The current economic landscape is being shaped by a powerful “monetary tsunami”. As global money supply is projected to outpace nominal GDP growth, this surge in liquidity is creating market conditions that often exceed what traditional markets can naturally absorb.
At Helix Research, we are closely monitoring these shifts to understand how to turn this data into a strategic advantage for our investors. Here are the key themes currently driving our outlook:
The Macro Picture: Policy and Polarization
We are observing a distinct trend toward multidimensional polarization and deglobalization. While macro policies and specific legislative acts are fueling corporate capital expenditures and offering tax advantages, they are also shifting risk premiums.
Furthermore, we see a divergence in the real economy:
Manufacturing: This sector has been on a notable decline.
Consumers: There is significant stress within the “bottom 90%” of consumers who are most affected by current economic forces.
Sentiment vs. Data
While some argue for trading purely on data, the reality is that markets remain heavily fueled by human emotion and sentiment. According to the CNN Fear & Greed Index, we are currently moving from a “neutral” stance into the “greed” stage, sitting in the 62-63 range.
This greed is largely driven by:
The AI Investment Cycle: A primary catalyst for recent market enthusiasm.
Energy and Oil: These investment cycles are triggering new interest, though they often mask the significant crowding in the tech sector.
The Concentration Risk
Investors should be mindful of the extreme concentration in current indices. In the S&P 500, just seven tech stocks—the “MAG7”—now account for 35% of the total index value. While these stocks continue to drive valuation increases, this level of crowding represents a recurring risk that we continue to evaluate in our strategy updates.
Want to learn more? Join our live session on Tuesday, 6pm GMT.
