🔎June 2026 Market Strategy
Don't miss the greatest asset rotation since early 2023.
In my May 2026 Market Strategy, I highlighted that institutional investors are desperately chasing the current rally in part because they are afraid to miss out on the technology boom (AI Trade), in part because they fear another inflation wave (Debasement Trade). I further emphasized that both themes will ultimately require US consumer strength, which nobody seems to be betting on right now. I argued that this disconnect will likely be the driver for the next correction and that B2C stocks generally have better prospects than B2B businesses. Let’s see how the picture has evolved since then.
TLDR Summary
Inflation is dead. There’s no excessive amount of it in measures that matter. Long-term inflation expectations are falling. The yield curve is flattening, even while investors don’t care about buying long duration bonds.
The majority of investors is hopelessly behind the curve on this. No rate cuts are priced in. Instead, investors are preparing for higher interest rates across all tenors.
The next step is blatantly obvious: There will be a downward impulse to interest rates which will liberate consumers and boost the revenues and earnings of those companies that serve them.
The corporate capex party will end because investors will drop the shares of the big spenders to chase the stocks of companies that will have a sustainable earnings acceleration from bombed out levels: B2C.
