mayor climbing a wall of doubt

a mayor climbing a wall of doubt

What I’ve said over and over again is that the market continues to rise in doubt, and you compare it to a dot-com bubble in reports and things like that, but if there’s no bubble or excess and there’s no trigger, the stock goes up again and again..

I’ve talked about dot-com bubbles a lot before. So are there any macro events that can put pressure on the stock market under the current circumstances… In fact, I think it’s relieved to some extent. First of all, Powell’s QT ends today… This confirms that the Fed is monitoring the pressure on short-term money markets, if not QE, so the stress on this is hard to trigger unless it’s a real serious situation. (The Fed is watching. This alone creates a lot of relief.)

But the exceptional trade dispute between Trump and Xi Jinping… no one knows about this. This is a very difficult part of the world and no one can predict it, so I think that’s where the price of gold continues to go up due to uncertainty about the future.. In other words, it’s not a previous tariff issue, but we don’t know what’s going to happen in the future, so we’ve got portfolio demand. (I mean it’s not a risk off..)

I think most of the bad news that happened before was reflected. And one of the reasons is that the Russell 2000 broke through the high point. And the spread is shrinking as the long-term bond rate is about to close to 4.000%. And that’s a big impact of Powell’s comments today. If the bond rate goes down, the pressure on the more interest-rate side goes away, and it’s pretty good across the board. But we have to link this to other asset groups. The Russell 2000 broke through the high point..

And I think that’s where the refutation is going to come from. Why did the Nasdaq fall? Well, the news says it’s a soybean tariff, but I think it’s a little bit of a money cycle. What does this mean? When you’re really uncertain, you’re mostly tied to safe assets. Safe assets are not necessarily gold and bonds, but stocks are solid, and when you’re uncertain, they’re also safe assets.

This can be explained as one of the functions of interest rates in economics theory, and one of the functions of interest rates is the “redistribution function of funds.” > This is the theory that when interest rates are high (uncertain), funds are concentrated toward solid performance or safety, but when interest rates go down, money is concentrated to smaller companies. That’s why money is concentrated on AI companies with strong narratives and strong performance in uncertain market conditions. It acts as a so-called safe asset..

However, Powell’s remarks hint at the end of QT + spread of AI investment by IB industries + interest rate cuts + temporary inflation, etc.. It can be said that an environment where money can run well in macro, interest rates go down, and > money has flocked to more dangerous assets…

So Nasdaq and S&P fell slightly today, but > I think Russell may have broken through the high point.

In summary, just because bond rates have gone down, gold has risen and Nasdaq S&P has fallen, it is not a risk off, but a little bit higher into the remaining uncertainty ahead, and the fact that Russell 2000 has breached its high point reflects most of the bad news.

So what’s the remaining uncertainty or black swan? No one knows. It could be Trump. Or it could be the Fed’s easing of inflation that’s expected to break away. Or it could be a problem for the private equity market that Dojun is referring to. Monitoring this part, but you don’t know when it will explode, so putting safe assets in the port weight may be the most comfortable situation.

In other words, if the Fed maintains its current stance and continues to communicate that it is monitoring inflation and risks that may burst, it will be able to submit a black swan and the market will rise with doubt.

Conclusion: There is uncertainty ahead, but there is an environment where money can run better. Time for portfolio theory to be bolstered..