Such a divergence between retail and professional investors has NEVER happened before: Hedge funds and institutional investors have sold US stocks at one of the fastest rates on record. At the same time, retail investors bought the most ever.
Who will give up first? https://x.com/GlobalMktObserv/status/1925530585893589371
Long term yields have eased, US 30 year -0.96% to 5.04pc, US 10-year -0.53% to 4.529pc.
The tug of war between instos and retail ended with neither winning overnight as US market closed flat, with Dow down just -1 pt with huge selling that saw -230pts wiped out in the last hour of trade, S&P500 -0.04% to 5,842, Nasdaq +0.28%.
Gold did not follow through on its 3,340 break and fell back below 3,300 to 3,296. BTC's rise may have taken some of Gold's momentum, closing at $111k and in the clear after breaking previous all time highs.
...many market pundits had been pointing to Trump 2.0's tax bill and deregulation as catalysts for next phase of the bull market. The tax bill has been passed with barely any market celebration today, while even bank deregulation priorities have been revealed. It feels 'naked' that the market has factored/imputed these 'good news' and will not be distracted away from adversity that comes next- unilateral tariffs and tit-for-tat trade wars next month.
...market is mixed on Trump 2.0 tax cuts because the bond market disapproves of it, so the equity market remains wary.
...so it begs the question why the US market isn't tanking more and faster or at least unwinding its recent sharp recovery? It is because the retail heroes have gone full monty in the final gambling spree - they have to make more money to offset the rising cost of living due to tariffs. And some of the fundies don't want to miss out on the action despite feeling very uncomfortable about prospects ahead.
...when markets are so disconnected from ongoing development of adversities, it becomes a dangerous turf of apathy and complacency. The world did not change all that much after the US-China truce, it was only a pressure valve release.
