Instead of treating private credit creation as a black box, analyze it by tracking corporate bond issuance in real-time and observing whether the market is rewarding high-debt companies over quality names. A rally in riskier firms signals a positive credit impulse.
The true signal of a recession is not just falling equities, but falling equities combined with an aggressive bid for long-duration bonds (like TLT). If the long end of the curve isn't rallying during a selloff, the market is likely repricing growth, not panicking about a recession.
Contrary to a common market fear, a Yen carry trade unwind is historically signaled by *falling* Japanese Government Bond (JGB) yields, a rallying Yen, and a falling Nikkei. The current environment of rising JGB yields does not fit the historical pattern for a systemic unwind.
While markets fixate on Fed rate decisions, the primary driver of liquidity and high equity valuations is geopolitical risk influencing international trade and capital flows. This macro force is more significant than domestic monetary policy and explains market resilience despite higher rates.
When asset valuations are elevated across all major markets, traditional fundamental analysis becomes less predictive of short-term price movements. Investors should instead focus on macro drivers of liquidity, such as foreign exchange rates, cross-border flows, and interest rates.
Top tech CEOs are strategically using debt and inter-company investments to function like a cooperative financial ecosystem. They optimize their collective capital stack for mutual benefit, behaving more like hedge fund managers allocating capital than direct product competitors.
The primary catalyst for Bitcoin's rally off its lows was corporate treasury allocations, not its function as a neutral reserve asset. Its subsequent underperformance against the S&P 500 and other high-beta sectors proves it still functions as a risk-on asset, failing its geopolitical test.