AIt's seven forty-nine on the East Coast, and we're starting with a market that looks calm on the surface—and is anything but underneath. This is Pre-Market, I'm Adam.
BAnd I'm Bill. Sixty percent of the S&P 500 is in a bear market while the index just won't quit. We're going to get into exactly what that means—and who's really holding this thing up.
ABut first, Bill, you brought this one. The Kobeissi Letter posted it twenty minutes ago and it stopped me cold.
BI saw it at five this morning and couldn't look away. Here's the line: we are in a stealth bear market. Nearly sixty percent of S&P 500 stocks are down twenty percent or more from their highs.
AAnd the index itself is sitting about three percent from a record. Both things are true at the same time.
BThat's the part that feels wrong. You look at the S&P, you say fine, barely anything happened. You look under the hood... most of the market has been taken apart.
AI ran the numbers. The claim holds, sixty percent is right. One trader crunched all five hundred and three names and found ten of them did seventy percent of the lifting.
BTen names propping up five hundred. That is not a market. That is a handful of giants and four hundred and ninety stocks having a bad year.
ABut here's my pushback, Bill. You keep saying 'the market is broken.' Is it? Or is it telling you exactly which companies are winning?
BTelling you ten companies are winning and everyone else is losing. That's not health. That's concentration. We have seen this movie before—narrow leadership like this ends one way.
AMaybe. But 'bear market' for the index has a definition: down twenty percent. We are nowhere near that. So calling it a stealth bear market... I'd call it a bear market in the median stock, not in the market.
BCall it what you want. The average investor who owns a diversified fund isn't feeling this, but anyone who bought a regular company six months ago is. This is the story of the year hiding inside the headline.
AThe reply that got me: one guy wrote 'Nothing says buy the dip like most of the market already being in a bear and the index still pretending everything is fine.'
BAnd that's the trap. You see the index near highs, you think you're fine, but your portfolio could be down twenty if you didn't own the same ten names.
AI think the disagreement here is about what the index is for. If it's a thermometer for the economy, it's giving you a false reading.
BIf it's a thermometer for a handful of AI companies, it's working perfectly.
AFair. Speaking of the few things working: UBS says gold could retest four thousand dollars an ounce.
BFour thousand. UBS says the floor is coming not from the Fed, not from real yields—which are rising—but from central banks and Chinese buyers who won't stop.
AThat's the line. Rising real yields and a stronger dollar should be poison for gold, and it's not working.
BBecause there's a buyer at every dip. Sovereigns are buying insurance, not jewelry. Debt concerns aren't going away. Four thousand feels a little close to a guess, but the trend is the trend.
AUBS is making a forecast, not stating a fact. They could be wrong. But the central bank buying story—that's documented, and it's been the quiet force under gold for two years.
BFunny how the 'barbarous relic' is outrunning almost everything. Moving east: Futu just opened BNB deposits and withdrawals for eligible Hong Kong professional investors.
AThat's a regulated broker connecting its platform to on-chain movement of Binance's token. CZ posted it himself five minutes ago.
BThis is what the Glassnode report was getting at this morning—traditional finance is moving onto crypto rails. Stocks, gold, oil, all trading as perpetuals on crypto venues.
AAnd now TradFi brokers are connecting to the on-chain side. Deposit BNB, withdraw BNB. That's a door opening.
BYou know my position. I'm old enough to remember when crypto was a sideshow. Now it's infrastructure. The rails are being built whether you like the passenger list or not.
ALet's not get ahead of it. This is professional investors in one market, one token. It is not a flood. But it is a regulated entity moving deeper in.
BA crack in the door. And meanwhile, a story you'll want to hear—on the oil side. Zerohedge flagged physical oil prices dropping in the Middle East while Iran claims it stopped 'illicit' vessel traffic in Hormuz.
ASo two competing headlines. Bloomberg says flows through Hormuz are holding up. Fars, the Iranian agency, says the bad traffic is stopped.
BNotice what's not in either headline: an actual disruption. The market's been terrified of Hormuz closing for a month, and now the premium is leaking out.
APhysical prices dropping says traders are pricing in that oil keeps flowing. Claims about stopping traffic are a headline, not a verified event. But the market's calm is real.
BOil up a little, but no panic. That's what matters this morning. Now, one thing the internet got completely wrong yesterday—futures opened higher.
AAll this talk of a Black Monday crash, and futures are up two tenths on the S&P. The fear didn't show up.
BBecause the fear was spread by the same people who predicted it last week and were right once. One correct call and suddenly everyone's listening.
AWe'll see where the day actually takes us. Adam and Bill, Pre-Market, back after this.