We're living in two markets at once.
On one side: AI stocks flying, hype everywhere, valuations stretched.
On the other: credit spreads for junk-tier US companies just hit 12.52% — widest in almost 4 years.
That's not background noise. That's the market screaming that the weakest companies are in serious trouble. Investors are demanding huge premiums to lend to them because default risk is real.
Meanwhile, everyone's piling into the same 10 AI names like there's no risk at all.
This is classic late-cycle behavior. Euphoria in one corner, stress fractures in another. The disconnect won't last forever. When credit markets crack, they don't send a courtesy email first.
If you're overweight hype and ignoring the cracks, you're not diversified — you're just gambling that the music doesn't stop.
On one side: AI stocks flying, hype everywhere, valuations stretched.
On the other: credit spreads for junk-tier US companies just hit 12.52% — widest in almost 4 years.
That's not background noise. That's the market screaming that the weakest companies are in serious trouble. Investors are demanding huge premiums to lend to them because default risk is real.
Meanwhile, everyone's piling into the same 10 AI names like there's no risk at all.
This is classic late-cycle behavior. Euphoria in one corner, stress fractures in another. The disconnect won't last forever. When credit markets crack, they don't send a courtesy email first.
If you're overweight hype and ignoring the cracks, you're not diversified — you're just gambling that the music doesn't stop.