The market reacts in a curious way š§
Let's look at the most important macro connections of the moment.
- The American fiscal remains under strong pressure š
šš¼ The deficit grows at an unsustainable pace;
šš¼ Treasury yields open across the curve (T30Y-5 %) ;
šš¼ Palliative proposals are circulating in Congress to increase taxes on the richest, trying to partially reduce the deficit.
- The dollar loses strength even with rising interest rates šµ
Traders have avoided going long on the US currency.
The fear is that fiscal adjustment will end up coming through inflation or devaluation.
This scenario has altered the global flow of protection.
- Bitcoin keeps riding this wave. āæ
$BTC is back to $110k, driven by flow and narrative.
ā¢ Protection against fiscal deterioration
ā¢ Alternative to the traditional system
ā¢ Hedge against new taxes and capital controls
- Scenario that generated a historic record for BlackRock's ETF. š
The current context has accelerated its success.
The fund reached $70 billion in AUM in 341 days, the fastest pace in history.
- Big US companies still deliver:
ā¢ Growth
ā¢ Cash generation
ā¢ Global scale
Now they lead the biggest narrative of the decade: artificial intelligence.
As they have already done with cloud, mobile and social networks.
The pause in tariffs was enough for investors to grab equity again.
- However, volatility is out of place. š
The VIX has fallen 63% in just 9 weeks.
It's the biggest fall in history.
Even with fiscal stress, rising interest rates and geopolitical noise, the market is operating in a calm that is difficult to explain.
- Feeling accompanies this complacency. š
The Fear & Greed Index rose to 64.
The investor is optimistic ā perhaps too much so.
And the macro scenario clearly does not provide all that comfort.
Summary: šÆ
Bitcoin skyrocketing.
ETF breaking record.
Big Techs pulling the bag.
Dollar losing strength.
VIX on the floor.
Is the market resilient or numb?