right questions. But what if we move even further from portfolio theory toward capital allocation theory which means we need to be asking where is capital itself flowing and, more importantly, who controls those flows? This post has already become much longer than intended. Should I continue to flesh it out more in an article? Is that something y’all would be interested in?