GlobalMarketsInvestor

Stacker_Stocks

Asset managers have aggressively increased their VIX futures shorts to the highest level since July 2024.

In other words, funds are betting heavily on continued low stock market volatility.

Such extreme short VIX positioning often leaves markets vulnerable to sharp volatility spikes if sentiment turns.

A similar setup occurred in July-August 2024, when a sudden shift in risk appetite drove a nearly -10% market drop.

Are we heading for a pullback?

![](https://m.stacker.news/125665)

Is the volatility index VIX set to spike?

Gold and silver somehow continued their run.

Meanwhile, volatility stayed subdued with option markets showing little fear. 

Is the volatility set to spike over the next few weeks?

Performance this week:

S&P 500 +1.6%
Nasdaq +1.9%
Russell 2000 +4.6%
Dow Jones +2.3%
US 10-year Treasury yield -2 bps
Bitcoin +0.1%
Bank Index +2.1%
VIX -0.1% front mth VIX futures +0.1%
US Dollar Index +0.8%
Gold +3.2%
Silver +1.8%
WTI Crude Oil +3.1%

![](https://m.stacker.news/125596)

US stocks ended the week higher; small caps led gains despite mixed data.

Net supply of Japanese government bonds is set to surge +8% to ¥65 trillion ($415 billion) in the fiscal year starting April, the largest increase in at least 15 YEARS.

This comes as the Bank of Japan continues stepping back from the market.

BoJ holdings are expected to shrink by ¥46.5 trillion next fiscal year, compared with ¥41.1 trillion in the current period, as monthly purchases are cut by more than a quarter.

This leaves private buyers with way more issuance to absorb.

Meanwhile, 10-year JGB yields have surged to 2.13%, the highest since 1999.

Japanese government bonds already lost -6% last year, the worst performance among 40+ sovereign markets tracked by Bloomberg.

More supply + fewer BoJ purchases = higher borrowing costs for the world's most indebted developed nation.

Brace for more volatility in the Japanese bond market.

![](https://m.stacker.news/125402)

Japan's bond market is facing its toughest year in over a decade..

US household equity holdings have surged to a record 47% of total financial assets.

This exceeds the 2000 Dot-Com Bubble peak by ~8 percentage points.

At the same time, the S&P 500 CAPE ratio rose to ~45, the highest reading since the 2000 bubble burst.

The two metrics have moved in lockstep for decades.

Both peaked together in 2000, followed by a -50% crash.

Both peaked again in 2007, followed by a -57% crash.

What's next?

![](https://m.stacker.news/125303)

US households have never been this exposed to stocks

~37% of market strategists picked NVIDIA as the 2025 winner most likely to turn into a loser in 2026, in the latest Bloomberg Markets Pulse survey.

This was ahead of US Investment Grade credit, gold, the Korean KOSPI Index, and copper.

Meanwhile, 71% of respondents expect the S&P 500 to be higher this time next year, with 60% expecting gains of up to +20%.

Only 28% expect the index to decline in 2026.

Is NVIDIA set to struggle this year?

![](https://m.stacker.news/125241)

Investors are turning bearish on NVIDIA

The US stock market cap to US M2 Money Supply ratio hit a record 306%.

This now officially surpasses the 2000 Dot-Com Bubble peak.

The percentage has nearly DOUBLED since the 2022 bear market.

![](https://m.stacker.news/125188)

A Bigger Bubble Than 2000: US Stocks vs. M2 at 306%

The Nasdaq 100 has gained +131% over the last 3 years.

The average bubble returned +244% over 2.55 years.

Other bubbles lasting less (except Japan):

ARKK (2020-2021, 0.92 years, +384%)
Dotcom Bubble (1998-2000, 1.46 years, +192%)
FAANG (2020-2021, 1.63 years, +229%)
Black Monday run-up (1985-1987, 1.93 years, +111%)
China A-share bubble (2005-2007, 2.36 years, +513%)
Japan (1986-1989, 3.19 years, +149%)

Is the AI Bubble about to burst?

![](https://m.stacker.news/125088)

The AI rally has outlasted many historic bubbles

My first post here


S&P 500 and Nasdaq 100 rose +16% and +20% respectively.

However, the US posted one of the WORST years on a relative basis over the last 3 DECADES.

That does not sound like an exceptionalism.

What is happening?

![](https://m.stacker.news/124834)



US equities underperformed the rest of the world by nearly -15 percentage points, the biggest margin since 2009, the last year of the Financial Crisis.

Investors sought diversification, rotated into more attractively valued markets, and reduced concentrated exposure to US.

![](https://m.stacker.news/124835)




Including dividends (total return), the US lagged the MSCI World ex-USA by the most since 1993!

This was also the first year of underperformance since 2022 and only the 4th in 15 years.

![](https://m.stacker.news/124836)



This was partially driven by emerging market equities, which soared +34%, supported by improving liquidity conditions, and rate cuts globally.

In other words, EM markets outperformed the US by 18 percentage points.

![](https://m.stacker.news/124839)




As a result, Bloomberg Emerging Markets Capital Flow Proxy Index posted the biggest capital inflows since the last year of the Financial Crisis.

Investors are pouring more money into emerging market assets than at any point over the last 16 years.

![](https://m.stacker.news/124840)




Among individual countries, South Korea, Peru, Spain, Poland, and Greece were the best performers in 2025.

South Korea beat the US by a remarkable 79 percentage points!

![](https://m.stacker.news/124841)



In fact, the US was the 13th WORST market in 2025 when considering total return in USD.

![](https://m.stacker.news/124842)




As more money flowed into equities outside the US, the Dollar saw one of the worst years in over 2 decades.

The US Dollar Index recorded a -9% decline in 2025, the 2nd-worst year since 2003.

![](https://m.stacker.news/124843)



One would say, but the AI trade has been remarkably strong, look at the Magnificent 7!

Nothing could be further from the truth.

Although the Mag 7 returned +25% last year, most of the group’s stocks actually lagged the S&P 500.

This was also below the return of global stocks.

![](https://m.stacker.news/124844)



One might also say I’m simply explaining the past.

Maybe so, but I’ve been putting my money where my mouth is.

My portfolio gained +39.46% in 2025, beating the S&P 500 by 13.07 percentage points.

Since January 2024, it has returned +72.30%, beating S&P by 28.78 ppts.

![](https://m.stacker.news/124845)


Why is this all important?

Because too many investors remain fixated on a single market, missing the broader global landscape and leaving massive money on the table. 

The world has shifted, leadership has rotated, yet many portfolios still look like years ago.



They are also exposing themselves to far greater downside if an adverse event hits, potentially even more damaging than what we saw in April 2025, when a single shock caused a violent unwind.

By ignoring what’s happening beyond the US, massive opportunities are sacrificed.

![](https://m.stacker.news/124846)

2025 was an extremely exciting year for investors.

Investment, Equity (on Wall Street), Macro Research background. ~10 years markets experience.