Out of Tokens: Xi/Trump, Momentum and Markets

The report highlights a narrow, AI-led equity rally facing headwinds from rising 30-year yields and sticky inflation. Investors are focused on the Xi/Trump summit and signs that AI spending is entering a phase of cost rationalization.

Key Takeaways

• 1.Market breadth is exceptionally narrow; more stocks in the S&P 500 are making new lows than highs despite indices hitting record levels.
• 2.AI spending is shifting from unlimited experimentation to efficiency and cost rationalization as companies exhaust their initial tool budgets.
• 3.Long-end bond yields above 5% represent a major 'bogeyman' and counterweight to equity momentum, reflecting fiscal stress and energy uncertainty.

Table of Contents

• Summit
• Breadth
• Inflation
• Out of Tokens
• Risk/Technicals
• First Time Since 2000...

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