Hello Capitalists,

Here is everything you should be following today:

• Taxpayers flee California at a rate of one per minute

• California Tax revenue losses are now more than $29 Billion

• JP Morgan’s projections for the S&P 500 for 2026 are out and they are big

• Nvidia brags about its chips after being snubbed by Meta

• IRS releases the rules for “No Tax on Tips” and what the limits will be

• Gen Z plans to flip the script for Black Friday in a surprising twist

• Britain’s socialist budget chaos rocks UK markets

Today’s markets + assets:

• ✅ DOW: 47532.95 (⬆️ 0.89%)

• ✅ S&P: 6825.79 (⬆️ 0.88%)

• ✅ NASDAQ: 23244.26 (⬆️ 0.96%)

• ⚠️🔴CBOE VIX Volatility Index: 17.31 (⬇️ 6.73%)

• ✅ Gold: $4164.70 (⬆️ 0.60%)

• ✅ Silver: $52.69 (⬆️ 3.38%)

• ✅ Bitcoin: $89,122.00 (⬆️ 2.25%)

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California Exodus, one taxpayer flees per minute

In a stark exodus signaling voter discontent, California is hemorrhaging one taxpayer every 1 minute and 44 seconds, per new IRS data, as residents bolt for lower-tax havens like Florida amid soaring costs, crime, and regulations—costing the state billions in lost revenue.

• Taxpayer Losses Escalate Dramatically: IRS figures reveal California’s outflow surged from $9 billion in 2018 to $29 billion in 2020, dwarfed by Florida’s $39 billion influx from new arrivals.

• Florida’s Rapid Resident Boom: The Sunshine State gains one taxpayer every two minutes, fueled by lighter regulations and functional governance, contrasting California’s “slow-motion collapse.”

• Expert Praises Influx Benefits: National Taxpayers Union Foundation’s Andrew Wilford hails migrant taxpayers as “job creators and innovators,” expanding economic activity and tax bases in welcoming states.

• Broader Electoral Ramifications Loom: Population shifts threaten California’s congressional seats and Electoral College votes, delivering a relentless “vote of no confidence” in its blue-state leadership.

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JPMorgan sees the S&P going to 7500 by the end of 2026 and possibly 8000

JPMorgan strategists forecast the S&P 500 hitting 7,500 by end-2026 amid robust earnings growth and Fed rate cuts, potentially blasting past 8,000 if easing continues—despite AI bubble fears.

• Robust Earnings Surge Expected: Analysts project 13-15% annual S&P 500 earnings growth through 2026, building on Q3’s 13.4% rise, fueled by AI productivity and deregulation benefits.

• Fed Cuts Catalyze Rally: The baseline assumes two more rate reductions before a pause, with 85% odds of December cut. Sustained long term easing of rates could propel the index beyond 8,000 via better inflation control.

• Market Multiples Justified Now: Elevated valuations reflect AI’ capital expenditure boom, higher shareholder payouts, and looser fiscal policies like the One Big Beautiful Bill Act, offsetting bubble risks.

• K-Shaped Economy Poses Risks: An uneven recovery could see low-income struggles versus high-income spending sprees, fostering volatile consumer sentiment amid broadening AI investments by firms and governments.

Nvidia fights back after Meta’s snub in favor of Google chips.

Nvidia boldly claimed Tuesday its GPUs outpace Google’s AI chips by a full generation, touting superior versatility amid reports of Meta eyeing Google’s Tensor Processing Unit rentals, Nvidia shares dipped 3% on competition fears.

• Nvidia Dominates AI Market: They control over 90% of the chip market via versatile graphics processors, supplying chips even to rivals like Google despite Google using their own chips for internal TPU use.

• TPUs Face Versatility Limits: Google’s custom ASICs (Application-Specific Integrated Circuit) excel in specific tasks but lack Nvidia’s fungibility, running fewer models across diverse computing environments.

• Blackwell Ushers New Era: Upcoming Nvidia chips promise enhanced power and flexibility, reinforcing their lead as AI demand surges.

• Gemini Trained on TPUs: Google’s latest state-of-the-art model uses TPUs exclusively, yet Nvidia stresses its platform supports such advances universally.

IRS releases the rules for “No Tax on Tips” - here’s what you need to know

The IRS unveiled long-awaited guidance Tuesday on President Trump’s promised tax deductions for tips and overtime pay, offering up to $25,000 in relief for millions of workers starting in 2025.

• Qualified Tips Deducted: Workers can exclude up to $25,000 in reported tips from taxable income for 2025-2028, but benefits phase out above $150,000 for singles.

• Overtime Relief Capped: Eligible employees deduct up to $12,500 in overtime earnings annually, mirroring tip limits and targeting 6% of U.S. workers who claimed it in 2024.

• SSTB Waiver Temporary: Healthcare, legal, and arts professionals gain 2025 transition relief for tip claims, but face exclusion in future years without new regs.

• Reporting Hurdles Loom: Employers urged—but not required—to track via W-2s for 2025, sparking expert fears of “hodgepodge” confusion during 2026 tax season.

Gen Z ditches AI and plans to flood brick and mortar stores for “tactile retail vibes” on Black Friday

In a stark generational twist amid an economic pinch, Gen Z shoppers are bucking tech trends by shunning AI gift hunts and charging into Black Friday stores with gusto per an AT&T survey.

• Gen Z Leads Charge: Youngest shoppers eye Black Friday for 40% of buys, outpacing millennials at 32%, while boomers delay until pre-Christmas weeks.

• Spending Squeezed Tight: Overall holiday budgets dip 4% year-over-year due to inflation woes, with Gen Z cutting deepest at 23% after prior year’s 37% surge.

• In-Person Ideas Dominate: Seventy-two percent draw gift inspiration from brick-and-mortar visits over social media, signaling a craving for tactile retail vibes.

• Small Biz Surge Emerges: Seventy-seven percent would consolidate shopping at local spots if prices match giants, boosting support for community economies by 8 points.

UK budget leaks ahead of release, tax raises and increased welfare cause UK markets to tank

In a leaked bombshell exposing fiscal chaos, Britain’s budget watchdog revealed Chancellor Rachel Reeves’ blueprint for £26 billion in annual tax hikes by 2030 to bankroll a massive welfare splurge, shattering Labour’s no-new-taxes pledge amid market jitters.

• OBR Leak Sparks Turmoil: A technical glitch prematurely disclosed Reeves’ fiscal scorecard during Prime Minister’s Question time, triggering a gilt yield spike, a weakening pound, and an internal inquiry—echoing a 1947 scandal that toppled a chancellor.

• Welfare Surge Hits £16B: The budget wil scrap the two-child benefit cap which will pump £3 billion yearly into 560,000 families, averaging £5,000 extra per household and up to £14,000 for largest ones, inflating total benefits from £333 billion to £389 billion by 2029/30.

• Threshold Freeze Nets £12.7B: Extending income tax bands until 2031 will drag 780,000 more workers into the basic rate and 920,000 into higher brackets, pushing the overall tax burden to a 300-year peak of 38.3% of GDP.

• Conservative Backlash Slams Giveaway: Conservative leader Kemi Badenoch branded it a “smorgasbord of misery” for workers funding “Benefits Street” handouts, as productivity forecasts slump and U-turns on fuel duty and winter allowances add £7 billion to costs.

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