US large-cap equities are vulnerable because earnings have not caught up with total market capitalization. The market is farther from its 200-week moving average than at any point in 18 years, and cracks are starting to show; staying bullish ignores these risks. Rate hikes remain possible, oil is still high, and yields may climb again, so now is the time for caution. x.com  x.com 

US stocks face a quiet but serious risk from the bond market, where the 30-year Treasury yield hit its highest level since 2007. Rising yields act like a slow tax, making borrowing costlier and pulling money from stocks; they reflect heavy borrowing, sticky inflation and a flood of corporate debt. The government had to announce large buybacks of long-term bonds to push yields down, which worked for now. A high yield is not a crash by itself, but it is a warning light. x.com 

US large-cap equities do not look like a bubble at current forward valuations. The S&P 500 forward P/E is below both its five- and ten-year averages, while tech and momentum have suffered their worst five-month decline by far. x.com 

A 10-year Treasury yield at 5.75% would have US stocks yielding to bonds. Wells Fargo Investment Institute now forecasts the 10-year yield at 5.25%-5.75% by end-2027, up from 4.50%-5.00% previously. x.com 

Persistently high yields would make borrowing more expensive and pressure US stocks, housing and the government. Treasury tripled its bond buyback to $6 billion, yet the 10-year yield climbed to 4.85%, its highest since November 2023, after last month's doubled $4 billion buyback had cut the 30-year yield by nearly 10 basis points. Oil above $100, rising US debt and inflation fears are pushing yields higher. x.com 

US large-cap equities look near a bottom because hedge-fund positioning suggests forced selling is in its final innings, not economic deleveraging. By many measures this is one of the largest hedge-fund equity deleveraging events in 30 years; AI positions built over 18 months are being unwound in 75 days. Yet profits are growing about 20% year over year, AI compute demand exceeds supply, and the S&P 500 has barely moved. Contagion has reached credit, multistrats and European bonds. x.com 

The S&P 500 looks set to roll over because it skipped the retest that has followed every breakout for six years. Each time it broke to all-time highs, ran into price discovery, then topped and retested prior highs before starting over; this time there was no retest, while bond yields are soaring and war is driving them higher. A correction comes every cycle, more likely than not, though an 8% drop would be a pullback rather than a crash. x.com  x.com 

US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.com 

US stocks could face a meaningful correction because the macro backdrop is deteriorating across bonds and inflation. The secular bull market is still expected to continue afterward, with a key factor potentially limiting the correction's severity. x.com  x.com 

US stocks face a black swan as the 30-year Treasury yield broke above 5.3%, its highest since June 2007. Higher long yields lift borrowing costs for households and companies, act like a rate hike before the Fed moves, and pull money from stocks into Treasuries. Yields are rising on heavy AI corporate debt issuance and surging US deficits, with $40 trillion of government debt costing about $1 trillion a year in interest. AI hardware sold off: SanDisk -9%, SK hynix -8.6%, Micron -7.3%. x.com