Macro Observations

The second reverse yen carry trade is in progress. Because it’s happening slowly and steadily instead of sharply and suddenly, it hasn’t been getting nearly the same attention. With geopolitics and a global trade war dominating the market narrative, investors are missing the damage that this has helped to contribute to the current decline and the risk that they’re still being exposed to.

Over the past 3-4 weeks, the market is experiencing something it really hasn’t seen since 2022 - a true downswing in investor sentiment. Investors seem genuinely worried. Beyond the feelings, though, there are numbers backing up why this environment is changing and why the worst of it may be yet to come. Let’s take a look at four rather ominous charts that signal trouble.

I’m starting to see some fear creeping into the markets. There’s plenty of places where you can see it. The thing is I’m not sure how investors know how to handle fear right now (or ever really). But that fear might be warranted this time around. I brought up the reverse carry trade because I don’t think it’s over.